Trolling for Patents

Art Levy | 9/1/2009

Good or bad, the troll business model is on the rise in Florida, partly because Florida is seeing growth in industries such as medical devices and biotechnology where the complexity of the intellectual property lends itself to disputes.

A bigger reason is that trolls have determined that the Tampa-based U.S. District Court’s Middle District of Florida is one of the best courts in the nation to file a patent-infringement lawsuit. A 2008 study conducted by the accounting firm PricewaterhouseCoopers found that patent holders had the highest percentage of winning trials in the Middle District compared to other federal courts.

Anat Hakim

The report ranked the district third nationally in patent holders winning summary judgments and third in the least amount of time — 1.7 years — it takes for cases to go to trial. As a result, many patent cases with no obvious Florida connection are still "being hauled into Florida court," says Anat Hakim, a Foley & Lardner intellectual property attorney based in Miami and Orlando. All a patent holder needs to do is show that the company it’s suing has sold the product in Florida.

"A lot of the companies the trolls go after are large national companies that are doing business pretty much everywhere," says intellectual property attorney William "Ty" Giltinan of Carlton Fields in Tampa.

Aside from filing suit in the most desirable courts, the trolls are also enjoying easier access to patents. When companies need money or go bankrupt, for example, the firm’s patent portfolio is often the last valuable asset it has to sell. As a result, patent auctions have also become more common.

Patent trolls may find it harder to thrive in the future, though. Hakim says Congress, "driven in part by the increase in troll litigation," is considering patent reform legislation that would limit potential damages and make it harder for patent holders to steer cases to more favorable courts.

Tags: Politics & Law, Government/Politics & Law