Saturday, June 17, 2006

House hearing: "Patent Trolls: Fact or Fiction?

At a Congressional hearing on "patent trolls," Paul Misener, Amazon's vice president of global public policy suggested that politicians should concentrate mainly on rewriting the law around damages. Since products may rely on hundreds of thousands of distinct patented components, juries could be required to award money to patent holders based solely on the infringed patent's contribution to the overall product, not on lost sales for the entire affected product.

However, Misener's suggestions prompted Congressmen Smith and Berman to take jabs at Amazon's one-click patent, which covers a process for making online purchases in a single step, and caused controversy when the e-commerce giant asserted it against

"Could not be accused of being a troll for patenting the one-click?" Smith asked, a wry smile on his face.

Misener defended the patent as "a radical departure from the shopping cart model" when it was granted in 1998. "We only exercised the patent against someone who at the time...had publicly announced intention to crush our business," he said. "This wasn't some scheme to hit up small users."

The interchange among Misener of Amazon and Smith and Berman illustrates the plastic nature of the definition of "patent troll." Misener seems to imply one is not a troll if one enforces a patent against LARGE users, like barnesandnoble [BN].

This view was not inconsistent with remarks by Segway inventor Dean Kamen who argued that politicians should not penalise legitimate inventors, in a quest to root out the trolls. "If a big company repeatedly disregards people's rights, they are as bad as the trolls at the other end," Kamen said. He suggested that a way to quell abuses by both sides could be to institute "some form of loser-pays" approach to "penalise people who are abusing the system."

Post-grant opposition came up. Bills by both Smith and Berman would establish a "post-grant opposition system" in which the public would have a certain number of months to dispute the validity of patents after they are issued, without having to go to court. Presumably, Smith and Berman have not considered the various arguments AGAINST a post-grant opposition system.


ComputerWorld reported:

A House of Representatives subcommittee, seeking to reduce legal claims by owners of illegitimate patents, heard June 15 that it's difficult to define just what is a bogus patent claim.

The goal of Thursday's hearing, said subcommittee Chairman Lamar Smith, was to define so-called patent trolls, which some patent-reform advocates say are those who own patents solely for the purpose of collecting license fees or suing alleged infringers.

"The patent system should reward creativity, not legal gamesmanship," said Smith, a Texas Republican and sponsor of patent overhaul legislation called the Patent Reform Act. Smith's wide-ranging bill would limit damages in some patent cases, allow a new patent challenge mechanism and allow third parties to submit evidence that a patent application contains someone else's invention.

But four witnesses, including Segway scooter inventor Dean Kamen, told the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property that defining who exactly is a patent troll become complicated in the details. Some people have defined patent trolls as patent holders who don't develop their inventions, and Kamen's firm pitches its patents to a larger company to develop the products, he said.

"I only recently found out, after reading the definition of a troll, that I am one," said Kamen, whose DEKA Research and Development Corp. has invented several medical products. "It's maybe a little bit unfair and dangerous to characterize people who license products as trolls."


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