They are for business negotiations.
Patent trolling is the business of extortion. Generally, patent trolling is when someone sues for patent infringement but is willing to settle for less than the cost of litigation. It is extortion, pure and simple.
Patent litigation will cost at least $500,000 in attorney’s fees to get to the first step (which is challenging the validity of the patent through the Inter Parties Review system as the USPTO). A patent troll will simply light up a lawsuit, then agree to settle for $500,000 or less. It makes complete business sense to pay the troll the extortion money and move on.
Patents for Trolling are Often Incomprehensible
There is a special type of patent that is used in trolling, one where the patent is often incomprehensible. The patent is so poorly written with convoluted legalese, long run-on sentences, and big, long paragraphs that are huge bucket of words.
For some unknown reason, some inventors think that twisted legalese is the right way to do patent applications. I have even heard comments like “I could not even tell if my invention was in there, once the patent attorney got through with it.”
These patents are designed to go to court to figure out what they mean.
Investment Grade Patents are Easy to Understand.
Investment Grade Patents are designed to be easy to understand. The fundamental thought process is that the easier it is to understand, the better it is for everybody.
An easier to understand patent goes through the examination process better. As a patent owner, I want the best examination possible. I need the examiner to fully understand the invention so that they can get the best prior art on the record. I want them to be confident that when they allow our patent, that they did a good job and that we actually deserve the patent.
Investment Grade Patents are made for Licensing and Litigation
As a patent owner, however, I also want regular people to understand the patent application. When I write a patent application, I envision pushing the document across the table to a potential buyer or licensee. I want them to understand it right away and know that they need to do a business deal.
I also want the judge and jury to understand the patent. When the patent is hard to understand, a court case devolves to which side can get an expert that explains the patent in the way they want. This means more money must be spent during litigation – but also that both sides need to spend money rather than just coming to an agreement.
It is much harder to write clearly than it is to write those big piles of legalese. In order to write clearly, the drafter must really understand the invention and pick apart the important features. In order to write clearly, the drafter must take the time to have clear, simple sentences. This takes a lot of work.
Mark Twain famously said “I didn’t have time to write a short letter so I wrote a long one instead.”
It may seem counterintuitive, but writing longwinded, convoluted document is much easier than writing an easy-to-understand one.
The patent attorney’s job is a difficult one. They get an hour meeting to grasp an invention that they have never seen before, dissect it with a lot of skill and precision, then recreate that invention in a patent application. In technologies that the attorney does not understand, it is much harder to parse out the important points of the invention or to even explain how the invention works.
In these cases, it is easier for the patent attorney to write very dense prose, full of legalese. Some of the sentences in patent applications may absolutely no sense at all – but that is really the point. The attorney did not understand the invention well enough to write a clear explanation.
Some attorneys and some clients feel that writing this way is good, but it is not. The patent examiners only have so much time to try to understand the invention, and their understanding has to come from what the attorney wrote. If the attorney did not understand it, the examiner will not, either. How can the examiner do their job when they struggle with the invention?
As an aside, remember that patent attorneys make their money during prosecution, the back and forth with the examiner. They have a vested interest in as much of that as possible, so they are not complaining about arguing with the examiner. In fact, they created the situation and they get paid even more to fix it.
Eventually, these patents get issued, usually because the attorney adds more and more to the claims until the examiner finally gives up.
An Investment Grade Patent has value ONLY because it covers products in the market.
Patents made for trolling are usually speculator-inventors who are betting that the market will figure out what the inventor has (allegedly) invented. They are betting that the market will come to them.
Patents for trolling are speculative in nature because they are prophetic, forward-looking guesses about how technology will develop. They are lottery tickets that hopefully will cash out in the next 20 years. In many cases, the inventors are willing to sit on the sidelines for 10 years before they realize value from their invention.
Investment Grade Patents get their value because they are tied to products in the market. An Investment Grade Patent has a symbiotic relationship with a product. The product has value because of the patent, and the patent has value because of the product.
When we invest in a patent, we require that the patent capture the key element of a main product of a company. The reason is simple: we want the company to spend as much time, money, and effort educating the market about the product, touting its value, and selling product.
The cold, hard facts are that a patent is essentially a call option on technology. A patent without a product in the market is purely an out of the money call option, where the intrinsic value is negative and there is only speculative value.
A patent with a product in the market has a positive intrinsic value based on actual sales, plus it has the additional speculative value over its lifetime.
An Investment Grade Patent seeks to get the value of the patent as high as possible as fast as possible. This is why we need startup companies to make the patents valuable.
 This happened in the case of Octane Fitness, as startup company. Turns out that Octane Fitness had a couple million dollars in patent defense insurance and was able to fight the troll all the way to the US Supreme Court. Octane Fitness was later acquired by Nautilus Fitness for $115M.
 I have actually received phone calls from examiners commenting on how good my patent applications were written. They said that they understood the invention much better and that they were able to do a much more thorough job of examining the case in the time allocated to them.