Defining The Patent Troll
from the definitions-matter dept
Recently, the IP Troll Tracker blog decided to try to officially define "patent troll" to a level that might satisfy a patent holder who insists that there is no such thing as a patent troll. For many years, we here at Techdirt avoided using the phrase "patent troll" because it did seem rather undefined, but it became so commonplace that we eventually gave in and used the phrase regularly. The term has showed up in all sorts of places, including courtrooms and discussions on legislation. In some circles, policy makers often use the term "non-practicing entities" (or NPEs) instead of "patent trolls" but that upsets some who feel that there are "NPEs" (like universities) that do research that they wish to license off, but which will never be "practicing entities." Some have also called them "Patent Assertion Entities" (PAEs) to describe companies who do nothing more than assert patents. At least that leaves out universities -- but then that also leaves out companies who do other things but who also, do some patent trolling (including, frankly, some universities, since we're discussing them).Stephanie Kennedy, who runs the IP Troll Tracker blog, came up with the following definition:
Patent Troll, n -I recommend not clicking on the link for number three.1/ A company or individual who, using patents that either never should have been issued or are broadly constructed (intentionally for the purpose of misuse, or as a result of poor USPTO patent examination practices), sends letters to various and sundry companies and/or individuals that simultaneously request license fees and threaten legal action if the recipient fails to respond correctly by paying up and who will, in the face of inaction by a demand letter recipient, actually file suit in Federal District Court, the District of East Texas being the most popular venue.
2/ A company set up to act as a cover for large corporations who try to breathe new life into older patents which they would ordinarily let expire but, as a result of greed and/or pressure from Wall Street, have decided are ripe for assertion or litigation.
Anyway, I like this formulation a lot better than the simplistic "NPE" designation, because I think there are lots of "practicing entities" that do trollish behavior (Microsoft being a big one). The problem with patent trolling tends to be that it's little more than a classic shakedown. Trying to get companies to pay up because the cost of paying up is usually a lot less than the cost of going to court to explain why you shouldn't have to pay up.
There is, not surprisingly, a fascinating discussion in the comments to the IP Troll Tracker's definition. A lot of it is people quibbling with who's to blame here -- arguing that there may be problems with the Patent Office granting patents it shouldn't or with some form of "litigation abuse," but that patent trolls aren't the "problem." That's... questionable at best. While it may be true that patent trolls aren't doing anything "illegal," it doesn't take any special economic skills to recognize that what they are doing is a deadweight economic loss.
Anyone who's spent any time exploring the murky underworld of patent trolling knows what is mostly happening. Quite frequently it's lawyers -- often former patent attorneys -- who absolutely know they're abusing the system for profit and they don't care about it at all. They buy up a few patents that they know are just vague enough and then they just start sending out the settlement letters and wait for the cash to come in. This is not "promoting the progress." It is not advancing any innovation. It is purely about taking money away from those who actually innovate, and handing it over to trolls and their investors, not to reinvest in any sort of innovation, but to reinvest in trolling.
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Filed Under: definitions, patent troll, patents
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Founders
If we enforce the plain language of the documents, we might be closer to what we are looking for, but there is plenty of dissonance around what the plain language means as well.
I believe the answer lies elsewhere. Remove money and political parties from politics (and the influences those provide) and we will, eventually, get to where we really want to be. Like trying to get the FCC to fix the internet when the true answer lies in creating more competition, which is in the FTC's bailiwick.
To do either of those is gonna take a whole lot of something, which I have yet to figure out.
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Ah... The old reverse psychology trick!
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Re:
Y'all are slow learners!!
=)
Cheers,
Steph
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About trolls
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Re: About trolls
How can they do that with a workable patent law situation?
Patent trolling is a symptom, not the disease we should be concerning ourselves with. The law is being an ass, as usual. Why? Because we allow it.
Fix the law, and the problem disappears.
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Re: About trolls
Bad patents are the problem, not people exercising their legal rights.
Patents are abused by everyone because the system allows it. Everyone involved seems to think that they can slack off and that someone else will fix whatever mess they make.
Of course it's rather obvious that the system needs to be fixed.
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Re: Re: About trolls
Cheers,
Steph
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To see how questionable the statement is, let's replace a few terms.
A lot of it is people quibbling with who's to blame here -- arguing that there may be problems with the statutory damages or with the standards of evidence, but that Prenda isn't the "problem."
Yeah, no. You bring a lawsuit you're not supposed to, you're a troll, law or otherwise.
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Fix the law.
Intellectual Ventures' shareholders disagree, and the so called "free market" disagrees. Apparently, society disagrees too, or it would get fixed.
