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Why Tech Vendors Fund Patent Trolls 58

Posted by timothy
from the can't-leave-their-friends-behind dept.
Lucas123 writes "Major tech vendors are funding patent trolls, companies that derive the bulk of their income, if not all of it, from licensing huge libraries of patents they hold as well as by suing companies that use their patents without permission, according to an investigation by Computerworld. Tech companies — including Apple and Micron — have railed against patent 'nuisance' lawsuits, only to fund or otherwise support some of the patent trolls. Because of patent trolls, more politely called mass patent aggregators, patent litigation has in part increased by more than 230% over the past 20 years. 'Most of the major tech companies are backing a troll in some way, probably financially,' says Thomas Ewing, an attorney who has authored reports on what he calls 'patent privateering.'"
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Why Tech Vendors Fund Patent Trolls

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  • by Anonymous Coward on Thursday April 05, 2012 @01:02PM (#39587351)

    The problem is obvious patents, not who owns and enforces those obvious patents. All big tech companies own and enforce obvious patents, so how is this worse than companies that produce nothing doing the same thing? We need a fix to obvious patents. Shorter time limits for (de facto) software patents, and peer review are the only workable solutions that have been proposed.

  • by Grond (15515) on Thursday April 05, 2012 @01:11PM (#39587513) Homepage

    Because of patent trolls, more politely called mass patent aggregators, patent litigation has in part increased by more than 230% over the past 20 years

    The number of patent cases has increased almost exactly in lock step with the number of patents granted [pwc.com] (see page 8). The growth rate for litigation since 1991 is 4.9%, whereas the rate for patents granted is 4.5%. There is not a lot of evidence that there are more patent cases because of non-practicing entities. For example, litigation rates have been relatively flat since about 2003, despite numerous patent aggregators only coming into existence in that timeframe (see page 8 again).

    NPEs also tend to lose cases more often than practicing entities (see above, page 24 and 32). NPEs win about 23% of the time overall, and PEs win about 39%. When NPEs do win the awards are higher, but that's to be expected. The primary value of litigation for an NPE is to get money, either as a damage award or as a license agreement. The primary value of litigation for a practicing entity is to exclude a competitor. Damages are nice, but the real point is the injunction.

    That loss rate is a good example of why more fee-shifting (i.e. loser pays the other side's attorney's fees) in patent cases would be beneficial in eliminating frivolous, "shakedown," and otherwise questionable patent suits brought by NPEs.

  • by HBI (604924) <kparadine@gma i l . c om> on Thursday April 05, 2012 @01:18PM (#39587641) Homepage Journal

    No, the problem is non-practicing entities holding and enforcing patents. A practicing entity - a real company - has an incentive to not troll with its patents. Trolling with its patents would be painting a big target on its ass, as Apple and Yahoo are starting to find out. What does a non-practicing entity have to fear from trolling? No liability at all. It doesn't do anything!

    While I agree that obvious patents suck, it's much harder to separate obvious from non-obvious. The USPTO doesn't inspire me to believe that it could ever fix the problem adequately. In comparison, it would be rather easy to say that non-practicing entities cannot bring patent claims.

  • by alen (225700) on Thursday April 05, 2012 @01:38PM (#39587985)

    DVD, bluray, 3GPP, JEDEC, the list goes on. you write a check, send in your patents or agree to license them cheap to anyone who asks and you are part of a standard

    the trolls or whatever you want to call them want to be the standards body. why let a non-profit collect membership checks when you can start a PAE and do the same?

  • Blackmail (Score:4, Interesting)

    by PPH (736903) on Thursday April 05, 2012 @02:16PM (#39588581)

    Either you pay them to fight on your side or they end up working for your competitor, working against you. Its basically a protection racket [wikipedia.org].

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