The patent trolls pose a threat to start-ups

The patent trolls are not a recent phenomenon, but in the last two years their influence on the market has been worrying. The PAEs (Patent Assertion Entities) don’t produce anything, but they hold a high number of patents (patent trolls) that they use, more or less in reason, to promote legal action against those that seem to counterfeit them. The sore point of such actions is precisely the high number of contested patents, often concerning software, and the difficulty of interpretation, which together make it more convenient to come to an agreement rather than come up for trial. A recent study of the Professor Colleen Chien has revealed that in the United States, this phenomenon has reached alarming levels. Who bears the brunt are the start-ups that as soon as they start to produce assets and provide vacant job positions, they get blocked right at the start. The most sought-after preys are those companies that have sufficient funds to pay royalties, but not enough to face a pressing legal action and risking to lose it. The consequences brought by patent trolls on a small company can even reach the 62% of its profits and this unavoidably has dramatic effects. Chien’s research has collected stories of some start-ups, and they have expressed their concern about the situation insomuch that some of them decided to narrow their business to Europe only, excluding the US or opting for the open source. The matter seems to be “when” rather than “if” a lawsuit will be filed. If it’s true that in 2012 in the United States over 60% of the lawsuits were promoted by patent trolls, there is little to laugh about. When there are very complex lawsuits where giants face each other like Apple/Samsung or Oracle/Google, the fight is fair and unbiased. In legal actions promoted by patent trolls, there is a difference between who acts and who defends oneself that leaves no choice but to accept an agreement, often a costly one, or face the risk of defending oneself in court that might be even more expensive. There is then a third way which is to close down.