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Patent trolls exist but their prevalence may have been exaggerated by the media.
Patent litigation is increasing, but only because of the uncertain nature of technological developments and how patent claims apply to that. Patent litigation surges are consistent with major shifts in technological developments
==Why Legislation Targeting Demand Letters is Bad==
The Truth Behind Patent Trolls Issue Brief (view source)
Revision as of 16:58, 23 March 2016
, 16:58, 23 March 2016no edit summary
The patent market is illiquid, which means that assets cannot be sold or exchanged easily. In illiquid markets, specialized intermediaries, like patent assertion entities, can help match patent holders to patent buyers and transfer ideas and technology from inventors to manufacturers effectively. [https://www.whitehouse.gov/sites/default/files/docs/patent_report.pdf] This allows inventors to focus on innovation while benefiting from the knowledge and connections that intermediaries possess. [https://www.whitehouse.gov/sites/default/files/docs/patent_report.pdf] Patent assertion entities are able to incentivize innovation through the effective brokerage of patents. [https://www.whitehouse.gov/sites/default/files/docs/patent_report.pdf] They manage risks for small inventors and inform manufacturers or inventors of the usefulness of having another inventor's patent in their patent portfolio. [http://www.bna.com/challenges-of-defining-a-patent-troll/]
==Are Patent Trolls Really that Big of a Problem?+ Why Stricter Demand Letter Requirements Isn't the Solution==
There's no doubt that patent trolls exist. eDekka, widely considered one of the top patent trolls, sued 101 companies in 2015, 55% of which are considered small businesses under SBA regulations ('''Endnote: eDekka considered top patent troll by Unified, and the percentage is based on the 92 companies we could find information on and classify'''). Compare this to '''find data for another company that is definitely not a patent troll, perhaps Apple?'''. 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". 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/].
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 Innovation Act that is currently under consideration in the House demands that if you believe your patent has been infringed on, your initial complaint letter must be very specific, including information such as the name, exact model number, and description of each alleged infringement.
There are two problems with this. First, the increase in patent litigation cannot be attributed to an increase in patent trolls. Patent litigation is increasing, but only because of the uncertain nature of technological developments and how patent claims apply to that. Patent litigation surges are consistent with major shifts in technological developments. When patent filings and lawsuits are graphed together, both lines have an obviously positive slope, and generally move in tandem. There has been an increase in lawsuits, but it is proportional to the increased filings. '''(Show the graph)''' Thus, patent trolls exist but their prevalence has been greatly exaggerated by the media. Second, demand letters are not an efficient solution to curbing patent trolls.
==Recommendations on Curbing Patent Troll Activity==
*have courts be more consistent on their rulings (so not everyone goes to E.D. Texas)
