LC-23 · Corporate
Patent assertion entities
A letter, then a settlement
In ordinary words
A company that makes nothing can own a patent and demand license fees from businesses that do, pricing the demand just below the cost of a court fight.
Why people call it a crime
People call them patent trolls. Owning a patent and enforcing it is the right the statute grants.
A scene, not a hypothetical statute
A small shop gets a letter: $40,000 to license a vague software patent, or see you in the Eastern District of Texas. The shop pays. No product was copied in any ordinary sense. The letter can still be lawful.
In legal terms
35 U.S.C. § 281 lets a patentee bring a civil action. Non-practicing entities are lawful owners. The America Invents Act, eBay v. MercExchange (2006) (injunctions are not automatic), Alice v. CLS Bank (2014) (abstract ideas), and fee-shifting under § 285 have narrowed the field. Demand letters are generally protected as pre-suit communication, with state anti-troll bad-faith letter statutes in some places.
A patent is a right to exclude, not a duty to manufacture. Courts enforce it regardless of the owner’s business model.
35 U.S.C. §§ 281, 285; eBay Inc. v. MercExchange, 547 U.S. 388 (2006); Alice Corp. v. CLS Bank, 573 U.S. 208 (2014).
Where it stops being legal
Asserting a patent known to be invalid, sending bad-faith letters banned by a state statute, or sham litigation that is a cover for antitrust violations can create liability.