Combatting Patent Trolls

A subject of extensive debate within the U.S. patent system has been the classification of “patent trolls” — most widely defined as individuals or companies that acquire patents solely for the purpose of assertion, often in cases without any merit, but which leverage the high cost of patent litigation defense to force small settlements. Sometimes, these entities are more charitably described as non-practicing entities (NPEs) — i.e., entities that do not use or practice the technologies claimed in the patents they own.
However, differences in approach and behavior generally separate the most notorious “patent trolls” from other types of NPEs (such as, for example, universities and research institutions that develop, but do not commercialize, new technologies). Ultimately, trolls are often characterized by the widespread assertion of baseless claims calculated to draw nuisance-value settlements.
A number of measures have been enacted in the U.S. patent system to combat the troll problem. Following the lobbying of big tech and others, the 2011 enactment of the America Invents Act provided a significant overhaul of the U.S. patent laws, and with it a number of tools for defending assertions of bad patents. The most popular among these is the introduction of inter partes review proceedings at the U.S. Patent and Trademark Office, which allow parties to challenge the validity of patents, giving the patent office a “second look” in a trial-like proceeding that has become the tool of choice for invalidating bad patents. But despite these new options, the troll problem has persisted.
More recently, in situations of particularly egregious behavior, federal courts have increasingly begun to impose various disciplinary measures on patent trolls — and even their attorneys — including sanctions pursuant to Federal Rule of Civil Procedure Rule 11 and 35 U.S.C. Section 285. These types of sanctions decisions are becoming more common, and possibly even signal a new trend in federal judges increasingly taking patent trolls to task.
When patent trolls or their attorneys commit particularly egregious conduct, courts can order sanctions using a number of mechanisms. One of the most common is Rule 11.