EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

11.17.11

Cost of Patent Trolls Studied as Acceptance of USPTO Falls, Developers Complain Even in Press Releases

Posted in Patents at 11:30 am by Dr. Roy Schestowitz

Bessen

Summary: More academic insight and more anecdotal evidence of the backlash against the existing patent laws and practices

The silly, meaningless measures that we see of innovation as function of patents continue to come from press outlets like the The New York Times, which in turn cites a “report by Thomson Reuters, published on Tuesday [and] tries to draw a more accurate link between corporate patent filings and real innovation. It does so by measuring not only the number of patents a company files, but also the influence, global reach and success of its patents.”

Innovation should not be quantified in these terms. Profit and patents are something better used as indicators of monopoly power, which is what patents are all about at the end of the day. To measure innovation properly, other yardsticks are definitely needed. Watch how Doom 3 source code fails to arrive due to patents. It was in the news yesterday and it’s a fine example of where patents do a lot of harm when geometric knowledge can be shared. There is a better — and for a change academic — work that helps shed light on the effects of patents. It was covered by CNN yet again (as before) and this time it focused on patent trolls. Bessen and his wonderful group published another paper which got the attention of those who keep abreast of the patents debate. Here is the original (Boston University) where the abstract states: “In the past, non-practicing entities (NPEs) — firms that license patents without producing goods — have facilitated technology markets and increased rents for small inventors. Is this also true for today’s NPEs? Or are they “patent trolls” who opportunistically litigate over software patents with unpredictable boundaries? Using stock market event studies around patent lawsuit filings, we find that NPE lawsuits are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010, mostly from technology companies. Moreover, very little of this loss represents a transfer to small inventors. Instead, it implies reduced innovation incentives.”

IDG covered this too. Notice the opening paragraphs:

For those of us who follow the tech industry closely, patents are a touchy subject lately thanks to all the litigation going on over software patents.

This is particularly true in the mobile arena, where companies including Apple and Microsoft have been especially enthusiastic in their use of patents as leverage over their competitors.

They do this because they are losing to Android/Linux.

Here is another IDG article, this one bearing the headline “Patent Trolls Cost Businesses $80 Billion Per Year, Study Finds”. To quote: ““Non-practicing entities” (NPEs) is the polite name given to patent trolls by Boston University School of Law researchers James Bessen, Jennifer Ford, and Michael Meurer, whose paper, “The Private and Social Costs of Patent Trolls” (PDF), will soon be published in the journal Regulation.

“Whereas such firms once helped enable technology markets and boost the profits small inventors could earn from their inventions, that’s no longer the case, the authors argue. Rather, today’s NPEs assert patents “on an unprecedented scale,” they write, involving thousands of defendants every year in hundreds of lawsuits.

“The researchers studied the effect of patent lawsuits on defendants’ wealth by examining the stock price of those companies around the time the lawsuits in question were filed. After factoring out market trends and random factors, they found that between 1990 and 2010, NPE lawsuits are associated with half a trillion dollars in lost wealth to defendants.”

Here is an example of a legal case that has been concluded after no less than 2 years (i.e. very expensive process):

A Portland, Ore.-based company that sued two multiple listing service software vendors for patent infringement has lost a two-year court battle, with a U.S. District Court Judge dismissing its claim against one of the vendors and invalidating the patent in question.

As the president of the FFII puts it in relation to another case:

ProSoftnet, creator of IBackup.com and IDrive.com, is now defending itself against patent trolls

There is actually a press release about it, which is a testament to the sad state this whole system is in. To quote:

Cloud Storage Pioneer Pro Softnet Faces Most Disruptive Patent Attack to Date

Pro Softnet, an independently owned and operated online backup and cloud storage company that provides service to over 800,000 subscribers through its popular IBackup and IDrive products, is now in the midst of defending itself against the largest patent attack it has yet faced brought on by a non-practicing entity, or NPE. With several new and exciting services in the cloud sharing space scheduled for release in the first quarter of 2012 – the pending lawsuit has the potential to interrupt growth for this pioneering company.

WIPO propaganda is trying to justify its existence, quite frankly as usual, while many genuine companies with real products (and no patent lawyers) are suffering. This leaves development and innovation crashing down and deterring participation. More and more people are starting to really get it. The patent system is on shaky grounds. It does not serve innovators.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

3 Comments

  1. Michael said,

    November 17, 2011 at 8:26 pm

    Gravatar

    FUD:

    It does so by measuring not only the number of patents a company files, but also the influence, global reach and success of its patents.”

    Innovation should not be quantified in these terms. Profit and patents are something better used as indicators of monopoly power, which is what patents are all about at the end of the day.

    And yet you did not complain when Google purchases massive “indicators of monopoly power”.

    Again, massive bias on your part.

    In any case, yes – the patent system is broken. It needs to be improved and it needs to be made more consistent around the world so people know what they are dealing with.

