Slashdot is powered by your submissions, so send in your scoop

 



Forgot your password?
typodupeerror
Patents The Courts Your Rights Online

Report Shows Patent Trolls Are Thriving 135

Posted by ScuttleMonkey
from the free-money dept.
eldavojohn writes "The 2009 Patent Litigation Study has been released by Price Waterhouse Coopers. It shows evidence that patent trolls are growing and doing quite well. Using a very conservative view of a non-practicing entity (referred to as NPE in the report), PWC noted that 'damage awards for NPEs have averaged more than double those for practicing entities since 1995' and 'certain federal district courts (particularly Virginia Eastern and Texas Eastern) continue to be more favorable to patent holders, with shorter time-to-trial, higher success rates, and higher median damages awards.' The report paints a dire picture of the state of patent lawsuits and especially those brought by NPEs and also shows that in the past eighteen years the number of patent cases filed yearly is on the rise significantly when normalized against the number of patents granted yearly."
This discussion has been archived. No new comments can be posted.

Report Shows Patent Trolls Are Thriving

Comments Filter:
  • by John Hasler (414242) on Monday February 01, 2010 @11:22AM (#30982442) Homepage
    Is favorable to both sides. It's especially favorable to the defendant if a preliminary injunction is issued.
    • by darkmeridian (119044) <william...chuang@@@gmail...com> on Monday February 01, 2010 @11:38AM (#30982682) Homepage

      A shorter time to trial is not more favorable to a defendant UNLESS a preliminary injunction is issued. The plaintiffs hold an overwhelming advantage. They get to spend months or years preparing their case, having their motions ready, doing research and investigation, finding experts, etc. They get to chose the time and venue of the suit. Once they file, they can drown the defendant in motions for preliminary injunction, summary judgment, etc. The defendant has to play catch-up because they have no idea what's going on with the plaintiff's patents. They have to play defense on PI motions without a lot of discovery. Rushing a case to judgment is very unfair to defendants who did not have the time the plaintiff had in figuring out their case.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Patent trolls don't need to spend months or years preparing their cases, and typically they don't. Most law firms representing trolls do the minimum amount of work necessary to keep the case going. The real nightmare comes when the defendant receives discovery requests for documents. A single 30-page generic set of requests (that can be copied from a prior case) forces a defendant's lawyers to interview scores of employees and collect what almost always amounts to millions of pages of documents. Then th

    • by eldavojohn (898314) * <eldavojohn@nOsPam.gmail.com> on Monday February 01, 2010 @11:50AM (#30982862) Journal

      Is favorable to both sides. It's especially favorable to the defendant if a preliminary injunction is issued.

      I'm not a lawyer but there's an article from Sunday [dallasnews.com] about Dallas firms specializing in 'tricky, rocky terrain' of patent litigation to be hired out in the Eastern Texas District Court ('Rocket Docket') cases listed in the report.

      Now, pay attention to this part of the article

      'Rocket docket'

      The Eastern District, which includes Collin County and much of eastern Texas, has won a reputation as extremely plaintiff-friendly and a preferred venue to get patent claims through quickly.

      Just getting a case into the Eastern District – known by some as the "rocket docket" because its comparative lack of criminal cases lets judges move civil patent cases swiftly – has prompted some companies to settle quickly.

      Nguyen says the district's reputation as friendly to patent plaintiffs is widespread; whenever it's mentioned at law conferences around the country, she hears the same reaction.

      A case against you that you found out about last week has just gone to trial in Eastern Texas and you need to be there to represent yourself even though you're based out of New York City. The reputation of the court is a bias toward the plaintiff and on top of that they have the Dallas firm that specializes in winning patent cases ... now, quickly, you need to decide to settle or fight this.

      Sound fair to you?

      • by TheTurtlesMoves (1442727) on Monday February 01, 2010 @12:16PM (#30983256)
        Yes! I am a lawyer and i can bill for travel time :D
      • by swb (14022)

        Is it merely the volume of the cases that makes it plaintiff friendly, or is it more plaintiff friendly than other districts when you adjust for volume?

        Has anyone asked why it's more plaintiff friendly? Has anyone done any kind of analysis of the judiciary to determine if they have some kind of background that gives them a superior understanding (engineering degrees, patent experience, etc)?

        Somehow it all smells rotten -- a group of judges and a group of local attorneys who have built a cozy little legal f

        • why would judges in those areas be so plaintiff friendly?

          It brings in business, which gets them reelected.

          • by nomadic (141991)
            It brings in business, which gets them reelected.

            Federal judges are selected, not elected, and their appointment is for life.
            • Well, in that case they are probably getting bribed.

              • by lakeland (218447)

                I'd have guessed not, though perhaps I'm being naive.

                Judges are people too. Even if their job is not on the line, their friends are likely lawyers and local businessmen - all of whom owe their livelihood to the continued patent cases.

                I doubt the judges are being biased deliberately (there goes my naivety again) but when all of your friends and colleagues are telling you about how good it is for the community that you're addressing these issues, it's pretty hard to retain objectivity.

                Honestly, I think if yo

            • Re: (Score:3, Interesting)

              Federal judges are selected, not elected, and their appointment is for life.

