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Patent Trolls: Seeking Profit in Patent Litigation

Updated: Apr 25

Patent trolls are companies that profit from lawsuits related to patents they often acquire

from financially distressed companies. These trolls file lawsuits against individuals or

organizations, claiming patent infringement, without any intention of using the patents for

manufacturing or product development. Typically targeting small or medium-sized

enterprises that cannot afford the costs of litigation, patent trolls aim to extract high incomes

through license fees and damages. Recently, some patent trolls have expanded their

activities to target major companies such as Apple, Google, Sony, and Samsung.

In such cases, the patent damages paid by companies can lead to increased product costs, as these costs may be reflected in the prices. Therefore, it can be said that patent trolls not only harm companies but also indirectly impact consumers by raising prices.

Turkey and Global Situation

Patent trolls, which are a major problem especially in the United States, can easily claim

patent infringement by using many advantages stemming from the structural features of the

American patent system. Relying on the expensive litigation processes of the American legal system, these trolls pressure the targeted companies into settlement by putting them in difficult situations. This situation enables patent trolls to achieve high profits with their

aggressive tactics.

Therefore, especially technology companies and other relevant organizations are taking

various measures to prevent the activities of patent trolls and improve the system. Although

not yet as widespread in Turkey, taking early measures to reduce the effects of patent trolls

is important.

Case Study of a Patent Troll

VirnetX, identified as a patent troll, first sued Apple in 2010. The company claimed that Apple violated some patents related to virtual private network (VPN) technology in its products such as FaceTime, iMessage, and VPN On Demand. VirnetX demanded billions of dollars in compensation from Apple for using its patents in these products.

The case was decided in favor of VirnetX in 2012, and Apple was ordered to pay 368 million dollars in compensation. However, this decision was later appealed and overturned for retrial.

In 2016, VirnetX filed a second lawsuit against Apple. This time, it was alleged that Apple could not securely transmit users' personal information over FaceTime. VirnetX claimed that this situation infringed its patents and demanded compensation. This case was concluded in 2020, and VirnetX won 503 million dollars in compensation from Apple. The court ruled that Apple had violated VirnetX's security protocols and ordered the payment of compensation.

From the registration process of patents to their proper follow-up, it is crucial to seek advice from expert intellectual property attorneys. This step will provide an advantage, especially in combating patent trolls

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