PlainSite targeted Intellectual Ventures, which it claimed is the "archetype of the Patent Troll," and searched the USPTO database for shell companies.
We combed through 15GB of this data and linked up every patent assignment with the PlainSite entity, law firm and attorney databases to create an improved version of the USPTO assignment database, which we've made available for free. Then we tagged all of the companies that have links to attorneys and mailing addresses frequently used by Intellectual Ventures. The resulting list is about 2,000 companies. We have not verified that each and every company is definitely a shell corporation for Intellectual Ventures (doing so would be prohibitively expensive), but some obvious overlaps are apparent: managing corporations, telephone numbers, and other factors.
Formally called "Non-Practicing Entities," trolls are notorious for saddling businesses with patent lawsuits--in 2011, U.S. companies lost more than $29 billion in legal fees and settlement costs, according to a study by the Boston University School of Law.
The study also found that trolls target mainly small and mid-size companies with average annual revenue of $10.8 million.
"Receiving a demand [from a patent troll represents] a death knell for a prefunded company. No one wants to invest in a company where founder time and investor money is going to be bled to patent trolls," said Colleen Chien, a law professor Santa Clara University, in her research paper "Startups and Patent Trolls."
When troll Alice Corps sued CLS Bank in early December for patent infringement, eight companies--including tech giants Facebook, Intuit and Google--filed an amicus brief. The companies asked the USPTO to "reject the notion that technology patents can be issued on what amounts to little more than an abstract idea."
Because they do not produce anything, trolls can't be sued for patent infringement, patent attorney Eugene R. Quinn Jr. told Inc.recently. "The best business to be in right now is being a patent troll, and that sucks. They've got nothing to lose. That's the problem."