Finally, A Bill To End Patent Trolling

http://arstechnica.com/tech-policy/2013/10/its-finally-here-a-bill-to-end-patent-trolling/

by drob • 13 years ago

448 62 13 years ago

batbomb• 13 years ago

It isn't just HappyTroll LLC or whatever shell company was set up that week that's going to be on the hook for fees. The fees can be applied to any "interested party" in the case.

That's good, but the pessimist in me thinks IV could probably find a way around this too, but maybe not. Modifying the law to somehow identify patent troll originators (IV) and barring them from disbursing patents to NPEs would seem like some added protection.

alexeisadeski3• 13 years ago

NPEs per se aren't a problem. Discriminating against them is unjust.

Iftheshoefits3• 13 years ago

Unless a company is in the business of producing things its patents cover, it isn't utilizing the patent system as intended. I fail to see how barring a Non Practicing Entity from litigating patents it isn't actually using in a real, product making capacity is unjust. It seems perfectly reasonable to me, in fact.

r00fus• 13 years ago

Can you explain? On the face of it, an entity without any skin in the game (i.e., can't be sued, it'll just fold and re-emerge as another company) sounds like a complete abuse of the system.

tzs• 13 years ago

Interesting legal fact: although the Constitution bars ex post facto laws, that only applies to criminal law. A retroactive tax is legal.

One of the reasons trolls have been successful is that the patent office is understaffed, and of the staff it does have, not enough are experts in software related matters. This means things get through that might not have if the PTO had more and better trained examiners.

If reforming to eliminate patent trolls, how about tossing in a nice big retroactive tax on patent trolls to help fund improvements in patent examining?

drob• 13 years ago

That's fascinating if true, since the power to tax is the power to destroy. I don't see a clean division around a domain on which a retroactive tax is justified.

I had a hard time coming up with a good citation for this. Retroactive taxes seem to be legally controversial whenever introduced, and they're usually retroactive only to the beginning of the year introduced. Could you point me towards a better link?

drivingmissm• 13 years ago

Yeah I've never heard of that, even retroactive tax in a given year is new and controversial. I'd have to think that a massive retroactive tax would be considered an unconstitutional takings.

dsrguru• 13 years ago

I don't think it's possible to have a retroactive tax on instances of patent trolling, as opposed to patents in general. In order for this to be a tax and not a fine, it seems like it would need to be a tax on the patent application, not on bringing and losing a patent lawsuit. And in order to determine at the point of application whether or not a patent will be used for trolling (which we might define as whether the patent will be used in a lawsuit by an entity that holds the patent but does not itself employ the patent's "invention"), the USPTO would need to be able to read the future.

chii• 13 years ago

One of the reasons trolls have been successful is that the patent office is understaffed

this can be combated by making patent examination a peer review process, in a similar vein to scientific papers.

the_watcher• 13 years ago

Or just get rid of software patents altogether. Software you don't want copied should be considered trade secrets, rather than IP.

rayiner• 13 years ago

The pleading requirement is very important. On of the basic tools courts use to filter out frivolous litigation is to quickly dispose of suits that are implausible on their face. See: http://en.wikipedia.org/wiki/Bell_Atlantic_Corp._v._Twombly. Until this bill, the pleadings in patent cases were often ridiculously vague. Like filing a lawsuit against Best Buy saying: "Best Buy was negligent" without making any more specific allegations that could be used to evaluate the complaint on its face.

As an aside, there are a lot of parallels between the litigation system under the federal rules and computer systems. In patent litigation, you have a phase that is extremely slow and expensive (claim construction). How can you minimize the average cost? One way is to try and filter out as many easy cases early in the pipeline so you hit the slow path as little as possible.

ihsw• 13 years ago

One has to wonder how this will affect the TPP, and other greater patent wars across the world.

TheMagicHorsey• 13 years ago

I know healthcare is really important, but I think this bill is also up there when it comes to the long term financial viability of our nation. Intellectual Ventures and all these other no-talent, pirate scum need to go down. If not, my children and your children will be working for bean soup while some cocksucker in a suit extracts rents for "intellectual" property rights based on some goddamn scrap of paper with no connection to reality.

Gonna call my senator and congress woman tomorrow. And then I'm going to tell everyone I know to do the same.

