June 5, 2013

"The onslaught of litigation brought by 'patent trolls'..."

"... who typically buy up a slew of patents, then sue anyone and everyone who might be using or selling the claimed inventions — has slowed the development of new products, increased costs for businesses and consumers, and clogged our judicial system...."
Because they don’t manufacture products, they need not fear a counterclaim for infringing some other patent. They need not be concerned with reputation in the marketplace or with their employees being distracted from business, since litigation is their business.
AND: Here's an excellent episode of "This American Life" about patent "trolls":

48 comments:

Methadras said...

Patent trolling is the new revenue generation scheme. That and Obama care.

Richard Dolan said...

As with so much of 'all the news that is fit to print', this wouldn't have been news 10 years ago. Perhaps a better name would be the NY Behind-The-Times.

El Pollo Raylan said...

I defer legal opinion on this to Bruce Hayden.

That said, I've never met a troll I liked.

Fernandinande said...

Many years ago "we" got a letter from Evans and Sutherland, who were a big but fading computer graphics hardware/sofware outfit at the time, saying that we might be violating their patent on "re-entrant polygon clipping"; I looked at it, decided it was a good idea, so we used it. (That company had a policy of never applying for patents because it exposes your methods).

CJinPA said...

I heard that "This American Life" program on a long drive this weekend. Well done.

I really enjoy NPR during those times when they're not telling me how much they despise my hateful politics and the awful people I vote for. Makes for a good 60 minutes per year.

Lem said...

I caught the tail end of this when it aired... they keep 90% profit on patents that they didn't even develop. I think that's what I heard.

Mitchell the Bat said...

I guess that cutesy illustration is supposed to look like it came from a patent application.

"Patent troll" sounds stupid.

Three very smart people wrote that piece and didn't explain what's wrong with a patent holder vigorously exercising its rights of intellectual property.

Maybe they'd do a better job explaining why there shouldn't be such a thing as a transferable right of intellectual property.

rhhardin said...

Not only doesn't it protect inventors, it doesn't even incentivize inventors.

It's a rent-seeking scheme with rent-seeker lobby support.

Arguments are at Michele Boldrin (has podcast link).

Everything you know about intellectual property is wrong.

I have a bunch of patents and can't understand any of them.

Nonapod said...

Our patent system could use a good reform to discourage this sort of behavior.

bagoh20 said...

We have one of these in our industry who completely controls who gets to manufacture a whole section of the industry, and they collect fees from those who do. It means that nothing much new has happened to that sector for years. We could make a killing in it with innovations, but we just refuse to be used, and would get no protection if we did. Their ridiculous patent covers any product that serves the purpose, regardless of how it does it. I don't know how they ever got such protection, but they spend whatever it takes on lawyers to keep it, and that's pretty much all they do.

Pogo said...

"... for when I awaked, it was just day-light. I attempted to rise, but was not able to stir: for, as I happened to lie on my back, I found my arms and legs were strongly fastened on each side to the ground; and my hair, which was long and thick, tied down in the same manner. I likewise felt several slender ligatures across my body, from my arm-pits to my thighs. I could only look upwards..."

Gulliver's Travels
by Jonathan Swift
Part I. A Voyage to Lilliput.

bagoh20 said...

If you ever get a chance, listen to the episode of "This American Life" where the kid has a revelation about his weed smoking when his Dad records his calls. It's awesome, funny, and intensely uncomfortable.

That show has some great episodes, and I've really enjoyed it over the years. NPR can be amazing listening when they aren't trying to talk politics, or business, or the environment, which are all immense blind spots there.

Alex said...

Mitchell - agreed the way system is currently set up, there is nothing illegal with being a patent troll. However I totally agree with reforming the system, so that those companies which can't demonstrate any R&D with those patents can't seek rents.

Pogo said...

I may listen someday.

But even hearing the phrase This is NPR makes my blood pressure rise and provokes a sense of dread, followed by the need to choke someone.

CJinPA said...

Three very smart people wrote that piece and didn't explain what's wrong with a patent holder vigorously exercising its rights of intellectual property.

I didn't read the article but listened to the related NPR program on it. The cases involved the millions of patents written so vaguely that anyone can be accused of violating them.

