AI is changing the world, but along with innovation comes a growing problem—patent trolls. These are entities that do not create anything new but instead hold patents just to file lawsuits against real businesses. In AI, where rapid development is key, these lawsuits slow down progress, drain resources, and create an unfair advantage for those who exploit the legal system.
Over 50% of AI-related patent lawsuits in the U.S. are initiated by non-practicing entities (NPEs), commonly known as patent trolls
More than half of AI-related patent lawsuits come from NPEs. This means that most companies being sued for AI patents are not actually facing competition from other innovators, but from entities that exist solely to extract money through legal threats.
Why does this matter? Because when half of all lawsuits come from patent trolls, it means businesses are spending time fighting lawsuits instead of improving AI. This slows down technological progress and makes AI more expensive for consumers.
What Can You Do?
- If you’re an AI company, consider patent insurance to protect against legal fees.
- Before acquiring AI-related technology, conduct a patent clearance search to identify potential risks.
- Advocate for patent reform policies that make it harder for NPEs to file frivolous lawsuits.
AI patent litigation has increased by over 300% in the past decade, with a significant spike in cases filed by patent trolls
The number of lawsuits involving AI patents has more than tripled in just ten years. Much of this increase comes from patent trolls aggressively targeting companies that use AI in their products.
One reason for this is the explosion of AI patents. As AI has grown, so has the number of patents granted, creating opportunities for bad actors to claim infringement. Another reason is that many AI patents are vague, making it easier for trolls to claim ownership over broad AI concepts.
How to Stay Protected
- Work with experienced patent attorneys to draft patents that are strong and defensible.
- Keep clear records of your AI development to show originality in case of a dispute.
- Regularly monitor patent lawsuits in your industry to understand which patents are being used for litigation.
As of 2024, more than 70% of AI patent disputes involve at least one NPE
Patent trolls are responsible for the majority of AI patent disputes. This means that most AI companies facing legal trouble are not dealing with true competitors but with legal entities looking for settlements.
These disputes create an uneven playing field. Startups and mid-sized companies, in particular, suffer the most, as they often lack the resources to fight long legal battles.
How to Avoid Being a Target
- Keep a low litigation profile—NPEs target companies that seem vulnerable.
- Build a defensive patent portfolio to deter trolls from suing you.
- If sued, explore inter partes review (IPR) at the USPTO to challenge weak patents before trial.
Around 90% of AI patent lawsuits filed by NPEs are settled out of court
Most AI patent lawsuits from NPEs never make it to trial. Instead, they end in settlements because companies want to avoid huge legal costs.
This works in the trolls’ favor. They count on companies preferring to settle rather than fight a long, expensive lawsuit. It’s a business model designed to pressure companies into paying rather than proving innocence.
How to Handle a Lawsuit
- Don’t settle immediately—assess whether the patent is valid and enforceable.
- Join industry groups that help companies fight patent trolls (such as LOT Network).
- Work with patent defense funds that help companies pool resources against NPE lawsuits.
The top 10 patent trolls collectively hold over 12,000 AI-related patents, with a primary focus on enforcement rather than innovation
A small number of patent trolls control a huge number of AI patents. These entities do not build AI products, research, or innovate—they exist only to sue businesses.
Because they hold so many patents, they can go after multiple industries at once. They often acquire patents from bankrupt AI startups, giving them a vast arsenal of intellectual property to weaponize.
What Can Companies Do?
- Before buying patents, research previous ownership to ensure they were not part of an NPE portfolio.
- Support patent reform legislation that prevents NPEs from stockpiling patents for litigation.
- If facing litigation, consider filing counterclaims to expose bad-faith litigation practices.
More than 40% of AI patents acquired by NPEs come from struggling startups or bankrupt companies
Many patent trolls don’t create their own patents—they buy them from startups that failed.
This is a big problem because AI startups often lack funding, and selling their patents is a last-resort strategy. However, once these patents land in the hands of trolls, they become legal weapons against other AI businesses.
How to Protect Your AI Patents
- If selling patents, consider license-back agreements to prevent trolls from misusing them.
- Conduct patent due diligence before buying patents from struggling companies.
- Join networks that help protect patents from being acquired by trolls (like the Open Invention Network).
The average cost of defending against a patent troll lawsuit in AI is between $3 million and $5 million
Fighting a patent troll is expensive. Even if a company wins, the legal costs alone can cripple a startup.
Many businesses choose to settle instead of paying millions for a court battle. This keeps the cycle going, as trolls know that lawsuits are an effective way to make money.
How to Minimize Legal Costs
- Explore alternative dispute resolution (ADR) methods to avoid full litigation.
- Work with litigation finance firms that help fund legal defenses.
- If sued, consider a joint defense agreement (JDA) with other companies targeted by the same NPE.
AI-related patent troll lawsuits account for over 20% of all tech-related NPE litigation
Patent trolls don’t just target AI companies—they go after all tech firms. However, AI has become a prime target, accounting for one-fifth of all NPE lawsuits in the technology sector.
This means AI businesses are disproportionately affected compared to other fields like cybersecurity, SaaS, or blockchain. AI is a hot market, and trolls see it as an opportunity to extract settlements from fast-growing companies.
How to Reduce Your Risk of Being Targeted
- If you’re developing AI products, do a thorough patent search before launching.
