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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 companies that tangentially intersect the sphere of innovationthe patent. One famous example of a patent troll is MPHJ Technology Investment, and incorrectly labeled as patent who claimed to have patents that cover any networked "scan-to-email" function. MPHJ sent demand letters to more than 16,000 small businesses, each letter demanding license fees of at least $1000 per worker.<section end=trolls.'''/>

Method 1:Find list of PAEs, sort by location, number of lawsuits filed, damages. Need to control for size of company and sector. Top 10 PAEs in 2015, according to [http://unifiedpatents.com/2015-year-end-report/ (Unified)]

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 Eassertion entities can help match patent holders to patent buyers and transfer ideas and technology from inventors to manufacturers effectively.D. Texas.  A patent infringement case can be filed in any of This allows inventors to focus on innovation while benefiting from the US districts knowledge and connections that have personal jurisdiction over the defendant, which include states or districts where intermediaries possess. Patent assertion entities are able to incentivize innovation through the defendant's products are sold, regardless effective brokerage of whether or not an office exists in that locationpatents. [https://www.fenwickwhitehouse.comgov/sites/default/files/FenwickDocumentsdocs/Legal_FAQ_Patent_Litigationpatent_report.pdf] The large number They manage risks for small inventors and inform manufacturers or inventors of cases filed in E.D. Texas could point to the favorable disposition usefulness of the court having another inventor's patent in their patent holdersportfolio. See [[Eastern District http://www.bna.com/challenges-of Texas]-defining-a-patent-troll/]. 

'''Hypothesis 2: Patent litigation is increasingAccording to the U.S. Census Bureau, but only because small businesses with fewer than 20 employees made up 89.6 percent of employer firms in the uncertain nature of technological developments United States in 2012. [http://sbecouncil.org/about-us/facts-and-data/] Small firms produce more patents per employee than large companies and how patent claims apply to thathelp drive innovation in the United States economy. Patent litigation surges The patents they develop have a greater impact and are consistent with major shifts often more technologically important than those of large firms. [http://www.imamidejo.si/resources/files/doc/analiza%20patentov%20v%20msp%20usa.pdf] The Small Business Administration reported that "although small firms account for only 8 percent of patents granted, they account for 24 percent of the patents in technological developments'''*High tech is the only sector where a majority top 100 emerging clusters." [http://sbecouncil.org/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 cases were NPE relatedthe innovation driving emerging industries today, they need patent assertion entities who have the power to protect their patents for them.

Method==An 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: Find //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 reliable graph patent on a form of household remote controls. 168 of developments within 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 technology sector merits and match it to instead aims for early settlements falling at or below the one below cost of defense" [httpshttp://docs.googlearstechnica.com/spreadsheetstech-policy/2015/d12/1mx9j2cnrQ_cL0PeP3x40yN7bGxnt4mNzzPPUDNltfaUin-a-first-east-texas-judge-hits-patent-troll-with-attorneys-fees/pubchart?oid=1082659239&format=image]:.

[[Image:Patent_litigation_2011==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.2015Many of them point to stricter demand letter requirements as the solution. The 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.png]]

We will There are two problems with this. First, the increase in patent litigation cannot be hard pressed attributed to find a graph that can map technological development over an increase in patent trolls. Patent litigation is increasing, but only because of the last 5 years reliably. Other measures uncertain nature of technological development we can use advancements and compare the application of patent claims to patent these new developments. Patent litigation trends: total patent grantssurges are consistent with major shifts in technological developments. There has been an increase in lawsuits, venture capital investment amountbut it is proportional to the increased filings. Thus, R&D spending in patent trolls exist but their prevalence has been greatly exaggerated by the high tech sector..media.

'''Hypothesis 3: Data that supports increased costs 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 rely on broad . Patent owners acting in good faith would not be able to legitimately enforce their patent rights, creating an ineffective patent system and confusing definitions reducing the incentives for NPEs 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 PAEs'''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=55365/].

