Intellectual Property Law

Patrolling of Patent Trolling: Exploring Options

A recent landmark judgment pronounced by US Supreme Court once again brought into limelight the patent trolling, a concept which is very close especially to the large tech companies. It was held that the jurisdiction for a case of patent trolling will lie with the court in which the defendant resides. [1] The purpose of the research is to analyse patent trolling from the perspective of India and suggest possible solutions to it.

 

[Saket Agarwal is a 4th Year (BBA; LL.B) Student, National Law University, Jodhpur]

Introduction

The term patent trolling was first used by Peter Detkin for a ‘litigious minded IP holding company’. [2] It is a practice where an individual or an organization hoards a large amount of patent in a specific field. This creates their monopoly in that area and forces others to take a license from the patent troll against the payment of a hefty fee. A peculiar point here required to mention is that a patent troll never practices/produces on the patents granted to him. He tries to restrict others from using it. The main business of patent troll is dependent upon the fear of the alleged infringer who is actually innocent.

Many a time, organisations work upon a technology for which the registered patent of the troll is indispensable. In spite of knowing that an organization is utilizing their patent without permission, the troll let the work to reach that stage from where there is no way back. The troll then threatens the organization to settle the case for a huge sum of money or else face the litigation which entails both high costs and a risk of high penalty. Any organization would not want to invite the legal troubles and will anyhow pay the so-called extortion money. For a better understanding, trolls can be called as the pitcher plants which first lure their target and then sustain on them.

 

Identifying Patent Trolls: A Herculean Task?

Identification of a patent troll is often considered to be a difficult task. In most of the cases of a patent troll, the shell companies are involved. These shell companies are registered as the owners of that disputed patent which might be controlled by a single company. These companies file cases in the different parts of a country indiscriminately. Because of this, it is very difficult for an individual to establish a link between these companies. This makes it difficult for a suit like a class action one. However, a troll can be identified on the basis of the following characteristics: [3]

  1. A troll never utilize his patents;
  2. They do not believe in technology transfer;
  3. They allow others to reach a stage where there is no way back;
  4. They register patents for the purpose of minting money from others;
  5. The patents they register are broad and unclear. Due to this, they are able to target multiple companies.

A business has three ways in which it can confront the patent trolling: [4]

  1. Workaround the controversial patent;
  2. Take permission from the troll in lieu of a license fee;
  3. Approach the court in the hope of success.

However, in most cases, filing suits are not considered as a desirable option. Litigation involves huge costs and that too with the high risk of uncertainty. Because of this, the companies without wasting time settle the case out of court.

 

Present Structure to Tackle Patent Trolling in India

Unlike the US where the problem of patent trolling is much rampant, India is able to restrict patent trolling though not eliminate it. The problem of trolling has been found mostly in the technology sector. Section 3(k) of the Patents Act, 1970 does not recognize computer programmes as inventions, thus carving out a  huge scope for trolling. Mechanisms such as pre-grant opposition and post-grant opposition have discouraged trolling to a great extent. Before registering any patent, the patent office invites any opposition before the registration of that patent for a period of six months under section 25(1) of the Indian Patent Act, 1970 [“Act”]. Even after, the registration of that patent, the opposition can be filed by an interested party within one year of the registration of such patent under section 25(2) of the Act. These prevent the patent trolling at the very first instance.

Further, section 84 of the Act allows the compulsory license for a patent. If a patent is an essential in public interest but not easily accessible then license can be granted, provided that sufficient negotiations have been taken place between the interested parties and a reasonable period of six months must have passed. The Act also ensures that there is no hoarding of patents. Commercial utilization of a patent is a must under section 146 of the Act. If a patentee fails to submit a proof of commercial utilization, compulsory licensing for the same is granted. Section 115 of the act also allows for the appointment of the scientific advisors on the subject matter to ensure speedy trials. As mentioned above, dubious or overly-broad patents are often used by the trolls. However, in India, a patent is only granted if it leads to enhancement in the efficacy under section 3(d) of the Act.

These measures seem to be sufficient but actually they are not. The legal framework discussed above is suitable to stop trolling in the field of technology. However, the scope of patents is much broader than technology and for that, the present framework of law is not sufficient.

 

Recommendations

1. Joint Litigation

The basic reason why any target fears to litigate is the involvement of the huge costs of litigation. The author recommends that if there will be a provision for joint/class litigation in the patents act, then the defendants/victims will feel motivated to face the threat posed by the patent trolls. As mentioned above, a troll targets many entities at the same time. If all the entity will collectively file the suit, there per head cost will get decrease.

Example– Under section 245 of the Companies Act, 2013 there is a provision of class action suits where the individuals whose rights have been violated come together and litigate against a common party.

2. Creation of a specific fund

Considering the fact that cases involving patents involve huge costs, a public fund can be created by the government. If a party can substantially prove that he is a victim of patent trolling, funds can be provided to him to file a suit at the proper forum. The sources of income in that fund can be through government grants, the interest generated on those funds, hefty penalty imposed on the patent trolls etc.

3. Specialised Body

To keep a check on patent trolling a specialised body can be created whose main task will be to keep a track record of the cases filed for the violation of the patents with the complete details of the parties involved along with the subject matter for such litigation. This information can be made publicly accessible for all. This will help in uncovering the identity of the troll and at the same time caution the innocent inventors not to work in the controversial zones.

4. Cancellation of the registration of patent

If after enquiry it is found that a firm is practising patent trolling, then the patent of such a firm can be cancelled, thereby making it available for the general use without any permission. This will act as a deterrent on such an entity from practising patent trolling.

 


Endnotes:

[1] TC Heartland LLC v. Kraft Foods Group Brands LLC, 122 U.S.P.Q.2d 1553.

[2] Ladas & Perry, Education Center, “A brief History of the Patent Law of the United States.”, https://ladas.com/education-center/a-brief-history-of-the-patent-law-of-the-united-states-2/ (last accessed July 11, 2019).

[3] Beyers, J., “Perspective – Rise of the Patent Trolls,” http://news.com./rise+of+the+patent+tro lls/2010- 1071, (last accessed July 9, 2019).

[4] Eric Rogers & Young Jeon, Inhibiting Patent Trolling: A New Approach for Applying Rule 11, (2014) 12(4) NJTIP https://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?art icle=1225&context=njtip (last accessed July 11, 2019).


 

 

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