As a business, it is up to you to know about the types of risks you are exposed to. One of them might be slightly unusual, but still something to be aware of. It is that is a patent troll.
A patent troll is when a person or organization falsely accuses you of being in violation of their own patent rights of a product or service, in order to try to get licensing fees from you. They are usually scam artists, though in rarer cases could even be an inventor, research organization, or a development firm. Follow this information for protecting your business against patent trolls.
What Patent Trolls Do
Someone who is called a patent troll is using patents as weapons. What they like to do is buy inexpensive patents from companies who are struggling or facing bankruptcy, who are desperate and just want as much money as they can get to stay afloat. These patents are usually for a broad idea, as opposed to something new and unique.
The scam artists will send letter to companies that are threatening them with litigation, trying to say that the company is infringing upon their patent. The letter is usually just asking for a licensing fee from the company, otherwise they will bring them to court. The fee can be thousands or hundreds or thousands of dollars. Unfortunately, companies often fall prey to this game because patent lawsuits can get very expensive and complicated.
Investigating the Claim
If you have received a letter about violating someone’s patent, the first thing to do is start investigating the claim. You should never should send money without knowing exactly what the money is for. Find out what the patent they claim is being used by your company, and if you actually infringed upon their property.
If you find that you did infringe upon it, check the document they sent to find out what can be done. If all they ask for is money and no other resolution, it is likely a patent troll.
You should also investigate the organization or firm that is making the claim against the patent rights, and find out who they are and how they obtained this patent. If you find that this organization often makes threats of litigations to companies but never follows through, it is best to ignore them.
How to Fight Against a Patent Troll
Getting a lawyer is also highly recommended at this point. The attorney will perform an investigating. You can also get in contact with the Better Business Bureau (BBB) to file a complaint against this person or firm, which may scare them off. There are also some states that are strictly against patent trolls, so by bringing up a claim with your local Attorney General office, it can also help put a stop to it.
Lastly, make sure you have the right protection for your company. Business insurance is vital, and should include all areas of protection, including general liability and crime insurance.
