Patent Trolling for Dummies

BY CCIA Staff
January 20, 2010

A step-by-step guide to the business of ‘being infringed’:

  1. Apply for or acquire vaguely worded, broad patents in areas where the business community is already investing money. When applying, look for areas where there is little focus on documenting prior art (e.g., technology integration, software, business methods, web design). When acquiring, seek out failing businesses trying to liquidate their patent portfolio in bankruptcy.
  2. Create a holding company for your new acquisitions, preferably one with “America” in the name. (actual residency optional).
  3. Send demand letters to small businesses that can’t afford to litigate. Offer them a license for less than the costs of litigating the case. Victims will settle even frivolous claims if the price is less than the cost of vindicating themselves.
  4. When suing, take advantage of lax venue laws to choose districts that are remote or known to be sympathetic to patent plaintiffs (e.g., Eastern District of Texas, Northern District of California). Alternatively, simply incorporate your shell company in a plaintiff-friendly district.
  5. Climb the food chain. Once you’ve secured licenses from smaller businesses, up the ante and sue medium size enterprises. Once you have a stable of companies licensing your vague patents, you graduate to Fortune 500 businesses and threaten to shut down their operations with an injunction.
  6. Get half a billion dollars in settlement. (Note: your mileage may vary)
  7. (optional) Sue your critics. Once potential whistle blowers see what they get for their troubles, they’ll think twice.

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