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[[Patent Trolls]] are an innovation bogeymen, ==Definition==<section begin=trolls />No agreed-upon definition of patent troll exists. The term patent troll is used interchangeably with numerous research articles the terms non-practicing entities (NPEs) and legislation addressing ways to curb troll activity. Patent Trolls, also known as [[Patent Assertion Entities]] patent assertion entities (PAEs). Despite similar sounding names, generate revenue through suing or threatening to sue businesses that infringe on patents. Experts dispute several key differences exist between the three terms for such corporations, labeling them as either [[Patent Assertion Entities]] (PAEs) or [[Non-Practicing Entities]] (NPEs).

'''Hypothesis 1: Most Patent Assertion Entities are drivers trolls may also target a slew of innovation, and incorrectly labeled as companies that tangentially intersect the sphere of the patent trolls.''' Method 1:Find list One famous example of PAEsa patent troll is MPHJ Technology Investment, sort by locationwho claimed to have patents that cover any networked "scan-to-email" function. MPHJ sent demand letters to more than 16, number of lawsuits filed000 small businesses, damages. Need to control for size each letter demanding license fees of company and sectorat least $1000 per worker.<section end=trolls />

648 total casesIn illiquid markets where asets cannot be sold or exchanged easily, 519 in E.D. Tex. 80.09% of all patent litigation cases filed in 2015 were filed in E.D. Texas.  A assertion entities can help match patent infringement case can be filed in any of the US districts that have personal jurisdiction over the defendant, which include states or districts where the defendant's products are sold, regardless of whether or not an office exists in that location. [https://www.fenwick.com/FenwickDocuments/Legal_FAQ_Patent_Litigation.pdf] The large number of cases filed in E.D. Texas could point holders to the favorable disposition of the court patent holders. See [[Eastern District of Texas]].  '''Hypothesis 2: Patent litigation is increasing, but only because of the uncertain nature of technological developments buyers and transfer ideas and how patent claims apply to that. Patent litigation surges are consistent with major shifts in technological developments'''*High tech is the only sector where a majority of cases were NPE related Method: Find a reliable graph of developments within the technology sector and match it from inventors to the one below [https://docsmanufacturers effectively.google.com/spreadsheets/d/1mx9j2cnrQ_cL0PeP3x40yN7bGxnt4mNzzPPUDNltfaU/pubchart?oid=1082659239&format=image]: [[Image:Patent_litigation_2011.2015.png]] We will be hard pressed This allows inventors to find a graph that can map technological development over focus on innovation while benefiting from the last 5 years reliably. Other measures of technological development we can use knowledge and compare to patent litigation trends: total patent grants, venture capital investment amount, R&D spending in the high tech sector..connections that intermediaries possess.  Patent Litigation Rate: Number of patent lawsuits relative assertion entities are able to number incentivize innovation through the effective brokerage of patents granted. This metric was used by economist Zorina Khan when researching historical patent litigation rates. Historical patent litigation rate during the 2000s has been 1.5%.