Patent trolls are a growing problem in Canada. Also known as non-practicing entities, these trolls go after struggling startups by threatening to sue for patent infringement on new products and services. What does that mean for you as a small business? Every time you introduce a new product to your customers that you feel is original, you run the risk of being sued by a patent troll who owns a broad patent covering the basis of your invention.
What Are Patent Trolls, and How Do They Operate?
So, what is a patent troll anyway? A patent troll is a company or person who gets a patent on a product or service for the sole purpose of suing other companies for the rights. They don’t actually produce or sell the product. Instead, they put large amounts of money into lawsuits knowing small companies don’t have the funds to fight back. Big companies have to spend more of their money defending against patent trolls and less money on researching new products. According to the Harvard Business Review, patent litigation costs businesses over $60 billion each year.
How to Fight Patent Trolls
Fortunately, the government and big companies are starting to fight back against the patent trolls. Two financial tech companies, FI Span and TD Bank, have teamed up with American companies, such as eBay, Amazon, and Canon, to push back against the frivolous lawsuits. The group calls itself the License on Transfer Network, and it has more than 100 members worldwide. Any company can join, and if your company’s revenue is less than $5 million per year, membership is free. Basically, each member of the group agrees that, if one of their patents finds its way into the hands of a troll, they grant a patent license to every other member of the group. This prevents the other members from being sued for that particular patent. As the group grows, the protection against patent trolls does, too.
The Open Innovation Network is another group that can help you fight patent trolls. It’s a shared patent pool that protects Linux developers on open source software. This group has over 2,000 members and is backed by IBM, Toyota, and Sony. It is also free to join.
Fighting Patent Trolls on a Budget
There are also a couple of low-cost options for fighting the patent trolls on your own. One is by filing for a judgment in Federal Court, and the other is through an administrative proceeding. With the Federal Court judgment, you ask the court to impeach a patent and make it void and unenforceable because it’s too vague. You can do this by submitting an application or by asking for a court proceeding. The application doesn’t cost as much and is faster, but it can still take as much as a year to process.
The administrative option lets you submit artwork related to a patent and proof you paid the fee for your product. You must use the artwork to prove the infringement claim is invalid. This is the fastest way to fight the lawsuit but can be the most complicated, because you must have prior documentation of the patent.
By coming together with other companies, you can fight against the litigation of patent trolls that threaten your small business.