Patent Trolls: Seven Steps to Stop Them and How They Are Contributing to the 20% Uptick in Patent Litigation in 2025

PDF

Who should read this article? Companies sued by patent trolls (NPEs)^[1] seeking to develop strategies to push back against NPE activity—and specifically companies in the following industries:

• Logistics companies that monitor data or even tangible goods or persons (through, for example, GPS or related technologies).
• Financial services – banks.
• Software companies – managing and displaying data through more efficient means, especially where that data is being manipulated, encoded, and transmitted between devices within a network.

Takeaways^[2]

• So far, in 2025, there has been a 20% uptick in patent litigation driven by an increase in NPE activity.
• The increase in NPE activity has been potentially driven by an increase in discretionary denials in PTAB actions, meaning cases are not as readily being stayed in district courts.
• Strategies exist and can be newly adapted based on case-law developments and the types of patents being asserted by NPEs.
• The Federal Circuit is delineating subject matter areas that are increasingly making pre-Alice patents more susceptible to challenge under 35 U.S.C. § 101—those subject matter areas include patents directed towards (1) monitoring of data (e.g., through GPS and related technologies) and (2) data display and transmission of information.
• NPEs are increasingly relying on expired (or soon-to-be expired) patents—making non-infringement and patent marking arguments stronger—particularly as the marking requirement applies to licensees of the NPE, providing a new twist to precluding damages since NPEs are not in the business of patent marking or ensuring compliance with 35 U.S.C. § 287.

Introduction – What is a NPE?

Twenty-five years ago, an attorney at Intel Corporation, Peter Detkin, coined the term: patent troll (also known as Non Practicing Entity – NPE).^[3] At the time, NPEs created a new kind of patent litigation. For those unfamiliar, they often operate by purchasing a patent many years after its conception. The patent may be broad and vague but survived USPTO examination, nonetheless.  The NPE then sues a defendant and uses the patent to extract a license fee from a company that manufactures a product that (arguably) falls within the scope of the purchased patent. Invariably, they seek early settlement. But sometimes the litigation goes further, possibly to the steps of the courthouse—particularly if there is litigation funding involved. 

This article is broken into three parts. 

• The first focuses on the uptick in patent litigation (and the reasons for this new trend, including the uptick in NPE activity in 2025 compared to 2024). It also sets out seven steps that can be taken (or at least considered) to push back against NPE activity.
• The second and third parts dive deeper into some of the pertinent steps—(1) patent marking strategies, (2) per se patent ineligibility positions, (3) building the case for sanctions and (4) non-infringement arguments—all of which can be used to challenge NPEs when a complaint is filed. Parts II and III will be published in early 2026.

Why the 20% Uptick in NPE Activity

According to statistics tabulated by Unified Patents, cases involving NPEs have increased by 15-20% between Q1 and Q2 of 2025 relative to the same period in 2024.  The statistics demonstrate a direct correlation between patent NPE activity and U.S. patent litigation, generally. But why?

Several factors may be behind this trend, but perhaps the most prominent one has been the increase in discretionary denials at the PTAB since March 2025—thus motivating patent NPEs to file more suits knowing that there is less potential for stays to be granted in district court litigation. In the past 9 months, institution rates have dropped to 10.3%.^[4] Further, the issue may be exacerbated by pending legislation that would strengthen the chances of injunctive relief, thus increasing the leverage the NPE can assert in settlement negotiations.  One such example is the RESTORE Patent Rights Act of 2025, which aims to restore a rebuttable presumption of injunctive relief for patent holders in infringement cases.  Both these developments, especially if the latter is enacted, will likely lead to a further uptick in patent NPE litigation in 2026.

The NPE Playbook – The Psychology and High Patent Litigation Costs

As a threshold issue, it is important to understand what lies at the heart of the NPE’s objective in patent litigation—maximum reward for the least amount of effort possible. Much like a ‘toll’ to cross a bridge, the toll in the 21^st Century for the NPE is a mandatory license fee for freedom from suit for alleged infringement of patent.  For at least large companies, the NPE exploits the high cost of patent litigation by extracting a nuisance value settlement. By demanding far less than the cost of defending the case, the NPE forces the defendant to accept the settlement fee or pay attorney’s fees and other costs in patent litigation that can amount to 10 to 25 times the settlement fee with no certainty of the outcome.  For small to medium-sized companies, the lawsuit, if not quickly settled, can be more than just a nuisance.  The public nature of the lawsuit can make it difficult to raise capital or secure loans. These non-patent factors are, too, leveraged against the targeted defendant.  In sum, the NPE’s typical playbook includes:

• possibly sending a demand letter pre-suit,
• filing a complaint,
• sending a demand letter,
• proposing a settlement sum,
• negotiating settlement with the threat that if the suit does not settle before discovery, the settlement fee will be raised to cover the NPE’s costs (with the NPE knowing that discovery will be far more costly for the defendant than the NPE, which usually has very few documents or witnesses to produce).

Discovery thus becomes a tipping point for any defendant.

Seven Steps to Defend Against NPEs and Create Leverage in Negotiations

If discovery is the tipping point, the question becomes—what steps can be taken to push back (or at the very least, what considerations can create leverage for the defendant) for any settlement? The following considerations provide a high-level overview of what can be considered to strengthen a defendant’s position.

