October 16, 2014 Articles

Patent Trolls: Can You Sue Them for Suing or Threatening to Sue You?

Victims of abusive patent assertion tactics may have the option of turning the tables

By Bradley P. Nelson

Much of the recent discussion about dealing with abusive litigation and licensing campaigns by so-called patent trolls and other non-practicing entities (NPEs) has focused on one of two things: (1) legislative attempts in Congress and the states to pass new laws, or amend the Patent Act, to make life more difficult for trolls; and (2) court decisions such as the Supreme Court's recent opinions in Octane Fitness and Highmark, which significantly relaxed the standard for awarding attorney fees under 35 U.S.C. § 285 against anyone, including trolls, accused of filing meritless cases or engaging in abusive litigation tactics. Often overlooked is a third category—whether a party subjected to a suit or licensing campaign by a patent troll may have a basis for going on the offensive, by asserting claims or counterclaims seeking damages or other relief. That third option is the subject of this article.

Companies facing threatened or actual lawsuits by patent trolls are often in a difficult position, one that many patent trolls intentionally create and exploit. As part of their strategy, trolls typically try to leverage the high cost of patent litigation into profits for themselves by (1) asserting patents against persons who have a relatively low stake in the accused infringing activity and, thus, less incentive to fight; and (2) settling with as many targets as possible for amounts that are modest or small relative to the extremely high cost of most patent litigation. Companies on the receiving end of this strategy often feel compelled to pay what they see as unreasonable settlement demands, even if they believe they do not infringe or have reason to question the validity of the asserted patent.

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