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. “Federal Circuit Had Affirmed on Every Issue in 77.4% of the Patent Trial and Appeal Board Appeals it Had Seen” in 2016

    The Federal Circuit (CAFC) and Patent Trial and Appeal Board (PTAB) continue to squash a lot of patents on software, in contrast to that fake news from patent maximalists



  2. Kudelski Group Not Only Acts Like a Patent Troll But Also Run by Intellectual Ventures Person; Mobile Market in Dire State of Patent Armageddon

    The patent thicket which pervades everything that is used by billions of people, mobile technology in particular, can be traced back to a lot of non-practicing parasites (or patent trolls)



  3. Watchtroll and His Swamp Still Blame Google (Where Michelle Lee Came From) for Improving and Gradually Fixing Aspects of the US Patent System

    Shooting the messengers (even wrongly associating yours truly with Google) in an effort to undermine patent reform when it is so desperately needed due to serious injustices



  4. In an Age of Necessary Patent Reform and Permanent Uncertainty for Software Patents the Patent Microcosm Looks for Workarounds and Spin

    Commentary on the status quo in the Michelle Lee era and some examples of bias from the patent microcosm, as well as news regarding the NFL getting sued by the Kudelski Group



  5. Michelle Lee, USPTO Director, Should Recognise That the Patent Microcosm is Her Enemy Which Hates Her

    The latest outburst from the patent microcosm, which has a temper issue and notorious disdain for judges it does not agree with, is more of what we have come to expect



  6. Battistelli is an Autocrat Above the Law and It's OK, Holland's High Council Says

    Battistelli's autocratic tendencies will not be challenged by Dutch authorities, in spite of sheer condemnation from many groups all across Europe and the entire world



  7. Beware Fake News About the Unitary Patent (UPC)

    The UPC is dead, deadlocked, stuck, in a limbo and so on; those who claim otherwise are merely lobbying (in disguise of "analysis" or "news")



  8. Shame on MapR for Pursuing Software Patents While Pretending to Stand for Free/Open Source Software

    The patents gold rush sees another company joining the 'fun', albeit this company should campaign hard against software patents rather than pursue any



  9. Doomsday Scenario in the Back Mirror as Michelle Lee Keeps Her Job (and Much-Needed Patent Reform) at the USPTO

    The future of patent reform, i.e. tackling overpatenting and patent trolls, looks somewhat more promising with today's confirmation of Lee's 'extended tenure' at the Office



  10. Links 19/1/2017: PulseAudio 10.0, Linux 4.9 Longterm Kernel

    Links for the day



  11. Corporate (Wall Street) Media Agrees That Brexit Dooms the Unitary Patent (UPC)

    The nonstop lies or the fake news about the UPC starting "real soon now" don't quite pass a reality check or a basic assessment based on fundamental concepts, such as the UPC's facilitation of subordination (to Europe) in the United Kingdom



  12. Farce of an 'Independence' for the Boards of Appeal as Another Ally of Benoît Battistelli Enters as Parasite Inside the 'Overseer'/Host

    The latest cluster of lies from the President of the European Patent Office (EPO) and direct refutation of false claims of independence for the Boards of Appeal, where the former Vice-Presidents can flock, just like the Mini Minion (Minnoye) of Battistelli



  13. Links 18/1/2017: Red Hat's OpenShift 3.4, Mozilla's New Logo/Branding

    Links for the day



  14. Union-Busting Action by Team Battistelli Takes Heavy Toll, Techrights Will Continue to Expose EPO Injustices to the World

    The Staff Union of the European Patent Office, SUEPO, which faced unprecedented and probably illegal (based on local laws) attacks, is being weakened by the worst President ever, whose own management team seems to be collapsing along with the institution he is destroying in just a few years



  15. A Lot More Fake News About the UPC, Trying to Convince People That the UK is Ratifying (It's Not, It Cannot)

    Response to some of the latest misleading (self-serving) whispers about the fate of the Unified Patent Court (UPC), which is in a deadlock due to Brexit



  16. Rumours Suggest That EPO Management is Aware of Decline in Patent Quality and is Thus Actively Lying About it to the Media/Public

    Whenever Battistelli brags about patent quality he may be consciously and deliberately lying through his teeth if the latest rumours are correct



  17. Links 17/1/2017: GIMP Plans, New Raspberry Pi Product

    Links for the day



  18. Resumption of EPO Propaganda ('Meet the President') Officially Starts Tomorrow

    Yet another one of these foolish 'Meet the President' stunts, scheduled to take place tomorrow morning



  19. Caricature: Battistelli's New Year's Resolution (More EPO Lies)

    The latest cartoon being circulated within the European Patent Office (EPO)



  20. Donald Trump Gives New Hope to Patent Aggressors and Patent Trolls

    Pessimism about the prospects of patent progress or patent reform in an age of staunchly pro-business Conservatives and glorification of protectionism



  21. More Fake News About the Unified Patent Court (UPC) Based on Lobbying Tactics From Bristows UPC and the Preparatory Committee

    Unified Patent Court (UPC) lobbying has gotten so bad that it now infiltrates general media outlets, where people are asked to just blindly assume that the UPC is coming and is inevitable, even though it's clearly in a limbo and is unlikely to see the light of day



  22. EPO Totally Silent for a Month, But Deep Inside There Are Serious Cracks

    The situation at the EPO seems to be pretty grim, even at the top-level management, and the EPO has gone into permanent silence mode



  23. Links 16/1/2017: Linux 4.10 RC4, Linux Mint 18.1 'Serena' KDE Edition Beta

    Links for the day



  24. 'Financial Director' Publishes Fake News About the Unitary Patent (UPC)

    Response to some of the latest UPC propaganda, which strives to misinform Financial Directors so as to enrich the author and his firm



  25. Independent and Untainted Web Sites About Patents Are Still Few and Rare

    Commentary about news sources that we rely on, as well as the known pitfalls or the vested interests deeply ingrained in them



  26. The 20% Rule: Patent Trolling Suffers Double-Digit Declines and Patent Troll Technicolor is Collapsing

    Significant demise or total catastrophe for the modus operandi (method) of going after companies with a pile of patents and threats of litigation



  27. US Supreme Court Did Not End Apple's Patent Disputes Over Android (Linux), More Cases Imminent

    An overview of some very recent news regarding the highest court in the United States, which has been dealing with cases that can determine the fate of Free/Open Source software in an age of patent uncertainty and patent thickets surrounding mobility



  28. Links 15/1/2017: Switching From OS X to GNU/Linux, Debian 8.7 Released

    Links for the day



  29. Number of New Patent Cases in the US Fell 25% Last Year, Thanks in Part to the Demise of Software Patent Trolls

    Litigation and prosecutions that rely on patents (failure to resolve disputes, e.g. by sharing ideas, out of court) is down very sharply, in part because firms that make nothing at all (just threaten and/or litigate) have been sinking after much-needed reform



  30. America Invents Act Improved Patent Quality, But Right Wingers Threaten to Make It Worse Again

    The past half a decade saw gradual improvement in assessment of patents in the United States, but there is a growing threat and pressure from the patent microcosm to restore patent maximalism and chaos


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