Patent trolls’ bread and butter for years was going after large corporations. They would buy patents from inventors, auction houses or bankrupt businesses and then file infringement suits against large businesses with a regional or national reach. These patent assertion entities would then find a specific court they saw as sympathetic to their viewpoint and ideally litigate their case and squeeze a lot of money out of a business.
Change in law
The Supreme Court changed this approach in a unanimous 2017 decision that stipulated that the case must be handled in the state where the defendant resides instead any jurisdiction where they did business – thousands of miles from us here in The Triangle, the Eastern District was particularly famous for going after tech companies. This change reduced the chances of success, increased expense and reduced the paydays.
A shift in tactics
This change in law has led to a shift in tactics. The trolls have turned their suits on smaller companies and startups. They now will often send hundreds of letters with the simple proposition of making a one-time payment of a modest amount for a permanent license and dropping the lawsuit. From the small business defendant’s point short-sighted point of view, it would be cheaper than litigation and make the problem go away. From a business perspective, a suit takes focus away from making a product or building a business.
Do not panic
Large corporations get sued all the time, but smaller companies may get spooked by the notice. The key is to stay calm. It is well worth the time for a business owner or manager to consult with a knowledgeable intellectual property attorney who has experience with patent trolls. They are generally looking for easy marks instead of a business willing to protect their long-term interests. Even if the case does have merit, an attorney can often negotiate or litigate terms that more than compensate for the expense of hiring them.