Although perhaps not ugly green creatures lurking under bridges, “patent trolls” have nevertheless haunted companies and patent practitioners for two decades.

Using extortive practices and preying on the inability of small companies to afford patent litigation, patent trolls have perfected the art of early settlement, requiring companies to pay tens or hundreds of thousands of dollars to avoid more significant litigation expenses. Such a practice can be quite lucrative when it involves hundreds of potential defendants. It has certainly not gone unnoticed. Both President Barack Obama and Congressional leaders called for patent reform in 2014 to curtail these practices. A recent patent reform bill focused on addressing abusive patent litigation tactics passed in the House but died in the Senate after failed negotiations. But patent trolls have not escaped unscathed. Rather, they have recently suffered a multi-faceted attack including executive and administrative actions and judicial decisions, which may have collectively succeeded in accomplishing at least some of the goals of the failed legislative reform. The following provides an overview of such attacks.

A patent assertion entity (PAE), or non-practicing entity, is a company or individual that owns and asserts patent rights but does not manufacture the products or provide the services covered by the patents. These entities are not all bad actors, but rather include research institutions, universities, and individual inventors who license or otherwise enforce their patents. The term “patent trolls” refers to non-practicing entities that acquire and assert patents of questionable validity in order to extort licensing revenue, or otherwise engage in abusive litigation tactics. Because the cost and risk of defending a patent infringement lawsuit are high, a target of a troll may choose to settle for tens or even hundreds of thousands of dollars even if the suit is without merit.