Why This Small Victory Against Short Sellers Might Be a Big Deal for Biotech Companies

Acorda Therapeutics, a small New York-based drug maker, just won a round in a rather obscure patent fight with hedge fund manager Kyle Bass. You haven't been following this? The case matters a great deal to the biotech industry, and the implications may stretch far beyond. This is a strange wrinkle in the effort to stop so-called patent trolls.

Back in 2012, Congress reformed intellectual property law to protect tech companies from patent holders that don't seek to make or sell anything, preferring to pursue a strategy of stockpiling patents and suing productive manufacturers for alleged violations. Often trolls seek monetary settlements—a form of perfectly legal extortion—in exchange for dropping patent challenges and returning to their troll lodge.