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Protecting Innovation in the Cyber World from Patent Trolls

By John Chen
March 01, 2020

Cybersecurity firms have a tremendous responsibility. They work 24/7 to protect many of the world's most trusted and valued companies and brands. Their clients rely on their expertise to protect crucial assets, and consumers trust that they are keeping client information safe and secure. At the same time, cybercrime is still a very real threat. In fact, "Cybersecurity Ventures predicts that cybercrime will cost the world $6 trillion annually by 2021, up from $3 trillion in 2015." (Cybercrime Magazine, Dec. 18, 2019).

With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls" as they are commonly known). PAEs are companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.

Patent Litigation Can Happen to Virtually Any Business

At Trend Micro, we know first-hand how patent trolls attempt to extract millions of dollars from a business. A few years ago, a patent troll came after our IP with threats of infringement. Intellectual Ventures, a known patent troll, develops and licenses IP, and in essence they bought tens of thousands of patents and leveraged those patents against companies in an attempt to generate billions in royalties for themselves. In Trend Micro's case, we were confident that the patents Intellectual Ventures asserted against us were invalid, and always held the belief that our products and innovation never infringed upon them.

We held our ground and litigated the case for six years, leading to a successful outcome. However, litigation like this comes at a price — time, energy, financial resources and more. Companies just starting out in the cybersecurity world may not have the means to spend six years in court fighting a patent troll — and that is what patent trolls rely on. They are opportunists hoping to engage an unsuspecting company who will eventually give up and settle for millions out of court. And for companies who have been around for a while, protecting their assets from potential litigation should be a part of their IP strategy.

Patent Litigation on the Rise

In the last few years, patent litigation has been on the rise. Unified Patents reported that in 2019 alone, patent litigation was up 4% across all industries. The majority of new patent disputes involve the tech industry. In fact, the report shows that 84% of all PAE assertions filed in 2019 involved high-tech companies. By contrast, only 10% of non-PAE litigation involved companies in the high-tech sector. What does this mean for cybersecurity firms?

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