              This is really misleading. District courts are wholly in the purview of Congress, specifically the Judiciary committees. District Court != Supreme Court.

              If you want to know why E.D. Texas is able to do what it does, for example, look at who is the ranking member of the House Judiciary Committee.

              When it suits their political interests, Congress has no problem changing the specialization of District courts, or even firing a judge.

              Don't let them pass the buck with this "appointment for life" nonsense. Your ele

              • by nomadic (141991)
                Don't let them pass the buck with this "appointment for life" nonsense.

                Nope, it's in the Constitution.
                  • Article III, Section 1:

                    The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behavior, and shall, at stated Times, receive for their Services a Compensation which shall not be diminished during their Continuance in Office.

                    Before anyone starts arguing as to what "good behavior" means, it was quite clear that it meant a lifetime tenure. See, for example, Federalist Paper # 78 ("If, then, the courts of justice are to be considered as the bulwarks of a limited Constitut
                    • misleading:

                      adj. tending to confuse or mislead; deceptive

                      No one argued about what "good behavior" means. Your Federalist Papers reference has little to do with the subject at hand.

                      I'm not saying you're stupid, but I am saying that you are a victim of a convenient bit of misinformation for Congress. There is nothing specific about the District court system in the Constitution; its operation is set forth by statute (which changes regularly), and judges do get fired (or resign before being impeached).

                      The writ

                    • by nomadic (141991)
                      As an attorney who works solely in federal district court, let me assure you that I am quite familiar with the statutory and constitutional basis for the authority of the federal district courts. Judges can get impeached, but that's in the Constitution, too. They can't get fired, not even by Congress. It's not "easy" to change a district court's subject matter jurisdiction in general, and it's probably not even possible constitutionally to remove the jurisdiction of a specific judge.

                      The writ of mandamu
                    • Okay, I think you knew that my comment about the mandamus was rhetorical hyperbole. No, I don't think that would stick in a trial. But I think you'd have to agree that E.D. Tex has raised quite a few eyebrows in higher courts, that particular case aside. You've read it [uscourts.gov], I assume? I wonder about you if what the C.A.F.C. had to say doesn't make you at least a little uncomfortable with the Rocket Docket.

                      Also, you know exactly what I mean by "fired". These things never get to the point of a Senate trial; the ju

        • by Anonymous Coward on Monday February 01, 2010 @01:25PM (#30984286)

          Being from Eastern Texas, I feel like I can speak with some authority in the matter. I've known many of these judges and lawyers (and bar-tended a few of their private functions) and I have found that they are idiots. It's really that simple. There is no conspiracy, there is only a mindset of "If someone sues someone else, then the defendant must deserve it".

  • Disgusting (Score:5, Insightful)

    by HEbGb (6544) on Monday February 01, 2010 @11:25AM (#30982488)

    It's a real shame that the patent system has been able to be manipulated so effectively, to siphon hard-earned money from real companies, and real inventors, into the pockets of these parasites. They're nothing but a drain on everyone. Lemelson's legacy lives on!

    I'm glad this is getting some attention, though.

    • Every system has holes. Lawyers these days only work to manipulate the flaws in the legal system; in the same way, I've found interesting effects of applying the rules in full of the IRS tax system to my 401(k) to nullify every penalty for taking i.e. hardship distributions (that being, you can't contribute to your 401(k) for 6 months), and figured out how to use my 401(k) as a tax evasion machine to lower my tax burden to 13.75% total (rather than 35% on my income) while still contributing a large (now la
    • Re: (Score:2, Insightful)

      by doramjan (766519)
      It's not the patent system that's being manipulated; the court system is being manipulated.
      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Both are being manipulated.

        The problem would not exist without a set of patent laws (and a USPTO) which encourage this type of systemic abuse.

        Whether any fair patent system can exist, or is necessary, is another question entirely -- but it's clear that the rules defining our current treatment of patents are fundamentally flawed.

      • Both are being manipulated. And the patent office as well.
  • Don't Abbreviate (Score:5, Insightful)

    by whisper_jeff (680366) on Monday February 01, 2010 @11:28AM (#30982528)
    Don't abbreviate it to NPE. Spell it out, each time - non-practicing entity. By just saying three letters, it weakens the point that these companies do nothing. They exist solely to sue. They are the personification of what is wrong with the patent system. Make it clear that these companies are leaches that do nothing of good. They are non-practicing entities.

    We may have issues when companies like (for example) Nokia and Apple wage patent warfare but both of these companies spend enormous fortunes on R&D and they both produce exceptional products. While the patent system may be borked, it exists so that companies like Nokia and Apple may exist and view R&D as a worthwhile expense. Patent trolls should be legislated out of existence. Don't produce anything using the patent? Bye bye patent. Your business model is built around "buy patent, sue everybody in sight"? Bye bye company. Start with that and we might get closer to a point where the patent system isn't a joke.

    Non-practicing entity. Spell it out. Make it clear. Leaches who do nothing of value.
    • by Grond (15515) on Monday February 01, 2010 @11:39AM (#30982700) Homepage

      Don't abbreviate it to NPE. Spell it out, each time - non-practicing entity. By just saying three letters, it weakens the point that these companies do nothing. They exist solely to sue.

