When it’s in the hands of patent troll. There is a great podcast on This American Life called When Patents Attack. I encourage anyone who is interested in patent reform, ‘patent trolls’, and software patents to listen. Clocking in at about an hour, the podcast might seem long, but the story told is extremely compelling and great a listen.

For the record, I am using the term ‘patent troll’ to mean, an entity that is in the business of owning patents for the sake of extracting license fees out of companies that are contributing to the GDP of the USA. They are also commonly referred to as non-practicing entities. It’s a company that owns and enforces a patent, but doesn’t make a product. The argument against patent trolls is that they stifle innovation, job and company growth, and new products coming to market.

The reporters talk with executives at Intellectual Ventures (IV), commonly referred to as the biggest patent troll, about their business model, which seems to be two-fold. According to their website, IV creates ‘an active market for invention that connects buyers, sellers, and inventors.’ (They forgot to mention that the ‘connect’ part usually involves licensing demands and expensive patent lawsuits.) Second, IV provides ‘access to [their] portfolio of patents, [by helping their] customers innovate and reduce their risk by Bridging the Invention Gap™ between the invention rights they currently have and the invention rights they need.’ Basically, companies can pay IV a fee to access IV’s 35,000+ patent portfolio in order to defend themselves from patent lawsuits.

Highlights:

1. The GC that coined the term ‘patent troll’, Peter Detkin, is in fact one of the founders of Intellectual Ventures. (Is this a case of ‘can’t beat ’em, then might as well join them’?) He is responsible for my new favorite quote: “Litigation is licensing by other means.” (It’s pretty good, isn’t it?)

2. According to Expert David Martin of the company M-Cam, who has testified before Congress on the Patent System, about 30% of patents issued by the USPTO are for things that have already been invented. Check out their Patently Obvious services and reports here.

I have to admit that the issue of concurrent patenting has been on my mind lately with the recent patent auctions in the cellular/mobile phone technology space. Given the sheer number of patents up for auction, being purchased, and in the portfolios of so many technology companies, I have a hard time believing that there is no overlap. Seriously, can there be 100,000+ patents on a cell phone?

3. There are non-practicing entities, i.e. patent trolls, leasing office space in Marshall, TX. These offices are empty. There are no employees. Why? To get jurisdiction in the Eastern District of Texas, a district that is considered to have ‘plaintiff friendly’ juries.

4. Software engineers really hate software patents, and it sounds like they just might have good reason.

5. There’s a patent on what is essentially toast. Sorry, it’s on ‘Bread Refreshing Method’. Check out Patent No. 6,080,436 issued in 2000.

Advertisements