It has long been argued that the US patent system needs reform. Many think that the US Patent and Trademark Office is a major problem, because patent examiners are in short supply and unworthy patents are often granted. But the worst complaints are about unscrupulous patent-licensing companies, known as "trolls".

Trolls are merely shell companies that file lawsuits, collect money, and distribute proceeds to patent owners. They enjoyed many advantages - few documents to produce, and most can be reused against new defendants in later cases. They demand settlements, knowing that defending lawsuits can be more expensive than settling. Many trolls try hard to settle before a case even goes to court.

Good patent-licensing rewards individuals and companies for their inventions. Trolls are different. They send demand letters to thousands of supposed patent infringers, sue everyone in sight and let the grind of litigation soften them up for settlement.

In three quick strokes, the Supreme Court made things better. The recent rulings did not involve trolls, but they affect them.

1. Lower courts were instructed to apply a traditional test before entering injunctions. Trolls can no longer count on getting injunctions, even if they win their cases.
2. It's now harder for trolls to wage licensing campaigns. Previously, trolls could send letters to targeted companies, putting them on notice, and at risk of being found "willful" infringers facing triple damages. Now a company receiving a letter offering a patent license may simply file a local lawsuit in response, removing the risk.
3. It's much easier to find that a patent should not have been issued in the first place, or that it should be declared invalid. "Obvious" inventions are no longer entitled to patent protection.

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