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03.23.16

Focus on Patent Trolls Persists, With Increasing Use of Euphemisms Such as NPEs and PAEs

Posted in Patents at 9:50 am by Dr. Roy Schestowitz

From IAM’s Web site (NPE 2016 could be crudely called Patent Trolls 2016)

NPE 2016

Summary: The debate about patent trolls (not patent scope) carries on in the media and events that improve the image of trolls are being organised by some of the media (paid by these trolls)

PATENT trolls are a big problem, but they are also a symptom of a much broader problem, notably software patents which can target a whole lot of companies that don’t manufacture things, e.g. online retailers.

IAM, which receives money from patent trolls, says that “legislation [...] balanced between patent owners and users of IP” (what about the public? Externality?) when it writes about patent reform. IAM currently organises and runs an annual event for patent trolls, who paid IAM to set this up (they are partying like patent trolls and getting flak from critics). Watch what guests they attract. If one makes a living by just passing around patents and threatening companies, that’s no constructive career. It’s parasitic and it injures the reputation of legitimate companies and legitimate patents. IAM itself doesn’t seem to recognise software patents when it sees them, or hosts those who use an old line (“We don’t rely on any patents that are purely software patents” or “Patents are such emotional things, people have this emotional barrier that they’re paying for nothing”).

“If one makes a living by just passing around patents and threatening companies, that’s no constructive career.”“What licensees are not paying for is solutions,” wrote Florian Müller in response to the above, “normally don’t need to read patent docs to solve software problems.” He later took note of patent trolls as proxies, alluding to the latest from Unwired Planet, which trolls Europe (Microsoft also does it, e.g. Intellectual Ventures). This is not OK. An articles roundup from Jim Lynch put it like this: “Microsoft has long sought to build credibility with the open source community, but it continues to shoot itself in the foot by forcing companies to pay for its Android patents. This has led some in the open source community to remain sour on Microsoft and its business practices.”

Intellectual Ventures is attacking Android too, not just Microsoft (the headline “Microsoft still forces companies to pay for its Android patents” could be expanded to “Microsoft and its patent trolls still force companies to pay for alleged Android patents”).

“It’s parasitic and it injures the reputation of legitimate companies and legitimate patents.”The EFF, in the mean time, speaks about the Venue Act these days (it tackles patent trolls, but not software patents), getting the attention of pro-patents sites like MIP and also patent sceptics like TechDirt. One side says that “US Senators Flake, Gardner and Lee have introduced the Venue Equity and Non-Uniformity Elimination (Venue) Act. The bill aims “to ensure that venue in patents cases is fair and proper”. The latter side says:

Patent reform is a constant legislative topic, even though what passes for reform generally tends to be heavily-watered down by the time it moves out of the House or Senate. One of the most abused areas of patent litigation is venue selection. Small towns in East Texas have become hosts to parasitic lifeforms known as “Non-Practicing Entities” — shell companies whose only product/service is litigation.

Jason Rantanen, guest posting at PatentlyO, suggests eliminating venue shopping might be a compromise parties involved in patent reform might be able to unite behind. Presumably, this means legislators, rather than patent trolls, who aren’t going to be willing to give up the “home field” advantage that easily. The problems with the current venue-shopping system are laid out by Rantanen in this sentence.

We don’t think this would ever be sufficient because patent trolls can endure all sorts of courts. With the UPC, for instance, some time soon they might be able to also troll companies all over Europe with just one legal case in a software patents-friendly German court.

“They used to speak about software patents, but corporate pressure seems to have changed that.”Professor Mark Lemley, an academic who often bemoans patent trolls, has just highlighted this new paper from John Allison, adding: “My latest study shows PAEs almost never win patent suits. Neither do software patentees, practicing or not.”

PAEs is a euphemism for particular types of trolls, such as Unwired Planet above (it’s effectively like a legal firm for Ericsson and it has gone on for years). The paper’s abstract says: “Much of the policy debate over the patent system has focused on the perceived problems with non-practicing entities (NPEs), also called patent trolls. Drawing on a comprehensive data set we built of every patent lawsuit filed in 2008 and 2009 that resulted in a ruling on the merits, we find that the situation is rather more complicated than simply operating companies vs. NPEs. While operating companies fare better in litigation than NPEs overall, breaking NPEs into different categories reveals more complexity. Patent Assertion Entities (PAEs) in particular win very few cases. Further, once we remove certain pharmaceutical cases from the mix, no patent plaintiff fares very well. That is particularly true of software, computer, and electronics patents.”

It is still rather worrying that not only the media but academia too (not to mention activism of EFF) focuses so much on patent trolls rather than patent scope. They used to speak about software patents, but corporate pressure seems to have changed that.

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