A demand letter from a patent troll is a different beast than a demand letter from an operating company. Operating companies sue to defend a real product. Trolls sue to extract a settlement. That changes everything about how you should respond.
This article assumes you've already read what to do in the first 48 hours — preserve documents, save the letter, pull the patent, hire a patent litigation attorney. From here, we focus on the troll-specific playbook.
Confirm it's actually a troll first
Before you optimize your response for trolls, make sure that's what you're dealing with. A demand letter from Apple, Microsoft, or Qualcomm is an operating-company assertion — the response strategy is different.
The signals you're dealing with a troll:
- The patentee is an LLC you've never heard of. Often a Delaware or Texas LLC formed in the last 24 months, with a name that ends in "IP," "Holdings," "Licensing," or "Innovations."
- The patentee has no products and no employees. Their website (if any) is a single page. They have a P.O. box, not an office. Their contact email is the law firm's address.
- The patent was acquired, not invented. The original assignee on the patent's USPTO record is a different entity from the current asserter.
- The same patent has already been asserted against many defendants. Search the patent number on PACER, RPX, Unified Patents, or our litigation registry.
- The demand is round and small relative to the case. Trolls' economics depend on settlement volume — they price at 30-60% of average defense cost so paying looks rational.
- The infringement allegations are vague. No claim chart, no element-by-element analysis. Just "your products generally include features that infringe."
If three or more of these apply, you're being shaken down. Adjust your response accordingly. (How patent trolls operate →)
What to send first
Your first response is not a check, and it's not a defensive denial that hands the troll free information. It's a short, formal, neutral letter that:
- Acknowledges receipt of the demand letter, by date.
- Reserves all rights and defenses. Make explicit that nothing in the letter is to be construed as an admission.
- Demands specifics. Ask for a claim chart matching each asserted claim limitation against a specific feature of your product. Ask for the basis of each infringement allegation.
- Reserves invalidity defenses. Note that you're investigating prior art and validity defenses including §§ 101, 102, 103, and 112, and reserve the right to file inter partes review.
- Requests an extension if the deadline is short. Anything under 30 business days is unreasonable; ask for 45-60 days to evaluate.
- Routes future communications through counsel. Once your attorney is engaged, the troll talks to them, not you.
This kind of response sends three messages:
- You're represented. You're not a panicked engineer who's going to write a check this week.
- You'll demand the work the troll didn't do. Most demand letters skip claim charts because writing them is real work. Demanding one extracts cost and time from the troll.
- You know about IPR and § 101. Trolls notice when defendants mention specific defenses by statute. It signals you're not a soft target.
The site's Demand letter analyzer generates a sample response letter in this style — a draft your attorney can review and adapt.
What never to send
- A check or a counter-offer. Settlement value almost never decreases over time before a complaint is filed. If the troll wanted $50,000 today, they'll take $20,000 in six months. The first response is the wrong place to talk numbers.
- A technical defense of your product. "We don't infringe because our product does X instead of Y" gives the troll free information they can use to refine their next demand letter or reshape their infringement contentions.
- A theory of why the patent is invalid. Don't tell the troll about the prior art you've found. That's ammunition for an IPR — keep it in reserve.
- Anything personal or emotional. Frustration is normal. Putting it in writing is a mistake. Anything you write becomes evidence.
- A blanket non-infringement opinion that you can't fully defend. If the case proceeds, anything you said in the demand-letter phase will be deposed.
How to make the troll's economics work against them
A troll's business model has three inputs: per-target settlement amount × number of targets / cost per assertion. To make a troll move on, you raise their cost per assertion or lower their probability of settlement.
Demand a real claim chart
A claim chart costs the troll's attorney 10-20 hours to produce competently — say $5,000-$10,000 of attorney time per target. If 50 defendants demand claim charts and only 3 settle, the campaign breaks even. Demanding the chart is free for you and expensive for the troll.
Ask for prior settlement licenses
If the troll has settled with other defendants, ask for the average settlement value (under a protective order). This isn't binding, but most trolls won't volunteer the number — and refusal to disclose suggests their average is lower than their demand.
Probe their litigation appetite
Run a PACER search on the patentee's case history. (Or browse it on this site if the patentee has cases on file.) If the troll has filed 30 cases and 28 settled before claim construction, they're a settlement shop, not a trial firm. The threat to litigate is bluff. Reference that pattern in correspondence: "We note the patentee has settled 28 of 30 prior cases at the pleading stage; we're prepared to test that pattern."
Threaten an IPR
Even mentioning IPR in correspondence is uncomfortable for trolls. It signals two things: you can afford the $200K-$500K filing cost, and you have prior art. If the patent looks IPR-vulnerable — broad claims, software methods, an issue date pre-2014 — say so:
"Counsel for the recipient is investigating prior art for an inter partes review petition. Should the IPR institute, the recipient will move to stay any concurrent litigation pending the PTAB final written decision."
A patent in IPR loses commercial value to the troll. They can't license what's about to be invalidated.
Threaten § 285 fee-shifting
Under Octane Fitness v. ICON Health (2014), district courts can award fees to prevailing defendants in "exceptional cases" — and the bar isn't high. If the patent is junk, the suit is unsupported by claim charts, or the troll's litigation history shows nuisance settlements, your eventual fee-shift motion is a real threat. Reference § 285 explicitly:
"If this matter proceeds to litigation, the recipient reserves all rights to seek fee-shifting under 35 U.S.C. § 285 based on the apparent weakness of the asserted claims and the absence of substantive infringement contentions in your demand."
The 2014 Lumen View v. FindTheBest fee award against the holder of US Patent 8,069,073 is the touchstone.
Find the joint defense group
If the troll has filed against many other targets, the other defendants are valuable allies. Joint defense groups share invalidity research and split costs — you get a $300K invalidity workup for $30K. Reach out through your attorney to defendants in earlier-filed cases. RPX Corporation and Unified Patents both maintain JDG infrastructure for member companies.
When to negotiate vs. when to fight
Negotiate if:
- The demand is small enough that fighting is irrational ($5K-$25K against a small business).
- The patent looks valid and you genuinely infringe.
- The troll has a pattern of pushing through to claim construction (i.e. they actually litigate).
- You're cash-constrained and can't afford a $500K defense even if you'd win.
Fight if:
- The patent is IPR-vulnerable (prior art exists, claims are broad).
- The troll's history is settle-or-drop.
- The demand is large enough that defense costs are similar.
- You have product-line risk — settling one patent invites every related patent in the portfolio.
- Your competitors are also targets and you can split costs.
What "fighting" actually looks like
Three concrete moves:
File a declaratory-judgment action in your home court. Beats the troll to filing and locks in your preferred venue. Your home district has lower court costs and a friendlier rocket-docket calendar than E.D. Tex. or W.D. Tex..
File the IPR. $23,750 in PTAB filing fees plus $13,750 per claim over 20, plus $200K-$300K in attorney and expert fees. Wins are typical when prior art exists. (Cost of IPR →)
Move to dismiss under Alice / § 101. For software patents and abstract methods, an early Rule 12 motion can end the case before claim construction. Cheap relative to anything else.
Bottom line
Trolls write demand letters expecting volume settlements, not fights. The right first response is short, formal, demands specifics, and signals defenses without conceding facts. The right second response — through counsel — is to make the troll's economics worse: claim chart demands, IPR threats, joint defense groups, § 285 reservations.
The troll's leverage is your fear, your time pressure, and your ignorance of the playbook. Remove all three and most demand letters quietly go away.
The site's demand letter analyzer automates the first-pass evaluation: it extracts the asserted patents, characterizes the asserter's litigation history, identifies validity vulnerabilities, and drafts a sample response. Useful as a starting point for your attorney's review.
This article is for general education and is not legal advice. The right response depends on the specific patent, the specific demand, and the specific posture — talk to a patent litigation attorney.