Posts Tagged: "non-practicing entities"

As so many run to condemn patent trolls and would like to compromise the integrity and strength of all patent rights to combat what they perceive as bad actors, I wonder whether patent trolls are really a drag on the high-tech industry. Are patent trolls really costing the industry, or is the industry making much ado about nothing? One theory holds that the tech industry is treating the patent troll phenomenon as nothing more than a nuisance, and a nuisance that is not worth doing anything about. I have for a long time stated that there are obvious strategies that could be employed, but they are ignored in favor of doing nothing. But earlier today I heard an interesting twist. What if they simply don’t want to do anything and they view the patent troll matter as simply a cost of doing business?

Acacia Research Corporation (Nasdaq: ACTG), which in some circles is known as the mother of all patent trolls, announced today that a wholly-owned subsidiary has become the General Partner of the newly formed Acacia Intellectual Property Fund, L.P. The Fund, who together with the subsidiary, have provided a total of $27 million as an initial funding commitment. The Fund is authorized to raise up to $250 million, which should strike fear in the hearts of all of the likely targets of patent infringement lawsuits, namely those that make high tech products.

The reality is that the term patent troll seems to be more in the eye of the beholder than anything else. So a patent troll is whoever is suing you because you must be correct and some evil wrong-doer is holding you hostage. Never mind that you are actually infringing and you are the real wrong-doer (i.e., tortfeasor). What is needed is a working definition for the term patent troll so that this nonsense can stop once and for all, and so the uninformed in the media can be spared the embarrassment of their own cluelessness. So lets take a look at some of the characteristics that will get you characterized as a patent troll and either confirm it as a useful indicator of a wrong-doer or as simply overblown and wholly inaccurate.

I can’t tell you the reason why companies choose to be targets, but I think I have a compelling idea. Those companies that are the ones who complain about patent trolls are also the ones who continually are on Capitol Hill lobbying for patent reform, which in their mind is really only appropriate when it makes issued patents easy to challenge and much more difficult to get. These are the folks who built their corporate empires on patents, growing from small company to mega-giant company while building an enormous intellectual property portfolio heavily dominated with patents that gave them a competitive advantage. Now that they have their market dominant position they really don’t need the patents so much because they have their market power to insulate them from competition, so they want to make it harder for the next individual inventor, start-up tech business or small business to innovate, protect and grow up the corporate food chain.