I think they said it took 100 years for the US to reach 1 million patents, and about 10 years to reach 7 million. Too many patents being awarded for ill-defined ideas.

Cedarford said...

Mitchell the Bat -

"Three very smart people wrote that piece and didn't explain what's wrong with a patent holder vigorously exercising its rights of intellectual property.

Maybe they'd do a better job explaining why there shouldn't be such a thing as a transferable right of intellectual property."

==============
Suppose instead of venture capitalists that created the computer industry because they really really wanted to develop and apply the patents they invested in and grow job-filled flourishing companies - the computer and integrated circuit chip patents had been bought up by a few wealthy lawyers?

Who saw their way to wealth waiting, not building a single computer product or creating a new job - but suing to blackmail any firm that sought to exploit the technology?

And all development was locked up in lawyers rooms (meaning the courtrooms and in law firm offices) for long periods of time as the wealthy lawyers were litigated against by other wealthy lawyers?

Mitchell probably wouldn't even have had a computer that was affordable and easy to use to post his thoughts...

It's not bad enough that cabals of wealthy lawyers are now blackmailing tecnology development...the large companies and their new "Lawfare" attorney warriors are playing that game as well. Buying up technology patents that could help a competitor's line of products more than their own...removing it from access.

It gets really bad when a drug company sees a patented process that would aid a rival firm make a more effective, even cheaper drug on their product line that hurt the company competing with them..so they buy up the patent to block the better and perhaps cheaper drug from being made.

How does that benefit us as a society?

bpm4532 said...

There's absolutely nothing wrong with owning and enforcing your intellectual property rights. The BIG problem has been with software or business process patents. These are absolute nonsense. Copyright should be sufficient, as being the first to patent something the patent examiner doesn't understand and is mostly likely a commonsense development is asinine.

I recall some time ago when some guy held the patent for when a mouse pointer moves across the screen and basically performs an exclusive-or (XOR) command to make sure the pointer was visible and didn't disappear into a background image. He would walk around trade shows back in the day collecting business cards of whom to contact to extract payment.

There are many instances of this where people who own these dubious "inventions" basically extort money from companies who don't have the time or money to fight them. This is just another cost imposed on business via imprudent government law and regulation.

chuck said...

Their ridiculous patent covers any product that serves the purpose, regardless of how it does it.

Yeah, some patents seem obscenely general. It's like you could patent the idea of faster than light travel, and if anyone should ever develop it, then, bingo.

Software patents often seem to patent the obvious, which means that like as not there is prior art that no one thought was worth a patent. Frankly, I think copyright is the correct protection for software.

Mind, I'm not an IP guy, so these are just the impressions of a naive observer.

CJinPA said...

NPR can be amazing listening when they aren't trying to talk politics, or business, or the environment, which are all immense blind spots there.

I once told a co-worker that "NPR is pretty good when it doesn't involve politics or culture."

She said, "What else is there?"

Granted, not a lot.

Pogo said...

I think I could listen to NPR if I had a few beers and took a beta blocker while it played in the car.

Maybe better if I was in the bathroom.
The nausea can be severe.

CJinPA said...

I recall some time ago when some guy held the patent for when a mouse pointer moves across the screen and basically performs an exclusive-or (XOR) command to make sure the pointer was visible and didn't disappear into a background image. He would walk around trade shows back in the day collecting business cards of whom to contact to extract payment.

The one highlighted in the NPR piece is a guy who used to record (cassette) programs about various topics and mail them out. He claims this is the idea for podcasts, and is shaking down some of the biggest podcasters for payments.

Pogo said...

BTW, I just patented hating NPR.

Just sayin'.

Toby said...

At some point, shouldn't the lawyers who file the most ridiculous & abusive claims be punished? The article mentioned suits against companies that have already bought a license for the patent and twisting the clear meaning of words to an extreme degree in order to drive up defense costs and increase the chances of a settlement. The patent troll ought to pay the defense's legal fees in these cases, but the troll's lawyer ought to take a hit for this as well. Perhaps follow the driver's license model: points against his law license, continuing ed to restore points and suspension or revocation for repeat offenders.

Michelle Dulak Thomson said...

