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How Patent Trolls Destroy Innovation 97

walterbyrd sends this story from Vox: Everyone agrees that there's been an explosion of patent litigation in recent years, and that lawsuits from non-practicing entities (NPEs) — known to critics as patent trolls — are a major factor. But there's a big debate about whether trolls are creating a drag on innovation — and if so, how big the problem is. A new study (PDF) by researchers at Harvard and the University of Texas provides some insight on this question. Drawing from data on litigation, R&D spending, and patent citations, the researchers find that firms that are forced to pay NPEs (either because they lost a lawsuit or settled out of court) dramatically reduce R&D spending: losing firms spent $211 million less on R&D, on average, than firms that won a lawsuit against a troll. "After losing to NPEs, firms significantly reduce R&D spending — both projects inside the firm and acquiring innovative R&D outside the firm," the authors write. "Our evidence suggests that it really is the NPE litigation event that causes this decrease in innovation."
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How Patent Trolls Destroy Innovation

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  • by Anonymous Coward on Wednesday August 20, 2014 @05:30AM (#47710601)

    Fixed that for you.

    "Patent trolls" is a propaganda term. It implies that there's a right and wrong way to own patents. In reality it's just that: Owning patents. Patents are a monopoly on ideas. That's the problem.

    • Well yes and no, patent protects innovation because you have a monopoly on your idea. Then up to you to make other researches on new products with the money gained.
      But if you use a patent, you're forced to reveal your idea and prepare your competitor to use it later. You're never forced to patent your idea tho (see Coca-Cola, never patented, receipt never given).

      • Re: (Score:3, Insightful)

        by Cenan ( 1892902 )

        patent protects innovation

        Citation needed.

      • by organgtool ( 966989 ) on Wednesday August 20, 2014 @10:48AM (#47712285)

        Well yes and no, patent protects innovation because you have a monopoly on your idea.

        While I agree with most of what you have said, I have to make a pedantic statement about a common mistake that you have made that infuriates me - you can not patent an idea! You may patent an implementation of an idea, otherwise known as an invention, but you are not supposed to be able to patent the underlying idea.

        You're never forced to patent your idea tho (see Coca-Cola, never patented, receipt never given).

        This is true, although you've used a bad example since recipes are not eligible to be patented. But otherwise, you are correct - unpatented ideas can be protected as trade secrets.

    • by martin-boundary ( 547041 ) on Wednesday August 20, 2014 @05:54AM (#47710673)
      Extra! Extra! This just in! New research proves that patent "trolls" actively reduce wasted "R&D" attempts by sad deluded companies aiming to reinvent by themselves and worsen already existing ideas! WIPO economic policies vindicated! Simplification within reach! Coming soon: the Golden Age of the One, Single And Perfect Idea Of Everything (a.k.a. "the Wheel") ! Thanks "trolls", your country owes you a debt of gratitude!
      • by fey000 ( 1374173 ) on Wednesday August 20, 2014 @06:24AM (#47710773)

        Extra! Extra! This just in! New research proves that patent "trolls" actively reduce wasted "R&D" attempts by sad deluded companies aiming to reinvent by themselves and worsen already existing ideas! WIPO economic policies vindicated! Simplification within reach! Coming soon: the Golden Age of the One, Single And Perfect Idea Of Everything (a.k.a. "the Wheel") ! Thanks "trolls", your country owes you a debt of gratitude!

        Dear Mr. martin-boundary,
        I am writing to notify you that I currently own patent #2139986924, entitled "Process through which a human being may communicate a non-specified message of arbitrary weight and importance to one or more other human beings without the distinct personal application of auditory signals and cues". It is clear through your most recent activity that you have applied this process without my express written consent. You are thus legally beholden to the patent owner, and unless you reimburse me a sum of €12,000 I will be forced to recoup the losses I have unjustly suffered from your piracy to the fullest extent permitted by US law. You have 45 minutes to comply.

        Thank you for your cooperation
        Mr Troll, Esq.

        PS. Perhaps you shouldn't try to reinvent the wheel.

      • I think the premise of the study is flawed. Spending on R&D is not the same as innovation although there is some correlation. e.g. Companies might be able to get away with spending less on R&D as they are able to license the relevant patents rather than having to duplicate the research.

        However, most patents aren't any use as most of them ARE obvious to someone skilled in the relevant discipline.
    • by gtall ( 79522 )

      It depends upon the industry. The drug companies are hard to defend, but there'd be no drug companies without patents. That's because it can easily cost well over $1 Billion to develop a new drug. No one will risk that kind of money without some guaranteed payback should they succeed.

      "What?" you say, "Let the universities develop the new drugs?". They do some. So now you want the federal government to fork over $1 Billion on a research that may not pan out. That's only one drug. The government doesn't have

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        In the case of the drug industry, the problem could be easily fixed by requiring each business which wants to sell a drug to perform and document the studies to prove that their formulation is safe and effective. No "theirs is safe, so ours is too". That would have the added benefit of verifying scientific results through replication, and it would give the original innovator time to recoup their investment.

        • If it costs $1.95 billion to research a health problem; try possible directions to address the issue; find promising possibilities; run animal trials that have problems; modify the approach; new trials until; repeat until you have something good enough for limited human trials where some fail and the entire effort is for naught; broad human trials for the few that work; and plan for long term monitoring to identify problems that take years to show the company doing that work needs to recoup the investment o
      • This example gets trumpeted out in every discussion on patents. First of all, I think most of us here are interested in software patents and maybe to a lesser extent patents on electronic or mechanical devices.

        Second... WHY does it take so much money to develop a drug. Is it really necessary? Or is this just the result of the system which people in industry and government have created? This is an industry where the customer MUST buy the product. To not do so is to be sick or maybe dead. That hardly give

        • It is expensive to develop a new drug for lots of reasons. I used to work in chemistry and the equipment, chemicals, scientists and facilities are expensive. These days a lot of drugs get discovered based on natural compounds that have shown some bit of efficacy against whatever ailment. The active compound needs to be isolated, synthesized, tested, modified, tested, etc until they run out of ideas to make it as effective as possible. And that's just the start. Then you need to find a scalable way to p
    • by AC-x ( 735297 ) on Wednesday August 20, 2014 @06:40AM (#47710829)

      Well, to me it's a combination of how patents are used and the fact too many vague, overly broad and (in the case of software) patents on general ideas rather than specific implementations are granted.

      If less nonsense patents were approved, or if there was a second class of patents (for software etc) that had an extremely short term, most of the problems of patent trolling would go away.

      There's nothing wrong with an inventor being able to protect an actual physical invention (without protected you'll be immediately priced out by cheap knock-offs), but no-one should be able to protect just a vague idea.

    • by Anonymous Coward

      Check out my patent.


    • Re: (Score:3, Insightful)

      by Begemot ( 38841 )

      Patents are a monopoly on ideas

      That's also a propaganda term. The patent system is flawed but not as much as you imply. You can only patent an idea that's not obvious and novel, which means you need to invest a significant amount of talent, time and money in order to develop this idea. Many people expect some protection of their investment in developing their ideas.

      The question is in what would incentivize inventors more, the patent system or the lack of it. I don't see a clear answer to this question.

      • by StormReaver ( 59959 ) on Wednesday August 20, 2014 @08:31AM (#47711251)

        You can only patent an idea that's not obvious and novel....

        That's how it should be, but it's not what has actually been happening for the last few decades. The patent office has been spewing out patent approval for the most obvious and commonly used ideas at a rate unparalleled in modern history.

        And Congress and the Courts have been complicit in making patent defense so expensive that only the richest companies and individuals can even consider mounting a defense. They have also tilted the courtroom so far in favor of the trivially obvious patent troll that everyone else must simply cave in to the patent offensive, even when the patent wouldn't have a chance in Hell of being upheld in court.

      • You do realize that you didn't actually contradict him.
        His term is perfectly valid and your clarification did not alter that at all.

        Nobody claimed patents were a monopoly on ALL ideas (though it's patently [if you'll excuse the pun] clear that the limitations you hold so dear have no practical meaning) - the very idea of a monopoly on ANY idea is inherently suspect.
        Benjamin Franklin considered it a completely unacceptable proposal and while refusing to patent any of his many inventions also actively campaig

      • A system where Inventors get paid for other people developing their ideas, or people they sold the idea to get paid for other developing the idea is broken

        If the Patent system encouraged people to innovate *and* develop their ideas then it would work, but the current system does not

    • by jellomizer ( 103300 ) on Wednesday August 20, 2014 @07:59AM (#47711107)

      I think the problem with the Patent system isn't the idea of patents, but some factors that need to have them adjusted.

      1. Patent Lifetime. 20 years is much too long in the technology industry. As technology is improving at an exponential rate. 20 years to hold onto a patents means by the time the patient expires, the technology is so old and out of date that it isn't useful any more. Back in the old days 20 years was enough for someone to get it in the market and make a good living off of it. When it was over then you can get others using it.

      2. Too many obvious patents. Especially in software, We code new and interesting stuff every day, as our programs are meant to solve a new problem. Software patents should be reserved for some really ingenious stuff. Like advanced algorithms that the average coder will go, you know I might as well just download the library and implement vs having to figure it out myself and probably not have it work as well.

      3. Lack of a good Non-Patent Protection legal mechanism. There isn't a way to register your idea officially, while not having the patent overhead, and if someone patents the same idea you can use your registration to prove yours is legit.

      • Agreed on point 2. However:

        3. Lack of a good Non-Patent Protection legal mechanism.

        Of course there is. It's called publishing a white paper [wikipedia.org].

      • by Anonymous Coward

        No. The problem with the patent system *is* the idea of patents. Making the adjustments you advocate will just reveal a different set of problems, calling for a different set of adjustments.

        The idea of patents is that companies can compete in the court room instead of the market place. This is a great benefit to legal counsel, but is of no benefit to consumers.

    • I'm not entirely sure how this got modded insightful. The patent system is certainly not built upon owning an idea. They cover a particular implementation, a certain solution to a problem, not just an idea. If you invent a machine that makes unicorn farts, you can patent that machine. If I make a unicorn fart machine that operates in a different way, I am free to do so. Now the market has two different unicorn fart machine styles, and we are arguably better off as a society.

      As an engineer with some hands on

    • by tlhIngan ( 30335 )

      Fixed that for you.

      "Patent trolls" is a propaganda term. It implies that there's a right and wrong way to own patents. In reality it's just that: Owning patents. Patents are a monopoly on ideas. That's the problem.

      Except there is nothing new. History repeats itself - we've been through these patent litigation storms for hundreds of years now. Probably amongst the earliest was the sewing machine where there were so many patents, and plenty of overlapping ones that it was impossible to make a sewing machine a

    • by suutar ( 1860506 )

      Not entirely sure I agree. There is, imho, a right way to get money out of a patent: produce the device, sell it, profit. And then there's the wrong way: find someone who's doing something vaguely similar, latch on like a leech, and destroy their business model by introducing a large unexpected expense. The first benefits someone besides yourself (or you're not going to get many sales); the second is purely parasitic.

    • There is a right way and a wrong way to own patents. When a patent troll buys a patent not to collect legitimate licensing fees on the intellectual property or to pursue a legitimate business endeavor, but rather just to sue anyone and everyone they can for damages then that is the wrong way. Just because I can buy some obscure overly broad patent that never should have been granted and use that as leverage to suck money out of legitimate businesses doesn't make it an acceptable business practice. Laziness,
  • Yup, that old /. chestnut; correlation != causation.
    Maybe they just "proved" that some firms invest less when they realise they don't know how to do innovation / R&D.

    In any serious organisation these days, spending serious money on R&D, there's a multi-layered approach to all this, ranging from building portfolio of defense/attack/trade patents (Google buying Motorola phone division), (or joining a group who does), through researching prior art to finally building a attacking others (think Apple vs.

  • who cares? (Score:5, Insightful)

    by AndyKron ( 937105 ) on Wednesday August 20, 2014 @07:46AM (#47711055)
    Why should I start a business when at any time a troll could come by with some vague patent, and sue me? Fuck this country, and fuck the government.
  • I would assume the parallel research showing that those who end up paying our against non-trolls also reduce spend later having lost a lot of money.

    The link is the losing of a patent suit (or having to settle) etc. rather than patent trolls.

    The real problem is that the patent system is open to abuse by everyone not merely trolls. It's expensive to be on the receiving end of a patent lawsuit regardless of if you are in the right or wrong. The well known issues with Patents been issued on broad ideas rather t

    • by Antique Geekmeister ( 740220 ) on Wednesday August 20, 2014 @08:28AM (#47711235)

      > The original purpose of Patents to create a period of exclusivity to regain the expense of research, tooling (and other capital risks), are good.

      That benefit can often, not always, be retained by simply keeping a trade secret. The corresponding social benefit of limited patents is that they expire, and the invention is then available to the public.

      Unfortunately, the patent office, and the patent system itself, is overwhelmed by software patents. These are by their nature nebulous, aggressive, and often overlapping in complex ways. They also open the doors for, yes, patent trolls, who do no innovation and produce no actual goods or services to the general public. They exist purely as legal entities to file lawsuits based on patents they've purchased, and have no history or intention of using themselves.

      The ideal solution is to discard software patents altogether. They are a horrific drain on software design and productivity, not merely due to patent troll losses, but because they force companies to invest thousands or millions of dollars in patent suites to protect from potential patent litigation. And they directly interfere with software authors publishing their work as open source or freeware. The corporate lawyers, and the expense of patent review, cause many companies to refuse to publish even patches to open source, or freeware. There are good reasons the GPLv3 has tried to deal with software patents harshly. They've been a real problem with open source and freeware.

  • Sadly, I lived next to a patent troll for a bit (Intellectual Ventures in Palo Alto) and did not pillage and raze their building. I don't have many regrets in my life, but this is one.
  • You guys are putting all the blame on people who are just taking advantage of laws created by elected officials. IMO the original patent winner is the problem or forced to sell because they" Patent Trolls" were the only ones willing to buy there patented whatever. IMO once that patent is sold to a non creator its value should be less how much less I would leave to the so called experts but the value should be at least half. IMO
  • There are also the large copyists who rip off innovative startups. See http://qz.com/250346/a-google-... [qz.com] Innovative startups, particularly in the life sciences but also in other industries that require large and long-term investments, need patents. Google doesn't need them, and it's working hard to crush the system. So what happens if Google succeeds? We'd still have government and non-profit (e.g. open source) innovation. Private innovation would still happen in fast-moving fields with first-mover ad

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