      Right, because universities, individual inventors, and non-profit research organizations do nothing and exist solely to sue. Oh, wait, those are actually common examples of non-practicing entities. For example, in the article the chart of damage awards exceeding $100 million lists 4 NPE plaintiffs, one of whom is an individual inventor (a doctor who invented a kind of drug-eluting stent) and another is Cornell University.

      • by vadim_t (324782) on Monday February 01, 2010 @12:00PM (#30983018) Homepage

        For universities it's easy: as most of them benefit from public funds, they shouldn't be able to patent anything and release it all under the public domain for the public's benefit.

        • Wouldn't it be better if they had patents to license and were thus not dependent on public funds?

        • Re: (Score:3, Insightful)

          by Tim C (15259)

          I do see your argument, but a counter-argument is easy. By doing so, you will be cutting off a source of income for them, ensuring that they need to have more public money to maintain their activities and so costing the public more.

          • by jandrese (485) <kensama@vt.edu> on Monday February 01, 2010 @12:22PM (#30983356) Homepage Journal
            It costs the public more, but you also get a benefit: namely patent free technologies that can be incorporated into products far and wide. It is actually a public good to have more technology available to entrepreneurs who would make the best use of it, instead of just to large corporations who can afford the up-front costs of licensing the dozens of patents they need to tie together to make a new product.

            Then again, I'm also one of those crazy people who thinks the Public Domain and Fair Use should be greatly expanded for the same reason. All of the great men of the world did their work standing on the shoulders of giants, and we have been letting the system stifle that for too long IMHO.
            • by microbox (704317)
              It costs the public more, but you also get a benefit: namely patent free technologies that can be incorporated into products far and wide.
              Yes. But. Value is defined by the bottom line, not something abstract like the "public good".

              Sad but true story.
          • Re: (Score:3, Informative)

            by apoc.famine (621563)

            As an anecdote to this, I'm in grad school now, and I'm funded based on patents my school received in the 40s and 50s. (And a bunch since then, but there are a couple from way back when which turned into millions of dollars for the school, which was then invested into the research endowment of the school.)

            Which is better? Patenting something, and then using the money from that to fund tens to hundreds of thousands of students, or releasing it to the US for free? I can see the argument both ways. But

            • Patenting something, and then using the money from that to fund tens to hundreds of thousands of students, or releasing it to the US for free?

              That depends. Would the economy of the USA have increased enough as a result of those inventions being unpatented that the increased tax revenue would have funded more students? How much do you think the economy of the UK has benefitted from the fact that DERA forgot to patent the TFT before publishing it? VAT collected from laptop sales almost certainly dwarfs any potential royalty that potential patent royalties and all of the people with digital cameras, working with their laptop on the train to work,

              • Re: (Score:3, Interesting)

                by apoc.famine (621563)

                It all depends on the company, really. If that money goes into slush funds, ridiculous executive salaries, and market speculation, it wouldn't be all that great for the economy. If it went to a company that provided fair wages and invested in its workers, it would be fantastic.

                Overall, corporations abuse patents. It's in their best interest to squeeze as much money out of them as possible, despite any ill effects on other businesses, the economy, or anyone else. Educational institutions milk them f

        • Re: (Score:3, Informative)

          by eldavojohn (898314) *

          For universities it's easy: as most of them benefit from public funds, they shouldn't be able to patent anything and release it all under the public domain for the public's benefit.

          Well, you have to repeal/amend the Bayh-Dole Act [wikipedia.org] that essentially gave universities the right to patent their findings. I think before that the patents went to the United States government if they funded the research. I know that our friends at the University of Wisconsin (Madison) have courted the government to keep funding them by offering Institutional Patent Agreements [warf.org]. Does WARF sound familiar to you? It should [slashdot.org].

          There's a lengthy blog post about this [mfeldstein.com] that has good quotes and points from both si

        • Uh - there's a contradiction when, on the one hand, you've been cutting public funding for universities (in real dollars/as fraction of GDP) for the last four decades straight and then, on the other hand, complain that universities should somehow not be allowed to make industrial profits by patenting things.

          Cornell, in particular, is a private university. I do not know what fraction of their research funding is public money, but I seriously doubt it's anything to write home about.

          Your refusal to put th

          • by vadim_t (324782)

            My refusal to do what?

            I don't live in the US, I live in Europe, where university is dirt cheap compared to the US due to the government subsidies. I'm pretty happy with that situation really and have no problem with paying the taxes to support it.

      • by mcgrew (92797) *

        Good job completely missing his point.

    • by Red Flayer (890720) on Monday February 01, 2010 @11:44AM (#30982784) Journal

      Don't abbreviate it to NPE. Spell it out, each time - non-practicing entity. By just saying three letters, it weakens the point that these companies do nothing. They exist solely to sue. They are the personification of what is wrong with the patent system. Make it clear that these companies are leaches that do nothing of good. They are non-practicing entities.

      I know that likely I'll be modded into oblivion because I disagree with this.

