Start-ups face a lot of adversity in their quest to become profitable companies and, in fact, most don't make it. One large factor in preventing start-ups from moving forward is the intervention of the dreaded "patent troll." Patent troll is a derogatory term for a business that produces no products or services, yet obtains patents and uses them to launch a plethora of law-suits against other companies. A patent troll uses the threat of a lawsuit against businesses in order to extort settlement money without having to go to trial. What set these trolls apart from companies that legitimately license out thier patented ideas, is that the trolls have no interest in developing the idea, only using it for threat purposes. They don't want to lease the idea out, and they don't care about the benefits of the final product.
Patent trolls are a pain in the butt for not just start-ups but many other businesses as well. Adam Corolla, a comedian and owner of Lotzi Digital Inc, a podcasting company, is being sued by a company called Personal Audio, a company that claims to own the rights to the idea of a podcast. When it realized that there wasn't much money to be made in suing podcasters, Personal Audio moved to dismiss the suit, a dismissal that Carolla refused. Carolla wants to see the suit through to the end, in the hopes of getting Personal Audio's patent revoked, a move which would free other podcasters from the fear of an absurd suit showing up on their front doorstep. This trend, the trend of taking the fight to the trolls, seems to finally be making some headway and others have started to follow suit.
In 2011 patent trolls were estimated to have cost businesses over $29 billion in legal fees and settlements costs, and creating legislation to curb their suits is hard to create. Any move to abolish software patents would work, but this would also harm legitimate research companies, companies like Toyota which has software patents on the device that controls the hybrid engine in their Prius. So what can be done?
In June of 2014 the Supreme Court gave those fighting the trolls a great new weapon for their arsenal. The case of Alice Corp. v CLS Bank made huge waves when the supreme court ruled that “merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.” This means when dealing with computer software, simply having the idea for something is no longer patentable, and only becomes patentable when implemented. Even then, only your particular version of the implementation is patentable, and not the idea as a whole. For trolls, who rely on not implementing to protect them from similarly absurd suits, this is a striking blow. Fresh on the heels of this Supreme Court decision, another trend is making the trolls take notice.
Patent Trolls make a large portion of their money from settlements outside of lawsuits. The cost of fighting a lawsuit is high, and rather than pay giant legal fees, many companies choose to pay what amounts to blackmail, often having to close down the company to do so. When one NYC startup was faced with a similar decision, they reached out to Brooklyn Law students for help. The students quickly realized that this was an opportunity for the best real-world practice that they could find, and put the troll on notice. With an unlimited number of hours of legal representation by third-year law students available to the defendant, the patent troll had no option but to tuck his tail and run. This free legal support drastically changes the game against the trolls, and could seriously impact many companies who make their money this way.