If you’ve heard the term patent troll but are not sure what it means, then you’re in the right place. A patent troll, sometimes called a patent pirate, is a company or other entity, sometimes an individual that uses patent law to enforce patents against potential offenders in exchange for a payout. This practice is questionable, but current patent law allows it.
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Patent trolls have no interest in using the patents they obtain for anything except as bartering power with large companies. Sometimes patent trolls purchase patents from companies that are willing to sell due to the fact that they never made what they had patented. In other cases, patents are bought in bulk quantities from companies going out of business or bankrupt.
The reason patent trolling is so lucrative, especially in hotspots like Tyler, Texas, is because it is very common for the patent troll that holds the patent to win in a lawsuit, which can sometimes mean payouts of millions of dollars with very little work being done by the patent troll.
Obviously, patent trolling is of questionable ethics but that only matters so much. The real problem is that current patent law allows patent holders to go after other entities even if they haven’t acted on their patent. Being the owner of the patent, even if you never used it, puts you in a position to barter with large companies with the threat of taking them to court for patent infringement. No company wants to deal with a patent infringement case and many cannot afford it period. Thus, patent trolls usually are able to “bully” the companies into paying an outside of court settlement.