Last month, you promised that you’d continue your explanation of patents and copyrights with a rant about patents and trolls. So…? What, exactly, do you have against trolls, other than the fact that they live under bridges and threaten goats?
Been Waiting a Month
OK. So as not to disappoint, here goes!
The press has been overflowing for the past few years with breathless articles about evil “patent trolls”.¬† You see, back in the late 1990s semiconductor giant Intel was being sued for patent infringement by many patent owners. The company’s lawyer, Peter Detkin, called one of the lawyers representing the patent owners a “patent extortionist” in an article about the company, but others at Intel did not like that term. There was a contest, and Detkin, Anne Gundelfinger and Mark Davis somehow came up with “patent troll” as an alternative.
Remember the story of how the trolls hid under a bridge that they had not built, but demanded a toll from everyone who crossed?¬† Me neither. The original Norwegian folk tale is completely silent on who built the bridge, but it’s pretty clear that the goats had not done so, right? Goats lack opposable thumbs.¬† And as there is no other character in the story…but I digress. The troll term struck a chord, and came to mean a company that asserted patents on technology that they had not invented, seeking royalties. Such companies are clearly evil villains, because they don’t invent anything, and they sue other people using patents that they buy from inventors. Boo! Hiss! The media climbed on board, and there have been thousands of publications decrying the “rent seeking behavior” of the trolls. For a very entertaining overview, click here.
Fast forward to 2014, and you have bills in Congress and the President of these United States promising to do something to stop the trolls because they hurt innovation! But…do they really? Let’s think about this.
Suppose you passed a law that says that anyone who owns a piece of ground¬† and who built a building there could do only one of two things: occupy it himself, or occupy part of it, and rent the other part out. He can sell the building, but only to someone who will only occupy it – and never rent it out, because otherwise, the new owner would not be the one who built the building – he would only be seeking to collect rent.¬† He can’t move out and rent the entire building because then he would not be using what he had built, only seeking to collect rent. Oh, and the original owner would not be allowed to hire a manager by promising to pay a portion of the rent collected, and he can’t buy the building next door, since he didn’t build it. Forget real estate investment trusts that buy properties to build a portfolio – they don’t build things…they must be evil too.
So under this new law, what is a property worth? What incentive does the land-owner have to build his building if he has to live in it until he can sell it to someone who can only live in it? Easy – you’ve just reduced the value of almost every property in America by a huge amount. No one can be a real estate investor in the resale market. Period. So why would our country want to do the same thing to inventors, by limiting their ability to sell their patents? Because big companies that infringe patents are sick and tired of getting caught with their hands in the cookie jar, and can afford to create a fable and lots of press to convince us that their problem is actually our problem. Congress has taken their money that comes wrapped in that same fable, and the President knows a good story when he hears it.
It has been pointed out that it costs millions of dollars to defend against a patent infringement law suit, and that these suits take years to work their way through the courts. True. But the same is true of other high-stakes business litigation in many fields. It’s not only the “trolls” who suffer from our less than efficient court system: Apple and Samsung have been battling for many years, and there is no end in sight. Few call either of these companies patent trolls (some surely do), but that doesn’t stop anyone from complaining that these suits are harmful. It’s just strange that these same complainers seem to be perfectly happy to have and use the innovations that are supposed to be protected by patents, while never bothering to ask what the world would look like if nobody could raise capital by having effective patents in the first place. (For a great explanation, read William Rosen’s The Most Powerful Idea in the World)
As a registered patent attorney who has represented all kinds of inventors for more than thirty years (from garage inventors to the largest multinational corporations) and has been involved in patent licensing and sale for all of that time, the Doc can simply say that there is another, more honest definition of “patent troll” — one given by Professor R. Polk Wagner of the University of Pennsylvania School of Law, who said that a patent troll is simply anyone who would dare to sue ME for patent infringement.
So there you have it. The same old story: don’t believe everything you read on the Internet…World War I started that way.
To get the straight story on intellectual property issues, be sure to ask the attorneys at LW&H. For reasons that nobody can explain, they actually enjoy thinking about this stuff.
Until next month,
– Lawrence Husick, Esq.