Who are patent trolls and whether to be afraid of them

Who are patent trolls and whether to be afraid of them


In order to understand better what a patent troll is and how it is dangerous for an honest entrepreneur, let us look into etymology and history.

Ordinary Scandinavian Troll (from the Swedish word "troll" – fascination, witchcraft) – a supernatural being from Norse mythology. Date of birth - from the appearance of the first fairy tales. Usually hostile to human beings, lives under the bridge, earns living by charging for the passage.

American Patent Troll – a quite real being, but equally malicious. Date of birth – 1993, father progenitor – ex-lawyer of Intel Company - Peter Detkin, called TechSearch company and its lawyer Raymond Niro, harassing Intel for patent infringement as the patent troll. His definition of them as "persons trying to make a lot of money out of the patents they do not practice and do not intend to practice" was similar to the behavior of an ordinary troll, shamelessly charging a bribe for a bridge it does not own, and therefore the term promptly got accustomed, and since 1993, patent trolls were called all the persons engaged in aggressive patent harassment.

How the patent trolls act

The purpose of their activities is as follows: having received by any possible means, to be discussed below, a document on patent protection, the patent troll makes claims to the manufacturer of the goods for violation of exclusive rights in the patent, requiring either to pay for the use, or to buy them for an impressive money amount. As a result, the original manufacturer can either agree to the proposals, or try to bring a fight and cancel the patent.

Taking into account that the cost of any legal services in the United States is extremely high, it is often more profitable for the manufacturer to buy the troll off, than to wage a large-scale and prolonged war with it, this caused the widespread occurrence of patent trolls existing for up today despite the efforts of the authorities.

Russian Patent Troll is a relative of the American one, focusing mostly on trademarks (however, only for the reason that patenting in the Russian Federation is much less intensive compared to the United States). The date of birth was determined approximately at the end of the 90's/beginning of 2000. The action principle is the same – to find "gaps" in the legal protection of third-party intellectual property, to register it in its name, to persuade the original manufacturers to pay money for allegedly illegal use of the patent.

The tactics of the patent troll are slightly different depending on whether a patent or a trademark will be the subject of future terror, so let's look at each of them separately.

Patent troll

So, a Russian patent troll specializing directly in patents usually follows one of the ways described below.

Option 1: The troll monitors the market for future appearance of new products from large companies, finds and buys a suitable "dormant" patent from small businesses, waits for a major manufacturer to enter the Russian market with a new product, and makes a claim.

Option 2: The troll acts ahead of the original manufacturers and developers in patenting their new technologies, and, taking advantage of the delay, gets a patent in its name. Such patent trolls are often generated from the former employees of the manufacturer developed such a new technical solution and failed to get proper recognition from the employer.

Option 3: The troll analyzes the intellectual property of enterprises engaged in production of so-called "complex innovations", i.e. the products consisting of many elements, each to be protected by a separate patent, and looks for "gaps" in such patenting. As a result, if one of the elements of a complex product was not protected by the corresponding patent in time, have no doubt - the patent troll will try to correct it and return with a claim.

Trademark troll

The tactics of sabotage of Russian patent trolls for trademarks are even more diverse, and consist in the following.

Option 1: In a similar to patents manner, the troll analyzes the Russian market for the nearest appearance of "novelties" from abroad, and preliminary registers trademarks of foreign manufacturers in its name. As a result, a company wishing to enter with a new product immediately faces the claims from a patent troll and the available ways to satisfy them. The similar problem occurred, for example, with the well-known STARBUCKS coffee chain, when planning to open a chain in the Russian Federation, they found a trademark registered in the name of a patent troll that was identical to their own designation, and spent a lot of time and money to cancel it.

Option 2: The troll registers widely used designations with low originality in its name (for example, MALYSH, SKAZKA, MIR), and, as a rule, in respect of all possible goods and services, whereupon the troll patiently waits:

A) when a nothing expecting manufacturer starts to use them and then receives a claim for violation of the exclusive rights;

B) for attempts by a third party to register the designation as a trademark, failing due to the opposition of the troll trademark.

