Sunday, July 12, 2009

Do inventive companies fear patent trolls?

An article in The Economist titled Red tape and scissors includes text

“Patent trolls” pose another problem. These are firms that buy up patents, not to turn them into products but solely to sue other firms that may have infringed them. Since the United States Patent Office grants patents freely and courts enforce them zealously, every inventive company lives in fear of trolls. If one can convince a court that a billion-dollar product incorporating hundreds of patents infringes only one of his, he can get an injunction to stop it being sold. The victim typically settles. Michael Heller, author of “The Gridlock Economy”, argues that such vaguely defined and aggressively asserted property rights stifle innovation and cost lives.

The blog IPFinance criticized the article, with text including

Contrary to what is asserted in the Survey, a party that sues on a patent that he purchased and of which it does not make any commercial will now have a difficult time if it seeks to obtain an injunction. Moreover, in the post-eBay world, courts are reluctant to grant an injunction if the patent in question covers only a small portion of the overall product. In a word, the account in The Economist does not reflect the current legal position regarding patent trolls, and patent trolls do not constant a systemic threat to the well-being of US business.

IPBiz notes that the part in The Economist about -- Since the United States Patent Office grants patents freely -- comes to us courtesy of Quillen and Webster. It wasn't true then, and now that the grant rate is below 50%, is something The Economist should fact-check before it expounds urban legends. Also, the use of "inventive" is ironic, in that said "inventive company" would be fearing something already disclosed in the patent database, sounding more in poor reasoning than in thought. If you fear what is known, one thing you are not is "inventive". If there is a problem, it is one of "bad patents," not one of who owns them. Ask IBM about a patent relating to airplane toilet queues. On the whole, the article is more British bluster than a rational analysis.

Of course, in the US, we still have Joe Mullin talking about trolls and copying.


The State of Intellectual Property


Blogger Allan Young said...

Lawrence - granted, "patent trolls" is not a household term.

Who benefits most by scaring the public about patent trolls? Certainly not the inventive companies, whoever they may be.

3:39 AM  

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