How do you deal with software patent trolls who threaten to sue you for infringement?

Software patent trolls are entities that acquire or assert patents without producing or selling any products or services based on them. They often target small businesses and startups with vague and dubious claims of infringement, hoping to extort a quick settlement or a licensing fee. How do you deal with these threats without wasting time, money, and energy? Here are some tips to help you protect your software business from patent trolls.

1 Know your rights

The first thing you should do when you receive a demand letter or a lawsuit from a patent troll is to consult a lawyer who specializes in software patent law. They can help you evaluate the validity and scope of the patent, the strength of the infringement allegations, and the potential risks and costs of litigation. They can also advise you on the best course of action, whether it is to ignore, negotiate, challenge, or settle with the patent troll.

Add your perspective

2 Do your research

Before you respond to a patent troll, you should do some background research on them and their patent portfolio. You can use online databases such as Google Patents, USPTO, or PatentScope to find out more about the patent's history, ownership, and litigation record. You can also look for prior art, which is any evidence that shows the patent's invention was already known or obvious before the filing date. Prior art can invalidate or limit the patent's claims and reduce the chances of infringement.

Add your perspective

3 Join a network

Another way to deal with patent trolls is to join a network of software companies that share information and resources to fight back against them. For example, the LOT Network is a non-profit organization that offers its members a legal protection from patent trolls. When a member sells a patent to a patent troll, the other members automatically get a free license to that patent. This way, the patent troll cannot sue them for infringement. The LOT Network also provides access to patent databases, legal experts, and litigation funding.

Add your perspective

Giacomo Russo

NITA Master Jury Trial Advocate & Board Certified Appellate Specialist at Computerlaw Group LLP, Entrepreneurlaw Group LLP; CEO/Founder, Florence Ventures; Chairman/FFCDR.com
Report contribution
The network will inform you of whether negotiation, mediation or other alternative dispute resolution (ADR) can be effective even in situations where: 1. The troll (or NPE) is uncooperative or aggressive: If a party directly or through counsel is unwilling to negotiate or takes an overly aggressive stance, it may be difficult to produce any satisfactory outcome without a Markman decision or other litigation win by summary judgment or stays pending PTAB proceedings. 2. The dispute is complex on liability and/or on damages: Plaintiff must prove all elements of validity, infringement, causation and damages. Can it do so? 3. Precedent is important: By litigating and securing a favorable court judgment, defendant can send a strong message.

Like

4 Consider alternative dispute resolution

Sometimes, it may be more practical and cost-effective to resolve a patent dispute with a patent troll outside of court. Alternative dispute resolution (ADR) methods such as mediation, arbitration, or settlement can help you avoid the uncertainty, complexity, and expense of litigation. ADR can also preserve your business relationships and reputation, as well as save you time and stress. However, you should be careful not to agree to any terms that are unfair, unreasonable, or restrictive for your software business.

Add your perspective

Giacomo Russo

NITA Master Jury Trial Advocate & Board Certified Appellate Specialist at Computerlaw Group LLP, Entrepreneurlaw Group LLP; CEO/Founder, Florence Ventures; Chairman/FFCDR.com
Report contribution
ADR can succeed in situations where: 1. The parties are willing to negotiate: For example, if a small software company is approached by a patent troll claiming infringement, the company might be willing to enter into a licensing agreement or pay a reasonable settlement amount to avoid litigation costs. 2. The dispute is relatively simple: In these cases, a neutral third-party mediator or arbitrator can help the parties reach a resolution without the need for a lengthy trial. 3. Confidentiality is critical: For example, a high-profile software company may prefer to resolve a patent infringement claim through ADR to avoid adverse publicity and risks to reputation or other competitive harm.

Like

5 Educate and advocate

Finally, you can deal with patent trolls by educating yourself and others about the impact and challenges of software patent law. You can learn more about the current laws, policies, and reforms that affect software innovation and competition. You can also advocate for changes that would limit the power and influence of patent trolls, such as stricter patent quality standards, lower litigation costs, and higher damages for abusive practices. You can join or support organizations that lobby for software patent reform, such as the Electronic Frontier Foundation or the Software Freedom Law Center.

Add your perspective

Wayne Scott

Regulatory Compliance Solutions Lead @Escode (an NCC Group company) | Global Financial Services Regulations - Resilience - Non-cyber risk - stressed exit planning
Report contribution
Software escrow can be useful in these circumstances. Although primarily used for business continuity and disaster recovery purposes having your code stored with an independent third party can be used to show how and when the code was developed if deposited frequently.

Like

How do you deal with software patent trolls who threaten to sue you for infringement?

1

2

3

4

5

1 Know your rights

2 Do your research

3 Join a network

4 Consider alternative dispute resolution

5 Educate and advocate

Software Licensing

Rate this article

Thanks for your feedback

More articles on Software Licensing

More relevant reading