Moreover, when acting under Option A, the troll, usually, demonstrates exceptional patience and waits for the start of large-scale production of the goods using the trademark. Taking into account that according to the Civil Code of the Russian Federation, the compensation for the unlawful use of a trademark can be calculated, inter alia, based on a double cost of counterfeit goods, the troll artificially inflates the scope of violations, such that the amount of compensation becomes so great that the idea of "pay off" does not seem so bad for manufacturer.

Option 3: The troll analyzes the existence of legal protection of intellectual property of original manufacturers. It may seem extraordinary, but often even major business players do not pay enough attention to registration of their commercial designations as trademarks, provoking a patent troll to attack.

Option 4: The troll buys out early trademarks from small businesses, then finds confusingly similar later trademarks of major companies being under attack. A good indicative example is the case concerning the trademark of the booking service OSTROVOK.RU that was canceled on the basis of its confusing similarity with the earlier trademark OSTROV that was purchased for nothing by a well-known patent troll from Ufa intentionally for the attack. The cost of an amicable settlement of the dispute declared by the troll was 2.5 million rubles. We have managed to restore the legal protection of the trademark of OSTROVOK.RU company having made a decision to fight back against the troll only in the Intellectual Property Court.

Option 5: The troll cancels trademarks of well-known companies on non-use grounds. An example is the case concerning "LENINGRADSKOE" trademark of BALTIKA Company, which, having temporarily suspended the manufacture of beer of the same name, almost lost its trademark and in order to reserve it had to pay off the troll 200,000 rubles.

With slight variations, it is possible to invent options 6, 7, 8 and so on, but it is better to apply the possible means of protection against malicious attacks of patent trolls.

Unfortunately, they formally act in a lawful manner, so it is quite difficult to hold the trolls liable, and all actions of the injured parties are focused on eliminating or mitigating the consequences of the attack, but not on chasing the troll.

Protection against patent trolls

For the purpose of protection, all those who faced an attack from patent trolls can be advised the following.

If the troll's claim is based on a patent, we recommend:

1. To check the actual violation (since often the claims are sent as bulk messaging, as "hit or miss").

2. If the violation exists, evaluate the "viability" of the patent, since most trolls have patented solutions and products having no originality or novelty, which is the basis for cancelling the patent.

If the claim is based on illegal use of the trademark, we recommend:

1. As in the patent case, assess the actual existence of the violation.

2. Try to terminate the troll trademark on non-use grounds. This counter effort is often effective because, as mentioned earlier, patent trolls usually only accumulate the trademarks, but do not use them.

3. Check the existence of other grounds for cancellation of the troll's trademark registration.

The advantage of revoking a patent or a trademark is that their legal protection is recognized as invalid retrospectively, i.e. as if these objects never existed, this measure immediately relieves the headache of the injured parties.

The disadvantages of this measure include the impossibility to impose costs for consideration of cancellation cases upon the previous copyright holder, even they are successfully completed.

If the cancellation is not possible, the only thing the injured parties can do is to prove to the court that the actions of the plaintiff - the patent troll - show the evidence of abuse of rights, which, according to Article 10 of the Civil Code of the Russian Federation should be the grounds for refusal of legal protection.

Average reliability option for the Defendant. On the one hand, all patent trolls are known to the courts of the Russian Federation by sight, and, for obvious reasons, have little respect for. On the other hand, the abuse is an issue very subjective and difficult to prove, and often the court, even if it feels something is wrong, is unable to support its guesses with sufficient evidence. Resulted in the decision not in favor of the defendant and the triumphant injustice.

So it turns out that the best way to be protected against a patent troll is a good relationship with your partners and employees who will not take offence and turn into patent scum, strict registration of all more or less valuable intellectual property, and, most important – prompt (to be understood as advanced, when first of all creation, then registration, and only then entering the market) registration of patents and trademarks.

And such a kind and prudent entrepreneur will find his business happiness and a passage across all bridges free of charge.
The Articles is published on b-mag.ru

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