Patent Trolls: Drain on Innovation or Defense of Invention?

Imagine you've developed an innovative product for a competitive market. One week after you launch the product, a lawyer contacts you. His client, a company you've you never heard of, claims a small but essential component of your product infringes a patent they own. Unless you settle for a licensing agreement, you'll find yourself in court in East Texas within a year.

Depending how you look at it, you're either learning how the U.S. patent system protects inventors or you're face to face with a so-called "patent troll."

Reform advocates including the Washington, D.C.-based Business Software Alliance say current patent law makes innovation industries a shooting gallery for companies whose sole business model is to acquire patents and extract licensing income from companies trying to bring products to market. But supporters of this practice say such firms are merely helping small-time innovators protect their rights.

One of the most famous cases occurred in 2006, when Virginia-based patent-holding company NTP Inc. nearly brought Canadian Blackberry maker Research In Motion to its knees with a patent lawsuit over a component of RIM's hot-selling mobile device.

In June, California patent holder Acacia Technologies Group sued the medical device manufacturer Boston Scientific Corp. over a catheter technology. Like many patent lawsuits, Acacia's claim was filed in East Texas, where federal court dockets are uncrowded and juries have reputations for generously rewarding successful plaintiffs.

A Boston Scientific spokesman declined comment, citing ongoing litigation. Acacia, a company that last year earned $111.3 million from patent licenses, its sole business, did not return calls seeking comment.

But this is how a patent troll preys on manufacturers, say patent reform advocates - waiting concealed like the mythical beast for opportunities to exact unmerited tribute from innocent passers-by. In most cases, the term is unfairly loaded, say some intellectual property lawyers.

"A patent troll, I think, is whoever is suing my client," said Boston patent attorney Bruce Sunstein, co-founder of the firm Bromberg and Sunstein LLP. A more neutral term might be "patent investor." Companies that buy patents and assert them can be a boon to the small-time inventor, who doesn't have the resources to assert a patent alone, Sunstein said.

Without so-called patent trolls, it would be hard for inventors to get paid for their work, he said.

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