My Dad is a (retired) biotech patent attorney. The words he uses to describe patent examiners are not suitable for a family blog.

exhelodrvr1 said...

Too many lawyers.

Astro said...

Not to mention large companies like Honeywell that have an entire division devoted to sic'ing its patent lawyers on other companies. (Patent Balrogs to continue the analogy.) Pay us $3 million in royalties because your jet engine controller infringed on Dependent Claim 17, Part 8, Subsection 3(c) of our home thermostat patent - or we take you to court.

Astro said...

@ Pogo - I sorta think hating NPR has been in the public domain for a long time. OTOH, I'd gladly pony up a royalty fee if it would make them go away...

Dante said...

I went through one of these patent troll claims. The whole thing is disgusting.

The patent troll had a patent for a technology in another technology industry that you couldn't build product from to meet the patent claims, and additionally had never built product, having acquired the patent for the express purpose of making money on lawsuits. And the algorithms I designed and implemented in a product didn't infringe on the claims.

I walked into a meeting with 14 lawyers, all outside council,and another three on the phone. The whole process took 6 months, with the company ending up paying the troll a significant sum to go away.

The company is an incumbent. So part of the equation might be, we can afford the significant sum of money, but it's going to hurt our competitors more.

That, plus all these lawyers. What a scam. And of course, they all sue in TX, which tends to side with the patent trolls.

I find it simply disgusting. One solution might be to limit the duration of the patents depending on the investment in developing the patent. In pharmaceutical companies, it can be millions, followed by hundreds of millions to productize. In the software industry, it's relatively small dollars to create the patent, and relatively small dollars to productize.

Lawyers ought to do something about this black eye. It doesn't give lawyers a good name, for sure.

Eric said...

I have a bunch of patents and can't understand any of them.

Hah! I thought it was just me. There's a patent with my name on it. When the patent attorney was done it was so broad and vague it applies to all the obvious solutions to the problem I was working on. You could never actually use it as a basis for additional work. But my company had a big push to patent anything they could get through the system. On my charitable days I'm assuming the reason is we can apply the MAD doctrine to patent lawsuits, though it won't protect us from patent holding companies.

The real problem here is the patent office is only supposed to be granting patents on inventions that are "non-obvious to an expert in the field", when what they're actually granting patents on fall into the "obvious to anyone" bin.

Dante said...

We could make a killing in it with innovations, but we just refuse to be used, and would get no protection if we did.

If the patents are aging, you can think up innovation now, patent the innovation, and when their patents expire, YOU can own the sector.

Another thing that amazes me is we have a lot of communist type of thinking in some sectors of the software field. I've recommended to some of these guys, why not make your own patent portfolio, and go after the bad people who assert patents to stifle innovation.

The problem is the damn trolls. They have literally nothing to lose. No products to protect. And it's not like they add any value: they look at new products and try to find clever ways to say we thought of it first. Zero value. Just leeches, ticks, and fleas.

Hope this isn't Bickering.

mccullough said...

It's fun to watch rent-seeking companies bitch about rent-seeking patent trolls. The Russians vs. the Germans.

Bruce Hayden said...

It's fun to watch rent-seeking companies bitch about rent-seeking patent trolls. The Russians vs. the Germans.

Problem with the legislation that is in process right now first that it is specifically aimed at software and business method patents. Some of the biggest trolls (or NPEs - non-practicing entities) were in electronics, which wouldn't be covered. Secondly, at least the early versions were asymmetric - loser pays if plaintiff loses, but not if they win.

What must be taken into account is that much of this is being pushed by the same large multinationals that got the America (dis)Invents Act passed in late 2011, and for similar reasons - it is cheaper to buy a Congress than pay patent royalties or damages. Also, same paid "experts" testifying, etc. And some of these have built themselves by stealing the ideas and inventions of others, and then using their financial might to run the original inventors out of business (e.g. MSFT - when was there last really innovative product?)

The other thing on the table right now is patent litigation reform, mostly aimed at reducing discovery costs. Problem is that this is not really a patent litigation issue, but rather a generic problem with complex litigation in general, and should be addressed by FRCP, and not patent specific legislation.

Bruce Hayden said...

