You've probably heard that so-called patent trolls have become a problem for many small businesses in the U.S. Maybe you've learned about patent trolls the hard way by getting a threatening letter from a law firm trying to extort a settlement for use of a patent, image, or document they claim to own.
Whatever your interest, it’s a good idea to review your options for dealing with patent and copyright trolls before you get a love letter from one of these litigious monsters.
What Is a Patent Troll? A patent troll is an individual or a company that purchases the rights to patents, often from companies going bankrupt, and then hires lawyers or law firms to zealously enforce those patents.
How zealously? Many small business owners have received letters claiming the scanners purchased by their companies violate a patent, and demanding a settlement of $1,000 per employee. The troll threatened to take the business owners to court unless a settlement was reached.
Read: Richard Branson on Why Patents Kill Innovation
Can you imagine a law firm suing your business because a computer, printer, or scanner you purchased supposedly violated someone's patent?
There's another troll under the bridge of American business, and that's the copyright troll. This troll shows up in the form of a threatening letter from a lawyer or law firm informing you that your business has used an image, video, or document online that is owned by the troll, without permission of the troll. The goal is to scare your business into a settlement rather than having to face going to court over a photo on your website.
What should you do if you receive one of the thousands of threatening letters sent to U.S. small businesses every day by patent trolls and copyright trolls? Here's a quick guide to some of your options.
1. Don't Feed the Trolls
Did you receive a threatening letter from a law firm today informing you that you have infringed on their client's property, suggesting discussions on a settlement? It's not wise to dash off a response, no matter how outrageous the claim may be.
Try to think of the letter this way: Every day, businesses receive emails from foreign nationals trying to send money your way - they just need your bank account number. You don't respond to those emails. You don't inquire further. You don't give them a second thought or let them ruin your appetite for lunch.
Think of the troll's letter with a similar level of respect. This is an insane person desperately reaching out to a large audience, hoping to find one or two fools to fleece. When you respond to the troll, you feed the troll.
So the first rule is: Don't panic. Stay calm. Don't feed the trolls.
2. Investigate the Claim of Infringement
If you feel you must do something to defend yourself, first investigate the claim. Did you, in fact, infringe on the troll's property? If you did, it's probably best to cease the infringement and document what you did to remedy the situation. You don't have to communicate any of this to the troll, but if the claim is substantiated, it may protect you from additional damages.
Whether or not you actually violated a legitimate patent or copyright is no longer the issue here. The issue for the troll is to get a settlement, not to seek the truth. The issue for your business should be to minimize the settlement - not to vindicate your business practices.
The best course of action is to ignore the troll, minimize any effort in responding to it, minimize any grief it costs you, and stay focused on the bottom line: getting through the incident at the lowest possible cost.
Along with investigating the claim, if you want to give the matter any more thought at all, you should investigate the firm making the claim, as well as the patent or copyright owner it claims to represent. That's where you probably will discover that this law firm has been doing this for a long time.
If the troll has been running this operation for a while, there will likely be clues as to the best way to fight back. Things to look for in your research include:
- Does the troll actually take people to court, or just threaten to?
- What amount have people settled claims with this troll?
- If the troll lost a court case, what was the reason for the loss?
- Where the troll won a court case, what were the circumstances?
You can learn a lot without hiring an attorney to investigate or respond. Remember, if you are trying to minimize the cost to your firm, you should not be hiring an attorney to investigate or engage until you really need one.
If, for example, your investigation determines you did, in fact, violate a patent or copyright, then you might want some expert guidance on how to proceed.
3. Alternative Ways to Fight Patent Trolls
Your research should give you a pretty good idea of where you stand and whether you should pay any more attention to the troll. You have a choice whether to respond or not, and you have the choice of whether to bring in a lawyer to deal with the matter. But you have some other choices you may not be aware of.
The Better Business Bureau (BBB)
The Better Business Bureau has a complaint mechanism that even nonmembers can use. You can file a complaint against the troll, state your case in your complaint, and the BBB will ask the troll to respond.
Getty Images, which used to engage aggressive law firms to defend its copyrights, dropped dozens of cases after complaints were made through the Better Business Bureau. So before you hire that expensive lawyer, you might be able to get the case dropped by appealing to the BBB or any trade group you are a member of.
Contact Your State Attorney General's Office
Many states have recently passed legislation against patent and copyright trolls. The laws require the trolls to have evidence of a violation before they can send threatening letters, among other restrictions.
The upshot is that every state attorney general's office is familiar with the patent troll problem, and it's fair to say that most of them are sympathetic with the small business owners who are being attacked. A letter from someone in your state's AG office -- or the troll's state AG office -- might be enough to chase them back under the bridge.
Contact the Patent or Copyright Holder Directly
The troll usually hires a law firm to press its claims. When the patent or copyright owner and the law firm sending threatening letters are not the same entity, there's a chance that going around the law firm and putting pressure on the owner can work. An appeal to an executive of the owner company could result in the case being dropped.
Generate Public Pressure Against Patent Trolls
It's terrible when these cases escalate to the level where your company is spending thousands of dollars on attorneys or hundreds of hours trying to defend yourself. Sometimes, by taking your case to the public, you can build enough support for a troll to back down.
After growing public outcry, Getty Images backed away from it's aggressive troll campaign and, instead, offered an olive branch of millions of images people are free to use without payment (as long as they credit Getty Images and link to the source).
4. When to Hire an Attorney to Defend Against a Patent Troll
Once a troll has filed an actual lawsuit against your business, you may be forced to hire an attorney to limit the damage to your firm. Your attorney may be able to get the case thrown out on a technicality. For example, the troll might not be able to prove that they actually own the patent they claim to. They may have filed the case in the wrong jurisdiction.
Read: 4 Ways to Protect Your Business Against Lawsuits
There are many simple things that can go wrong with the claim that could quickly get you off the hook. Your lawyer can also engage in settlement talks designed to minimize the cost of the whole ordeal to your business. While it may upset you to pay a small fee to use something you have every right to use, it could cost your business less than having to pay lawyers to press your case.
If you decide to engage legal representation to defend your firm, you won't regret having done the research into how others have handled disputes with the troll. It will give you a realistic idea of how your case is likely to play out.