Bad News for Patent Trolls

The supreme court has made a step in the right direction to curb patent “trolling,” the practice of holding patents with the sole intention of suing anyone who infringes rather than creating anything with them. The ruling basically says that in order to sue someone for patent infringement, you must use the court where your company was originally incorporated.

How patent trolling works

There are patent holding companies out there who buy software patents in order to litigate against anyone who writes software that infringes on their patents. The problem is that because these patents are vague or too broad, it’s easy to sue companies for doing almost anything. For example, photo uploading is technically patented. Any website that supports photo uploads is technically infringing on a patent and could be sued for it. There’s a great episode of This American Life on this topic if you’re interested.

So, patent trolls will buy up a bunch of vague software patents and find small businesses who might be infringing. They send cease and desist letters demanding royalties — essentially blackmail — from their prey, and then sue anyone who won’t bow to their demands.

The Supreme Court’s ruling helps a little

Patent trolls used to be able to “shop around” for courts friendly to them. There are a few well-known courts that almost always rule on the side of the plaintiffs (notably in East Texas), so the trolls would go there to file their suits. When the court almost inevitably ruled against the victims of the trolls, they’d get their payday.

After today’s ruling, this “shopping” has been ruled illegal. While it’s possible that trolls will avoid this by simply incorporating in troll-friendly districts, it does throw one more roadblock into their patent extortion plans.