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May 14, 2006

Patent Pejorative

A patent propaganda coalition is forming, euphemistically named: The Coalition for Patent Fairness. CPU-reliant (common misnomer: high-tech) companies want to incite self-interested change of patent laws, lobbying Congress to gut patent enforcement. Expect to hear even more about the patent pejorative in the woodpile: patent trolls.

Intel, Cisco, Hewlett-Packard and others are reportedly banding together as a lobbying group to further unfetter their patent infringement. According to ZDNet: "The group will focus on reforming the standards for injunctive relief, standards for royalty and damages awards, and choice of venue." That's softball talk for gutting patent holders rights via legislation.

ZDNet defines patent trolls as: "companies that exist primarily to make money from patent litigation and are using the system to force lucrative settlements."

Dennis Crouch shamelessly helps perpetuate the ultimate patent pejorative in his May 12th entry, providing a clumsier definition than above.

Some comments to Dennis's posting were more enlightening.

David Jaglowski wrote:

Patents are the equivalent of property, and there is no requirement of "merit" for someone to purchase and hold property. I can no more claim that you are undeserving of your unoccupied second home, and thereby seize it and/or destroy it, than you can claim that patent trolls do not merit the legal protection of a patent, and penalize them for attempting to enforce it against others in industry.

If you have a problem with the quality and nature of the patents that are being asserted, then you have a problem with the USPTO and the Federal Circuit. I have yet to see objective statistical evidence that "patent trolls" are litigating patents that are any more questionable than the patents that are litigated by industry entities. Anecdotal cases are sob stories, not proof.

Derek (one of those one-name people, like Madonna) wrote:

"The patent troll does not research or develop the technology or any products related to its patent." But wait a minute - somebody invented something, or there wouldn't be a patent (or do you distinguish invention from "research"). And no university "develops the technology or any products" - it licenses the patent to someone who does. "Patent troll" means simply a patent owner that the speaker of the moment doesn't like - no more than that.

Dan McGlinchey wrote:

Patents are assets and any owner of an asset that does not enforce infringement of rights is a poor manager. And frankly, I am so tired of the bleating about poor corporations complaining about unsuspectingly stepping into a "trap". Baloney. I have over 30 years experience investing in IP companies and to use one as an example, who has licensed their technology since 1968; is extremely well known historically for their invention of the technology---it has been an extremely rare event (example only once since 1992) that they have been approached for a license proactively. Rather, they have to monitor and notify and enforce. It is my experience that infringers infringe until they are caught.

Patent troll is just a pejorative, like calling someone a patent nigger. Peter Detkin coined the term in 2001 while at Intel, sick of dealing with Intel's repeated patent infringement, and blaming it on the patent holders. Now, by his own definition, he is a patent troll, and perhaps regrets his youthful, as Alan Greenspan would put it, irrational exuberance. But that spirit lives on at Intel.

A patent is an intellectual property commodity, and an ironic one. A patent only grants a right of denial. If no one commercially employs a patented technology, the patent is worthless.

A patent's worth is only in its employment by its owner. If a company with a patent is fortunate enough to be able to market a product with the technology, having the patent provides a competitive edge, at least for a while. If a patent holder does not have the resources, or business savvy, to market a product of the patented invention, the only way to profit from a patent is in enforcing the patent rights, or, lacking resources to do even that, selling the patent to someone who can; a patent troll is born. Pity the "patent troll", because, while necessarily born of invention in getting a patent, either springs from orphaned patents out of economic necessity, or, at the least, companies orphaned from marketplace competition for a multitude of reasons, some not of their own making.

More so now than ever, behemoth corporations dominate most product markets. It is nearly impossible for an individual inventor to hope to create a product using a patent, especially in the CPU technology area, because most products now incorporate numerous patented technologies. Cell phones, for example, embody a few hundred patents.

It should not matter what business a patent holder is in. The rules of patent enforcement should not differ because of the wealth or market power of a patent owner. As a patent grant is the right of denial, an available remedy too should be denial. As to granting injunctions, current law 35 U.S.C. ยง 283 gives the court discretion "in accordance with the principles of equity to prevent the violation of any right secured by patent," a well-tempered remedy.

The companies creating the Coalition for Patent Fairness are the real patent pirates: expecting something for nothing. They didn't invent the patented technology; they just want to steal it. These companies cross-license each others' patents, but they'd rather eat dirt than pay inventors or small companies and voluntarily take a patent license. And the Coalition companies, besides stirring public opinion by preying on patent ignorance, are going to spend hundreds of thousands, if not millions, in Congressional lobbying to take the sting out of patent infringement.

My definition of patent troll, taking the pejorative out: a person or company, not making a product of a patented technology, enforcing its patent rights against a corporate infringer.

Posted by Patent Hawk at May 14, 2006 12:00 AM | Patents In Business


So much for my opinion. In MercExchange v. eBay, the Supreme Court just ruled that, in something of a fudge, it DOES MATTER what business a patent holder is in.

Posted by: Patent Hawk at May 15, 2006 1:39 PM