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Alliance Center for
Intellectual Property Rights


PATENT TROLLS: TURNING INTELLECTUAL PROPERTY INTO A LITIGATION GOLDMINE

May 15, 2025

*Mr. Sachein V. G.

INTRODUCTION

Patents under intellectual property are designed to protect the rights of the inventors and to encourage more innovations to be made. However, this concept of “Patent troll” has influenced the patent system into a litigation business. Even though the term “troll” has different explanations, “patent trolls” refer to those who use patents for the sole purpose of collecting licensing fees and other amounts gained through patent infringement committed by different companies. This makes the tasks of product producers difficult and hinders the entry of new technology into the market, causing issues such as lower innovation, resource drain, and more.

PATENT TROLLS AND THEIR IMPACT

Patent trolls are generally companies that buy patents not to produce products but to make money through licensing and filing lawsuits against those companies that infringe their patent rights. The target is mostly on startups, tech companies, and small businesses.

Patent trolls use a basic business model, but it can be very harmful. To begin with, they are assigned patents, generally used for filing for those businesses that went bankrupt or by putting out very broad claims. Such patents may be about common techniques or processes that make infringement claims from third parties simpler. The possible targets are usually companies working with similar technology. The companies are threatened with letters to make the payment and if the companies fail to do so, then the companies are threatened with lawsuits. A lot of companies, especially those not very large, decide to pay upfront to avoid ending up in lawsuits about claims they feel are unfair. If the company opposes the troll, the troll will move forward in court, as the threat of legal costs can usually make the company agree to a deal.

RAISE OF PATENT TROLLS:

Typically, patent trolls gain patents that are too unclear or broad, sometimes getting them from companies about to go bankrupt or making suspicious patent claims. Thereafter, organisations find such companies by using similar tools and send notice letters demanding money before proceeding with a lawsuit for non-payment of fees. Because litigation could cost a small company over $1 million per case, they often select a settlement over fighting the case, even if they feel the claims are invalid. The business works well for patent trolls since they risk little, since they do not produce products. This being the reason, there is now a thriving industry in which certain companies only pursue patent lawsuits. One survey showed that 67% of all patent lawsuits in 2020 were started by NPEs.

LEGAL REFORMS AS A DEFENCE:

Strong safeguards against frivolous patents include tough patentability rules (in Section 3(d)), pre- and post-grant oppositions, and the rights to compulsory licensing in India. Yet, the risk of patent trolling remains, specifically in pharmaceuticals and tech, with courts still scrutinizing patents closely and high legal fees leading to many unfair settlements. Firms should react to patent trolls by tracking new patents, contesting invalid patents before they are granted and challenging granted patents using section 64 of the Patents Act. By working with industry groups such as the Indian Pharmaceutical Alliance (IPA) and technology alliances, pharmaceutical companies can combine resources to protect themselves and the industry. Even though trolling is discouraged under Indian law, obstacles with court delays and ineffective responses continue to be a problem. If fast-track invalidation processes and lower legal costs from alternative resolutions are adopted, it will be harder for people to abuse patents and easier to keep true inventions safe.

CONCLUSION

Due to “patent trolls”, what is supposed to be a system for safety is now a way to exploit the law. Although some recent efforts have been made, the issue remains, costing a huge amount of money to productive businesses every year. We must adjust laws further and expect corporations to be careful, and it is especially important to rethink how we regard intellectual property rights. As long as this is the case, patent trolling will bring plenty of profit while being destructive and mainly involving lawsuits. Organisations must learn about possible patent issues, get involved in dealing with them and support reforms to fix how patents are used.

REFRENCES:

  1. Tina M. Nguyen, Lowering the Fare: Reducing the Patent Troll's Ability to Tax the Patent System, 22 FED. CIR. B.J. 101 (September 2012).
  2. Terrence P. McMahon, Stephen J. Akerley & Jane H. Bu, Who Is a Troll: Not a Simple Answer, 7 SEDONA CONF. J. 159 (2006).
  3. Adam Copeland, Fighting Patent Trolls Early: Learning from the United Kingdom in Our Scramble to Determine the Correct Pleading Standards for Direct Patent Infringement, 21 WASH. U. GLOBAL STUD. L. REV. 293 (2022).
  4. Kanishk Kumar Sinha & Vivek Kumar, Comparative Analysis of Patent Trolls in Different Countries, 5 INDIAN J.L. & LEGAL RSCH. 1 (2023).
  5. Jeremiah Chan & Matthew Fawcett, Footsteps of the Patent Troll, 10 INTELL. PROP. L. BULL. 1 (Fall 2005).

Author:
* Mr.Sachein V.G.,
4th Year, B.B.A. LL.B. IPR (Hons.) Student, Alliance University, Bengaluru

Disclaimer: The opinions expressed in the article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of the Alliance Centre for Intellectual Property Rights (ACIPR) and the Centre does not assume any responsibility or liability for the same.