*A March 10===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, 2015 letter signed by 40 economists argued these skeptics should remember that papers claiming high direct costs of the Federal Trade Commission has already demonstrated willingness and ability to address patent trolls misconstrue innocent NPEs. In the 2014 investigation regarding MPHJ Technology Investments, LLC, the FTC found more than 16, such as universities000 demand letters sent to small businesses. Subsequently, as the FTC prohibited MPHJ from asserting "false or unsubstantiated representations" regarding a patent trolls. The broad definition of NPEs increases 's licensing activity or the number of cases filed by supposed trolls potentiality and the number imminence of court fees accumulated through lawsuitsa lawsuit.[httphttps://cpipwww.gmuftc.edugov/wp-contentsystem/uploadsfiles/2015documents/03cases/Economists-Law-Profs-Letter-re-Patent-Reform150317mphjtechdo.pdf]*Adam Mossoff specifically critiques aforementioned Unified Patents data for its broad definition of NPEs.[http://cpip.gmu.edu/2015/07/15/its-time-However, the FTC did not award any damages to-say-no-small businesses that fell victim to-junk-science-in-the-this patent-policy-debates/]troll.

The bad faith standard in legislation such as the [[Targeting Rogue and Opaque Letters (TROL) Act]] provides a high standard that the FTC must meet in its patent trolls investigations. Bad faith refers to "'clear and convincing evidence''Hypothesis 4: Patent legislation should not be targeting that the reform of demand lettersinfringement assertions are 'objectively baseless''Recently proposed legislation includes changes to the form of demand lettersavoid dismissal on summary judgment or a motion to dismiss." [http://patentlyo. The Innovation Act in particular requires the party alleging com/patent infringement to include /2013/05/what-is-happening-in the initial complaint:*Identification of each -vermont-patent allegedly infringed*All claims (heart of -law-reform-from-the patent, defines -bottom-up.html] In the limits case of exactly what an FTC investigation, the commission would have to show that a demand letter written by an alleged patent does) necessary troll demonstrated bad faith assertions. Some examples of these bad faith assertions include, but are not limited to produce , falsely claiming the identification existence of each processa pending lawsuit, machineprevious patent infringements, manufacture, or composition and even the valid ownership of matter (accused instrumentalities) that infringe the a patent*. The name, model number, description authors of each AI*How each limitation of each claim is met by the AI*For indiret infringement, issue brief will note that determining the acts bad faith nature of demand letters sets a high standard for the infringer that are inducing FTC. However, such a direct infringement*Authority of the party to assert each high standard will protect legitimate patent assertion entities against unreasonable investigations and sanctions.

TL;DR If you believe your ==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 has been infringed on, you must write trolls from engaging in your initial complaint letter VERY SPECIFIC information regarding exactly which parts 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 your 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 have been violated . For example, legislation like the recently proposed [[STRONG Patents Act]] gives the FTC the power to determine that certain demand letters are in "bad faith" and by what model/devicepenalize the companies that issue these letters, but also specifically protects mistakes that were made in good faith.

If Congress last passed comprehensive patent trolls are rampantreform only five years ago, in 2011, this measure could reduce and the amount of demand letters they send out and unintended consequences from those changes are still appearing. [https://www.congress.gov/bill/114th-congress/senate-bill/632/text#toc-id645863c82106422dbabf0358ad52716d] Without carefully analyzing the number potential effects of companies they accuse of infringement. Howeverbroad reform, patent holders that have a legitimate concern may find it hard Congress should not rush to identify combat the exact make and model small amount of the device(s) abusive litigation activity with sweeping changes that infringe upon their patent, especially in the high-tech sector where products are less clearly definednegatively affect everyone.

'''Interesting facts that may deserve extra research'''*Historically, the [[Eastern District of TexasCategory: Public]] is the top patent dispute venue. In 2015, 44% of all patent litigation was filed in E.D. Texas, most of which were assigned to Judge Rodney Gilstrap