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 in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email
  • Slashdot

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. Links 26/9/2020: Wine 5.18, FreeBSD 12.2-BETA3 and Debian 10.6 Released

    Links for the day



  2. 'Appeal to Novelty' as a Lever for Proprietary Software Monopolies, Bloat (Planned Obsolescence) and More Surveillance

    Novelty is generally fine, but in many cases products are developed iteratively (not cumulatively) not to advance society or to objectively improve services, only to increase control over people (because emergent ‘freemium’-like business models nowadays revolve around addiction and subjugation, e.g. ‘brain-farming’ and manipulation of minds)



  3. IRC Proceedings: Friday, September 25, 2020

    IRC logs for Friday, September 25, 2020



  4. Microsoft Windows is Obsolete

    The so-called 'leak' of old Windows code (almost 20 years old) is rather meaningless and useless; the world is moving past Windows, plus old Windows code cannot be used (due to the licence) and is barely used anymore, even in binary form



  5. [Meme] Conflating Critics of Corporate/Class Abuse With Womanisers and Chauvinists (and Now Doing the Same to Influential Women)

    It's regretful to see real victims of discrimination having their grievances and legitimate causes hijacked by opportunistic corporate media, which rallies a bunch of Internet trolls while oligarchs sponsor the whole thing, emboldening attacks on critics of powerful people (the likes of Jordan Peterson are a distraction; even women are nowadays being targeted using the very same tricks)



  6. Losing the Battle for Rights/Justice, Freedom/Liberty, and Emancipation Potential

    We're losing our most basic rights amid transition to "digital"; too little is being done to push back against this worrisome trend, which necessarily means reduction in both our freedom and our fundamental human rights



  7. Response to Eric Raymond (ESR) on “Last Phase of the Desktop Wars”

    Eric Raymond (ESR) talks about Microsoft's "embrace"; but there are many misunderstandings and misconceptions in his blog post, as we'll explain patiently, based on known facts



  8. Links 25/9/2020: Calibre 5.0, Fedora 33 Beta Days Away, Snap Setback

    Links for the day



  9. Faking 'Progress' to Distract From True Justice or From a Full, Meaningful Reform

    Activism for truly meaningful change doesn't stop at superficialities and cosmetic changes (which merely give a false sense/impression of accomplishment, resulting in inaction); we need to regularly consider how to dismantle injustice, not based on the criteria set by oligarchs-owned media, rallying gullible mobs to appease only big egos



  10. IRC Proceedings: Thursday, September 24, 2020

    IRC logs for Thursday, September 24, 2020



  11. Richard Stallman: New Interview About Privacy (Published This Morning)

    “The last few months have put data protection back in the spotlight. During a crisis of this kind, do we have to choose between safety and privacy? We talked about this with Richard Stallman, digital privacy activist and the founder of the Free Software Movement,” RT says



  12. Links 25/9/2020: PostgreSQL 13, DragonFly 5.8.2 and Python 3.8.6

    Links for the day



  13. Code of Ethics Versus Code of Conduct in Action

    Reprinted from Daniel Pocock's Web site



  14. Linux Foundation: “Transformation Through Open Source” is Proprietary Software That Rejects Linux

    The Linux Foundation, run by proprietary software companies that don’t really care about Linux, is still a lot more about openwashing (perception management techniques) than about “Open Source” or even Linux (which most of the Foundation rejects)



  15. Links 24/9/2020: KaOS 2020.09, Arch Conf 2020 Coming, IBM Z Day 2020 Ends

    Links for the day



  16. At ZDNet, in 2020, “Linux” Means Microsoft and Windows

    The incredible charade of ZDNet carries on; the site whose parent company went bust last December isn’t even trying to hide its true agenda



  17. Red Hat is Spamming People in Order to Promote Its Sites and Its Products, Subscribing People to Mass-Marketing Lists Without the Recipients' Consent

    "Engagements" from Red Hat; have the IBM-led marketing people gone overboard, subscribing lots of people to marketing spam without bothering to ask for consent?



  18. “If I'm the Father of Open Source, It Was Done by Artificial Insemination With Stolen Sperm”

    The father of the Free software movement, Richard Stallman, is being wrongly compared to some patron of an “open source” ‘movement’ (an early effort to cancel Stallman and the FSF), which is basically a hostile corporations-led ploy these days



  19. IRC Proceedings: Wednesday, September 23, 2020

    IRC logs for Wednesday, September 23, 2020



  20. The Second Wave (of Free/Libre Software)

    Despite some major setbacks and new threats to digital freedom (autonomy is perhaps a more suitable term), progress is being made and activism must adapt to tackle newer trends



  21. Exploring the Relationship Between Red Hat and Microsoft: They're Barely Even Rivals Anymore

    The ‘older Microsoft’ (serial monopolist IBM) bought Red Hat, but evidence shows that one would be wrong to assume Red Hat really competes against Microsoft (any more than Novell did; there’s a strong relationship)



  22. Microsoft Lost More Than 15 Million Web Domains in One Month!

    Microsoft's presence on the Web is being reduced to ridiculously low levels; sooner or later Microsoft will turn from 'king' of parked (unused) domains to master of nothing



  23. Links 23/9/2020: Lenovo's Deeper GNU/Linux Dive and Tor Browser 10/Tails 4.10

    Links for the day



  24. IRC Proceedings: Tuesday, September 22, 2020

    IRC logs for Tuesday, September 22, 2020



  25. The Latest Greenwashing Campaign by the EPO is Just 'Chinese Propaganda'

    When the EPO speaks of “innovation” and “clean energy transition” it means nothing but patents on batteries, in effect monopolies being granted in Europe (to a lot of Asian — not European — companies)



  26. Links 23/9/2020: Librem 14 Shipping in December, Linux Journal Returns, Istio 1.6.10 Released, Release Candidate 3 of LLVM 11.0

    Links for the day



  27. Welcome Back, Linux Journal!

    Linux Journal is coming back under the ownership/umbrella of Slashdot folks, who are sadly preoccupied and obsessed with Microsoft talking points and PR campaigns



  28. What the Efforts to Remove Dr. Stallman Reveal About the Agenda of Large Corporations (Looking to Absorb the Competition, Remove Freedom, Spread Proprietary Software in 'Open' Clothing)

    Richard Stallman's (RMS) positions and foresight are usually correct; at the moment we're losing access to key people whose leadership positions are essential for the independence of cornerstone projects



  29. Links 22/9/2020: Tails 4.11, Linux Lite 5.2 RC1

    Links for the day



  30. Minimalism for Maximisation of Productivity and Clutter Mitigation

    Unfortunately, GNU/Linux (especially the latter, Linux) embraces bloat and anti-features in pursuit of sales (appeasing large corporations, not users’ needs), reducing the modularity, reliability and productivity of computer systems in the name of helping “dumb” users (they keep telling us people are very dumb and those who disagree are “elitist” and “extremist” or even “neckbeards” — in effect insulting every person out there)


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

Recent Posts