      While the potential of patent abuse by NPEs exists (and has been seen to occur), NPEs are an important part of the patent system. They allow for better valuation of patents.

      Let's say I invent something, which some company uses in their flagship product, making millions off my invention. Let's say that I am unable to bring my product to market (because of limited capital, because of limited knowledge, because of a single market for my invention that someone else has control of... pick a reason, or multiple ones).

      My choices in seeking redress are to set up my own company to litigate the matter, or to sell the patent to someone who will litigate it. There are other choices, but these are the best ones available.

      Why should I outsource the litigation to someone who is much more efficient at it? Why shouldn't I offload the risk of unsuccessful litigation, in exchange for a reduced payout? Why shouldn't a company be allowed to do assume the risk and cost of the patent litigation, in exchange for the potential reward?

      Not allowing NPEs limits the ability of small inventors to overcome the cash of huge corporations. It gives those with the deepest pockets even more of an advantage.

      The key is to prevent abuse of the system by NPEs. Unfortunately, any system will be abused by those seeking unfair gain. So we need to balance the rights of patent-holders against the potential for abuse. Eliminating NPEs trades one form of abuse (egregious litigation) for another (small patent-holders get screwed by the big corporations making millions off their inventions).

      • by Rogerborg (306625) on Monday February 01, 2010 @12:01PM (#30983034) Homepage

        Let's say I invent something

        Let's not, until you do. Can you name three patents for inventions in the past 20 years that were filed by Joe Basement which were subsequently abused by Evil Incorporated? And when I say "abused", I mean that you can show that they only started to design Widget X after the patent had been published, rather than that they were developed co-incidentally?

        Three examples from the past 20 years, and I'll cede you the point.

        • Re:Don't Abbreviate (Score:5, Interesting)

          by Red Flayer (890720) on Monday February 01, 2010 @12:20PM (#30983322) Journal
          Look at Microsoft's abuses. i4i and others.

          It doesn't need to be Joe Basement (the single inventor), many firms are "small" when compared to the deep pockets of Microsoft, IBM, et al.
          • by microbox (704317)
            If a firm really has merit to their case, then there will be lawyers scrambling to represent them. In effect it is the lawyers that take on the risk of losing, but they also win big when the case is successful.

            The notion of outsourcing litigation to an efficient entity which is there to make money with no repercussions on the investors (limited liability) makes my skin crawl. The law should be about justice, and has met the latest slickest incarnation of exploitation for profit -- morals be damned.

            The s
          • by Rogerborg (306625)
            A simple "no" would have sufficed (again).
        • Re: (Score:3, Insightful)

          by syousef (465911)

          Can you name three patents for inventions in the past 20 years that were filed by Joe Basement which were subsequently abused by Evil Incorporated?

          Can you even estimate the number of people who haven't invented anything because they know there's a good chance someone will have some vague patent that has almost nothing to do with what they might build but that they would have to fight anyway? I don't think ANYONE would recommend "inventor" as an occupation, and it is certainly NOT because all the good one m

      • by s73v3r (963317)

        And in the same time, you're stifling the progress of a company that, more likely than not given the description in your scenario, did not willfully infringe upon your patent, but merely made the mistake of putting someone clever on their problem who happened to come up with a similar solution. If you are unable to gather investors for your product, especially given the viability of the market as demonstrated by the other company, then why should the other company be unable to use their solution?

        And there

    • Re: (Score:2, Funny)

      by cormander (1273812)
      People are going to abbreviate no matter what you do, so we need to come up with an abbreviation that speaks for itself: POOP - People Orchestrating Obvious Patents Everybody say it with me. These companies are POOP!
      • by Adambomb (118938)

        Hell, then they could hold an annual Forum Educating Companies About Litigation. All the POOPs will want to attend FECAL conferences.

    • by devnullkac (223246) on Monday February 01, 2010 @11:57AM (#30982978) Homepage

      Just goes to show that the US generally values the ability to convince people that something is true over the ability to discover that something is true. Time and again we see that marketing, fear mongering, and legal tactics overwhelm reasoned arguments and hard work. Not that I would have the laws simply torn down to get at this devil (see A Man For All Seasons [wikipedia.org]). We must take care in our approach to reform that we don't find ourselves adrift in a worse sea of argument and arbitrary assignment of winners and losers.

    • by Idbar (1034346)
      Universities spend a lot of money in research. And PhD students expect their contributions to be taken into account. If you created something that requires a platform to run on, but you don't have the platform, you expect the platform manufacturer to find you application useful and pay for it.

      The issue with big companies is that they have lawyers, and they turn around their patents to cover others and avoid paying you fees. There is no easy way to figure out that people will misuse the system.

      I recently
    • We may have issues when companies like (for example) Nokia and Apple wage patent warfare but both of these companies spend enormous fortunes on R&D and they both produce exceptional products.

      So they're somehow more virtuous than other €vuh£ Corpra$hun$ because they do R&D and manufacturing[1] under the same roof, but why should other companies be forced to do so? Why can't one company specialize in R&D and work with another that specializes in production and another that specializes

    • by microbox (704317)
      They exist solely to sue. They are the personification of what is wrong with the patent system.

