Beware: Patent Trolls Are Active Again Seeking Royalties

Intellectual Property

During the early part of this decade, patent trolls (entities who acquire patent rights to monetize them and not practice them) prolifically used the threat of litigation as a means of extorting royalty payments from alleged infringers. However, a series of United States Supreme Court decisions, coupled with changes in post-grant review practices before the United States Patent and Trademark Office, caused a dramatic drop in patent troll activities starting in 2014. Now that declining trend appears to be shifting, with patent trolls once again actively using litigation or the threat of litigation to coerce royalty payments.

Recently, two separate patent trolls sued two separate Northeast Ohio companies alleging patent infringement. Additionally, we have learned that other clients of the firm have recently received letters from patent trolls claiming the infringement of patents and offering licenses in exchange for royalty payments. These clients have not received such letters for a period of years. Reviewing court dockets, we see that several patent trolls that had not initiated new litigation for several years are once again suing target companies. In sum, we see a general increase in patent troll activities, both in Northeast Ohio and across the nation.

If your organization receives a letter alleging its infringement of a patent, we urge you to contact us before responding. We have the knowledge and experience to quickly, efficiently, and cost effectively assist you in deciding how best to respond to such a letter. We also have research tools available to us to investigate both the patent troll alleging infringement and the patents that are alleged to be infringed.

In most cases, we can now determine in a matter of minutes whether the troll has ever litigated its claims of patent infringement and, if so, against how many defendants, in what forums, and to what resolutions. Further, we can just as quickly determine whether a particular patent has been subjected to post-grant review by the United States Patent and Trademark Office by, for example, inter partes or covered business method review and, if so, how far that review proceeded before resolution.

Information regarding the troll’s past litigation activities often gives valuable insight into how likely that troll is to litigate or how quickly that troll is likely to settle its claims. Information regarding a troll’s past practices allows for an informed decision regarding how best to respond to claims of infringement and offers of a license.

Calfee has a large and sophisticated intellectual property practice, including patent litigation. Calfee’s Intellectual Property Litigation practice is included in the 2019 “Best Law Firms” rankings by U.S. News – Best Lawyers in America (National and Metropolitan Cleveland rankings). Calfee’s Intellectual Property practice is also ranked by Chambers USA: America’s Leading Lawyers for Business.

We have a broad base of experience in dealing with patent trolls in various situations. In many cases, we have been able to formulate a response strategy resulting in the patent troll abandoning its efforts at negotiating a royalty payment. And, where litigation has been commenced, we have been able in some instances to get the patent troll’s claims dismissed outright or resolved on terms favorable to our clients.

Upon receipt of a royalty demand letter, the most opportune time to seek advice from your patent attorney is prior to responding. Please contact us with any questions or to discuss specific legal strategies.

For additional information on this topic, please contact your Calfee attorney or the author(s) listed below:


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