Intellectual Ventures and these other pantywaste dirtbags are going to be lobbying hard against this bill, so the only thing we can do (unless you have some millions of dollars to spare on lobbying) is to call people and spread the word. That worked for SOPA, so maybe it can work now too.

Go, go, go!

iwwr• 13 years ago

Intellectual Ventures is now the bitter pill tech giants have to swallow to maintain their intellectual monopolies. With legislation that makes trolling impossible, but still maintains the legal privileges, large companies will have their cake and eat it too. It would mean there's nothing stopping the likes of Oracle or Microsoft from lobbying for harsher penalties, looser rules and longer terms for patent law in general.

The cure for this problem would be a refutation of patents wholesale, or at the very least a repeal of software and algorithmic patents. Patent trolling isn't a problem that's distinct from legal patent enforcement, it just means some "little guys" can steal some of the intellectual free lunch the large companies have been having.

AlisdairO• 13 years ago

Agreed. Patent trolling isn't the problem - it's a symptom of the wider issue that far too many obvious patents are granted.

The reason NPEs are perceived as a problem is because they break mutually assured destruction. If the patent system were working as intended, we wouldn't need MAD, because it would be possible to write a nontrivial computer program that didn't infringe on someone's patent.

I have no real problem with the concept of an NPE, if their patents are genuinely worthwhile.

marcosdumay• 13 years ago

Well, maybe the bill is completely different from the commentary, but there is nothing at the article that is specific against NPEs.

metaphorm2• 13 years ago

I think you're right on, but lets take our victories where we can get them. Shutting down patent trolls is worth doing. Lets make the next fight patent reform in general.

mindslight• 13 years ago

Who needs nuance?

"Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

adastra• 13 years ago

This is certainly kind of legislation that could come down to a close vote, especially if IV throws around some lobbying dollars against it.

A little advocacy will go a long way, and it will be very interesting to see if the tech industry gets their act together enough to support it in any meaningful way.

freakyterrorist• 13 years ago

Good start but it would be great to see something targeting trolls which threaten small companies and individuals, maybe something forcing them to do a class action against all companies that use Apple IAP frameworks rather than allowing them to target everyone one on one.

dlitz• 13 years ago

This basically shoots the messenger. NPEs just expose a greater problem with the patent system, which people like rms and others have warning about for years.

What we need is actual reform of the patent system, not just sweeping the problem under the rug by singling out "trolls".

swatkat7• 13 years ago

YES!! I don't think ideas need to be protected if you can back it with great execution. Ideas aren't unique, can never be. As René Girard said, all desires (and hence ideas) are mimetic! So, I don't buy into the philosophy that ideas need to be guarded. It curtails innovation.

A couple of years ago when I was building a product, our board convinced us to apply for a patent. After a provisional application and following it up with a proper submission, we finally had an offer that granted us the patent. Never pursued it. I know, it makes sense to protect your ideas; but we had Whatsapp, Pinger and other apps kicking ass in the space.

curiousquestion2• 13 years ago

I like the idea that NPE can only make a certain percentage of revenue on "trolling". What if, for example, only 25% of a company's revenue can be made off these "trolling" escapades? I think it would clean things up quite a bit.

joesb• 13 years ago

So big company can infringe on small company's patents with tiny revenue because if it's cheaper than actually buying the license?

curiousquestion2• 13 years ago

The rule should be for NPE only. In otherwords, as soon as you can prove that the idea is making you money (even if it's a small amount) the ceiling comes off. This doesn't mean "NPE" no longer exists. For example, a business who has a revenue stream but haven't incorporated their invention into their products yet, but want to claim the invention is worth alot. Why aren't you making money on it yourself if it's worth so much?

jheriko• 13 years ago

still about a million miles away from good enough. but a nice attempt a political manouveur

when $100k dollars is considered a low cost, someone is living in cuckoo land...

how about charging people this for failed patent applications? or just no patents at all?

nearly all of the arguments for patents are trivially in the worst interest of the wider public... frankly its an embarassment that the system exists at all, much less in the way that it does

otikik• 13 years ago

It will not work.

I'm pessimistic like that.

vog• 13 years ago

Care to elaborate?

throwawaykf3• 13 years ago

Anyone interested in getting a better understanding of the economic reality of trolls is encouraged to go to ssrn.com and do a quick search for "patent trolls". These are not all peer reviewed papers, but many of them have data and methodologies and, most importantly, numbers. Read only the abstracts, if you're short on time.