If we're unwilling to outlaw predatory behavior, some of us will get eaten from time to time. You can't blame the predator for wanting to eat. If we make it impossible to eat us, they'll go eat something else. With patent law as it is, we're the easy meal.
I don't understand why anyone thinks this is complicated. We created the patent trolls by wandering around looking like an easy meal.
I think granting patents is just asking for trouble, but what do I know? If we must have patent law, make it a *good* patent law.
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Re: Fix the law.
Do they though? Are they making money now off of their "investment" in patent trolling? They weren't not too long ago...
Just sayin',
Steph
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Patent Troll is too offensive a term
I recommend using NPE (Nauseating Putrid Excrement) which all parties to a discussion can agree puts the NPEs in a much more positive light.
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Re: Patent Troll is too offensive a term
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Re: Patent Troll is too offensive a term
It's a great metaphor for what's going on. People are trying to demand payment for something they don't own or shouldn't be allowed to own. Closely following this metaphor also allows us to not get distracted by people that want to ignore the most relevant abusers.
Insisting that only NPEs are trolls distracts from the real issues and makes it less likely that the real problem will ever be fixed. (bad patents)
Of course a thief will be offended by being referred to as such. So will any sort of criminal or sociopath.
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As part of the demand, requires the recipient to enter into a non-disclosure agreement. Patents are explicitly public, for good reason; a company that insists on a non-disclosure before identifying the patents involved in the claim, is evidence of a vexatious patent litigator.
Demand for contractual recognition
As part of the demand, requiring the recipient to contractually recognize the validity of the patent in addition to paying, is evidence of a vexatious patent litigator.
Demands against users but not manufacturers
Demands made against the users of a device, in the absence of claims against the company that manufactures it, are evidence of a vexatious patent litigator. This is particularly true when manufacturer has the resources to litigate effectively and users do not, indicating that the goal is not enforcement but simply money.
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Microsoft
I think that the NPE designation can be maintained because the "practising" is in no way protected by the patents that they use for trolling. After all many burglars have a day job!
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Call them what they are... Parasites
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The Truth About Patent Trolls
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Re: The Truth About Patent Trolls
This was interesting: "Although i4i does have a business besides enforcing its patents, it is not competing with Microsoft for word processing software."
I remember that case well, and at no time did anyone (I don't think) consider i4i a patent troll.
Agree that unethical patent litigators are the new ambulance chaser (hello? blog post title just wrote itself...) and I made reference to that at some point, regarding the lawyers that moved from the mesothelioma "dust docket" to patent infringement litigation.
Interesting read.
Just sayin',
Steph
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Re: The Truth About Patent Trolls
Your premise is correct. Not all patent trolls deserve the epithet. RIM and Microsoft are thieves, and it's a *good thing* they were forced to pay for their malicious greed. IV is just milking broken law for whatever it can get. Don't blame the predator for wanting to eat.
As for "patent reform", no surprise that's a dog's breakfast that isn't going to help anyone that it should. US' law is broken, and becoming more broken every day.
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Re: Re: The Truth About Patent Trolls
You analogy is faulty. IV isn't like a predator in nature. IV is an extortionist -- and I think it's totally OK to blame extortionists for extorting.
That a broken law allows that behavior is completely irrelevant.
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No such thing as a troll
If you break down the 1st definition, it defines a legitimate patent holder protecting their rights. The only part deviating from that is the clause saying that they are asserting an invalid or overly broad patent.
Here's a little piece of truth... It's not possible to assert an invalid patent because a patent is presumed valid legal instrument. It's also not possible to assert an overly broad patent for the same reasons. It can be invalidated, and once it is it cannot be asserted. I agree that it can be legitimately argued that the PTO has issued many patents that should be invalidated. That argument positions the problem squarely where it exists - at the PTO
My problem is that the PTO is taking as long as 12 years to allow my patents. This is costing me enormously and encouraging infringement on my inventions.
If there is a problem in common between the troll fairy tale believers and inventors, it is that the PTO is failing. Fixing the PTO would solve the problem for both sides and we could all live happily ever after.
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Re: No such thing as a troll
This is pure semantics.
By "invalid/overly broad patents" what's meant is those patents that clearly should never have been granted, not patents that have been legally declared invalid. So it's 100% possible, and not that rare, to assert an invalid or overly broad patent.
"If there is a problem in common between the troll fairy tale believers and inventors, it is that the PTO is failing. Fixing the PTO would solve the problem for both sides and we could all live happily ever after."
Which is precisely what most people here have been arguing. However, the PTO is unlikely to ever get fixed (evidenced by the fact that all the changes we've seen to patent laws so far have been designed to make the whole problem even worse, not better).
That said, I think it's important to call out the companies that engage in extortion using the patent system.
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At least we were able to beat one of these guys in 2014
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