      And also with the corporate system altogether. Something about an entity that grants investors limited liability over its actions to make a return on investment -- as though that in-and-of-itself is proof that a particular corporation is a net-benefit to society.

      Limited liability has replaced social justice in our society. I think we'd see a lot less unethical behaviour if investors were held responsible the
  • by Pojut (1027544) on Monday February 01, 2010 @11:29AM (#30982558) Homepage

    ...how come patent trolls are awarded patents in the first place? Would it be possible to make an applicant show proof that they are in the planning stages or are currently using what they are trying to patent?

    Or would that just be a logistical nightmare?

    • by bschorr (1316501) on Monday February 01, 2010 @11:45AM (#30982792) Homepage
      It would probably be pretty easy to fake that though. Create some bogus plans to produce the thing you're patenting but never actually go through with it. It would be too costly to follow-up on every patent to make sure people actually did what they said they would.

      Plus there are folks who get patents who don't intend to actually produce the thing themselves, rather they want to license it to others. Sort of an "R&D Department for Hire" concept. Unfortunately it's a fine line between those who intend to license their patents and those who intend to lay in the weeds and wait for somebody to infringe their patent and then sue.

      It's those kinds of parasites we need to figure out way to deal with.
      • by microbox (704317)
        It would be too costly to follow-up on every patent to make sure people actually did what they said they would.

        When you are awarding $500 million in damages, I'm sure that the price of an investigation would be chump change.
    • by Grond (15515) on Monday February 01, 2010 @11:51AM (#30982882) Homepage

      how come patent trolls are awarded patents in the first place? Would it be possible to make an applicant show proof that they are in the planning stages or are currently using what they are trying to patent?

      That's called a 'working requirement' or a requirement to practice the invention. A few countries have such a requirement (Turkey, for example), but the requirement is usually riddled with exceptions that make it essentially toothless. There are several reasons why a strong working requirement is a bad idea, as I explained in a comment [slashdot.org] on a recent Slashdot story [slashdot.org] that suggested forbidding patent ownership by or assignment to non-practicing entities.

      In the US patents are personal property--and thus freely assignable--by statute. 35 U.S.C. 261 [uspto.gov]. Assignability is also guaranteed by Article 28 of the TRIPS Agreement [wto.org], which is a treaty that the US is party to. So changing the assignability of patents would require amending the law and withdrawing from or amending a very important international treaty.

      And even if the law were changed, it would mean that hundreds of patent holding companies would suddenly lose their patent rights because of an action by the government. That's called a taking, and the ex-patent holders would be able to sue the government for the value of the patents. It would be a massive litigation and cost the tax payer an enormous amount of money.

      But anyway, how would we implement such a requirement? We could require that patents only be assigned to an entity that intended to practice the invention. Sounds great, right? No more patent holding companies, therefore no more trolls. There are at least five big problems with that:

      1. Not all patents can be freely practiced because of other patents surrounding the technology. Imagine I own a startup company. If I invent a new transistor design I can't be expected to practice it myself: other companies have patents on things like manufacturing processes, bus designs, chip packaging, etc. I would have to license dozens of other patents in order to sell chips with my new transistor design. But that's backwards. Instead, I should license my one patent to companies like Intel and AMD and let them do the manufacturing and sales. But a requirement to practice means I couldn't do that; I'd have to practice it myself.

      2. And what about pure research institutions like universities? They can't be expected to also become manufacturers.

      3. But suppose we say it's worth making universities sell their patents. So now the patent will be owned by a single practicing entity. The patent can no longer stay with the university and be licensed to whoever will pay the fee. The end result is less competition in the market place for the finished product.

      4. Okay, suppose we say that it's sufficient that the patent owner license the patent to at least one entity that is going to practice it. But then the law is too narrow. Almost no patent trolls actually rely on litigation damages for income; it's too uncertain and the margins are too narrow--and often negative. Litigation is just a tool to extract a licensing fee. So the end result is that the trolls can point to a manufacturer who licenses the patent and nothing changes.

      5. What about patents on technologies that are ahead of their time? For example, suppose I invented an amazing new transistor design. It will make computers much faster but it requires X-ray lithography in order to work. Well, X-ray lithography is not cost-effective yet, so I can't really practice my invention. Does my patent just evaporate? How does that spur innovation?

      As you can see, there are a lot of problems with such a proposal.

      • by Pojut (1027544)

        That's what I figured...logistically impossible, more or less.

        Thanks for taking the time to write out a detailed answer...super interesting stuff :-)

      • by microbox (704317)
        That's called a taking, and the ex-patent holders would be able to sue the government for the value of the patents.

        I find it ludicrous that the government would be threatened with litigation for passing laws. Surely the laws themselves would have to be impugned -- which means referring to the constitution.
    • by grasshoppa (657393) <skennedy.tpno-co@org> on Monday February 01, 2010 @11:54AM (#30982924) Homepage

      I'm probably alone in this, but if the patents were of significant value, I wouldn't have a problem with the "trolls".

      The problem is that they are not of significant value. Usually, they are trivial extensions of existing technology which are inevitable. Thus, they are worthless to exploit directly, but if you wait for someone else to exploit it you can derive more value from them. That's the problem that needs to be fixed.

