In the lead up to a recent Stratford Publications CLE program that I gave regarding troll-proofing your business and defense strategies for troll cases, I received an interesting and earnest question about what a patent troll was. The question was unique in that it carefully laid out arguments on both sides and was not fueled by bias, so much as genuine intellectual curiosity. Since then, I have talked to various people that I respect on both sides of troll cases and come up with several definitions, none of which were satisfying to me. In the end, I always come back to what I call the pornography definition. I will come back to my definition, but first the definitions from the people I solicited:
1. Pure Troll: This is the narrowest of definitions. Trolls are patent-holders that do not produce their own products or use their own processes commercially. The definition excludes universities (which is somewhat universal), as well as solo inventors regardless of what the inventor has done to commercialize her inventions. The support for the inventor exclusion is generally supported by pointing to Thomas Edison.
My concern with this definition is that excluding all solo inventors is too broad for two reasons. First, a solo inventor that makes no effort to commercialize her products or processes can certainly be a troll. This is particularly true if the inventor blankets industries with assertions and suits, or tries to wedge unrelated technologies into the infringement assertions. Second, as patent trolls become bigger business too many “inventors” have begun to prospect in patents. These inventors try to think a few years ahead and patent where they expect technology to develop into without truly inventing or any interest in building their invention, so much as licensing it.
2. Action-Based Troll: This defines a troll based upon how or how broadly the entity asserts its patent rights. Of course, the troll still needs to not have a business outside of asserting the patents. But proponents argue that licensing or suing without producing does not automatically make an entity a troll. What makes an entity a troll is the breadth of enforcement efforts.
This definition provides the appeal of objectivity without any clear objective limitations. Some say a patent-holding entity or a solo inventor becomes a troll after they assert against more than five entities or when they asssert, for example, a product claim against a retailer instead of the manufacturer or distributor who is the real party-in-interest. This definition has some facial appeal, but falls apart upon inspection largely because it is a subjective standard masquerading as an objective standard. As an example, if you are the fourth entity sued by a patent-holding company, it is hard to explain to your Board or C-level executives that plaintiff is not a troll because you are only the fourth entity sued. Furthermore, this definition would be equally faulty with two, three or ten assertion limits
3. No Definition: Many people, more than a few of them engaged by or employed by trolls, argue that the term “troll” is unseemly name-calling and that defining an entity as a troll or even an NPE is pointless and erodes civility. I speak from experience when I say that in-house counsel are disabused of this theory the first time a patent troll demand letter or complaint lands on their desk. When you see what the troll, without any stake in your industry, threatens to do to your company and how it harms your client and your company, it is clear that the troll definition is necessary and serious. Allowing trolls to be combined with traditional companies asserting their patents against competitors, does not make sense. There are clear and important differences for retailers, and knowing whether a plaintiff is a troll can help the retailer.
4. Industry Troll Exclusion: This is not a whole definition, but is an important exception to any definition. Increasingly, companies are, either on their own or in industry groups, pooling patents in separate entities to enforce their patent rights. In some cases, the individual companies or the industry groups have even gone out and purchased patents from others. Where these entities are pursuing their competitors and leaving retailers and other later links in the supply chain alone, there is a decent argument that these entities are not trolls. An example of such an entity would be RPX. Of course, these entities could cross over and become trolls.
Having looked at some common definitions and identified their flaws, I turn to my pornography definition. The definition comes from the Supreme Court’s definition of pornography: I know it when I see it. This definition allows for the good parts of the Action-Based Trolls definition without its rigidity, as well as for the Industry Troll Exclusion. But neither is rigid, so the definition allows to correct for particular instances of a particular patent plaintiff/troll.