[httphttps://www.forbeswhitehouse.comgov/sites/forbesleadershipforumdefault/2012files/02docs/09/no-the-patent-system-is-not-broken/2/#121813df63a3patent_report.pdf] We should update it with the 2008-2015 numbers (currently working with Excel). '''Sub-Hypothesis: There's something fishy going on with Judge Rodney Gilstrap'''  Out of Judge Rodney Gilstrap's 3743 terminated cases, *2354 were Likely settlement: stipulated dismissal*901 were Likely settlement: plaintiff voluntary dismissal*152 Procedural consolidation*151 procedural interdistrict transfer*40 procedural: dismissal*30 Claim defendant win*11 Claim win: default judgement*4 Procedural: intradistrict transfer*2 Claimant win*2 procedural: severance *62.89% of Judge Rodney Gilstrap's terminated cases ended with a likely settlement of stipulated dismissal, where the defendant paid the plaintiff money out of court, afraid They manage risks for small inventors and inform manufacturers or inventors of the court judgement. In contrast, only 42.57% usefulness of Judge Janis Lynn Sammartino in S.D. Calhaving another inventor's terminated cases ended with likely settlement.   Of Judge Janis Lynn Sammartino patent in S.D. Cal's 148 terminated cases*63 were Likely settlement: stipulated dismissal*40 were Likely settlement: plaintiff voluntary dismissal*32 Procedural stay*3 Procedural consolidation*3 procedural interdistrict transfer*4 procedural: dismissal*1 Claim defendant win*2 Claimant win '''Hypothesis 3: Data that supports increased costs to innovation rely on broad and confusing definitions for NPEs and PAEs''' *A March 10, 2015 letter signed by 40 economists argued that papers claiming high direct costs of their patent trolls misconstrue innocent NPEs, such as universities, as patent trolls. The broad definition of NPEs increases the number of cases filed by supposed trolls and the number of court fees accumulated through lawsuitsportfolio. [http://cpipwww.gmubna.educom/wpchallenges-content/uploads/2015/03/Economists-Law-Profs-Letter-re-Patent-Reform.pdf]*Adam Mossoff specifically critiques aforementioned Unified Patents data for its broad definition of NPEs.[http://cpip.gmu.edu/2015/07/15/its-timedefining-to-say-no-to-junk-science-in-thea-patent-policy-debatestroll/]  '''Hypothesis 4: Patent legislation should not be targeting the reform of demand letters''' Recently proposed legislation includes changes to the form of demand letters. The Innovation Act in particular requires the party alleging patent infringement to include in the initial complaint:*Identification of each patent allegedly infringed*All claims (heart of the patent, defines the limits of exactly what the patent does) necessary to produce the identification of each process, machine, manufacture, or composition of matter (accused instrumentalities) that infringe the patent*The name, model number, description of each AI*How each limitation of each claim is met by the AI*For indiret infringement, the acts of the infringer that are inducing a direct infringement*Authority of the party to assert each patent  TL;DR If you believe your patent has been infringed on, you must write in your initial complaint letter VERY SPECIFIC information regarding exactly which parts of your patents have been violated and by what model/device.  If patent trolls are rampant, this measure could reduce the amount of demand letters they send out and the number of companies they accuse of infringement. However, patent holders that have a legitimate concern may find it hard to identify the exact make and model of the device(s) that infringe upon their patent, especially in the high-tech sector where products are less clearly defined.  