1. Consider filing a Motion to Dismiss based on Rule 12(b)(6) of the Federal Rules of Civil procedure. Such motions provide one of the best vehicles for the Defendant in creating leverage. The motion typically halts discovery in most federal districts (but not all) until disposition. But that’s not the primary reason to take this action. A well-reasoned motion based on strong (1) ineligibility, (2) non-infringement and (3) patent marking grounds can make the NPE second-guess the strength of their own case. No NPE wants a well-reasoned motion in the public domain, even more so if there are multiple defendants still to be targeted—much less an early judgment against them.  
2. Consider patent ineligibility positions under 35 U.S.C. § 101. Many of the patents asserted by NPEs were examined pre-Mayo and Alice. They haven’t undertaken exacting scrutiny as provided by these Supreme Court decisions—yet the claims are likely broad and vague, making them susceptible to ineligibility. See Universal Secure Registry, LLC v. Apple Inc., 10 F.4th 1342, 1355 (Fed. Cir. 2021). Where the NPE’s patent is directed toward (1) displaying and transmitting information or (2) monitoring information through GPS or otherwise, the Federal Circuit is increasingly viewing such subject matter as per se ineligible under 35 U.S.C. § 101. See AI Visualize, Inc. v. Nuance Commc’ns, Inc., 97 F.4th 1371, 1378 (Fed. Cir. 2024) (holding that “obtaining, manipulating, and displaying data . . . are abstract concepts”); Sanderling Mgmt. v. Snap Inc., 65 F.4th 698, 703 (Fed. Cir. 2023) (“[M]atching a GPS location indication with a geographic location” held ineligible). Part III addresses these per se categories in depth.  Critically, some of the best evidence against the NPE is the patent itself—i.e., well-known admissions on the face of the specification that conform with the patent eligibility language under Alice’s two-step analysis. It can be used against the NPE without the need for downstream discovery in the context of a motion to dismiss.
3. Consider whether the NPE has pled compliance with patent marking requirements under 35 U.S.C. § 287 (and accounted for its licensees). Not uncommon is the filing of a patent by a NPE that is soon to expire (or has expired). Plaintiff “bears the burden of pleading and proving [it] complied with § 287(a)’s marking requirement” to recoup damages from a defendant. Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1366 (Fed. Cir. 2017); see also Dunlap v. Schofield, 152 U.S. 244, 248, 14 S.Ct. 576, 577, 38 L.Ed. 426 (1894) (“[T]he duty of alleging, and the burden of proving, either [actual notice or constructive notice] is upon the [patentee].”). Failure to comply with § 287—along with failure of licensees to comply—can preclude damages.  If notice of an expired patent comes first from the filing of a complaint (and there has been no patent marking), then there are no damages under § 287’s marking requirement.  Without a remedy to damages, there can be no right to a claim for patent infringement. Stated another way, because the NPE has not pled a sufficient remedy (damages), it has failed to state a claim for relief.  The claim can be dismissed under Rule 12(b)(6).
4. Consider whether the NPE has alleged infringement of a product that post-dates the expiry of the patent. If a NPE cannot allege infringement occurred before expiry, the claim cannot successfully allege direct and indirect theories of patent infringement. See Kimble v. Marvel Entm’t, LLC, 576 U.S. 446, 451 (2015). The NPE may then be forced to dig deeper for such evidence, creating more work and the amendment to the complaint.
5. Always communicate in good faith, but build a case for attorneys’ fees under 35 U.S.C. § 285. Start asking the NPE for reasons to justify the settlement sum based on the merits of the case—i.e., their infringement, invalidity and damages theories. The defendant should put forward their theories in a detailed letter (pre-response)—and expressly ask for authorities that counter the authorities the defendant puts forward.^[5] If they don’t counter, it signals that their case is weak.  This is helpful evidence for any downstream court decision when considering sanctions or an award for attorney’s fees.
6. Consider the jurisdiction. Know the terrain.  But even if the case is in the Western District of Texas or similar districts, look to each district judge’s standing orders and practice standards.  Some only allow one amendment before dismissal with prejudice and have mechanisms that allow for placing the NPE ‘on ice’ if they are forced to amend before filing a Motion to Dismiss. As such, draft a detailed letter to the NPE setting out the merits—and point out glaring deficiencies, such as referencing method claims in a complaint when there are none in the patent or that the defendant’s name is not the same in the claim chart.  Simple things. But if it forces amendments, they are small wins, and a Judge will only give so many chances to a NPE that is filing a complaint based on ‘copy and paste.’ The merits letter also supports downstream arguments that the amendment would be futile. See also Step 5 – sanctions and fees.
7. Consider public litigation records through PACER. Matters of public record can be judicially noticed without violating due process and support a Rule 12(b)(6) motion.  For reasons addressed in Part II of this article—patent marking—such records become critically important in demonstrating dismissals with prejudice that require compliance with patent marking requirements under 35 U.S.C. § 287.  See Step 3.

Conclusion

There are at least seven steps/considerations to help leverage or dismiss a NPE suit.  These are summarized at a high level above.  Two of those seven will be addressed in more depth in Part II of this three-part article, namely, how patent marking is increasingly being used against NPEs to cut down expired patents asserted against defendants. Attorneys’ fees can also help gain leverage, which will be discussed in Part II. Part III will focus on patent eligibility and address subject matter areas that are increasingly making pre-Alice patents more susceptible to challenge under 35 U.S.C. § 101.

^{[1] NPE means non-practicing entities.
[2] Parts II and III of this article are co-authored with colleagues that have dealt with NPEs—and patent litigation, generally—over years (if not decades). And while these colleagues will be co-authoring future parts of the article, a special note of thanks goes to Mary Grace Kiernan for her edits and assistance with this article.
[3] See also Patent Trolls, definition in Electronic Frontier Foundation.
[4] Since USPTO Director Squires “began making institution decisions in the fall, he has now instituted review in a total of 13 cases and denied review in 113, for an institution rate of 10.3%.” Squires Institutes 7 AIA Reviews, Denies 12 Other Petitions, IPLAW360 dated, December 12, 2025.
[5] Naturally, if one intends to rely upon the letter downstream, it cannot be under the umbrella for Federal Rule of Evidence 408.}