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Beware the patent troll

If you've listened to certain popular podcasts lately, you've probably noticed some hosts are under attack.

Radio personality Adam Carolla, for instance, is already being sued, while comedians Ari Shaffir and Marc Maron have received letters threatening legal action. Why? They've all stepped into the crosshairs of a patent troll.

"The patent troll waits for others to develop, market, and sell products and only then asks for a cut," says Dan Nazer, staff attorney for the Electronic Frontier Foundation a non-profit U.S.-based international digital rights group currently fighting patent trolls.

"There's no way I can afford to fight a court battle and they know that," Maron told This American Life. The host of WTF with Marc Maron and his podcasting colleagues are being targeted by a company called Personal Audio, which claims to have invented the podcast in 1996, but has never put forth so much as a prototype to that end.

"Why don't they have a percentage in mind or a number that they think is justified?" asks Maron. "Why are they being cagey about that? Because it's a shakedown!"

Spotting a troll
"Companies and institutions interested in legitimate technology transfer try to find partners before the technology is commercialized," says Nazer. "Research shows that patent trolls tend to wait to assert patents until the final years of the patent term. This is how patent trolls operate as a tax on innovation."

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Even though the risk of these lawsuits is lower in Canada because of the smaller market and lower damage amounts, that doesn't mean Canadians aren't affected. American companies with Canadian operations or partners can be sued in U.S. courts, while some alleged patent trolls, such as Ottawa's Rock Star, are based in Canada. So, how can Canadian entrepreneurs in Maron's position fight back?

Catching a troll
Canadian law is no different from American law in that if you infringe on a patent, you risk getting sued. But, in Canada, costs work differently.

"If you end up filing a patent lawsuit and losing, you could be on the hook for costs," says Aaron Edgar, an associate patent lawyer at Gowlings Law Firm in Toronto.

Currently, there's a bill before congress that could see the same thing in the U.S. If passed, The Shield Act would require fee-shifting when the suit is found invalid and losing plaintiffs would be on the hook for the defendant's legal bills. It's hoped such a requirement would deter patent troll lawsuits the same way it does here, but fee-shifting isn't all defendants are armed with in either country.

Killing a troll
"Whenever there's a patent lawsuit there are probably two heads of defence," says Edgar. "One is non-infringement saying, 'No, I don't do what the patent claims' and the second is invalidity where you allege that the patent is invalid because something like what the patent covers already existed before that. This is called 'Prior Art'."

President Obama has also recently put his power behind stamping out patent trolls, issuing several executive orders in June 2013 that direct the U.S. Patent and Trademark Office to require companies to be more specific about what their patent covers and exactly how it's being infringed. They've also been told to heavily scrutinize overly broad patents and curb lawsuits against small business owners using off the shelf technology.

Aaron Broverman is a Toronto-based freelance writer

-- Posted June 24, 2013
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