What To Do If You Get Sued By a Patent Troll

Originally posted on May 3, 2017 @ 7:21 am

Ever had a patent troll come after you with a lawsuit? Then you know the huge headache it causes.

It’s more than just an inconvenience. It hurts your business.

You probably feel helpless and alone in this. You’re not!

Patent trolls are also known as “patent assertion entities.” They love to target small startups.

However, medium and large companies can be targets too.

These trolls hurt innovation. They take down businesses for no reason other than lining their pockets.

Research shows that patent trolls cost the economy $29 billion dollars a year.

Your business and livelihood are at stake. This is scary, but it’s important to stay calm and do your best to fight these people.

Protecting your patents is incredibly important – especially when it comes to lawsuits. Read here to learn about what to do if sued by a patent troll.

Patent trolls sometimes send out mass mail out letters about a patent infringement

These are also known as “demand” letters.

They do this to try to get you to make a licensing deal.

The trolls send these letters out to a lot of startups. They’re hoping that a few will take the bait.

Trolls might also file a lot of lawsuits against several companies to get them to cave to a licensing deal.

The fee for these licenses can be upwards of $50,000 or more!

They usually take this money to fund lawsuits against biggest companies.

If either of this happens to you, stay calm.

You have a few options. Ignore the letter, write back with reasons why there is no patent infringement, or settle with a licensing deal.

They are counting on you settling with a licensing deal to get them off your back.

Of course, you should first consult with a patent lawyer to decide the best option.

But, settling could open you up to other trolls trying to take advantage of you.

You probably don’t have the money to fund future lawsuit defenses.

Consider explaining to the troll that you don’t have much money

When a patent troll comes after you, their goal is for you to settle.

They name a price based on the highest amount they think you’ll be able to pay.

They’re hoping you’d rather settle for this amount than spend more in court.

This usually works for them. According to research, 90% of cases are settled before trial.

If you’re a smaller business, you can try claiming you have no money to give them.

You’d say you don’t have the money on hand to settle.

And if they took you to trial, you’d never be able to pay the amount they might win.

You can try to convince them of this by sending them a lot of information. Copies of bills, how much money you owe in loans, etc.

Hopefully, with this strategy, they’ll get annoyed. They’ll figure the small amount of money they might get from you won’t be worth the trouble.

They aren’t really trying to protect their patent. They just want your money. If you have none to give, there’s nothing in it for them.

If this doesn’t scare off the troll, you’ll have to start fighting.

Do all the research you can on whoever is suing you

You’ll feel even more in control the more information you have.

First, look into who is bringing the suit. Look into their history and see how many businesses they’ve sued.

Figure out which cases were settled. For how much?

Do research on which cases went to trial. Did they win or lose the case?

Next, figure out all the details of their patent.

Then follow up by sending them lots of questions. Demand a detailed claim sheet of the patent infringement.

The goal is to be as annoying as possible. Make this not worth the trouble for them.

You must reply to them within 30 days. Expect a lot of back and forth between you. Keep a detailed record of this.

Take all this information, and go through it with your lawyer. Decide from here what your next steps will be.

Best case scenario is by now you’ve scared the patent trolls and they drop the suit.

If not, all this information gives your lawyer more to use against them in a trial.

Hopefully, it won’t come to a trial. Trials are drawn out, expensive, and tedious.

In some cases though, it might not be a bad idea to go to trial. Especially if you have other companies on your side.

If you go to trial, consider joining forces with other startups

Going to trial is very expensive. On average, it costs companies $3 million to defend this kind of suit.

If you’re a new company, losing this amount of money can be devastating. You might have to decide between settling or losing your business.

When you’re sued and you can’t afford to go to trial, stop before you settle.

Patent trolls go after many companies at once over the same patent.

Joining forces with other small companies could be a big help to fight these patent trolls.

Look into which startups are also being targeted. It’s easy to do since lawsuits are public record.

Reach out to them and see if they’re open to teaming up.

You could trade information on the patent trolls so you both have stronger cases.

Maybe consider sharing legal counsel and splitting the costs. This won’t just relieve some of the financial strain. It could scare the patent troll into dropping the suit.

If it doesn’t, you can afford even better lawyers with your money pooled together.

While these companies might be in competition with you, it’s worth putting that aside.

Together, you can all try to expose the patent troll

If you team up with other companies, you can put everyone’s strengths to good use.

For example, you might have a lot of information on the patent troll that they don’t have.

And they might have a huge social media presence that you don’t. Perhaps they have access to the media in a way that your company doesn’t.

You can really use that to your advantage.

Patent trolls are just coming after you for money. They don’t have a product or business to promote.

They’re targeting businesses just for their own gains and hurting the economy in the process.

That doesn’t make for very good press.

The last thing they want is to be exposed. Trolls want to do their work in the dark.

So take all that information you gathered earlier. It’s going to come in handy again!

Go to any publication you can. Contact news organizations.

The more information you have to give, the better the story will be. That means the more likely the story can go viral.

Groups of companies have created marketing campaigns targeting trolls.

Going to the public can help your case. It might also prevent these trolls from targeting others in the future.

For the future, learn from this and don’t let yourself be a target again

Once you fight off a patent troll, there could be another waiting around the corner.

There’s no cap to how many times you can be targeted by a patent troll. That’s pretty scary.

Make sure you protect yourself for the future.

First, if you’ve had a big win in your last suit from a troll, let everyone know.

Go back to the media outlets you reached out to before. Have them report on how hard you crushed the troll.

Write a blog about it. Do what you need to make sure that when a troll searches your company, they find that story.

This probably will scare them off from targeting you. They don’t want to bother with a company who’s ready to fight hard.

It’s also a good idea to keep up with patent trends. This is especially true if your business is thinking about filing another patent.

The United States Patent and Trademark Office has a search engine you can use. Called a Freedom to Operate search, patent lawyers can compare your patent to another.

It will show if your patent could be compared to an existing patent. If it can, then this could be a clue that trolls might go after you in the future.

From there you can decide if you want to go forward with your new patent.

If you do, you can get ahead of these trolls. You’ll know they’re coming before they do.

Another option is to get insurance against patent lawsuits. If you do have to fight again, some of the money you spend will be covered.

Are you currently being sued by a patent troll?

Did you find these tips useful?

Let me know in the comments!

Want to learn more about patent infringement?

Read our other blog, So What Exactly is Patent Infringement, Clearly Explained.

Are you the victim of a patent troll or have a question about a patent?

I’m a patent law attorney serving the San Francisco Bay area. Let’s schedule a time to talk about your intellectual property needs.