8 Lessons Every SME Should Learn When Dealing With Patent Trolls in the USA

By: Graham Maile
Director of Strategic Consulting

29th November 2017

It is estimated that 2500 companies were sued in 2016 by patent trolls in the USA and £6 billion was expended in litigation costs and settlements, according to US patent and litigation advisers, RPX.

As one of the largest and homogeneous markets in the world, doing business in the States can present many opportunities. But there are risks, not least being the target for alleged intellectual property infringement. It is not uncommon to be one of many companies being attacked in relation to the same patent and, in such situations, certain actions need to be taken swiftly. Often resulting in lengthy and arduous legal battles, the process of winning these lawsuits can last for months, if not years.

While positive steps are being taken to bring in legislation to curb patent suits and this ‘patent troll’ culture, this has created a chilling effect for small and medium-sized enterprises (SMEs) that do not have lawyers in-house to take the burden.

This can lead to many SMEs finding their top management being seriously distracted from running the business and potentially causing more financial loss than just the inherent legal costs. From years of consulting experience in the technology market, here are eight lessons to think about as an SME when dealing with patent trolls in the USA:

1. Be absolutely clear about the facts

Ensure you are not in infringement by comparing what you sell in the US against the claims of the patent(s) asserted against you at an early stage.

2. Don’t rely on a defensive patent portfolio

Trolls aren’t amenable to cross-licensing and will not be swayed by an existing patent portfolio, no matter how extensive.

3. Assess the consequences of mounting a challenge

Do this objectively by potentially involving people and advisors more detached from the issue.

4. Counter Attack

It is standard practice to respond claiming the patent is invalid, but proving it can be expensive.

5. Find out who else is being attacked

You may find an ally but just as importantly, you should learn something from the other defendants.

6. Have a US lawyer on stand-by

Because there is little time to react if you are subject to this, know who you can call quickly.

7. Factor in litigation or insurance costs

When trading in the US in a market that is often a target for legal action, always factor in these costs into your budget.

8. Make people aware

Ensure your development people know about patent infringement and ways to avoid it.

Find out more detail about this subject in my free whitepaper.

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

It is estimated that 2500 companies were sued in 2016 by patent trolls in the USA and £6 billion was expended in litigation costs and settlements, according to US patent and litigation advisers, RPX.

As one of the largest and homogeneous markets in the world, doing business in the States can present many opportunities. But there are risks, not least being the target for alleged intellectual property infringement. It is not uncommon to be one of many companies being attacked in relation to the same patent and, in such situations, certain actions need to be taken swiftly. Often resulting in lengthy and arduous legal battles, the process of winning these lawsuits can last for months, if not years.

While positive steps are being taken to bring in legislation to curb patent suits and this ‘patent troll’ culture, this has created a chilling effect for small and medium-sized enterprises (SMEs) that do not have lawyers in-house to take the burden.

This can lead to many SMEs finding their top management being seriously distracted from running the business and potentially causing more financial loss than just the inherent legal costs. From years of consulting experience in the technology market, here are eight lessons to think about as an SME when dealing with patent trolls in the USA:

1. Be absolutely clear about the facts

Ensure you are not in infringement by comparing what you sell in the US against the claims of the patent(s) asserted against you at an early stage.

2. Don’t rely on a defensive patent portfolio

Trolls aren’t amenable to cross-licensing and will not be swayed by an existing patent portfolio, no matter how extensive.

3. Assess the consequences of mounting a challenge

Do this objectively by potentially involving people and advisors more detached from the issue.

4. Counter Attack

It is standard practice to respond claiming the patent is invalid, but proving it can be expensive.

5. Find out who else is being attacked

You may find an ally but just as importantly, you should learn something from the other defendants.

6. Have a US lawyer on stand-by

Because there is little time to react if you are subject to this, know who you can call quickly.

7. Factor in litigation or insurance costs

When trading in the US in a market that is often a target for legal action, always factor in these costs into your budget.

8. Make people aware

Ensure your development people know about patent infringement and ways to avoid it.

Find out more detail about this subject in my free whitepaper.

Save

Save

Save

Save

Save

Save

Save

Save

Save

Further Reading