Feature
The Unified Patent Court:
A bridge across
the Atlantic for
patent trolls?
Traditionally, patents have been used by manufacturers to protect their
products, or by product designers without manufacturing facilities who are
interested in licensing their patents to manufacturers. In recent years, however,
another type of organisation has come to the fore, acquiring patents despite
the fact that they have no interest in manufacturing or developing products.
In contrast to other non-practising entities such as universities and research
organisations, these organisations (known as patent assertion entities or PAEs)
are not even interested in researching and designing new products. Instead,
the sole ambition of PAEs is monetising their patent holdings by extracting
licences under the threat of litigation. This behaviour has earned PAEs the
derogatory name ‘patent trolls’.
10
IPreview
summer
2015
PAEs have always tended to spring up around innovative new technologies. Even the railway
had a problem with PAEs when first invented. The broad patents typically granted in the early
days of a developing technology are particularly attractive, because their broad scope means
that they may be infringed by a wide range of activities and organisations, thereby giving a PAE
a large number of potential targets to pursue. They have been a particular problem in the USA,
because legal conditions there have allowed PAEs to thrive. In US patent cases, each side pays
its own legal costs, reducing the risk for the PAE while increasing the incentive for a company
threatened with litigation to settle out of court. Additionally, the US Patent Office has, at least
historically, been willing to grant patents relating to business methods, and such patents are
now a favourite weapon of US PAEs.
A variety of PAE-friendly courts, aided by the patent cases being heard in front of a jury of lay
people with no patent expertise, has seen PAEs enjoy a 75% success rate in some courts, such
as the District Court of East Texas and Tampa in Florida, which have capitalised on the growth
of the PAE industry. In such conditions it is easy to see why an estimated 100,000 companies in
the United States were contacted by PAEs in 2013, whilst in 2011 some $29 billion was handed
over to PAEs.