As always, the topic is so much more nuanced than "good" or "bad". The first result, "Patent Troll Myths" by Michael Risch is a good start.

Sure, you will find the papers by Bessen et al where the "trolls cost the economy 29 Billion" meme comes from. But you'll also find a paper (by Schwartz and Kesan) that debunks Bessen's paper, which got nearly 0 coverage in the press. You'll even find a paper showing trolls have better patents than average! But these tend to get settled quickly, so typically the poorer ones go to trial, and so you get papers (like from Lemley) showing that trolls lose more cases than average.

You'll also find papers arguing the benefits of trolls, debunking some of the common arguments against trolls, and introducing new previously unconsidered harms of patent trolls.

And of course, just like there's no clear definition of "software patents", there is no clear definition of "patent trolls" either, and you'll find papers discussing this.

And because they use different data sets, different papers look at the same problem at the same time and reach completely opposite conclusions.

And further, because the authors are almost never practitioners in the field, you get some really obvious findings being reported... and then misconstrued! For instance there's a paper showing litigation has shot up since 2007, and presenting various theories, completely missing the Medimmune v Genntech decision that effectively upended the rules of patent licensing. And there's the paper that argues patent quality is dropping because more patents were being issued, without being aware of the ending of the misguided "reject, reject, reject" unofficial policy instituted by former USPTO head Jon Dudas (http://www.ipwatchdog.com/2009/03/16/prespective-of-an-anony...)

And as always, it's helpful to keep in mind where the authors' funding comes from. Bessen of the "29 billion" fame, for instance, is funded by the "Coalition for Patent Fairness". Check out the list of supporters. It's almost ad hom, but hey, if we can point out that studies showing the harms of piracy are often funded by the MPAA, we can point this out too.

Yes, there are clear bad actors like Lodsys, but there are so many more variables out there, and many are arguably helping more than harming.

Yet, somehow, it's only one small side of the story that gets told.

As this is a hot-button topic, we should take an objective look at the data. Because, quoting from one of the papers above, "Without a better understanding of the many complicated effects of patents in high technology markets, we run the very real risk of misguided policy decisions."

mildtrepidation• 13 years ago

While it's definitely healthy to step back and attempt a broader view of any issue, it seems to me that "patent troll," by admittedly informal definition, means a non-practicing entity litigating solely for profit.

Maybe I'm missing something, and maybe it is a lot more complex than that, but I think this is one case where ill-defined or over-applied terms may be muddying the water with regard to what is or isn't taken into consideration on an issue that, by its nature, seems to have no redeeming value.

throwawaykf3• 13 years ago

Read the papers to get an idea of how they are beneficial. One obvious way is straight-up helping individual inventors or small companies take on big ones. But another less obvious way they help is by creating a secondary market for patents. This has many follow on effects. For one, VCs are more likely to fund startups with the idea that they can partially offset the risk of failure by monetizing the patents (papers by Merges, Mann, etc. to this effect, IIRC). This enables entrepreneurs to pursue riskier technology ventures.

Saying they exist only to litigate is missing the whole picture. That is simply what they specialize in, primarily because patents are essentially a right to sue, and there's a gap in the market when it comes to enforcing patents.

Now you may say that patents themselves are crap and represent no value, but 1) that's a different problem than trolls, as others have mentioned, and 2) you'd be making a generalized assertion with little data to back it up. Even if you are an experienced patent litigator who's seen a lot of cases, there are biases at play. Which is why, again, we should turn to studies, which, again, do exist and, again, present a much more nuanced reality.

joshdance• 13 years ago

Most agree that patents are a good thing. But a "patent troll" as commonly understood is an entity that only litigates. There is no value creation on their end, and they are not using the patents to create value. Simply to re-distribute value from other parties to themselves.

devx• 13 years ago

Most agree that patents are a good thing

No, not software patents:

http://news.ycombinator.com/item?id=2552740

joshlegs• 13 years ago

So I got to speak with Bob Goodlatte a few times before. I generally considered him a generic shmuck, but this legislation is pretty impressive. Kudos, Bobby.

jschnell13• 13 years ago

finally is right

TallboyOne• 13 years ago

Thank mother of god and all that is holy. This &$&$ bullshit has gone on long enough.

Finally, A Bill To End Patent Trolling

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