patent troll

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patent troll

An organization that uses its patents to generate revenue without manufacturing the products that the patents pertain to. The patents are often purchased from a third party, which may be bankrupt or no longer interested in bringing the product to market.

Also called a "non-practicing entity" (NPE) or "patent assertion entity" (PAE), which are less denigrating, the patent troll looks for infringers that have invested heavily in the product and often has to threaten them with or actually instigate a lawsuit in order to obtain licensing revenues. Companies that are involved in the business that the patent covers may indeed sue others for patent infringement, but that does not make them a patent troll. A patent troll is a holding company that buys patents based on their potential profitability if enforced. See Internet troll.
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References in periodicals archive ?
As such, adjusting the length of the patent to more closely match the nature of the industry such as in software would allow the inventor to capture their profit share while concurrently eliminating the likelihood of patent trolls being able to capitalize on old patents to hold firms hostage for payouts or jury verdicts.
As patent reform legislation makes its way through Congress, supporters and opponents are waging a war of words over whether the bill will weaken the patent rights of innovators or effectively squash the abusive tactics of patent trolls, also referred to as non-practicing entities (NPEs).
More than half the states have joined the battle against the most litigious of patent-assertion entities, those known as patent trolls. Vermont led the charge in 2013 by passing the first legislation addressing the menace.
Wikipedia, for example, conflates patent trolls, non-practicing entities (NPEs) and patent assertion entities (PAEs), defining them collectively as "person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question, thus engaging in economic rent-seeking."
Watkins Jr., a research fellow at the Independent Institute, is the author of the August monograph Patent Trolls: Predatory Litigation and the Smothering of Innovation.
It's not clear whether Vermont has the legal authority to regulate patent activities, but even if not, its efforts foreshadow a coming legislative crackdown on patent trolls." (1)
These government-sponsored patent trolls (GSPTs) amass patents to effectively manipulate markets, and with government funding and regulatory clout behind them, they can do so on an unprecedented scale.
Rather than building or inventing products or services, patent trolls are individuals or companies that have acquired a patent for litigation purposes.
"Patent trolls are companies that purchase patents and intimidate thousands of individuals and small businesses with the threat of a lawsuit," said Sen.
And then there are what President Obama dubbed this June as "patent trolls,'' which are firms that sue companies to extract licensing fees.
If half of those credit unions contributed $1,000 to the fund, there would be $3.5 million available for credit unions to take on patent trolls. Those funds could mean the difference between life and death for a small community credit union dealing with a patent troll.