Protect Your Business: Get Smart with Intellectual Property
As a business owner, you may have heard the term “patent troll’ come up in the news a few times over the last couple of years. Depending on what type of business you run, you may not have spent much time wondering what a patent troll is or what they do. Today, we’re here to change that. No matter what type of business you own, you should be wary of the wandering-eye patent trolls that could hinder your business’s profits or growth in order to, seemingly, serve their own personal gain.
Small businesses and big corporations alike can be vulnerable to patent trolls, which is why it’s becoming more and more important that any business takes preemptive measures to protect themselves against these kinds of threatening legal opportunists.
But, before we delve into the actions you can take to protect yourself and your company, let’s first take a step back and get a closer look at what defines a patent troll.
The Evolving Definition of a Patent Troll
At first, patent trolls were dubbed non-practicing entities, or NPEs. Now, since the White House has recently taken the patent troll issue under serious consideration, these companies are being called patent assertion entities, or PAEs.
According to a report the White House released several months ago, patent trolls are defined as, “companies that do not make products, but buy up or own patents and sue businesses they claim are infringing on those rights in order to collect licensing fees.”
The report goes on to state that these sort of companies are disturbing the flow of new technology and innovation by engaging in impractical attempts to sue companies, resulting in the established companies becoming bound up by the responsibility to pay hefty fees either as an unjust cash settlement, or to provide themselves with legal counsel.
President Obama put it nicely when he said that these entities “don’t actually produce anything themselves.” Their business model relies on “leverage[ing] and hijack[ing] somebody else’s idea [to] see if they can extort some money out of them.”
How to Protect Your Business
The US patent system was established for the purpose of legally protecting an inventor’s design and has been in operation for almost 400 years. It’s supposed to work in such a way that inventors who have created something that they intend to make public and want to offer to consumers seek a patent for that item so that they retain rights over production and distribution.
But, as we have already discussed, some companies called ‘patent trolls’ are taking advantage of the system in the worst way. These ‘trolls’ are purchasing patents for items in the broadest, least specific way that the system allows, with no real desire to ever use or sell the items they are patenting.
- Be Preventative – The US Patent and Trademark Office provides a way for you to search for patents or trademarks on their website. Protect your business and don’t put anything on the market until you are 100% sure it has not already been patented.
- Intellectual Property Insurance – Every company is different. Intellectual property may not mean much to your business, but it does mean a great deal to some. Frivolous patent infringement lawsuits have become so prevalent that some insurance companies are now offering a policy to help protect your company in the event a patent lawsuit occurs.
- Consult a Lawyer – Not every company will receive a letter demanding payment or notification of suit, but if you do, don’t do anything until you discuss it with a lawyer first. If the patent troll’s bark is worse than their bite, there’s a chance a professional letter from an attorney could call them off completely.
How Other Businesses Are Responding
It’s important to note at this point that ‘patent trolls’ seem to engage in numerous lawsuits while fully equipped with the knowledge that the majority of these suits will be settled out of court. Those who run these trolling companies are very aware of the fact that hiring a lawyer to fight a lawsuit is usually more costly than simply paying the amount that was originally demanded.
Thus, whether or not the patent infringement actually occurred, the business ends up paying off the trolls because they are under the assumption it would cost them more to fight rather than just pay up.
They’re not wrong. Lawyer fees can be one of the most expensive bills you’ll ever encounter as a business or an individual.
But that doesn’t mean you should give up just yet in the war against the patent trolls. Huge companies like Cisco have fired back against trolling companies like Innovatio IP Ventures.
While end-users, very small businesses and other everyday people have little to use to fight back against patent trolls who may engage them in unjust legal battles, people like Kevin O’Connor are stepping up to bat in the name of justice.
O’Connor, CEO of FindTheBest, has publicly announced his decision to spend $1 million fighting against the company Lumen View, who has recently demanded that FindTheBest pay them $50,000 for reasons that aren’t 100% clear.
While O’Connor knows that as a business decision, spending $1 million to fight instead of just paying the $50,000 that was demanded in the first place makes no sense, he doesn’t care.
After the sale of his company DoubleClick to Google back in 2008, he feels that he is now in a position to use some of his wealth to fight against the deplorable practice of patent trolling.
Image via Shutterstock
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