In recent years, American companies have faced a growing threat from patent assertion entities derisively called “patent trolls.” These often shadowy firms make money by threatening patent lawsuits rather than creating useful products. A recent study suggests that the roots of the patent trolling problem may lie with the US Patent and Trademark office—specifically with patent examiners who fail to thoroughly vet patent applications before approving them.
Playsaurus, a small Los Angeles-based game studio that makes Clicker Heroes and the upcoming Clicker Heroes 2, has recently been threatened with a lawsuit if it doesn’t pay $35,000 for a patent licensing fee to cover a patent for “electronic tokens.”
In a Thursday blog post, the CEO of Playsaurus wrote that the company that sent him the letter, GTX Corporation, is a “patent troll.” CEO Thomas Wolfley called GTX’s demands to avoid “costly litigation” over Playsaurus’ use of electronic “Rubies” in its games “meritless.”
The importance of the US Patent Office’s “inter partes review” (IPR) process was highlighted in dramatic fashion yesterday. Patent appeals judges threw out a patent [PDF] that was used to sue more than 80 companies in the fitness, wearables, and health industries.
Trying to succeed as a startup is hard enough. Getting a frivolous patent infringement demand letter in the mail can make it a whole lot harder. The experience of San Francisco-based Motiv is the latest example of how patent trolls impose painful costs on small startups and stifle innovation.