Journal of Intellectual Property Law & Practice Advance Access published online on December 3, 2008
Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpn230
| ||||||||||||||||||||||||||||||||||||||||||||||||||
© The Author (2008). Published by Oxford University Press. All rights reserved
Practice Point |
Strategies for defending international companies against US patent trolls
Legal context: This article presents strategies for defending international companies against patent infringement lawsuits brought in US federal courts by patent trolls. Patent trolls are non-practicing entities that acquire patents solely for the purpose of enforcing them. International companies headquartered outside of the USA are primary targets of patent trolls because of a perception that these companies are averse to US patent litigation and may settle quickly, yielding large sums of money to the trolls.
Key points: Patent trolls maximize their revenues by suing as many companies as possible over the same patents. The international company can assess its relative position in a ‘defendant string’ by identifying companies that are likely to be sued over the same patents and determining which companies have previously been sued, are currently being sued, and have not yet been sued. Defendants earlier in the string have a better chance of obtaining favourable settlement.
Patent trolls capitalize on the desire of many companies to dispose of litigation quickly and minimize risk. A defendant can increase its bargaining power by displaying a willingness to vigorously defend the lawsuit. A defendant should approach settlement only after thoroughly assessing the merits of the lawsuit.
Patent trolls often employ shell entities to manipulate jurisdiction and obstruct discovery. The defendant should pursue all aspects of discovery early and aggressively in order to penetrate the roadblocks presented by these entities.
Practical significance: Patent trolls sustain their existence by suing as many companies as possible, with international companies being among their primary targets. An international company experiencing any measure of business success will likely encounter a patent troll at some point. It is important for international companies and their counsel to be familiar with patent trolls, how they operate, and how to defend against them.
Correspondence: * Maxwell J. Petersen is a partner at Pauley Petersen & Erickson located in Northwest Suburban Chicago, and can be reached at mjp{at}ppelaw.com. The views expressed here are those of the author, and may not reflect the views of the firm. Email: mpetersen{at}ppelaw.com