No - copyright is not sufficient to adequately protect software. Take an example - spreadsheets. Microsoft took the concept of spreadsheets and created Excel. Or web browsers and IE, etc. what is being copied is invention, and not original expression. Sure, in some Circuits, a certain level of non-literal copying is can be infringing, but the critical 9th Circuit limited this significantly when Apple sued MSFT and HP. Sure, actual copying of code is typically infringing, but that most often does not cover copying the basic concepts or invention, and pretty much anything that is functional enough to be patentable (assuming novelty, non-obviousness, etc.) typically needs to be filtered out before comparing for similarity for determining copyright infringement.

Bruce Hayden said...

Continuing my previous point - you can somewhat view IP protection in this area as being either patent or copyright but not both. The code,, etc. it's protected by copyright agains verbatim copying, but patents cover the functionality and concept, and the parts that are protectable by patents are filtered out and excluded from copyright protection. So singling out software would open a gaping hole between what could be protected by copyright and patents.

Carl said...

Here's my idea:

(1) The PTO continues its willingness to issue patents fairly indiscriminately.

(2) Courts as a matter of policy are generous about interpreting infringement of patents. Basically, courts will back you up if it's at all plausible that somebody's work is described by your patent.

Ouch! Now the catch:

(3) The license fee for a patent is annnual, $100 for the first year, and triples every year after.

So in year 2, it costs you $300 to keep the patent, and in year 3 it costs you $1,200, relative peanuts. But by year 5, it costs you $8,100, and in year 8, $218,700. In year 10, a shade under $2 million, and by year 15, $478 million if you have the stomach for it. Nobody would have enough money to maintain a patent much longer than that.

The point being, if you are truly a poor inventor, you can get protection for your idea cheaply and easily, and easily enforce it against the big guys without having to hire a big expensive IP lawyer. So we protect the little inventor.

But...you had better put that invention to use right away and make money off it.

Furthermore, you have a very strong incentive to develop, as fast as possible, some means of ensuring your product dominates the market other than through patent enforcement. You'll want to shed the patent and its associated costs as soon as possible.

And in a general way, we use the free market to ensure that patents are granted for the longest time when they are the most important -- produce the most income for the inventor, which inter alia means the most value for the end consumer, and that patents that can't be readily implemented and turned into profitable products are discouraged.

A patent troll could still operate, of course. But in general all you'd need to do to defeat him is wait a few years.

You could fine-tune this a bit by allowing people to take out new patents that are "within" (narrower than) their existing patents, and restarting the fee clock to some extent. That would help someone who files a patent quickly to get protection, and who draws it as broadly as possible because he's not 100% sure how the implementation will go. He's incentivized, once he does understand the implementation, to reconstruct the patent, so to speak, with an appropriately narrower scope.

Roger Zimmerman said...

To those that are saying: "I have a patent and don't understand what it's for" - that's hard to believe and, if true, morally suspect. I have 10 patents and understand them well.

If you're talking about the claims, then, OK maybe. Claim language is purposely legally technical, and may need a bit of practice to interpret. But, the disclosure itself should be precisely what you invented, and if it isn't, you shouldn't have signed the paperwork.

Now, admittedly, it is the claims that define the IP, and lawyers are known to try to over-generalize there, usually as a negotiating tactic for the USPTO process. So, if an overly broad claim gets approved, you can go ahead and blame the system.

And, I agree that the USPTO has been overwhelmed with applications that they do not have the expertise to evaluate. As such there are a large number of suspect patents being granted, and I think this is imposing unnecessary costs on R&D in this country. I don't think it's catastrophic, and I don't think that "software patents" are inherently suspect. I just think it's currently too easy to write an application for a non-innovative idea, and then, if you're willing to spend the $15K, to get an ill-prepared examiner to relent and grant you some of the claims, usually narrowed a bit as a result of some pro forma back and forth.

The troll issue is small potatoes compared to this much more fundamental problem, in my view.

Dante said...

The troll issue is small potatoes compared to this much more fundamental problem, in my view.

I think it was Edison who patented something he felt was non-obvious. He went to court, and he stated the following.

Stand this egg so it stand upright using nothing other than the table and the egg. No one could think of how.

Then he smashed the big endian side of the egg, and it stood up fine. NOW it's obvious.

