Patent trolling

Patent troll is a categorical or pejorative term applied to person or company that attempts to enforce patent rights against accused infringers far beyond the patent's actual value or contribution to the prior art, often through hardball legal tactics (frivolous litigation, vexatious litigation, SLAPP, chilling effects, and the like) usually backed by a large war chest, sometimes to the extreme of what critics regard as legally sanctioned extortion.

Patent trolls often do not manufacture products or supply services based upon the patents in question. However, some entities which do not practice their asserted patent may not be considered "patent trolls" when they license their patented technologies on reasonable terms in advance. Other related terms include patent holding company (PHC), patent assertion entity (PAE), and non-practicing entity (NPE), which may or may not be considered a "patent troll" depending on the position they are taking and the perception of that position by the public.

While in most cases the entities termed "trolls" are operating within the bounds of the legal system, their aggressive tactics achieve outcomes contrary to the origins of the patent system as a legislated social contract to foster and protect innovation (in the absence of such legislation, exclusivity of ideas is generally not a natural property right); the extremely rapid rise of the modern information economy has put the global intellectual property system under strain.

Patent trolling has been less of a problem in Europe than in the U.S. because Europe has a loser pays costs regime. In contrast, the U.S. generally used the so-called American rule, providing that each party is responsible for paying its own attorney's fees, until the U.S. Supreme Court decided Octane Fitness, LLC v. ICON Health & Fitness, Inc. on April 29, 2014.

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