The news has been full of various proposals for addressing the perceived evils associated with patent assertions by a patent owner that have been identified at different times as a patent troll, a patent assertion entity and a nonpracticing entity (hereinafter collectively referred to as a troll). The perceived evil arises from the concern that the troll is using the threat of initiating a litigation or actually commences a litigation as part of its efforts to secure licensing agreements requiring the target company/defendant to pay licensing fees for the use of patents that are controlled by the troll, but are not practiced commercially by the troll. This identification of the problem seems simple enough and there are a multitude of proposed solutions for addressing the perceived problem. However, as noted below, both the perceived problem and the proposed solutions suffer from a lack of clear definition and, ultimately, may be further proof of the law of unintended consequences.
As a starting point, there is no clear definition of a troll. If the definition is as simple as looking to whether the patent owner is not practicing the asserted patent, it is bound to include a variety of organizations that are otherwise perceived to be contributing to society. Thus, a General Electric that secures something on the order of 2,000 patents a year becomes a troll when it assigns patents to a spinoff that is designed to assert the patents with some of the benefits inuring to General Electric. While most will concede that General Electric is a viable commercial entity, it could fall victim to a law that includes a broad definition of a troll.
