A patent troll is a business which does not itself engage in research, development or manufacture, but which seeks to make money solely be enforcing patent rights. In some cases the patent troll (also sometimes referred to as a Patent Assertion Entity, PAE, or a Non Practising Entity, NPE) may partner 50-50 with the patent owner and assume the patent owner's legal costs and risks. Because of the high cost of defending against a patent infringement suit, particularly in the US, defendants often settle without a trial, and such settlements may result in large payments to the patent troll.
According to a White House report issued in June this year, lawsuits brought by patent trolls has tripled over the last two years from 29 per cent to 62 per cent of all infringement suits. President Obama publicly addressed the issue of patent trolls on 4 June 2013, saying, "they don't actually produce anything themselves, they're just trying to essentially leverage and hijack somebody else's idea and see if they can extort some money out of them." President Obama directed the United States Patent and Trademark Office (USPTO) to take new measures to help stem the surge in patent-infringement lawsuits tying up the court system.
House Judiciary Chairman Bob Goodlatte has now released the second version of a discussion draft of an "Anti-troll Bill" aimed at reducing the incentives for what it describes as "abusive patent litigation".
Under the proposals, if a patent troll sues for patent infringement defendants would be able to require the real party with an interest to join the litigation, and if the patent troll loses, the defendant could collect costs from the real party of interest.
The bill would also limit discovery in order to reduce the costs of defending a patent infringement suit in the US.
One difficulty with developing new rules relating to patent trolls has been the vexed question of how to define a patent troll. One person's patent troll can be argued to be another person's champion of the rights of small businesses and inventors who lack the funds to enforce their patents themselves. Also even large companies which are involved in research and manufacture may also own patents which are not derived from their own research, and may also bring frivolous litigation.
However the draft bill seeks to avoid this problem by focussing on "abusive patent litigation" itself, rather than trying to define patent trolls and legislate against them directly.