Why Tech Vendors Fund Patent Trolls 58
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.'"
Laborless Capital (Score:1)
This is what it looks like when you decide that labor is unnecessary and all you need is capital. Who needs to do real work, anyway? Viva la capitalism!
Re:Laborless Capital (Score:4, Insightful)
I think this is what it looks like when the system values bureaucracy over results. Viva la Kafka!
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Not really. In the context of trolling, the only labor was to file a patent application for something obvious, and the only thing funded by trolls is legal services.
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Unfortunately, it also stops people like a close relative of mine, who invented a new and useful mechanism for a common device (involving optics and high temperatures), but had no interest in developing the business around it himself, or dealing with the cutthroat competition in that particular industry. He sold licenses to the major manufacturers, recouped what he spent developing the mechanism (because lenses aren't cheap), and went back to his normal life.
A genuine innovator, who advanced technology in a
Like Warren Zevon said... (Score:2)
Send lawyers, guns, and money.
Although industry best practices avoid the gunplay part, leaving that to surrogate enforcement agencies.
Re:Like Warren Zevon said... (Score:5, Funny)
You can defend yourself from guns. From lawyers all you can do is kill them and hope you dont run out of bullets before they run out lawyers.
What's the difference between a lawyer and a zombie? Zombies only want your brains
Financially backing? (Score:2)
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they fund them directly, like investing in a hedge fund
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Why? (Score:2)
Because if you can't beat them join them.
The problem is obvious patents (Score:2, Interesting)
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.
Re:The problem is obvious patents (Score:5, Insightful)
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Adam Smith in action http://en.wikipedia.org/wiki/Adam_Smith [wikipedia.org]
Comment removed (Score:5, Interesting)
Re:The problem is obvious patents (Score:4, Insightful)
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You've recognised yourself that that's an extreme solution to the problem, and I can't help but think that such a solution would do infinitely more harm than good.
One of the stronger arguments for the benefits of a patent system is the notion that it helps correct the market imperfection which would result in the absence of intellectual property rights, where (for non computer-implemented inventions) he who holds the manufacturing and distribution capabilities can effortlessly muscle out your little guy who
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Unfortunately there's no good way to define practicing versus non-practicing. Is a law firm that employs some pimply-faced script kiddie who writes phone apps now a practicing entity? I think the real solution is to eliminate software and business process patents, they're like an architect patenting the idea of putting a window in an office at a specific location. Big deal.
I say, force the NPEs to do exactly that. It will a) force them to spend money - thus causing a slight but important barrier to trolling, b) increase employment (negligible but a worthy goal), and most importantly, c) if by some luck the troll actually creates an app/product that has sales, it would be put in exactly the position that practicing entities have - ie, having a stake and exposure to counter-litigation.
In short, forcing even a sham of practicing in the areas where they litigate will likely kill
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Unfortunately there's no good way to define practicing versus non-practicing.
Not at all. A patent owner that really is trying to "promote the useful arts and sciences" is either trying to bring an implementation of the claimed invention to market, or is offering the patent for licensing. Virtually all patent trolls could be taken care of by requiring the plaintiff to show that they have made a good faith effort to do one of these two before they can bring a suit for infringement.
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A practicing entity - a real company - has an incentive to not troll with its patents.
That disincentive only works for large companies with similar patent warchests. Small companies, end users etc. can get just as screwed by a practicing entity, since they have no or few patents. What are you going to do when someone sues you for patent infringement if you use Facebook? [groklaw.net] What are you going to do if you really do invent some new technology, say a new graphics pipeline rendering technology? Do you think that Nvidia would hesitate to take you down with their patent warchest to take you down if y
Do not play the lawyers game (Score:2)
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I suspect you'd sooner run out of mailmen.
Math Check.... (Score:5, Insightful)
"patent litigation has in part increased by more than 230% over the past 20 years."
Math check... a 4.2% increase, per year, over 20 years yields 230%.
Is 4.2% per year so much? Given the changes in technology in the past 20 years, that seems quite modest to me.
Re:Math Check.... (Score:4, Insightful)
That's a really good point - thanks for making it.
And if this rate of increase continues into the future, where it approximately doubles every ten years, in 2020 we'll be 400% higher than 1990 and in 2030 we'll be at 800% and by 2040 we'll be at 1600% ...
As far as math goes, that's all fine. But behind those numbers we have to put resources, and resources come from meatspace, where there are physical limits to growth. In the finite world, continuous growth is just not sustainable. And even if it were, is this where we want to dedicate our resources?
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A 4.2% compound growth rate is not a doubling every ten years. Simply just apply the rule of 70 and you find it's 16.7 years.