    But unless or until you have an actual solution, all you are doing is whining. Over and over and over.

    saulgoode Reply:

    And yet you did not complain when Google purchases massive “indicators of monopoly power”.

    Actually, Techrights — on several occasions — has complained about Google’s purchasing of patents.

    http://techrights.org/2011/07/25/cartels-part-of-the-problem/
    http://techrights.org/2011/04/06/benjamin-henrion-on-google-nortel/
    http://techrights.org/2011/09/15/brutal-nature-of-patents/

    Michael Reply:

    Fair enough… and thank you for the correction.

    But Google is not deemed “evil”. They are still the good guys – even if they play the same games as the “bad guys”.

    I would love to see Roy state what he sees as good and evil and then apply that equally to all of the companies he talks about: Apple, MS, Samsung, Google, HTC. Also apply it to the open source world.

    is it wrong to sue? Is it wrong to “slavishly” copy other’s work? Is it wrong to give products away for free? Is it wrong to collect users’ data?

    The answer changes with Roy depending on his preconceived notions of who is good or evil. Bottom line: if Apple or MS do any of those things it is wrong; if the others named above do it they are doing the right thing, or, at worst, are making a strategic mistake but are not being evil.

What Else is New


  1. EPO Brain Drain (Even Directors Fed Up With Team Battistelli) and Rumours About Battistelli Becoming President of the UPC

    Words heard through the grapevine of the European Patent Office (EPO), where staff is overwhelmingly against the managers and some people, including high-profile staff, add to the exodus



  2. More Than 20 Years in the Line: European Patent Office and Claims of European Convention on Human Rights Infringement Against Applicants/Stakeholders

    Gross incompetence and potentially an infringement of the European Convention on Human Rights at the European Patent Office (EPO), this time impacting an applicant (one of many in a similar position)



  3. UPC Nepotism, Political Abuses, and UPC Involvement From the Legal Firm That EPO Hired to Bully Techrights

    The Unitary Patent Court (UPC), a rigged system that is being rammed down Europe's throat by the EPO, its big clients (even foreign), and their patent lawyers laid bear for people to see



  4. Member of European Parliament Brings Up “Ongoing Violations of the Fundamental and Employment Rights of the Staff of EPO”

    Question to the European Commission from Portuguese MEP Ana Gomes, as published in the site of the European Parliament



  5. La Oficina Europea de Patentes Pretende que No Pasa Nada y Prepara una Feria de Vanidad

    La estrategia de relaciones públicas de la OEP cuya destructiva estrategia de patentes continua sin disminución (por ahora), se engancha en Colombia y se esfuerza en manufacturar el mito donde el público, examinadores de patentes, y aplicantes de patentes todos estan muy felices con la OEP.



  6. La ‘Internacional’ Commisión de Comercio Impone/Reenfuerza Patentes de Software para Establecer Otro Embargo

    La Comisión Internacional (sic) de Comercio se esta entrometiendo en competición de nuevo permitiendo a un gigante de los Estados Unidos Ciso en este caso, a potencialmente bloquear rivales (no importaciones del extranjero) usando patentes de software.



  7. Links 9/2/2016: Linux in Robotics, Hyperledger Project

    Links for the day



  8. Besieged Benoît Battistelli Mimics 'Damage Control' Tactics of FIFA or Blatter as More Judges Start Getting Involved in EPO Scandals

    Rumours and a new rant from Battistelli reinforce suspicions that actions are being organised behind the scenes, possibly as part of an upcoming, high-level campaign to unseat/dethrone Battistelli, who has become a reputational disaster to the European Patent Office (EPO), much like Sepp Blatter at FIFA



  9. Several Political Parties Directly Challenge the European Patent Office for Ignoring the Law, Not Obeying Court Orders

    Politicians make it crystal clear that the EPO, despite its unique status, cannot just raise its nose at the rulings of courts of law, definitely not in Dutch territory where the EPO operates



  10. Even the Legal Community is Upset at Benoît Battistelli for the Damage He Did to the EPO

    A recent article from lawyers' media (in German) speaks of the great damage (or mess) left by its current president, who has become somewhat of a laughing stock and growingly synonymous with farcical trials even in the circles of stakeholders, not just his own staff



  11. EPO Union (SUEPO) Getting Busted: “More and More People are Joining the Union, but Fewer and Fewer People Dare to Take on Leading Positions There.”

