Dive Brief:

• The Supreme Court Tuesday handed down two rulings giving courts more leeway in awarding attorneys’ fees to the prevailing side in cases involving so-called “patent trolls.”

• Many companies facing patent lawsuits settle rather than fight costly legal battles when faced with claims by Patent Assertion Entities — companies mostly set up to extract money from companies over broad patent issues.

• While there are legitimate patent infringement cases, those instigated by PAEs tend to be too broad to be winnable in court. These rulings strengthen the incentive for companies targeted by PAEs to defend themselves in court because they’re more likely to be able to recoup legal fees.

Dive Insight:

Companies who fight patent trolls tend to prevail in court, but because those can be expensive battles, many companies subject to challenges by patent trolls just settle because that option is cheaper. These Supreme Court rulings will likely embolden companies victimized by patent trolls. Perhaps best of all, these rulings are likely to make those patent trolls think twice about threatening or entering frivolous lawsuits in the first place.