Friday, April 03, 2015

William Watkins confused on Innovation Act

William J. Watkins, Jr. in an article Conservatives wrong to oppose patent reform spends much time demonizing patent trolls:

Our 21st-century economy depends on innovation, which patents were supposed to encourage. But trolls obtain patents not to produce anything, but solely to license and enforce the patents. Trolls seek broad patents likely to be infringed in a particular industry—especially the software and computer industries—and scour the country for older patents relating to technology still be used in modern products. Favorite haunts are bankruptcy auctions, where patents of failed technology companies are for sale.

In other words, the trolls’ business model undermines our national policy of patent protection because they are allowed to enjoy all the rights attached to patents without benefitting society by increasing its knowledge.

Many trolls employ no workforce (except trial lawyers), have no physical facilities that produce things of value, and have little invested in the patents themselves. Trolls exist simply to shakedown companies that engage in productive activities. Researchers at the Boston University School of Law calculate that from 1990 through late 2010, troll lawsuits cost the economy over half a trillion dollars (2010 dollars) in lost wealth.

As to Boston University, Watkins is notably silent on the fact that BU was a signatory to a letter OPPOSING the Innovation Act. Also as to BU, Watkins is silent about a patent litigation involving BU (see for example

Although Watkins mentioned the Innovation Act by name [ Innovation Act (H.R. 9) ], he did not mention the STRONG Act. He did not argue that the "loser pays" provision of the Innovation Act (which is not in STRONG) is necessary or desirable to control trolls. Apart from not showing "loser pays" will curb trolls, Watkins does not mention the adverse impact of loser pays on smaller companies, who may lose patent suits by virtue of allocating less money to litigation against bigger companies. Also, what happens when an infringement defendant "wins" on infringement but loses on "validity"? Who is the loser?

**Separately, on other confusion, see Lawrence Solum's post

Lemley on Non-consequentialist Justifications for Intellectual Property :

Lemley argues that the classic figures in the social-contract tradition (for example, Locke and Rawls) did not themselves discuss IP. This is a version of the argument from authority (perfectly valid when discussing legal issues where there is "authority" from the internal point of view), but simply fallacious as an approach to moral and political philosophy. And Lemley makes an ad hominen argument that the advocates of non-consequentialist justifications are motivated by "faith," but this kind of argument is a classic informal fallacy. What Lemley fails to do is to engage the arguments on the merits in a way that reflects the landscape of contemporary moral and political philosophy. Here is one way of getting at the importance of the issues that Lemley fails to engage.


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