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Crowdsourced database now available to help identify patent trolls

Posted in Intellectual Property, Patents

You received a threatening letter from what looks like a “patent troll”  demanding a licensing fee and/or royalties but you can find little or no information about the party that sent the letter.  The sending party may not even be the owner of record for the identified patent(s) at the USPTO.  You may not even be able to determine whether or not the sending party is a patent troll.  How do you identify who you are up against?  A new online crowdsourcing tool, referred to as Trolling Effects, was launched on July 31, 2013 that provides a database of demand letters and other information that can help you identify patent trolls.  The Trolling Effects database is available at www.trollingeffects.org

Patent trolls often send letters to businesses demanding payment of a licensing fee to avoid expensive patent infringement litigation. In some instances, a draft complaint is attached and the letter states that the complaint will be filed on a certain date if the licensing fee is not timely paid.  The licensing fee is typically low enough that many businesses simply pay the fee just to make the patent troll go away.  Sometimes these demand letters are sent by the thousands or even tens of thousands so that the patent trolling becomes a profitable business model even if complaints are never or rarely filed.

It can often be difficult for a business to evaluate the risk of not paying the license fee because the history of the party sending the letter may not be known or even the true identity of the party behind sending the letter may not be known.  Patent trolls often take advantage of anonymity by using techniques such as: (1) not identifying the true owner of the patent in the assignment records at the USPTO; (2) frequently changing the entity which actually sends the demand letters and/or files lawsuits; and (3) creating large quantities of different entities that send demand letters.  Even though the party behind sending the letter may be responsible for sending tens of thousands of letters and never bringing a law suit, even against those refusing to pay the license fee, you may not be able to obtain this information.

Trolling Effects was created by a coalition of organizations and law schools to establish an online site where the public can post demand letters from patent trolls to create a publicly viewable database of demand letters.  The coalition is headed by the Electronic Frontier Foundation.  This database should be useful in determining if others are receiving demand letters from the same entity that you did or if others are receiving essentially the same letter from other entities regarding the same patent.  Like all crowdsourcing projects, the success of Trolling Effects will be determined by the acceptance and usage of the site by those receiving demand letters.

There are numerous proposals in Congress for solving these same anonymity problems.  For example, Rep. Theodore Deutch (D-FL) introduced the End Anonymous Patents Act of 2013 which requires the real party at interest to be disclosed at the USPTO when the patent issues, when maintenance fees are paid, and whenever there is a transfer of ownership.  Also, President Obama issued an executive order to introduce a real party in interest rule within the USPTO.  However, these are only partial solutions to the anonymity problems.   Perhaps more important, on June 4, 2013, President Obama announced a legislative recommendation for incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.  Sound familiar?  If and until such legislation is introduced, approved, and signed into law, the crowd sourced database of Patent Effects should be a useful tool.