Patent trolls – “non-practicing entities,” which are companies that acquire patents with little or no intention of doing anything with the patents except to hunt down and sue patent infringers have received much criticism and little love. President Obama has gone so far as to say "They don't actually produce anything themselves. They're trying to essentially leverage and hijack someone else's side and see if they can extort some money out of them."
Patent trolls generally have the legal right to sue, but these kinds of lawsuits cause much consternation and expense on the part of the companies that are sued. No one likes to be sued and it seems being sued by a troll is particularly galling. Whether non-practicing entities are consistent with incentivizing innovation is a legal, social, and business issue of considerable importance.
A patent litigator colleague once told me that patent litigation is the “sport of kings.” Copyrights are generally nowhere near as expensive to litigate as are patents. Further, damage awards are generally nowhere near as high or as regal.
Why are there so few copyright trolls – not enough really to even merit a presidential rebuke? For one thing, the value of a copyright is often very small and not the millions of dollars that, say, a telecommunications or smart phone patent might be worth. Litigating on minor copyright infringements might not be worth the effort because damages might be just a few thousand dollars, even with the possibility of an attorneys’ fee award for the successful plaintiff.
There have been some attempts at copyright trolling; I’ve seen a few. I’ve participated in defending lawsuits by the former well-known copyright troll, Righthaven, whose plan to sue bloggers and others who posted newspaper stories and other materials ultimately fared poorly. http://arstechnica.com/tech-policy/2013/02/remember-righthaven-on-appeal-copyright-troll-looks-just-as-bad/ (I’m a copyright litigator when I’m not negotiating deals or writing blogs.)
Righthaven’s tactics were to sue alleged infringers and, in my empirical view, to seek to obtain quick settlements -- and then move on. Some of the defendants fought back and Righthaven took some heavy hits.
The main action in the copyright trolling community now seems to be in adult or porn cinema. A handful of law firms are suing – or threatening to sue – companies and individuals for uploading or downloading adult movies. The law firms assert that they have evidence through Internet Service Providers or otherwise that the potential defendants have had access to the adult films. Copyright protection is judgment neutral. An adult film is just as entitled to copyright protection as a family-friendly film. Strategically, the copyright owners count on the embarrassment factor to obtain quick settlements. In other words, the potential defendant may not want the bad press of having access to a pornographic film with a salacious title – and might settle quickly.
As happened with Righthaven, there is enormous pushback. See just one example: http://arstechnica.com/tech-policy/2013/03/angry-judge-calls-porn-trolls-bluff-orders-entire-firm-to-court/
So if you receive a letter threatening you or company for such activity, the first thing to do is to try to independently verify the truth of the allegation. Second, is to decide whether to fight, give in and settle, or just wait it out. It’s fair to say that so many of these cases have been filed in federal courts, that the shock or embarrassment value may not be all that high at this point. Still any claims of alleged copyright infringement of this kind take time and money to deal with in terms of in-house and outside lawyers, IT department resources, and more. As with Righthaven, the fight between copyright trolls and potential (or actual defendants) has been engaged, and there can be numerous defenses.