The Line Between Patent Trolls And Extortion

Patent enforcement is a legal right afforded to inventors and rights holders, allowing them to protect their intellectual property. However, when that enforcement begins to resemble threats or coercion, the line between lawful activity and criminal conduct becomes less clear. Many patent holders work through a patent lawyer to pursue legitimate claims, but others — commonly known as patent trolls — take a much more aggressive approach.

Patent trolls, also referred to as non-practicing entities (NPEs), are individuals or companies that own patents but do not produce products or offer services based on them. Instead, their business model focuses on filing lawsuits or sending demand letters to businesses that may be using similar technology. The goal is often to obtain a quick settlement rather than to resolve a real dispute. You may be more familiar with something similar in the web space: there are people who purchase domain names that are similar to yours and try to sell them to you. Or, they wait for the name to expire and grab it in the hopes that you will pay big bucks to get it back. While not the same, this is a similar situation.

What Makes A Patent Troll Different From A Legitimate Rights Holder

There is nothing inherently illegal about enforcing a patent. Even companies that don’t manufacture goods have the right to license and protect their intellectual property. The difference lies in how the patent is used.

A rights holder with a legitimate claim typically works through legal counsel, such as a patent attorney, to address infringement in a reasonable manner. They may seek royalties or licensing fees based on actual use. In contrast, a patent troll may target small businesses with vague or overly broad patents and threaten costly litigation unless a settlement is paid quickly. These tactics can look more like a pressure campaign than a legal process.

Where Aggressive Enforcement Crosses A Legal Boundary

The issue becomes more serious when enforcement tactics involve threats, false claims, or harassment. For example, sending dozens of threatening letters to businesses with no real intention of going to court can resemble extortion. In some cases, trolls will accuse companies of infringement without fully understanding the technology involved or without clear evidence. They are just hoping to get some money out of the company they are going after.

If a patent holder uses intentionally misleading language, falsely claims infringement, or suggests criminal consequences for failing to settle, that conduct may attract scrutiny beyond patent law. Prosecutors have, on rare occasions, considered whether such behavior could qualify as criminal extortion, especially when the intent is to frighten or manipulate businesses into paying.

Recent Legal Developments And Challenges

Several states have passed laws targeting bad-faith patent assertion. These laws typically require that demand letters include basic information about the patent, the alleged infringement, and the relationship between the enforcer and the patent itself. Courts have also dismissed cases brought by trolls when it’s clear that the patents in question are too vague or broad to support a claim.

Still, enforcement remains a challenge. Because trolls often operate through shell companies and file lawsuits in patent-friendly jurisdictions, it’s difficult for businesses to push back unless they have legal support.

Attorneys like those at COFFYLAW can attest that patent enforcement, when done without a good-faith basis, creates unnecessary legal pressure that often burdens startups, small businesses, and innovators. It’s not just about defending against a patent claim — it’s about knowing whether the conduct itself is abusive.

When Patent Enforcement And Criminal Defense Overlap

In rare situations, a patent dispute may involve conduct that also raises questions about criminal liability. If a business receives repeated threats, false accusations, or is subject to conduct intended to coerce payment through fear rather than legal action, they may consider involving law enforcement or seeking criminal defense advice, especially if they are being accused in bad faith.

Patent law is meant to protect innovation, not punish it. When used properly, it benefits inventors and the public. But when patents are used as weapons rather than legal tools, there may come a point where the issue extends beyond civil law.

If you’re facing aggressive patent demands or are unsure whether a claim is valid, working with a qualified patent lawyer is one of the best ways to protect your business and respond appropriately.