      • by PPH (736903)

        Right. Another problem which needs fixing (after clearing all the trivial crap out of the patent database), is to develop better standards for describing patentable ideas and some method for building some sort of semantic database with which to contain them.

        The current art in writing patents is to generate claims which, on their surface, appear to be unique and therefore patentable. But in fact they overlap with prior art or other patents. So we end up with some pretty obfuscated descriptions of what is be

        • To be fair, if I have a truly significant patent ( that is; it's a really unique idea ), why shouldn't I be able to charge whatever I want for it? Or refuse to license it at all? It's mine, after all.

          The difference between this and your loaf of bread is this; If safeway determined cost by the amount the end user has, I would simply shop somewhere else. Bread is not a limited supply commodity, like a good patent is. If supplies were limited, and I held the patent on bread then I'd be well within my right

          • by PPH (736903)

            To be fair, if I have a truly significant patent ( that is; it's a really unique idea ), why shouldn't I be able to charge whatever I want for it? Or refuse to license it at all? It's mine, after all.

            Because the Constitution says: To promote the Progress of Science and useful Arts
            So sitting on something, or pricing it beyond a fair market price doesn't constitute promoting progress.

            • The constitution is also pretty big on personal liberties. While I'm not fully versed on patent law, and thus wouldn't want to offer a firm opinion on the topic, my initial bias is to protect the idea of personal property and ownership over the government determining what is fair use of my idea.

            • There you go again with the bullshit economics. There's no such thing as a fair market price, since "fair" is subjective. What the buyers think is fair is likely to be different to what the sellers would choose.

        • Another problem which needs fixing (after clearing all the trivial crap out of the patent database), is to develop better standards for describing patentable ideas

          Actually, if there's one thing that would fix 99% of the problems in one go, it would be not allowing patents on ideas at all.

          Ye horseylesse carryjes, powered by fearsom contapstians utilisynge ye spirits distillated of ye petroleumechal vapeurs, verily wouldst that be most cool, forsooth! - idea - no patent.
          Otto cycle - practical invention - pat

          • by PPH (736903)

            I'm not quite sure what you mean by an open market. To me, it means one in which anyone may take part, in other words what we already have. But more important is a free market, and in a free market either party - buyer or seller - is free (hence the name) to refuse the deal if he doesn't like the price.

            An open market is one where all interested parties have access to pricing information. If you have a patent you are willing to license, you post your terms someplace and let interested parties bid. Even for a fixed price system, the price would be posted and everyone can see what they and their competitors are paying.

            Currently, license negotiations are rarely conducted like this.

            Unless the cashier has x-ray eyes It's nothing of the sort. If you walked in, you can walk out again, and walk to Sainsbury's - or better yet support a small local tradesman.

            Ever heard of buyer's club cards? There's the listed price, the member price, an additional discount that pops up at the register

    • by jittles (1613415)
      Patent trolls don't get awarded patents. They buy patents, typically from companies that are going out of business or have been purchased to be sold off in pieces. There are a few research institutes that make money by licensing research, though. Would they be considered non-practicing entities? Because that does seem like a legitimate use of the patent system.
      • by russotto (537200) on Monday February 01, 2010 @12:00PM (#30983016) Journal

        There are a few research institutes that make money by licensing research, though. Would they be considered non-practicing entities? Because that does seem like a legitimate use of the patent system.

        It's legitimate if they're actually doing research. It's not legitimate if they're just brainstorming a bunch of ideas based on the current state of the art and then patenting everything which comes out of the brainstorming session.

    • by bluefoxlucid (723572) on Monday February 01, 2010 @11:57AM (#30982972) Journal

      It'd be a nightmare. The guy who invented pulse wipers has sued every car company for royalties now; when he first invented them, he presented the idea to 2 car companies, who dismissed him because his idea was non-useful. They immediately implemented pulse wipers, followed by every other car manufacturer. After several years of legal bullshit, he managed to start making some headway and getting judgments against them for the theft of his idea.

      Patents are marketable. Some folks like to sit back on a patent and wait for someone else to re-invent it, rather than go out there and risk someone finding a way to work around your idea so you can't sue them for it. If they successfully work around it, then they don't have to license the patent from you and can't be successfully sued, so there is incentive to attempt to come up with a similar-but-legally-different implementation. On the other hand, waiting for the entire industry to implement your invention and then suing everyone in the world is a shit move.

      Forbidding inventors from profiting from their inventions would be a disaster. It would prevent small-shop inventors without the capital to make a real, marketable product from capitalizing on their work at all. I could design a new type of nuclear reactor, but I can't build any significant components for it and thus my invention is impossible for me to actually manufacture (I'd need hundreds of millions of dollars). I could license the design to someone else, of course. There may not be a market for new nuclear reactors at this time, though; maybe I need to wait 10 years....

      What a mess, yes? The system has to make these considerations, but in doing so it leaves itself open for abuse. In failing to do so, however, it also leaves itself open for abuse.

