Inventions and engineers go
together like songs and musicians, and consequently every engineer should know
something about patents. The
practice of patenting inventions to give the inventor a temporary monopoly as a
reward for ingenuity is something that most countries do today, and by and
large, we are probably better off with patent systems than without them. But patent systems can be abused, and
some of the biggest abusers of the patent system in the U. S. are
"nonpracticing entities" (NPEs), otherwise known as patent trolls, as
pointed out in William J. Watkins' recent book Patent Trolls: Predatory
Litigation and the Smothering of Innovation.
If you're a patent troll, here is
what you do. First, you acquire a
lot of broadly written patents on some technology that either has a lot of
wealthy corporations active in it already, or is likely to in the future. Software is a favorite, as are wireless
technologies and even business practices involving the Internet. You either file the patents yourself
or, more likely, buy them up at a dime a dozen at a bankruptcy sale of some
startup. Then you wait till a
well-heeled firm like Apple or IBM is doing something vaguely related to your
patents, and you send them a letter threatening to sue for patent
infringement. If they call your
bluff, you file suit in the U. S. District Court of the Eastern District of
Texas, headquartered in the town of Marshall near the Texas-Louisiana
border. You carefully select a
jury of twelve rural citizens who probably wouldn't know an ethernet cable from
a rattlesnake, and your lawyer (who is a member of your small NPE firm) exhorts
them about the evils of out-of-state big-business interests who try to crush
the innovative spirit of the small, struggling, independent businessman/inventor,
namely you. More likely, the
defendant corporation you threaten to sue simply settles out of court for
millions of dollars rather than face an even more expensive jury trial, and you
walk away richer and better-funded to do it all over again next time.
If this unsavory process smacks
of blackmail, you are on the right track.
Unfortunately, a number of legislative and bureaucratic circumstances
have created a large loophole through which millions of dollars each year is
drained from productive firms into the pockets of patent trolls. The U. S. patent law was written back
at a time when most inventions had a lifetime of at least several years, so the
term of fourteen years (later extended to twenty) was a reasonable one. But now that product lifetimes,
especially in the software field, are measured in months rather than years,
twenty years is plenty of time for a patent to turn into a kind of zombie,
rising from the dead when revived by a patent troll to haunt a legitimate firm
with dubious claims of infringement.
The U. S. Patent and Trademark Office is severely understaffed, with
each of its few examiners having to work through hundreds of filings a
year. Rather than let a backlog
pile up, they have defaulted to issuing patents freely, including many which
really shouldn't be allowed. And
finally, judges and juries in the Eastern District have proved so friendly to
the patent trolls and hostile to the defendants that the American Tort Reform
Foundation has put it on their watch list of "Judicial Hellholes."
The well-heeled giant tech firms
are not the only ones harmed by patent trolls. Watkins cites an example of a
small software startup in the late 1990s headed by one Brandon Shalton, who
teamed with two nuns to develop a way that pastors could record their messages
and play them back through a website.
After testing the product with several churches, Shalton prepared to
market his product, only to be confronted by a challenge from Acacia Research
Corporation, which held a patent that they claimed would be infringed by
Shalton's product. Shalton knew
the claim was false—the general idea of recording audio on a website had been
around for years. But lacking the
resources to fight Acacia's threat, Shalton threw in the towel, and his company
died before it was even born, a victim of a patent troll.
What can be done about patent
trolls? One idea being considered
for legislative action is to impose some kind of practice requirement on a
plaintiff in a patent infringement lawsuit. Unless the plaintiff suing for infringement can show
evidence of actually intending to use the patent to make something—manufacturing
facilities, investment plans, etc.—the plaintiff would not be allowed to
sue. Under current law, simply
owning a validly issued patent, no matter how flimsy, entitles you to file a
suit for patent infringement, even if you never intend to use the patent
yourself to make or sell anything.
In making such a fix, lawmakers
would have to be careful to protect the rights of the truly independent
inventor, who has a good idea and patents it but lacks the resources to exploit
it fully. This is the mask that
most patent trolls don when they go before juries, but the reality is different
in most cases. Watkins thinks
there are ways to make sure that small independent inventors can still obtain
valid patents and protect them, while putting the true patent trolls out of
business.
Patent law represents a balance
between protecting the rights of the inventor and allowing the benefits of the
invention to spread beyond the inventor's initial monopoly. No patent system will ever make
everybody happy. But Watkins makes
a good case that patent trolls are currently stifling innovation and exploiting
a loophole in the present system that ought to be closed.
Sources: Patent Trolls: Predatory Litigation and the Smothering of Innovation by
William J. Watkins Jr. was published by the Independent Institute of Oakland,
California in 2013. A complex case
of a true inventor who eventually veered toward patent-trolling but left a
legacy encouraging independent invention was Jerome Lemelson, who I mentioned
in my blog of May 30, 2007, "Engineering Altruism: Two Paths."
