It isn't yet clear whether the U.S. Supreme Court's recent decision in the cases Octane Fitness LLC v. Icon Health & Fitness Inc. and Highmark Inc. v. Allcare Health Management Systems Inc. will deter so-called patent trolls, officially known as patent assertion entities. Patent trolls typically buy up patents without intending to actually develop products or transfer the technology, but instead aim to force other companies to pay licensing fees or infringement settlements. The two landmark Supreme Court decisions effectively loosen the standards set earlier by the Federal Circuit Court of Appeals.

"There's a whole market out there of people who specialize in locating patents that would make good lawsuits, and then brokering buy-sell deals to get the patent owner to sell it to the interested future litigate buyer," explained Phoenix attorney Brian W. LaCorte, a partner in Ballard Spahr's intellectual property practice, who called that approach "extraordinarily misguided."

Mr. LaCorte told SCRIP that trolls usually set settlements at amounts lower than defense costs to make it more attractive to settle the litigation. He said that the U.S. system is "uniquely well situated to allow for this kind of litigation explosion."

Related Practices

Intellectual Property
Intellectual Propety Litigation