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Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
Rise of the Trolls: An Innovation Story
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Rise of the Trolls: An Innovation Story

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Cloudigy Law's Founder and CEO, Antigone Peyton, discusses patent troll firms and how they operate.

Cloudigy Law's Founder and CEO, Antigone Peyton, discusses patent troll firms and how they operate.

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  • 1. Rise of the Trolls: An Innovation Story Antigone Peyton CEO & Founder Cloudigy Law An Intellectual Property & Technology Law Firm #DCTrolls #DCWeek
  • 2. Here’s How It Began . . . It’s an old story Figure out a system, then figure out how to game it
  • 3. • Patent rights are not contingent on using an invention You create something new You file with the USPTO You disclose your invention You get your patent
  • 4. Patent Rights• Right to exclude others• Violation=infringement • Using • Making • Selling • Offering to sell • Importing
  • 5. Now, the game It’s the 1990s . . .And the patent litigation business was born.
  • 6. Patent Litigation Model• Business=make more $$ off IP• Purchase patents for little $• Don’t make products or commercialize technology• Lack R&D function
  • 7. Patent Litigation Model• File lawsuits & send infringement letters• Sue many companies at once• Several firms make their reputation on these suits• Seek early settlements for $$$• Contingent fee or low effort before trial
  • 8. Sometimes it feels like . . .
  • 9. And the Moniker Was BornNon-Practicing Entities (NPEs)
  • 10. Non-Practicing Entities (NPEs)
  • 11. A Case Study
  • 12. In the Beginning . . .• Nathan Myrvold - • Investors included former Microsoft Microsoft, Apple, exec Nokia, eBay, Google• Approached Silicon Valley’s large tech companies• Buy patents and create a pool to keep them away from trolls
  • 13. The Metamorphosis• Intellectual Ventures • Other companies did not sue directly would sue or send licensing letters• Set up shell companies to place IP • Over 1,300 companies assets traced to IV• Sold patents to other companies
  • 14. The Metamorphosis• IV now suing directly • Sued Motorola Mobility for infringement of 6• Used more than $1.5B patents of $5B investor capital • Google acquiring• Over 35,000 IP assets company• Over $2B in licensing • Google also an early revenue investor in IV
  • 15. The NPE Game Plan• A small town in TX • Has over 2,000 pending (Eastern District of TX) patent cases• Known to be Plaintiff • No real TX business friendly activity required
  • 16. The NPE Game Plan• License or sue• Defense litigation costs approx. $2-5M• Get settlement• Give patent license
  • 17. The NPE Game Plan• Monetizing IP• More than a nuisance fee• Leverage risk of litigation loss• Gag on settlement term disclosure
  • 18. JPEG Patent Attacks• Forgent Networks & Global Patent Holdings patents• Forgent collected over $100 million in licensing fees before patent was invalidated• Licensed to 30 companies & sued 31 more
  • 19. High-Profile Win• Research in Motion gave over $612M to NTP (a patent holding company) to keep its Blackberries on
  • 20. What’s the Problem?• Fees extracted out of • Dragging down line w/perceived IP companies w/lawsuits value • Cost passed on to• Not making or selling consumers inventions• Not bringing products to market
  • 21. Protection Issues• Defensive patent suit involving company’s own patents ineffective• Not trackable like competitors• Antitrust & patent misuse charges don’t work • No market power • Suing isn’t patent misuse
  • 22. Minimizing Risk• Design around costs • Fight clumping of reduce value of parties with different potential license products• Patent watch and • New patent laws don’t clearances allow one suit against multiple parties that• Oppositions in Europe “infringe” a patent and other countries & reexaminations at USPTO• Centralizing invalidity research & analysis
  • 23. Minimizing Risk• Litigating for • Patent aggregation everyone behaviors and agreements• Collaboration among defendants• Early settlement• Patent infringement insurance
  • 24. Defensive Buying• Allied Security Trust • RPX Corporation • 11 high-tech • Defensive Patent companies that Aggregation identify & purchase program pulls key tech patents patents off the open market
  • 25. Defensive Buying?• Nortel Patent Auction-6K patents• $4.5B defense arsenal purchase• Nortel 6-Ericsson, EMC, Sony, RIM, Apple, Microsoft• $750,000/patent
  • 26. Closing Thoughts• IP monetization • Behaviors drive use business is here to of pejorative term stay “troll”• Innovative $$ strategy• Well-known “patent trolls” are similar to patent pools or consortiums
  • 27. Antigone Peyton CEO & Founder, Cloudigy Law (703) 436-2033 antigone.peyton@cloudigylaw.comTwitter: @antigonepeyton @cloudigylawFacebook: http://www.facebook.com/CloudigyLawLinkedIn: http://www.linkedin.com/in/antigonepeytonCloudigy Blog: http://cloudigylaw.com/news/

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