'''Interesting facts that may deserve extra research'''*HistoricallyAccording to the U.S. Census Bureau, small businesses with fewer than 20 employees made up 89.6 percent of employer firms in the United States in 2012. [[Eastern District of Texashttp://sbecouncil.org/about-us/facts-and-data/]] is Small firms produce more patents per employee than large companies and help drive innovation in the top patent dispute venueUnited States economy. The patents they develop have a greater impact and are often more technologically important than those of large firms. [http://www.imamidejo.si/resources/files/doc/analiza%20patentov%20v%20msp%20usa. In 2015pdf] The Small Business Administration reported that "although small firms account for only 8 percent of patents granted, 44% they account for 24 percent of all patent litigation was filed the patents in Ethe top 100 emerging clusters.D" [http://sbecouncil. Texasorg/about-us/facts-and-data/] Because small businesses and emerging companies are not always able to protect their patents on their own and account for much of the innovation driving emerging industries today, most of which were assigned they need patent assertion entities who have the power to Judge Rodney Gilstrapprotect their patents for them.

==Issue Brief DraftAn Illustration of Patent Troll Activity==There's no doubt that patent trolls exist. eDekka, widely considered one of the top patent trolls, filed lawsuits against 101 companies for patent infringement in 2015, 55% of which are considered small businesses under SBA regulations. There may be more companies eDekka sent threatening demand letters to, companies that decided to settle instead of bringing the case to court. Compare eDekka to Intellectual Ventures, which had only filed 6 patent lawsuits in all of 2015. Intellectual Ventures is considered by the public to be a legitimate patent monetization firm [http://www.ipnav.com/blog/patent-assertion-entities-good-or-bad-for-innovation/]. It is clear that there is a distinct difference between patent assertion entities and patent trolls. As of December 2015, eDekka had sued over 200 companies for infringing upon the US Patent no. 6,266,674 "Random Access Information Retrieval Utilizing User-Defined Labels", a patent on a form of household remote controls. 168 of these cases were later thrown out by US District Judge Rodney Gilstrap, who wrote that the "strikingly similar lawsuits" demonstrate "an aggressive strategy that avoids testing its case on the merits and instead aims for early settlements falling at or below the cost of defense" [http://arstechnica.com/tech-policy/2015/12/in-a-first-east-texas-judge-hits-patent-troll-with-attorneys-fees/].

[[==Evaluations of Proposed Regulations=====Stricter Demand Letter Requirements===Supporters of current legislation against patent trolls claim that the huge increase in patent litigation cases proves that patent trolls, just like eDekka, are increasing in number and prevalence. Many of them point to stricter demand letter requirements as the solution. The Truth Behind Patent Trolls Issue Brief]]Innovation Act that is currently under consideration in the House demands that any claims of patent infringement must be accompanied by a very specific initial complaint letter, including information such as the name, exact model number, and description of each alleged infringement.

Second, stringent demand letter requirements are not an efficient solution to curbing patent trolls. The proposed reforms against demand letters by the Innovation act are too broad; they have the potential to stifle innovation. Patent owners acting in good faith would not be able to legitimately enforce their patent rights, creating an ineffective patent system and reducing the incentives for innovation. Qualcomm Incorporated, one of the leading companies within the telecommunications sector, manages a portfolio that contains at least 13,000 US patents. As a company that relies on the current patent system to protect its innovations, Qualcomm stated that "the appropriate goal of the legislation should be to identify, and empower the FTC to address, only those demand letters that are sent in bad faith" [http://www.ipwatchdog.com/2015/03/04/demand-letter-legislation-must-be-narrowly-tailored/id==Blog Post Draft==55365/].

===Empowering the FTC===Skeptics of the Federal Trade Commission’s (FTC) effectiveness may question how well the commission would handle patent trolls that have heavy financial and litigation muscle. However, these skeptics should remember that the Federal Trade Commission has already demonstrated willingness and ability to address patent trolls. In the 2014 investigation regarding MPHJ Technology Investments, LLC, the FTC found more than 16,000 demand letters sent to small businesses. Subsequently, the FTC prohibited MPHJ from asserting "false or unsubstantiated representations" regarding a patent's licensing activity or the potentiality and imminence of a lawsuit. [[Eastern District of Texas]https://www.ftc.gov/system/files/documents/cases/150317mphjtechdo.pdf]However, the FTC did not award any damages to small businesses that fell victim to this patent troll.

==Recommendations on Curbing Patent Troll Activity==Legislation that enacts sweeping reform of the patent system will not help curb patent troll activity. This type of reform only weakens patent protection for legitimate patent holders and patent trolls alike and does not deter patent trolls from engaging in abusive or frivolous litigation. The [[Innovation Act]] and [[PATENT Act]] would exceed what is needed to reduce the activity done by a small number of patent trolls by raising the costs and risks for all legitimate patent holders to enforce their patent rights in court or defend themselves from larger companies. Any legislation that would alter the current patent system should target the specific actions used by patent trolls and should not propose broad reforms that change the procedure used to enforce patents. For example, legislation like the recently proposed [[Patent Troll Lit ReviewSTRONG Patents Act]]gives the FTC the power to determine that certain demand letters are in "bad faith" and penalize the companies that issue these letters, but also specifically protects mistakes that were made in good faith.

[[Patent Troll Fact SheetCategory: Public]]