Tibore said...

"Methadras said...
Patent trolling is the new revenue generation scheme."


I don't even think I would call it "new". Back when Blackberry was the dominant mobile email giant (2000) they got hit up by patent troll NTP. I joked at the time that NTP was basically 2 guys and a secretary who's business held a filing cabinet, and the joke may not have been all that far off the mark, given that their business model is nothing but lawsuits.

Then there was the British Telecom suit trying to claim a patent on hyperlinks. Granted, that's a bit different in that BT wasn't and isn't a company dedicated to just holding patents and suing over them. But it's sort of in the same spirit.

Anyway, my point is that this isn't really new. NYT and NPR are both basically saying the same things that were said back in 2000.

Revenant said...

Software should not be patentable.

Dante said...

Software should not be patentable.

I don't think it is. That is covered by copyright law. What the machine does as controlled by software is patentable, as are mechanisms to make the machine work better.

damikesc said...

At some point, shouldn't the lawyers who file the most ridiculous & abusive claims be punished? The article mentioned suits against companies that have already bought a license for the patent and twisting the clear meaning of words to an extreme degree in order to drive up defense costs and increase the chances of a settlement. The patent troll ought to pay the defense's legal fees in these cases, but the troll's lawyer ought to take a hit for this as well. Perhaps follow the driver's license model: points against his law license, continuing ed to restore points and suspension or revocation for repeat offenders.

Conservatives have tried to correct the ridiculous tort system we have in the US for years. Trial lawyers are hell of rich and give shit tons of money to Democrats so that never goes anywhere because it will "harm the poor" or some such bullshit.

IP needs to be far less protected. Why are drug companies, who spend ungodly sums of money developing drugs, given less protection than almost any other business out there?

Bruce Hayden said...

I don't think it is. That is covered by copyright law. What the machine does as controlled by software is patentable, as are mechanisms to make the machine work better.

Not quite that black and white. Verbatim copying of code is, of course, usually protected by copyright, but it isn't clear at what level of abstraction above that does copyright essentially disappear. On the patent side you often get rejections for mere software, and a court even illogically extended this theory to memories (such as disks and Flash) containing software. The theory is that you can't patent abstract thought, and how something that can be held in your hand can be abstract is beyond me. Nevertheless, today "software" patents tend to be for method steps fairly closely tied to hardware, general purpose computers or systems specially programmed to execute such method steps, or non-transient memories containing software instructions to execute such method steps.

drozz said...

MDK-
I am an active primary patent examiner. The words we use to describe representation do not belong on a family blog.

El Pollo Raylan said...

@drozz: LOL!

Bruce Hayden said...

Software should not be patentable.

Here is the problem there - how do you protect and monetize investments in software? Copyright protects against verbatim copying, but not concepts or inventions. And some of the wealthiest companies in the country think nothing of appropriating software inventions and turning them in products worth many millions, if not billions. Patents provide a way for people who spend countless hours inventing and then developing new technology to get paid for their time, money, and risk. And, sources of capital know this, which is why a lot of venture capitalists demand seeing patent portfolios before investing, knowing that without good IP protection, small innovative companies are often highly vulnerable to deep pocketed appropriators of their technology. Thus, singling out software for exclusion from patent protection will necessarily divert investment capital into more secure technologies.

SGT Ted said...

These are lawyers doing this, Althouse. Not "Patent Trolls", living under some ethics or shame free bridge.

The money harvesting schemes of lawyers are killing to golden goose of invention, no surprise there. They never see a pot of money they don't think they should get a piece of. We need Lawyer Control. Because they are out of control along with the judges (more lawyers) that enable this farce.

Michelle Dulak Thomson said...

drozz,

MDK-
I am an active primary patent examiner. The words we use to describe representation do not belong on a family blog.


I think you mean me, though where you got "MDK" I don't know.

Yeah, I assume the enmity is mutual. Dad was irked with people who couldn't see (what he saw as obvious) the difference between his application and prior art. Biotech is kind of a specialized field, and I got the impression from him that the examiners didn't know enough about it to evaluate applications fairly. He was one of a relative handful of patent attorneys with both a law degree and a biochem PhD., and the examiners usually had neither, nor any equivalent education.

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