A recent Federal Court ruling demonstrates why Australia is not a fertile a hunting ground for patent trolls.
Upaid Systems Ltd, a UK patent portfolio company which some regard as a ‘patent troll,’ has stumbled at the first hurdle in its case against Telstra. In Upaid Systems Ltd v Telstra Corporation Limited [2013] FCA 1441, Upaid alleged two of its patents had been infringed by Telstra’s mobile commerce system. The Federal Court found Upaid failed to identify, with sufficient particularity, at least one instance of each type of infringement alleged to have been committed.
Patent trolls are companies that don’t produce new products or ideas but rely on purchasing and collecting patent royalties to turn a profit. A troll will typically buy up patents and then send out letters threatening legal action against a company it perceives as potentially infringing the purchased patent unless that company pays a licensing fee. In the US, a significant proportion of patent law suits are now undertaken by patent trolls. The Goodlatte Innovation Act (currently before the US Senate) is an attempt to address the problem.
Although Upaid is not a ‘classic’ troll, because it co-developed the systems in dispute in the late 90s and early 2000s but didn’t effectively monetise them, the court’s finding that it failed to plead its case adequately highlights some of the challenges that a true patent troll would face in Australia.