      • by s73v3r (963317)

        When discussing the subject at hand, your story is a special case. He is someone who actually did get screwed by a (several?) large company, and I hope he was able to get satisfaction. He is who the patent system was meant to benefit.

        Patent Trolls, which is what we're discussing, do not deserve patent protection. They do none of the research, none of the hard work. They simply try to acquire patents from other companies, and wait for someone else to come up with a similar solution to the problem. Most lar

        • Yes, but what I'm saying is sometimes you have a marketable idea that you can't currently market to anyone, but still want protection. We've seen this many times already, and we've seen people have marketable ideas that the market wasn't ready for-- many actual companies get a product to market way ahead of the technology curve, for example Apple had this with their network-ready phones....

          In any case, there are things that need patent protection, which we can't really do anything with unless we're market

      • The guy who invented pulse wipers has sued every car company for royalties now;

        Wait, he INVENTED pulse wipers? He made the ("non-obvious to a expert in that field" according to TPO guidelines) leap of increasing the time interval between wiper passes, and then tried to sell that to car companies? Talk about a patent troll. I don't blame car companies for 'stealing' his idea.

        Was his idea worth some money? Sure, probably about $5. Someone would have thought of it, and it really isn't hard to wire a cap
        • At the time, the obvious solution to not always needing "full speed wipers" was to make the wipers move slower. At some point, it's too slow to efficiently clear the windshield, so it's pointless. Thus, pulse wipers: run the wipers at "slow" speed, and delay between using them.

          At some point, HTTP didn't have the capability to resume a half-finished download. This is obvious to anyone technical in the field now, but it wasn't then.

          Remember, this is a person that went to companies that hadn't yet consi

    • by s73v3r (963317)
      Most patent trolls don't even come up with the patent themselves. They go around to companies that are going under, and buy up their patent portfolio for cheap. Then they wait for some other company, preferably one with deep pockets, to do something marginally similar, and then they sue.
  • When Normalized... (Score:3, Informative)

    by Bob9113 (14996) on Monday February 01, 2010 @11:37AM (#30982674) Homepage

    the number of patent cases filed yearly is on the rise significantly when normalized against the number of patents granted yearly.

    Number of patents granted are also on the rise significantly when normalized against GDP.

  • by francium de neobie (590783) on Monday February 01, 2010 @11:39AM (#30982694)
    The politicians can't be bothered with minor problems like the technology lead of the US. So let's just solve it the capitalist way.

    Get the financial industry into the game, set up mutual funds and exchange traded funds to support patent trolls, get the investment banks into the game.

    Once this gets started, within 6 months all the technology companies in the US will be able to do nothing. Then here's the smartest bit of the plan: the whole tech industry ask White House for a bailout because we've collectively become yet another too big to fail. So we get the money while we sit our asses doing nothing. No more death marches.

    The perfect win-win situation! Wall Street wins, Silicon Valley wins!
  • by BooRolla (824295) on Monday February 01, 2010 @11:54AM (#30982920)

    This is great! The only way these things changing is if the game becomes to costly for the corporations who write the rules. I hope "NPEs" start putting more companies through the wringer.

    Sounds harsh but consider this: If I independently created something useful and it blows up like Facebook or Google but infringes on some minor or trivial patent for IBM/MS/Apple/Etc, the fruits of my labor will be taken from me.

    God bless the NPEs for taken advantage of the game created by the advantaged.

    • That's how power works in our society. It is not about what is "right", but what suites the needs of the big players. Our system is *obviously* better than anything before it -- it has many checks and balances -- but I think people expect too much from it when they think that patent laws should be revised merely because it would be a sensible thing to do.
  • by Grond (15515) on Monday February 01, 2010 @12:11PM (#30983180) Homepage

    Non-practicing entities exist in other legal and business contexts. Consider a car rental company, for example. It might own thousands of cars, yet it does not build cars, sell cars, or use the cars itself. What's more, it charges an obscene fee to rent a car compared to buying one (~$20/day for a compact is $7300/year!).

    Sounds a lot like a patent troll, right? It doesn't use the technology, it won't sell the technology outright, and it quite possibly didn't even invent it in the first place.

    But what both kinds of NPE provide is convenience and certainty. People pay car rental companies a comparative fortune because it's cheaper than owning a car in every city you might want to fly to, and the car rental company provides certainty that the car will be available, in reasonably good condition, properly titled, etc.

    By the same token, a patent holding company provides convenience and certainty. Patents and patent applications are publicly available, so you can avoid wasting time and money on duplicate research and development by simply seeking a license from a company that has already done the work. And of course a license gives you legal certainty. Knowing that your product is licensed reduces the risk of an infringement lawsuit, which makes things like developing venture capital and contracting with suppliers and distributors easier.

    Now, of course, there are problems. Too may patents are too vague to be of much practical use to a practicing entity because they don't go into adequate detail on how to actually make and use the invention. In response the courts are moving towards tightening the written description and enablement requirements, which I support. Another problem is that too many patents are actually invalid, and Microsoft is currently asking the Supreme Court to make patents easier to invalidate by eliminating the strong presumption of validity that patents currently enjoy, which is another reform I support. (That's right, Microsoft is trying to make it easier to invalidate patents).

