The patent ‘troll’ tide is turning

Many NPEs have been using their well-stocked war chests to build massive patent portfolios in the medical technology sector, so right owners need to be prepared for a fresh wave of litigation. Jay Nuttall of Steptoe & Johnson offers some tips.

Patent litigation has been on the rise for decades, with the number of cases filed increasing six times since the 1980s. Most of the growth in the last decade can be attributed to a class of litigants who file lawsuits for a living.

These plaintiffs call themselves patent aggregators or non-practising entities (NPEs), but are sometimes referred to as patent ‘trolls’. They acquire patents with no intention of using the underlying technology. They never manufacture or sell anything.

Instead, many monetise their patents by aggressively filing infringement lawsuits. Because they don’t manufacture anything, they have no need to worry about infringing any competitor’s patents, and have no fear of countersuits. It’s actually the more the merrier: as they pile on cases, they create economies of scale that enable them to bring legal actions at a relatively low cost.