And even that math isn't that great because it doesn't factor in the overall US economic growth rate of 2.5% over the past 20 years or so. So really the excess patent rate is 1.7% per year compared to the overall economy. That's a doubling every 40 years.
And that's the overall growth rate, which is not as fast as the growth rate of the technological components of the US economy.
Once y
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Thanks for the correction on doubling time.
I'm not sure I buy your adjusting the rate of litigation growth by the rate of economic growth or widget growth - doesn't seem mathematically legit to subtract dollars or widgets from # of court cases. But maybe a graph comparing such things would be interesting.
I think a better analysis than this thread is here: http://yro.slashdot.org/comments.pl?sid=2768395&cid=39587513 [slashdot.org]
From the limited data given it's not clear that we can assume continuous growth, nor a fi
Patent litigation trends (Score:5, Interesting)
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.
Re:Patent litigation trends (Score:4, Insightful)
NPEs win about 23% of the time overall, and PEs win about 39%
That's a very sad statistic for the patent office. It means they are rubber stamping far too many invalid patents. But you already knew that.
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That statistic tells you absolutely nothing about the validity (or otherwise) of the patents involved in litigation.
The numbers would include the successful bringing of an infringement action with respect to a perfectly valid patent, for example.
A declaration of invalidity is far from the only remedy available in patent litigation.
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Due to selection bias, such numbers say very little. If a case would be obviously won - in either direction - then it will most likely be settled instead of going to court.
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Due to selection bias, such numbers say very little. If a case would be obviously won - in either direction - then it will most likely be settled instead of going to court.
"Would be obviously won" applies to very few pre-litigation patent disputes. One look at the reversal rates at the Federal Circuit would be enough to tell you that, to say nothing of the uncertainty created by Supreme Court decisions, Federal Circuit en banc cases, and the America Invents Act.
Anyway, are you suggesting that NPEs have caused a significant increase in out-of-court patent disputes all involving either obviously strong or obviously weak patents? If the patents are that obviously weak, then wh
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Due to selection bias, such numbers say very little. If a case would be obviously won - in either direction - then it will most likely be settled instead of going to court.
"Would be obviously won" applies to very few pre-litigation patent disputes. One look at the reversal rates at the Federal Circuit would be enough to tell you that, to say nothing of the uncertainty created by Supreme Court decisions, Federal Circuit en banc cases, and the America Invents Act.
These numbers can't be drawn conclusions from either; they have similar types of bias.
Anyway, are you suggesting that NPEs have caused a significant increase in out-of-court patent disputes all involving either obviously strong or obviously weak patents? If the patents are that obviously weak, then what's the problem? And if the patents are so obviously strong that the defendants don't bother going to court, then it sounds like there's not a problem with NPEs abusing weak patents.
And if there had been such an enormous swell in the number of out-of-court patent disputes one would expect significant spillover into the courts because of close cases. Remember that an alleged infringer can easily drag the patentee into court via a declaratory judgment action. In fact, it is almost impossible to discuss a license agreement without triggering declaratory judgment jurisdiction. So it's not like the NPEs have complete control over whether a dispute ends up in court; far from it, in fact.
I'm only suggesting not drawing conclusions from numbers that have significant bias in them. In this case, I think the conclusion is right but the inference is wrong.
In more depth:
I believe the quality of software patents is horrible; and I believe both PEs and NPE mostly play with patents that should never have been issued. However, agreeing with the conclusion doesn't make me agree with the way it is argued - I want my
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"Winning" means that a patent is found valid, enforceable, and infringed. NPEs can lose not just because a patent is invalid but also because it was simply uninfringed. Fee-shifting could apply in either case, of course. Without more detailed statistics it's impossible to say whether the PTO is "rubber stamping" too many invalid patents.
Furthermore, "rubber stamping" is a pretty big overstatement. The PTO might not be doing a very good job of examination, but it's clearly not rubber stamping patent appl
Call for action! (Score:1)
Someone should start a White House e-petition!
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Patent system broken (Score:5, Insightful)
they are trying to become the standards bodies (Score:4, Interesting)
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)
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].
Patent trolls are get high damages in software (Score:2)
Chart 6d on page 22 [pwc.com] shows that patent trolls (non practicing entities) receive vastly higher damages in software. The median for software is ~$143, while that for the runner-up (computer hardware) is ~$48.
Combine this with unavoidability of accidentally using obvious software patents and you can see why there are only a few big players that control the software market.
Chart 2c shows that the Lucent got awarded over $1500 million in damages from Microsoft for MP3 techology. I was not aware of this case from