    The answer to the problem of non-practicing entities is not to ban them outright, nor to engage in overly narrow reforms that will only add complexity to the law. The solution is simple, broad reform that will increase the societal value of all kinds of patents while at the same time reducing the incentive to file for unsupported patents.

    • Re: (Score:1, Insightful)

      by Anonymous Coward

      Non-practicing entities exist in other legal and business contexts. Consider a car rental company, for example. It might own thousands of cars, yet it does not build cars, sell cars, or use the cars itself. What's more, it charges an obscene fee to rent a car compared to buying one (~$20/day for a compact is $7300/year!).

      Sounds a lot like a patent troll, right?

      No, not really, a rental car company is actually providing a service to society at large. Such companies allow people to use cars on a short-term basis, like when you are traveling for business or please. On the other hand, NPE patent trolls provide no benefit for anyone besides themselves and at times considerable detriment to others.

    • Re: (Score:3, Interesting)

      by Animats (122034)

      Yes. Having invented something, you may not want to do a startup. Often, the technology developed is useful, but not suited for a standalone business, because it's better used as part of something else.

      I hold several patents, and put "inventor" on my tax return. One patent was licensed to Autodesk, one was licensed to Havok, and I'm currently going after DARPA for patent infringement on a third. My fourth patent is about to issue, and a fifth one is in examination. In each case, there's a working im

      • "Non-obviousness" just means "someone else screwed this up at some point"? I've seen a lot of bad games, many of which I could probably fix the problems with if I had a mind to. Maybe I will, if that's the only standard of patentability.

        That's quite aside from the issue that software should never be patentable. Software for a computer is like music for a guitar-copyright (for a genuinely limited time), yes, patent, no. Not tangible, and certainly doesn't work to "promote science and the useful arts"-allowin

        • by evilviper (135110)

          That's quite aside from the issue that software should never be patentable.

          There's an extremely small difference between software, and firmware.

          Do you really believe that a software MP3 player shouldn't be patentable, but the same software, in the firmware of an MP3 player SHOULD be? Because that is currently the situation in countries without software patents.

          I'd be happy to hear any justification for that, or a good solid explanation for where the line SHOULD be, instead.

          • No, I wouldn't see any particular difference with firmware. It would (and should) depend on the issue of tangibility. If the design of the MP3 player itself is somehow revolutionary, it would be patentable like any tangible device. If it weren't, it wouldn't be, just like any tangible device.

            Firmware is in essence software. It is and should be copyrightable, but not patentable.

            If you come up with a brilliant design for a guitar, that can produce unmatched tone quality or make it far easier to play or what h

            • by evilviper (135110)

              The problem here is that you're saying some ingenious mechanical device should be patentable, but some digital device that replaces it, should not, despite them accomplishing the same thing, and being equally as non-obvious.

              • I don't see any dichotomy there at all. The idea of copyrights and patents, according to the Constitutional section that authorizes them, is "to promote the progress of Science and the useful Arts", not "to apply patents to anything that's ingenious". Designing a mechanical, tangible device often requires a significant investment in parts and components, as well as the appropriate tools to machine and modify them, as different iterations are tried and failed. Different iterations of software have no such ba

                • by evilviper (135110)

                  Ah, I see. So patents are only for very expensive devices...

                  • While you might be being facetious, generally speaking, that's a good formulation (though of course that shouldn't be the only criterion). Patents are for stuff that wouldn't be developed without them. Generally, that's because it would be cost prohibitive to do so and no return approaching the cost of development would be possible without it. It's not cost prohibitive to develop software, since the equipment on which to do it is readily and cheaply available and there is no cost per iteration, and a simple

      • by s73v3r (963317)
        Here's the difference: Did you actually do the work involved in developing the patents, or did you find someone else who did, yet was going out of business, so you bought their patents and waited for someone else to do the work in implementing a similar solution?
    • An automobile is a rivalrous good; something that only one person can posses at a time. A patent licence is not; an unlimited number of licences may be issued for the same good. And a patent licence does not provide the same sort of security; multiple patents can apply to a product and most patents are worded more broadly than what they can apply to, making it difficult to know if a product is licenced or not.

      Also, the "simple" solution is seriously lacking in details.

  • Who gets the money's derived from patents and new ideas is of little importance except to the parties concerned. Clearly an enormous amount of money and other resources are wasted in legal fees that might otherwise be spent on research, development and invention. On the other hand this is a rich country and the real issue is whether or not the constitutional goals of the patent system have been compromised: ... to promote the progress of science and useful arts by securing for limited times to authors and i
  • ...and in other news, water is wet.
  • Side Note (Score:2, Insightful)

    by bakestyle20 (951118)
    Might be off topic but.... Wish Bell Labs was still truckin.... All those public works patents made the world a better place and the R&D staff were compensated well. The failure of the firm though is just another instance of business executives and politicians banding together to ruin a strong and truly beneficial company.
  • I've gathered some info already about patent trolls:

    swpat.org is a publicly editable wiki, help welcome.

A computer lets you make more mistakes faster than any other invention, with the possible exceptions of handguns and Tequilla. -- Mitch Ratcliffe

Working...