They scour bankruptcy sales and auctions, looking for promising patents. They also buy patents directly from inventors. But these patent buyers — some attorneys and some entrepreneurs — have no intention of actually taking anything to market. Rather, they use ownership of the patents to sue companies that already use similar technologies. In most cases, the company that’s being sued, fearing expensive litigation, pays the patent holder to just go away.

Officially, these individuals or shell companies are called "non-practicing entities," but they’re more commonly known in the legal industry by a less flattering term: "Patent trolls."

"I think people used to call them extortionists and that got some people in trouble, so they sort of toned it down a little bit and decided the image of the troll waiting under the bridge came to mind," says Tom Saitta, head of the intellectual property group at Jacksonville’s Rogers Towers. "It’s seen somewhat as easy money in many circumstances."

Some of the alleged trolls say they have legitimate claims that their patents have been violated. Erich Spangenberg, a Texas entrepreneur, purchased a patent for an auto parts ordering process patented in 1994. The process was in widespread use in the auto industry. Spangenberg hired an attorney and sued. Most of the major auto companies settled, but Hyundai went to court in 2007 — and lost. Spangenberg was awarded $34 million in damages. The case is on appeal.

Many inventors see patent trolls as their only means to capitalize on their inventions if the inventors lack the capital to commercialize their discoveries. "The trolls look for patents that are basically just sitting around and offer the inventor something," Saitta says. "The inventor has made nothing so far and has spent all the money to get the patent, so suddenly someone walks up and says, ‘I would like to buy your patent.’ The inventor is in a winning situation."

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.