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LAM

LAM

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Published by: sairamsk on Jun 22, 2012
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Legal Aspects in Management 
Patent Trolling
Submitted to Prof. C.L. BansalSection B, Group 3
Dheeraj Arora PGP27078Dilip Singh PGP27079N. Mahesh PGP27092Senthil Kumaar PGP27098Punit Shukla PGP27101Rachit Sharma PGP27102Ram Chandra PGP27109Sairam Kandaswami PGP27113Indian Institute of Management, Lucknow
 
 
 2Patent Trolling
Table of Contents
1. Introduction ............................................................................................................................. 32. Modus Operandi of Patent trolls .............................................................................................. 43. Incentives for Patent Trolls ...................................................................................................... 43.1 Punitive Damages ............................................................................................................... 43.2 Permanent Injunction ......................................................................................................... 44. Causes of Patent Trolling ......................................................................................................... 54.1. Volume of Patent Applications .......................................................................................... 54.2. Broad-based Patents .......................................................................................................... 54.3. Risky Litigation ................................................................................................................. 54.4. Undermining of Patent Grants .......................................................................................... 54.5. Lack of Alternative Technologies ...................................................................................... 54.6. Possibility of nationwide litigation .................................................................................... 55. Defenses against Patent trolling .............................................................................................. 65.1. Design Arounds ................................................................................................................. 65.2. Patent Watch ...................................................................................................................... 65.3. Clearance Search ................................................................................................................ 65.4. Opposition Proceedings .................................................................................................... 65.5. Litigation ........................................................................................................................... 65.6. Patent Infringement Insurance ......................................................................................... 65.7. Defensive Patent aggregation ............................................................................................ 66. US Context ............................................................................................................................... 77. Indian Context ......................................................................................................................... 87.1. Indian Patents Act ............................................................................................................. 87.2. Amendments ...................................................................................................................... 8 Appendix .......................................................................................................................................... 9Bibliography ................................................................................................................................... 11
 
 3Patent Trolling
1.
 
Introduction
 A patent is a set of exclusive rights granted by the government to an inventor or applicant for a limitedamount of time (usually 20 years). A patent, thus, provides the inventor the right to exclude others frommaking, using, selling, and offering for sale the patented invention.Patent Trolling is a term used for a person or company that enforces its patents against one or moreinfringers in a manner considered unduly aggressive or opportunistic, often with no intention tomanufacture or market the patented invention.
 These entities are also described as “Patent Pirates”,“Non
-
practising Entities”, ”Non
-
manufacturing patentee”, “Patent Sharks” etc. For a patent to b
e usedas a troll by a person or an entity, it should satisfy the below conditions:
 
Should be owned by a person or entity that does not practice the patented technology orinvention
 
Is infringed by and asserted against, non-copiers almost exclusively 
 
Has no licensees practising the particular patented invention except for defendants describedabove As the above description suggests, the patent trolls are not inventors who pursue their research, offer itfor sale and then defend their rights against deliberate infringements. Instead, trolls seek to profit from
companies that inadvertently infringe the company’s patent rights mostly because they did not even know 
that such a license existed. The main issue with such patents is that they do not contribute anything usefulto society as they lie unused in respective patent offices and, in turn, inflate the prices on the products.Patent trolls do not:
 
Intend to actually practice a patent. Here intention is of primary importance as small inventorsmay have the intent to practice a patent, but do not do so due to lack of resources.
 
Do not make use of or sell any new products and technologies but solely aim to force thirdparties to purchase licenses.Based on the description of what patent trolls are, it can said that patent trolls are only interested in theexclusionary right that a patent bestows on them and not in the implementation of the underlying knowledge. Thus, the patent trolls are exempt from many of the costs faced by manufacturers. Thereason patent trolls are so popular is that in addition to being lucrative; the likelihood of extracting alicensing fee is considerably high. The patent trolls have nothing to lose as they hold only paper patentsand thus are not vulnerable to counterclaims.It is important to distinguish between patent trolls and firms which legitimately manufacture theirinventions but also take advantage of licensing laws to increase revenue. Using this broad definition of patent trolls tends to include universities and other research institutions that have no intention of making or distributing products, but file for patents that protect and give value to their research. Broadly speaking, two categories of people behave in a manner similar to that of trolls but are not trolls. These areinnovators i.e. people who create or develop a new technology and producers i.e. who acquire patents as apart of their strategy related to their product line.

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