Patent Troll

DEFINITION of 'Patent Troll'

A derogatory term used to describe people or companies that misuse patents as a business strategy. A patent troll obtains the patents being sold at auctions by bankrupt companies attempting to liquidate their assets, or by doing just enough research to prove they had the idea first. They can then launch lawsuits against infringing companies, or simply hold the patent without planning to practise the idea in an attempt to keep other companies productivity at a standstill.

BREAKING DOWN 'Patent Troll'

The name originates from an educational video released to corporations in the early 90's. The goal of the video was to alert corporations to the newest scandal in business, as well as to dissuade potential future trolls. The video depicted a troll rushing into the patent office stealing the patent from the rightful owner.

RELATED TERMS
  1. Medical Patent

    A legal protection against market competition that a government ...
  2. Design Patent

    A patent protecting the unique visual qualities of a manufactured ...
  3. Patent Reexamination

    A process conducted by the U.S. Patent and Trademark Office (USPTO) ...
  4. Field Of Use

    Restrictions that are placed on a license granted for the use ...
  5. Patent Agent

    A professional licensed by the United States Patent and Trademark ...
  6. Patent Share

    The percentage share of a universe of patents owned or created ...
Related Articles
  1. Investing Basics

    Who Are Patent Trolls & How Do They Work?

    Patent trolls are in the business of patent litigation, enforcing their patent rights against alleged infringers through license fees and lawsuits.
  2. Fundamental Analysis

    How Patent Trolls Hurt Competition

    Patent trolls are known to have a negative impact on the overall business ecosystem. Investopedia explores how.
  3. Investing Basics

    Patents Are Assets, So Learn How To Value Them

    Innovation is the key to staying on top. Find out how companies protect their ideas and how to figure out how much they're worth.
  4. Investing

    Protecting Your Idea: Should You Patent It?

    At what stage of development should you patent an idea – and which ideas can you patent? Here's how to decide and what to do next.
  5. Investing

    Hiring A Really Competent Patent Attorney

    Use this guide to find a well-qualified attorney to guide your application through the complex patenting process at the best possible price.
  6. Investing

    Filing A Patent

    Want to patent your invention or design? Here's a complete step-by-step guide to the process.
  7. Investing

    What's The Cost To File A Patent?

    When filing a patent, be ready to pay attorney fees, filing fees and other related expenses. Usually the total bill is a few thousand dollars.
  8. Investing

    Patents, Trademarks and Copyrights: The Basics

    The decision to pursue a patent, trademark or copyright depends on the type of intellectual property you’re trying to shield.
  9. Entrepreneurship

    Protecting Your Idea From Angel Investors

    If you need outside financing to grow your business, be careful about whom you decide to talk to and what information you offer them.
  10. Entrepreneurship

    Prickly Patents

    Knowing these start-up company issues - and how to avoid them - will keep your new business thriving.
RELATED FAQS
  1. Can you realize capital gains on intangible property?

    Learn more about capital gains and losses and how they may apply to intangible assets. Find examples of intangible assets ... Read Answer >>
  2. What types of companies have a high proportion of intangible assets?

    Explore what types of companies are most likely to have a high proportion of intangible assets, due to the nature of the ... Read Answer >>
  3. What are typical examples of capitalized costs within a company?

    Learn examples of capitalized costs such as expenses incurred to put fixed assets to use as well as software development ... Read Answer >>
  4. What are some common examples of noncurrent assets?

    Learn more about noncurrent assets and examples of noncurrent assets, such as tangible fixed assets, intangible fixed assets ... Read Answer >>
  5. What are the major barriers to entry for new companies in the drugs sector?

    Find out why barriers to entry for U.S. drug companies are so high and how the Food and Drug Administration, or FDA, inhibits ... Read Answer >>
  6. What is the drugs sector?

    Learn more about the drug industry and how new drugs are brought to market. Find out about how drug research is financed ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center