- Watch for NPE activity in your industry—if a troll is active in your sector, prepare for potential lawsuits.
- Avoid using AI patents from unknown sources that might later be used against you.
In 2023 alone, over 500 AI-related patent cases were filed, with NPEs responsible for about 350 of them
The numbers are rising fast. In just one year, patent trolls accounted for nearly 70% of AI-related patent lawsuits.
This shows that litigation is no longer a rare event—it’s a common business risk in AI. Companies need to expect this problem rather than be caught off guard.
How to Stay Ahead of the Trend
- Monitor patent troll cases using litigation tracking tools like PACER or RPX Insight.
- If you receive a demand letter from a patent troll, don’t panic—consult a patent attorney before responding.
- If you see AI patent lawsuits in your field, assess whether you’re at risk and prepare a legal strategy.
Machine learning and natural language processing (NLP) patents are among the most targeted by patent trolls
Not all AI patents are at risk—some areas are hit harder than others. Machine learning and NLP are top targets because they are widely used across industries.
Patent trolls look for patents covering broad, fundamental AI concepts so they can claim infringement against multiple companies.
How to Protect AI Models and Algorithms
- Ensure your AI patents are narrowly defined to avoid broad claims that attract NPEs.
- Regularly check for AI patents being litigated in your niche and compare them to your tech.
- Work with legal and technical experts to defend against algorithm-based patent claims.
Approximately 80% of AI patents held by NPEs are never used for actual technological development
The vast majority of AI patents controlled by trolls are never used to build anything. They exist only as legal weapons.
This shows that patent trolls are not innovators—they are purely opportunists. By understanding this, AI companies can take steps to disarm them before they strike.
How to Fight Back Against Troll-Controlled Patents
- If sued, consider challenging the validity of the patent at the USPTO.
- Support policies that require actual product development for patent enforcement.
- Join AI patent defense groups that work to invalidate weak patents.
The rate of AI patent trolling in the U.S. is three times higher than in Europe due to differences in litigation costs and patent laws
AI companies in the U.S. are three times more likely to be sued by patent trolls than those in Europe.
This is because U.S. patent laws make it easier to file lawsuits, and litigation is much cheaper for plaintiffs. In contrast, European courts have stricter requirements that make patent trolling harder.
What U.S. AI Companies Can Learn from Europe
- Push for U.S. patent reform to discourage frivolous lawsuits.
- If expanding to Europe, consider protecting key AI patents there to benefit from stronger defenses.
- Use defensive patent pools that protect against lawsuits (such as the Open Patent Alliance).
Over 60% of AI patent troll lawsuits target companies in autonomous vehicles, fintech, and healthcare AI
Some AI industries are at much higher risk than others. Autonomous vehicles, fintech, and healthcare AI are top targets because they involve valuable patents and deep-pocketed companies.
Patent trolls strategically go after businesses where settlements are likely to be high.
How Companies in High-Risk AI Sectors Can Defend Themselves
- Secure strong AI patents in these industries before trolls do.
- Monitor emerging AI litigation trends to see what patents are under attack.
- Consider licensing or cross-licensing AI patents to avoid litigation risks.
Amazon, Google, and Microsoft have faced a combined over 150 AI-related patent troll lawsuits in the past five years
Even tech giants are not safe. The biggest names in AI have been targeted by trolls over 150 times.
If these massive companies—with huge legal teams—are struggling with patent trolls, it means smaller AI businesses must be even more vigilant.
Lessons from Big Tech’s AI Patent Battles
- Even with large legal budgets, companies prefer settlements over lengthy lawsuits—so smaller firms must be extra cautious.
- AI startups should consider partnering with large companies for shared legal protection.
- If targeted, look at how major AI firms defended themselves to shape your own strategy.
AI startups with less than $50 million in funding are twice as likely to be targeted by patent trolls compared to larger firms
Startups are the easiest targets for patent trolls. They often lack the funds to fight back, making them twice as likely to be sued compared to larger companies.
Trolls assume that small businesses will settle quickly to avoid legal fees.
How Startups Can Avoid AI Patent Troll Attacks
- Get legal protection early—consult patent attorneys before launching products.
- Build partnerships with larger companies that can help defend against lawsuits.
- Apply for defensive AI patents to make it harder for trolls to target you.
Nearly 50% of AI patent troll lawsuits filed since 2020 involve claims of infringement related to deep learning and neural network architectures
Deep learning patents are at the heart of AI innovation, and trolls know it. Nearly half of recent AI patent lawsuits involve claims around neural networks.
Many of these lawsuits are based on broad or outdated patents, making them difficult to fight.
How to Protect AI Innovations from Patent Trolls
- If developing deep learning technology, ensure patents are well-documented and specific.
- Monitor AI patent databases to see if similar patents are being litigated.
- Work with AI-focused patent attorneys to prevent legal vulnerabilities.
wrapping it up
Patent trolls are a growing problem in the AI industry, draining resources, stifling innovation, and creating unnecessary legal battles. As AI technology advances, these lawsuits are becoming more frequent, targeting companies of all sizes—from startups to tech giants.
The statistics show that AI patents are being weaponized at an alarming rate, with patent trolls using the legal system as a tool for profit rather than innovation.
