A company that purchases a patent, often from a bankrupt firm, and then sues another company by claiming that one of its products infringes on the purchased patent.. adj.
These patent system bottom feeders have now become so common that Intel has coined a term to describe them: "patent trolls ." Several problems contribute to making this "patent troll" business model a simple and effective source of illegitimate profit irrespective of the quality of the patent. For example, if the troll can claim that the patent covers $5 billion in annual revenue, that troll will ask for a royalty fee of a few percentage points of revenue; e.g., $150 million per year. While that may seem to be an absurd amount to pay to someone who bought a patent out of bankruptcy for less than one hundred thousand dollars, the troll will threaten the legitimate business with a permanent injunction at the end of the patent case, threatening the halt of the sale of a critical product or closing down a production facility. Even if the chance of the troll winning is low, the troll's costs are modest, normally a few million dollars at most. In contrast, the legitimate business the troll targeted faces potential financial ruin if it can no longer sell a key product. Intel recently faced such a troll who wanted $8 billion and a permanent injunction after purchasing the patent for $50,000.
David M. Simon, "Patent processing improvements," Federal Document Clearing House Congressional Testimony, July 24, 2003
Panelists cited the growing problem of "patent trolling," where an individual asserts patent rights over a firm for an invention that the individual is not actively using.
Maureen Sirhal, "Corporate Patent Experts Take A Stand For The System," National Journal's Technology Daily, March 20, 2002
The assistant general counsel at semiconductor titan Intel Corp., Detkin spends much of his time these days fighting off claims of patent infringement by companies that have never made a semiconductor device. In 1999 alone, the claims topped $15 billion, Detkin said, and he hurls the epithet "patent trolls" at the companies that want Intel to pay up. He even keeps a couple of troll dolls on his desk in the gray warren of buildings at Intel's Santa Clara headquarters just as a reminder of his company's legal enemies. "We were sued for libel for the use of the term 'patent extortionists' so I came up with 'patent trolls,'" Detkin said. "A patent troll is somebody who tries to make a lot of money off a patent that they are not practicing and have no intention of practicing and in most cases never practiced."
Brenda Sandburg, "Inventor's lawyer makes a pile from patents," The Recorder, July 30, 2001
The use of the word "troll" in this phrase is a sly linguistic trick. On the one hand, it contains the sense of the fishing activity in which a baited line is dragged through water, usually from the back of a slow moving boat. On the other hand, it also refers to a being from the old Scandinavian legends that's usually depicted as a dwarf (although sometimes as a giant) that lives in a cave or under a bridge. (Both senses date from the 17th century.)
So a "patent troll" is, officially, someone who fishes around for unused patents, but is also, unofficially, a low, inhuman creature who only uses those patents for litigious purposes.
Here's an earlier citation that uses the phrase in a slightly different way:
Although Wang believes that Intel has occasionally been too quick to sue rather than settle, he maintains that the company is defending a solid patent position. Lee contrasts Intel with Stac Electronics, which last June launched a splashy patent suit against IIT's lossless data-compression processor before anyone had even seen a chip. The suit collapsed, but not before helping to sour the market for the IIT device. Wang says that he worries more about these fanciful suits from out of left field than about suits by companies like Intel. As for the Japanese, now depicted as the new patent trolls, Wang believes that for political and cultural reasons they are taking a merely defensive stance.
"When Intel Doesn't Sue," Forbes, March 29, 1993
I'll admit that, at first, I was against the idea of NPEs -- "patent trolls" -- profiting from others' innovations. However, after doing some research, I've come to think that so-called "trolls" are doing nothing worse than many other companies. Notice that it's generally the large corporations that get incensed about the trolls. Most NPEs don't seem to be any worse than day traders, for instance.
Check this out: