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Stopping Patent Trolls

Patents are enshrined in the U.S. Constitution as a means to “promote the progress of science and useful arts.” Yet, in recent years, abusive and rent-seeking patent litigation has done just the opposite. In 2011, lawsuits brought by “non-practicing entities” – commonly known as “patent trolls” – led to $29 billion…

Patents are enshrined in the U.S. Constitution as a means to “promote the progress of science and useful arts.” Yet, in recent years, abusive and rent-seeking patent litigation has done just the opposite. In 2011, lawsuits brought by “non-practicing entities” – commonly known as “patent trolls” – led to $29 billion in direct costs, and $80 billion in lost wealth for publicly traded companies.

In an effort to address this growing problem, Reps. Darrell Issa, R-Calif., and Judy Chu, D-Calif., this week introduced legislation called the Stopping the Offensive Use of Patents Act (or STOP Act) – a companion bill to the Senate’s Patent Quality Improvement Act, sponsored by Sen. Chuck Schumer, D-N.Y. – that looks to streamline how patent infringement disputes are resolved and drastically reduce how much the process costs.

Patent trolls are individuals or firms that own patents but do not produce goods or services. Instead, they assert their patent rights against companies whose products they claim infringe on one or more patents. Colleen Chien of Santa Clara University Law School notes that in 2012, 62 percent of all patent litigation was brought by patent trolls, up from 19% in 2006. Moreover, the targets are disproportionately small and medium-sized businesses who have limited resources to fight back.

When these cases go to trial, defendants are successful 92 percent of the time. But because patent litigation is so expensive, it is almost always cheaper to settle with trolls, even if the infringement claim is spurious. The average cost of litigating a single case is more than $5 million.

(To continue reading this piece, press the “Read More …” icon below).

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Jeremy Kolassa is a libertarian and self-described “athiest science fiction writer” from Washington, D.C. This piece – reprinted with permission – was originally published by RStreet.org, a think tank which “supports free markets; limited, effective government; and responsible environmental stewardship.”

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26 comments

Finius Nullis July 24, 2013 at 10:45 am

Uh Oh! I can see it coming — these patent trolls are coming after FITSNEWS!!

Reply
Finius Nullis July 24, 2013 at 10:45 am

Uh Oh! I can see it coming — these patent trolls are coming after FITSNEWS!!

Reply
Smirks July 24, 2013 at 11:16 am

Stopping the Offensive Use of Patents spells SOUP, not STOP. I guess the SOUP Act probably would be rather odd.

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Finius Nullis July 24, 2013 at 11:44 am

Perhaps they didn’t want to hear any jokes about “no more soup for you!”

Reply
Smirks July 24, 2013 at 11:16 am

Stopping the Offensive Use of Patents spells SOUP, not STOP. I guess the SOUP Act probably would be rather odd.

Reply
Finius Nullis July 24, 2013 at 11:44 am

Perhaps they didn’t want to hear any jokes about “no more soup for you!”

Reply
Frank Pytel July 24, 2013 at 11:57 am

They should simply do away with patent law period. It’s not the gubmints job to protect business or their products. If they want to sell their product to everyone without fear of infringement, produce it at the lowest cost for quality ratio possible.

DONE.

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tomstickler July 24, 2013 at 6:26 pm

Patents protect the investment in research and development necessary to bring new and innovative products to market. If not for the exclusive right to market a patented product for a limited period of time in order to recoup these costs, anyone could reverse engineer an innovation and produce it at a cost advantage in some third-world sweatshop, destroying any incentive to innovate.

My name is on 14 US patents, so I know whereof I write.

Reply
Frank Pytel July 25, 2013 at 5:17 am Reply
SeneseLikeChaps July 26, 2013 at 2:08 pm

The problem isn’t the existence of patents. The problem is granting them to business methods that are not non-obvious (and essentially have no cost for R&D). It is a one-two punch of bad ideas.

If we already have the ability to transfer files across a network, monitor and measure how much of that file has been transferred and print something on a screen, patenting a notification of file transfers isn’t “an adequate distance beyond or above the state of the art”.

Should I get a nickel every time someone tells a waitress “when” because I’ve patented a method for notifying beverage transfer?

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Frank Pytel July 24, 2013 at 11:57 am

They should simply do away with patent law period. It’s not the gubmints job to protect business or their products. If they want to sell their product to everyone without fear of infringement, produce it at the lowest cost for quality ratio possible.

DONE.

Reply
tomstickler July 24, 2013 at 6:26 pm

Patents protect the investment in research and development necessary to bring new and innovative products to market. If not for the exclusive right to market a patented product for a limited period of time in order to recoup these costs, anyone could reverse engineer an innovation and produce it at a cost advantage in some third-world sweatshop, destroying any incentive to innovate.

My name is on 14 US patents, so I know whereof I write.

Reply
Frank Pytel July 25, 2013 at 5:17 am Reply
SeneseLikeChaps July 26, 2013 at 2:08 pm

The problem isn’t the existence of patents. The problem is granting them to business methods that are not non-obvious (and essentially have no cost for R&D). It is a one-two punch of bad ideas.

If we already have the ability to transfer files across a network, monitor and measure how much of that file has been transferred and print something on a screen, patenting a notification of file transfers isn’t “an adequate distance beyond or above the state of the art”.

Should I get a nickel every time someone tells a waitress “when” because I’ve patented a method for notifying beverage transfer?

Reply
RHood2 July 24, 2013 at 1:02 pm

Most of these suits are software claims. It would make a huge dent in the problem if software were treated under copyright laws instead of patents. Totally different enforcement. As it is now, the guy who came up with the communicator on Star Trek is suing cell phone manufacturers and the estate of the guy who created Dick Tracy is waiting to pounce on the first manufacturer to bring a “two-way wrist TV” to market.

Reply
? July 25, 2013 at 4:28 pm

Bingo on the copyright laws!

You gotta admit that that a EULA in theory should cover IP….proving someone didn’t self discover in court is almost folly though.

I think contract law for IP can be covered by EULA and the statute system thrown out the window….but there’s so much gov’t involvement it’ll probably never happen.

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SeneseLikeChaps July 26, 2013 at 1:45 pm

This. There is plenty of grey area where software and hardware collide (say for graphics technology), but the vast majority of software patents make about as much sense as Dashiell Hammett getting a patent on the crime novel.

Too bad this won’t change until it hurts the right pocketbooks.

Reply
RHood2 July 24, 2013 at 1:02 pm

Most of these suits are software claims. It would make a huge dent in the problem if software were treated under copyright laws instead of patents. Totally different enforcement. As it is now, the guy who came up with the communicator on Star Trek is suing cell phone manufacturers and the estate of the guy who created Dick Tracy is waiting to pounce on the first manufacturer to bring a “two-way wrist TV” to market.

Reply
? July 25, 2013 at 4:28 pm

Bingo on the copyright laws!

You gotta admit that that a EULA in theory should cover IP….proving someone didn’t self discover in court is almost folly though.

I think contract law for IP can be covered by EULA and the statute system thrown out the window….but there’s so much gov’t involvement it’ll probably never happen.

Reply
SeneseLikeChaps July 26, 2013 at 1:45 pm

This. There is plenty of grey area where software and hardware collide (say for graphics technology), but the vast majority of software patents make about as much sense as Dashiell Hammett getting a patent on the crime novel.

Too bad this won’t change until it hurts the right pocketbooks.

Reply
lawzoo July 24, 2013 at 1:26 pm

These and class actions, whistleblower suits, and anything with statutory atty.’s fees are the most misused and abused devices in the legal world.

$$$$ without purpose all too often.

Reply
lawzoo July 24, 2013 at 1:26 pm

These and class actions, whistleblower suits, and anything with statutory atty.’s fees are the most misused and abused devices in the legal world.

$$$$ without purpose all too often.

Reply
Soft Sigh from Hell July 24, 2013 at 7:08 pm

Mencken railed against the same sorts of parasites a century ago, then involving copyrighted music I believe. “Predatory” is the adjective he used if I remember correctly, though he liked “prehensile” too, meaning “grasping” in this use.

Reply
Soft Sigh from Hell July 24, 2013 at 7:09 pm

True and significant and harmful infringement is a different matter, of course.

Reply
Soft Sigh from Hell July 24, 2013 at 7:08 pm

Mencken railed against the same sorts of parasites a century ago, then involving copyrighted music I believe. “Predatory” is the adjective he used if I remember correctly, though he liked “prehensile” too, meaning “grasping” in this use.

Reply
Soft Sigh from Hell July 24, 2013 at 7:09 pm

True and significant and harmful infringement is a different matter, of course.

Reply

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