More on patent trolls

March 20th, 2013 at 1:00 pm by David Farrar

responds to my earlier blog on patent trolls:

He says:

Thomas Edison was a “patent troll.”

So was Nikola Tesla.

So was almost every great inventor in the last 200 years*.

So is any inventor who licenses their invention rather than produce it themselves.  Unlike the ignoramuses who attack them, these people aren’t trolls. They’re benefactors:

Not every person who something they don’t produce is a patent troll. But patent trolls don’t actually come up with inventive ideas. Their inventive idea is to just file a patent over anything they can think of, even if it is not a true invention. Once they get the patent, they’ll find victims who will pay them a fee rather than go to court to get the patent over-turned.

PC quotes a Judge:

Judge Michel,  former head of the CAFC, the US court that hears all patent appeals, points out that the number of patent suits filed each year has remained constant at less than three thousand.  Only about 100 of these suits ever go to trial.  In a technology based economy with over 300 million people and 1 million active patents this is trivial.

Of course they don’t go to trial. If you want to try and fight a patent claim you need US$1 to US$2.5 million generally. What small business can afford that?

The proposed law change mooted in the US doesn’t ban patent trolls. It just changes the economic incentives so that the trolls have to post a bond to cover the defendant’s costs in case they lose. So you can’t just set up a $500 shell company and threaten patent lawsuits. The problem for the defendent is that even if they win, they will never recover the cost of defending the lawsuit. So of course they settle.

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12 Responses to “More on patent trolls”

  1. gump (1,474 comments) says:

    I’m generally sympathetic to Peter Cresswell – but he is completely wrong on this matter.

    He doesn’t seem to have understood that “Patent Troll” refers to a very particular type of behaviour. It isn’t a synonym for “Patent Holder”.

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  2. labrator (1,745 comments) says:

    Does Peter Cresswell support the online shopping cart patent?

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  3. RRM (9,435 comments) says:

    PC observes that the ability of inventors to sell their patents (to “patent trolls” or anyone else) frees up the inventor to go on inventing things.

    If you accept that, a “patent troll” by that definition is not really much different than a ticket scalper… and IIRC you don’t have a problem with ticket scalpers DPF?

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  4. Nigel Kearney (864 comments) says:

    Bloggers and commenters can throw around terms like ‘patent troll’ all they want, but legislation has to be precise about what it refers to. If the law says that someone who purchases a patent has fewer rights than the original inventor, it will become harder for an inventor to sell patents, and therefore they are less likely to invent in the first place. Even if the purchaser can prove they are not a troll, they still need to go to the effort of actually doing that before the patent has any value.

    I do agree with the loser paying the winners costs and don’t really understand why the US doesn’t do this for everything. But the real problem is that it is too hard for defendants to get cases dismissed when the plaintiff’s case is weak. This applies to lots of lawsuits, not just patents. There ought to be a streamlined process where the parties go before a judge without delay, if one side’s case is overwhelmingly strong the judge can just rule immediately, then the loser has to post a bond if they want to appeal.

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  5. gump (1,474 comments) says:

    @Nigel Kearney

    If the law says that someone who purchases a patent has fewer rights than the original inventor, it will become harder for an inventor to sell patents, and therefore they are less likely to invent in the first place.

    ——————

    I disagree. The act of invention is valuable in its own right, and will continue to be valuable in its own right.

    The patent system exists so that inventors can publicly disclose the details of their invention in exchange for a short-term enforceable monopoly on the invention’s usage i.e. it’s an attempt to balance the public and private benefit.

    Inventors are free to exploit their inventions in what ever way they wish – there’s no requirement to patent them. Many companies simply keep their inventions secret rather than patent them (as they don’t wish to disclose their IP to competitors).

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  6. The Scorned (719 comments) says:

    PC has updated his original post to answer DPF….and he slaps him hard….can DPF recover from it…?

    http://pc.blogspot.co.nz/2013/03/death-to-those-who-say-death-to-patent.html#c5866509009284149390

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  7. Lance (2,444 comments) says:

    It would be a huge step in the right direction if someone can’t patent something that is unpatentable. The grounds for not being able to patent something is long but the enforcement is rare, well in the US anyway.

    Alas that is the steaming pile of poo emanating out of the US patent system that these obnoxious individuals thrive on.

    All one can do now is to fight the patent that shouldn’t have been granted int he first place, as pointed out by DPF, this is very expensive.

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  8. Ed Snack (1,734 comments) says:

    I can agree with PC, I think the problem with David’s original post is that he described Patent Trolls too broadly. My understanding is that the term is a bit nebulous, but broadly put PT’s try to enforce weak or inadequate patents often based broadly on common methods or practices. This is perhaps more of a patent problem than anything else, most trolling seems (IMHO) take place around patents that most reasonable people agree should not have been granted in the first place. The “online shopping cart” and the “one-click” Amazon patent are two they I would suggest should not have passed muster at the patent office.

    I believe that any attempt to tighten up on PT’s risks catching genuine inventors, and any law would need to be carefully constructed. But first, get rid of pointless patents !

    RRM, ticket scalping is only very peripherally related, and FWIW I generally support scalping anyway. If you don’t support it, don’t buy from scalpers and if everyone agreed there’d be no more scalping. It exists because so many people do buy, they just hate having to pay extra which is simply their greed showing through.

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  9. labrator (1,745 comments) says:

    @RRM interesting analogy with ticket scalping, certainly adds an interesting angle I hadn’t considered before. I think the summary of difference would be that tickets have value where most patents where the term ‘patent troll’ is applicable would be of no value and should never have been granted in the first place.

    Many patents that have been granted were nothing more than reading a early 20th century sci-fi book and copying over the idea. No invention took place, it was actually just a physical process applied in a digital world. The USA dug themselves this hole, it’ll be an interesting climb out of it.

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  10. RRM (9,435 comments) says:

    labrator –

    I think DPF and PC are talking at cross-purposes about what a “patent troll” is, and PC thinks DPF is unreasonably smearing people who buy patents with the moniker “patent troll”

    [I was only thinking of scalpers from the point of view that showbiz promoters like scalpers, because the promoter gets to sell all of his tickets at his asking price, and the scalpers take over the risk that there may be inadequate demand for the tickets.

    Similarly if I invent a really clever mouse trap, I could hold the patent and MAYBE make $millions from the mouse traps in the future, but on the other hand I might actually be quite happy if someone (let's call him a "patent troll" as per the definition PC is using) came along and offered me $20,000 for the patent right now. ]

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  11. dbhalling (1 comment) says:

    The ticket scalper issue show an inclination to believe people in the free market are not allowed to sell their property. Vulture capitalist who buy bankrupt assets get the same argument. But from a free market point of view vulture capitalists act as a clearing house for property rights. You might argue that the building they bought is already built and the squatters living their are already using the asset. But if you allow the squatters to take over the property then it reduces the chance that the original investors will put money/time to build the asset since they will get nothing. In the case of inventions, this means fewer people will invest in new technologies which are the only way we increase are per capita income/wealth.

    Non-practicing entities are the beginning of a secondary market in patents. A secondary market in patents will increase the amount of money people invest in new inventions, by reducing the risk of not being able to personally commercialize the invention. This will make us all wealthier in the long run

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  12. slijmbal (1,211 comments) says:

    Cresswell appears to be more focussed on DPF’s inconsistencies and vagueness rather than the underlying problem.

    I disagree with the proposed approach as it is addressing the symptoms of the problem of allowing many ludicrous patents.

    Fix that.

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