SALT LAKE CITY — Before the advent of the World Wide Web, a troll was thought by most to be a mythical creature, typically ugly, that lurked in the nooks and crannies of the landscapes of children's stories, poised to pounce on the first unsuspecting victim.

And while the internet changed all that, a Monday ruling by the U.S. Supreme Court could go a long way to abate the behavior of yet another kind of troll, a type that's been earning billions via a predatory business model that targets the work of innovators and inventors — particularly those in technology industries.

Nonpracticing entities, or "patent trolls" colloquially, have been targeting businesses that hold patents or intellectual property rights by buying up typically old and vaguely worded patents that can later be used to challenge the rights of companies that are actually using their innovations in products or services. Through cease-and-desist orders and filing patent litigation actions, the patent trolls can effectively force their targets into out-of-court-settlements that are a much less costly alternative to court proceedings. The trolls have also exploited a loophole that was created by a 1990 court ruling that made it easy for them to sue in virtually any location, allowing the predators to choose courts with track records friendly to their causes.

An 8-0 Supreme Court opinion, delivered Monday and authored by Justice Clarence Thomas, closed the loophole that allowed "venue shopping." The decision is widely supported by tech industry legal experts.

Amelia Rinehart, associate dean for faculty research and development at the University of Utah's S.J. Quinney College of Law who specializes in patent law, explained that the nature of patent infringement, as a legal question, is fairly easily raised in spite of the rigorous process required of anyone who acquires a patent.

"Nonpracticing entities can buy a patent on the open market or approach an inventor who got a patent 15 years ago for a simple process that does one small thing and allows you to sue anyone who is doing that one small thing, even if it's enveloped in a much larger process," Rinehart said. "The only way to resolve it is to seek a court finding."

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And, Rinehart said, that's the weak point exploited by people who know it's far cheaper for a company to pay a relatively small amount of money in an out-of-court settlement rather than financing a legal battle.

"These cases can easily run into the millions of dollars for attorney's fees," Rinehart said.

Rinehart said the East District for Texas courts had earned a widespread reputation for rulings the skewed toward plaintiffs and, under the old rules allowing venue shopping, were hearing the lion's share of all the cases brought by patent trolls.

She also noted there are legitimate, above-board cases, but that patent trolling, in one form or another, can trace its history back to the first patent protections offered to U.S. innovators in the late 18th century.

Utah not immune

Utah innovators have not been immune to attention from patent trollers.

Mark Miller, Salt Lake City patent attorney and partner in the intellectual property litigation group at Holland & Hart, said his firm has been tracking the Supreme Court's work on the case and was, overall, pleased with the outcome.

"After this ruling, these (nonpracticing entities) will be forced to sue in the home districts of the defendants," Miller said. "We feel it is definitely a benefit for a lot of companies, including many in Utah. There is a lot of innovation happening in Utah and we've seen numerous examples of these companies being targeted."

In a story published earlier this month, tech website TechCrunch said more than 10,000 companies have been sued at least once by patent trolls, and that the same entities filed over 84 percent of the high-tech patent lawsuits. Patent trolls have been responsible for $80 billion in lost wealth annually, the site noted.

While the most populous states in the country can generate tens of thousands of patents a year, patent volume in Utah is relatively small but has been rising. From 2011-15, Utahns were issued more than 6,200 patents, according to the U.S. Patent Office.

While Miller said the Supreme Court action will effectively negate the practice of cherry-picking friendly federal courts in Texas to hear patent infringement cases, there were other courts that are known to have similar track records and, additionally, the changes may have inadvertently created some new challenges.

Miller explained that the ruling also will require that cases brought by companies against infringing competitors be filed in the state where the competitor is based, which may create disadvantages in nonpredatory disputes between active companies.

Those issues, he said, could likely be addressed by follow-up legislation, a matter raised by Sen. Orrin Hatch, R-Utah, during a presentation at the Capitol on innovation issues earlier this year.

"Abusive litigants have exploited a hole in the law to direct a disproportionate number of suits to plaintiff-friendly forums, and to one such forum in particular," Hatch said. "The Supreme Court is currently examining the issue, so we won’t have a full view of the landscape until after the court rules.

"But no matter what the court does, we’re likely going to need follow-on legislation to prevent future forum-shopping and to ensure that litigants have a meaningful connection to the site of the suit. I intend to take a leading role on this critical issue," Hatch said. Email: araymond@deseretnews.com Twitter: DNTechHive

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