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The rising threat of patent trolls and what you can do to protect your startup

Ever thought of patent trolls and how they can affect your business? No. Let’s find out. Suppose you create an amazing product through a brilliant idea & the right execution but all of a sudden you are slapped with a frivolous lawsuit of patent infringement and you have no idea what they are talking about. Or think of it this way. You created an amazing app that is running high on android. Your app is paid and you are rapidly increasing in value but some lawsuit claims that you have used the payment method without their permission and now you can either pay them a litigation fee or they can drag it out in court which will affect your reputation as well as cost you a hell lot of money. And there is a little option that you have.
A patent troll is type of business which does not use the patent that it is granted and does not think about doing anything with the patent but instead goes around buying old patents and then sue people using those services for far beyond the actual value of the patent. Patent trolls often do not supply products or manufacture items but tend to go around business by filing vexatious litigation. This practice is more common in Europe than in Americas because Europe has a regime that the loser pays the legal fees upfront whereas in America both the parties pay their respective legal and other lawyer fees.
The people in this business register so vague patents that have broad implications that they cannot really refer to a particular type of invention. And later they go around suing hundreds of companies claiming that they are in violation of their patent rights and if they wish to avoid the litigation fee, they can sign upon a certain licensing fee. Or this may be called extortion in normal terms. These people go around waiting for startup to get into funding stages and then take leverage of the fact that if the investors know about the lawsuit, they may shy away from taking the bait and pass the funding and the businesses are strong armed to pay what they ask for.
New businesses cannot do much but they can go for their own patents and if it is axed, they can ask for reexamination. It might be costly but they must know the disadvantages that come with not taking this step. Companies need to consider that they need to protect their intellectual property from day one and thin about the possible problems and their remedies. They should take legal advice and take the help of seasoned players.
In order to make the system efficient, there must be some relaxation in case there is a frivolous suit against the company. If someone brings a ridiculous claim, there must be some way to punish them so that it sets an example for the likes of them. There must be a system where we can examine the patents that were unwisely issued and they are thrown out. And there must be regular training at the patent office so that the employees are made aware of the developments in the modern startup sphere.



This article has been contributed by Simmi Setia, Content Writer at LegalRaasta, an online portal for GST Software, GST Return Filing, GST Registration, Section 8 Company Registration, Nidhi Company Registration, IEC Registration, Fssai License, File ITR Online.

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