Via PriSim: Patent Trolls… Are They Good or Bad for Business?

When you’re setting up a business, you’re going to make allowances for any number of different costs, but here’s a cost you probably haven’t budgeted for: trolls.

We’re not talking about trolls like the one from “The Billy Goats Gruff,” or even the types of trolls who hang out on internet message boards, though the trolls in question do share a couple of pertinent attributes: they’re annoying (if not downright unpleasant), and they will cost you money. “Patent trolls,” or patent assertion entities, are businesses that make frivolous claims that a patent they own has been infringed upon. These trolls then offer the targeted company a choice: pay a license fee, or pay to go to court. Either way, it’s going to cost you.

For example, in 2011, patent trolls cost the U.S. economy $29 billion. The following year, patent trolls sued Apple 44 separate times. However, big businesses are not the only targets. One of the most notorious patent trolls, MPHJ Technology Investments, has been sending out thousands of emails to small businesses demanding $1000 per worker for violating patents on networked “scan-to-email” functions.

These patent trolls sound pretty bad, right? Well, an article in Forbes claims that patent trolls are actually a good thing, saying that these trolls help protect inventors from patent thieves by purchasing ideas the inventor would not otherwise be able to develop and/or market. What do you think?

PriSim Business War Games Inc. runs and designs customized business simulations that teach decision-makers about business, strategy, finance, and leadership.

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