As any entrepreneur or business owner will tell you, a patent assertion entity (PAE), aka Patent Troll, can be a serious annoyance--which is putting it very lightly. Besides causing you a migraine and giving you high blood pressure, patent trolls are actually quite detrimental to innovation and the economy.
Research studies cited by the White House and the Congressional Research Service have found that patent litigation reduces venture capital investments for startups, as well as reducing R&D spending. Catherine E. Tucker has conducted research that found that "lawsuits can distract management from developing new and innovative products, and may cause them to ignore products targeted by lawsuits, in addition to the more obvious litigation cost." On top of that, it's also been estimated that patent trolls cost the economy $29 billion a year.
Since it seems patent trolls are a serious threat to entrepreneurs and business owners, how can you handle a PAE when faced with this challenge? Here are 12 tips to help you win the fight against patent trolls.
1. Don't Freak Out
I know. Easier said than done. After all, who wouldn't be concerned about a possible court appearance or costly settlement? The thing is, however, keeping your cool will give you a better chance of handling the situation. I mean how often have you been able to rationally face a problem head while emotional?
So, take a deep breath and chill. Your supporters won't leave you high and dry. And, the accusations could be completely frivolous.
2. Do Your Research
After you've had a chance to get back to homeostasis, it's time to get to work. The first place to start is by doing some research. Kevin O'Connor, who has had experience with patent trolls with FindTheBest, states on PandoDaily that you should find out as much as possible. He suggests you "dig through documents, court dockets, and websites to find out everything you can about the people behind the lawsuit."
By doing a little bit of investigating, you will have the knowledge to "come back armed and ready to win the war."
3. Don't Settle
O'Connor also recommends you don't settle. If you're 100% certain that the lawsuit is frivolous, then this is an absolutely necessary tactic. Why? Because if you're quick to settle just to get it over with, then chances are that you'll have more trolls knocking at your door. They want your hard-earned money, not your patent or business.
While you want to act as soon as possible, Colleen Chien - an assistant professor of law at Santa Clara University School of Law - discovered in a survey of 223 tech company startups that 22% of responders reported that they did nothing to resolve the demand.
I've had to deal with Patent trolls over the years. When I founded Due, I found that the only reason I was able to win was I didn't settle. I kept pushing through and putting things off. You can really rack up and draw out lawsuits with trolls. It's very frustrating and won't always win, but can discourage them to drop it or settle sooner.
4. Ask Specific Questions
Want to make your troll sweat bullets? Start grilling them on specifics. O'Connor used this technique when he was dealing with his patent troll. O'Connor states that he contacted the troll's attorney immediately when the lawsuit arrived. O'Connor "asked very specific questions about the case, the patent, the parties involved, and how our company was supposedly infringing." After not getting anywhere with the attorney, O'Connor reached out to the patentee and asked similar questions - which the patentee was not happy about.
As Eugene Kaspersky, Chairman and CEO of Kaspersky Lab, plainly states, "the main aim is to get from the troll clear and detailed explanations regarding how its patent might be being infringed, and to make it send you a claim chart with an explanation of all the terms (that is, definitions) used."
5. Use Online Resources
Patent suits can be lengthy, expensive, and exhausting. Thankfully, there are a number of online tools and resources to help you with the battle. One of the best places sources is the USPTO website that tells you what to do if you've been served an infringement notice or subpoena. You can also sham the troll by posting the letter on Trolling Effects or find out what previous legal actions the firm in question has taken through RPX Search or "Demand Letter Analytics" tool.
Another option would be to join your peers in the LOT ("License on Transfer") Network. This network aims to reduce patent litigation. How? GitHub describes the process as follows: "when any member of the LOT network sells a patent to a troll, or when a patent troll grabs hold of any member's patent by any other way, every other LOT member immediately receives a license to that patent."
6. Cry Poor
Since a majority of patent trolls are in it for the money, don't be afraid to tell them you don't have the resources to face either a costly settlement or court case. Colleen Chien suggests on TechCrunch that your lawyer share financial information regarding your business, on a confidential basis of course. Or, you could get in touch personally with the patentee that you don't have the cash to settle this problem. As Chien states, trolls won't "want to pursue costly litigation when there is no pot of gold at the end of the rainbow."
7. Expose the Troll
Remember, your troll just wants your money. Which means that they definitely don't want to be in the headlines. Whether you issue a press release, write a blog post, tell the world via social media or join a major print and ad campaign, make your story known. Not only will this help you gather support, it will also demoralize your troll.
Of course, you can't accomplish this if you sign a nondisclosure agreement - which you shouldn't. Once you do that you lose control of the situation since you won't be able to publicly call out your troll.
8. Prove the Claims Are Invalid
Kaspersky suggests you, "Look for contradictions in the patents, study all the examinations of them, and do a patent and nonpatent search for prior art." Actions like this may help you find enough evidence to have the matter settled - prior to walking into a courtroom. In short, to prove these claims are false, you need to have all your evidence lined up and ready to go.
9. Find Out Who Is Behind These Claims
If you've done your homework, then you probably already know who's behind the lawsuit. Furthermore, you also know who is representing your troll. Why is this important? Besides getting in touch with these individuals and asking them specific questions, it gives you some more leverage in fighting back. For example, if you discover that they have done this before, you can see how the matter was resolved by contacting the previous targets and attorneys.
10. Team Up With Other Companies
There's a very good possibility that you are not the only person being targeted. If this is the case, then you'll want to team up with other companies who are also being attacked by this troll - this isn't a major hassle since lawsuits are public records and you can check the court's docket.
This is beneficial because you can pull together resources, information, and even split costs for the lawsuit. In other words, instead of fighting this troll alone, you're battling them with an army.
Whether if it's for your attorney or the courtroom, you need to cooperate 100%. Always tell the truth. Produce documents when asked. Make sure there aren't any contradictions. Not only will the troll take advantage of these 'irregularities," it will also show that you have respect for the legal system.
12. Be Prepared
Of course the best way to deal with a troll is to be well prepared. This starts right from the beginning by making sure that the patent has absolutely nothing with your business. You also shouldn't share every aspect regarding your business, require website visitors to register before giving them access to more detailed information, and make sure you have everything legally and properly documented. You can even get insurance for patent suits through a company called RPX.
In short, take matters into your hands and be prepared before you have to face the headaches caused by patent trolls.