The arrival of Thierry Breton, the new European Commissioner for the Internal Market, sounds like a promise of change in the patent wars. More than 150 companies, including major groups such as Apple, Microsoft and Volkswagen, have chosen to write to the former CEO of Atos in January 2020.
More than 150 companies, including major corporations such as Apple, Microsoft and Volkswagen, have addressed Thierry Breton, the new European Commissioner for the Internal Market. The aim is to ask for concrete solutions to curb the growth of patent trolls, groups that buy up patents on a massive scale with the aim of suing companies that use them in the development of their products.
Patent trolling, a financial risk and a brake on innovation.
As a reminder, a company holding a patent has the right to prohibit third parties from using their innovations. In this sense, it is entirely possible to lodge an infringement complaint, as long as you hold the industrial property title. The patent troll is a financial strategy. The structures that make use of it have generally never had a research & development project! Although many of the signatories to the letter to Thierry Breton are large corporations, it is often the smaller companies that are penalized by patent trolls, because they have fewer resources to defend themselves.
No longer penalizing innovative companies
Industrial property is highly regulated within the single market, and infringement is severely punished. With the number of patent troll disputes on the rise, many companies are warning the European Commission of the risks this poses to innovation. To prevent over-penalization of innovative companies, a call has been made to Brussels to move towards a change of legislature and a more flexible, fairer assessment of these offenses.
Famous examples of patent trolling
In 2012, Apple was ordered to pay $368 million in damages to the company VirnetX for infringing a network connection patent, similar to the device in the FaceTime software. This company is well known in the U.S. for deriving a large part of its revenues from its extensive patent portfolio. But it’s not just large corporations that are being targeted – quite the contrary.
| August 13, 2020 update following the August 11 Texas federal court ruling.This year, 2020, Apple is accused by PanOptis of exploiting between 5 and 7 patents related to 4G LTE technology to create the IPhone, IPads and Apple Watch. The complaint was issued by PanOptis and its numerous subsidiaries in 2019, just before Apple closed its stores in the Eastern District of Texas. After several negotiations and refusals to pay on the part of the tech giant, which fought to prove the invalidity of these patents, the jury sided with PanOptis. Apple must now pay the sum of $506 million. PanOptis has acquired a real reputation as a patent troll, since its activity, although legal, mainly consists of negotiating licenses and suing companies that refuse to negotiate. |
Patent trolls are relentless in their attacks on small businesses, which may not have the means to go to court, so they turn to out-of-court settlements. However, despite the legal resources deployed by Apple, this has not prevented patent trolling from being effective.
If you are the victim of a patent troll, the first thing to do is to contactan IP consultant and lawyer. The lawyer will be able to defend you, also thanks to the IP counsel to interpret patents. The technical nature of patent law means that there are many ways of defending your interests, depending on the case in question. Whether you want to invalidate the patent you’re being sued over, or prove that you had prior art… get advice from the right people!
Finding out whether other companies have fallen victim to patent trolling is a strategy you can adopt. A joint action highlights the fact that this is patent trolling, and not simply an infringement action. This may well have been the strategy chosen by Apple and Intel last November. The two IT giants decided to jointly sue Fortress Investment Group.