    The union-busting actions taken by EPO management in collaboration with Control Risks (for weak accusations against staff representatives) and FTI Consulting (for 'damage control') as described in a recent article, in the words of SUEPO lawyer Liesbeth Zegveld



  12. Microsoft's Copyrights- and Patents-Based Attacks on GNU/Linux Carry on

    The SCO case is still going on and Microsoft has just signed a patent deal with GoPro over its FOSS-based software, relating to “certain file storage and other system technologies”



  13. The EPO's Benoît Battistelli is the Dictator Who Can No Longer Dictate Like He Used to

    The European Patent Office's mechanism of oversight is starting to work just a little because, based on a new report from Juve, Battistelli is now reluctant to make proposals that would prove unpopular among delegates



  14. La Más Detallada Explicación (hasta ahora) de ¿Qué esta mal con la OEP?

    La insistencia de la OEP que permanece arriba de la ley no sólo est bajo fuego en los medios pero también esta siendo desafiada basado en personas familiares con la aplicabilidad de la ley a organizaciones internacionales.



  15. Links 8/2/2016: Vista 10 Nags Help GNU/Linux, Nautilus Updated

    Links for the day



  16. The European Patent Office “is Acting as Though the Law Does Not Apply to It.”

    An article from Nieuwsuur which provides the words of Liesbeth Zegveld (for SUEPO) and Guillaume Minnoye (for the European Patent Office), reaffirming the EPO's bizarre notion that it is above the law, even in the face of human rights violations and a court ruling against the EPO



  17. Microsoft-Connected FRAND Lobbying (Software Patents Against Free/Open Source Software) in Brussels

    Anti-Free/Open Source software (FOSS) talking points and FRAND (anti-FOSS) lobbying groups in Brussels as seen by proponents of FRAND, who also worked for Microsoft



  18. Latest Propaganda From the EPO's Management an Effort to Make the EPO the Tool of Megacorporations

    A quick roundup of some of the latest spin and paid-for (bought) coverage that helps introduce a distorted patent system whose beneficiaries are not European (or even people)



  19. 'Aversion to Change' Propaganda From the EPO Echoes or Parrots Lenin and Stalin

    The out-of-control EPO management is trying to fool the media by blaming staff representatives for getting fired, simply because they stood up to a highly abusive and megalomaniacal dictator



  20. The Gates Foundation Subjected to Criticism, But Over a Decade Too Late

    Reckoning and accepting the fact that even some in the media now openly speak about Bill Gates' corrupting influence in everything, including politics



  21. Links 8/2/2016: Zenwalk 8.0 Beta 2, Q4OS 1.4.7

    Links for the day



  22. SIPO (China's Patent Office) Taken Over by Patent Maximalists

    A look at China's race to the bottom (decline in quality) when it comes to patents, assuming quite wrongly that quantity is more important than quality and severe penalties for perceived infringement will spur innovation



  23. The Alice Case Continues to Smash Software Patents (This Time OpenTV's); Will the EPO Ever Pay Attention?

    The potency or the grip of software patents in the United States is quickly eroding, but the EPO continues to act as though software patents are legitimate



  24. EPO Staff Responds to Team Battistelli's Expansion to Include French Economic Propagandist on the Payroll

    With strings attached (like string puppets of Battistelli in various units including the Investigative Unit), can the new Chief Economist, who is French and paid by Battistelli, ever be trusted?



  25. UPC: To Understand Who Would Benefit From It Just Look at Who's Promoting It (Like TPP)

    The UPC, which is designed to aid patent trolls and aggressors (and their lawyers), is still being advanced by the EPO and some misinformed (but loyal to these former groups) politicians



  26. Trolls Molestos: Rovi (del famoso Angry Birds) Ayuda al Más Largo Troll de Patentes de Microsoft Intellectual Ventures (Corregido)

    Alguna vez conocido como hacedor de juegos y más tarde como vigilancia en masa en jugadores, Rovi ahora se ESTA ALIANDO CON EL MÁS GRANDE TROLL DE PATENTES



  27. Estadísticas de Invalidación de Patentes y Costos de Litigación de Patentes (incluso si son falsas) Muestran que la Esfera de Patentes y los Estándares de Examinación son un Probleman, No Sólo en Los Estados Unidos

    Demasiadas falsas patentes que no deberían haber sido otorgadas en primer lugar y fraudulentes jucios de patentes que terminan en favor del acusado sirve para mostrar el costo externo (o externalidad) cuando set trata de un bajisímo sistema de patentes que se esfuerza en otorgar muchas patentes irrespectivamente de su mérito.



  28. The 'Offenses' of EPO Staff Representatives Boil Down to Truth-Telling

    Dutch television examined the documents of the mock 'trials' against SUEPO leaders and concluded that whistle-blowing (i.e. exposing abuses by EPO management), not misconduct, is the reason for overzealous dismissals



  29. Rumours About Dismissal of Benoît Battistelli and New Letter From Union Syndicale Federale Blasting Battistelli's Behaviour

    hings have been heating up since the dismissal of staff representatives at the European Patent Office (EPO) and some even spread rumours about withdrawal/dismissal of the EPO's President



  30. VirnetX Case Against Apple Shows Not the Problem With Patent Trolls But With Software Patents

    What the media really ought to be talking about after the high-profile VirnetX case, rather than obsess about the status of Apple or patent trolls in the Eastern District of Texas


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts