A patent troll is a non-practicing entity whose purpose is to enforce patents. The patent troll has one or more patents as its sole assets. Patent trolls have become increasingly more active in the recent recession and usually target larger companies that can afford to pay a licensing fee. The licensing fee is typically cheaper to pay than to litigate. Thus, the patent troll is able to generate a great deal of revenue from its enforcement activities.
Step 1 - Looking at how detailed the Patent Troll's letter is
The first step is to evaluate the letter itself. Does the letter contain a lot of analysis and detail comparing the allegedly infringing product to the patent at issue? Or, does the letter contain little to no analysis or comparison to the patent at issue? If there is little analysis, the letter was likely sent to a large number of companies, and there likely hasn't been a detailed analysis done of whether your product infringes. If, however, the letter is very detailed, then the patent troll may be targeting fewer companies that it believes infringes and may be more aggressive with enforcing its patent or patents against you.
Step 2 - Looking at the Troll's litigation histiory
The next step is to research how active the patent troll is in bringing suits. You may do so at www.pacer.gov If the patent troll is very aggressive, you must quickly decide whether you wish to pay a licensing fee, or fight the troll. If you choose to fight, you may have a narrow window in which to bring a declaratory judgment action. If, however, the troll has not sued many companies, you may have more time to evaluate your position.
Step 3 - Deciding to fight the patent troll
Lastly, if you decide to fight a patent troll you must hire a reputable IP attorney. You will have two choices. First, you may simply refuse to pay a licensing fee and wait to get sued. Second, you may file a declaratory judgment action if your attorney believes that your product does not infringe. This second option is favorable because you can choose the location most favorable to you to bring suit - i.e. your home turf. The danger with waiting to be sued is that you may be sued in a less-than favorable jurisdiction. Many times, patent trolls bring suits in the Eastern District of Texas.