In the 1990s, the "patent troll" carried a negative connotation, a person or company that aggressively enforced its patents through assertive lawsuits. However the troll of the 2000s translates into an entirely different hobgoblin.
Frenzy in the research, software and technology fields has ensued as forward thinking businesspersons are buying up struggling companies no longer solely for the product or idea itself, but for multiple strategic reasons.
In a defensive chess move to protect itself from its competitors, companies are being purchased for their collection of patents, in an effort to shelter themselves from competing companies' lawsuits. Most recently, Google wrangled a deal with Motorola Mobility for its 17,000 patents in an attempt to protect itself from competitors' potential lawsuits against companies who have purchased Google's Android software.
Conversely, Eastman Kodak is looking to sell its patents during a two-stage auction. Its lucrative patent settlements dried up recently prompting Kodak's sale. It is rumored that an undisclosed buyer may be interested in purchasing these patents for defensive protection. The speculation over this potential transaction resulted in a positive spike in Kodak's share price this week, closing at $2.69, a 26% increase.
There is also significant money to be made in the patent business. If it is diligent, a company that has acquired a patent portfolio can go about filing infringement lawsuits to defend its patents. Many times defendants will settle patent lawsuits due to the high cost of litigation or fear of jury verdicts. Consequently, due to the high prices of licensing fees and defending lawsuits, smaller independent companies or individuals have decided to simply throw in the towel rather than play the high stakes game.
So is the troll term misapplied? Are companies using lawsuits as a profit center? It appears there is still a great argument to be made between the terms "exploitation" and "opportunity" as it relates to the patent world.
