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08.08.17

Extortion and Racketeering: What the Latest Article at The Hill Calls Patent Trolling

Posted in Microsoft, Patents at 11:43 am by Dr. Roy Schestowitz

This is what we’ve always been saying

Trolls' extortion

Summary: The consensus on the effect and the innate nature of patent trolls is moving closer and closer to what we argued over a decade ago

Patent trolling isn’t the ‘business’ of small firms; there are some massive patent trolls out there and Microsoft, for example, is connected to quite a few (e.g. Intellectual Ventures); it also acts much like a patent troll itself. It’s a unique case. Trolls don’t just target small firms either; the small firms are an easy target when litigation is seen as a threat to the patent’s (or patents’) eligibility.

“Trolls don’t just target small firms either; the small firms are an easy target when litigation is seen as a threat to the patent’s (or patents’) eligibility.”The other day we saw this new article titled “Our legalized extortion racket: Congress must take on patent trolls” (we often use similar terms to describe what they do).

“The same thing is being allowed to be perpetrated in trademarks too,” somebody told me, “but there’s more money for the lawyers “correcting” patenting abuses.”

“Their exclusive function is legal marketing and creating barriers to entry for any and all industries,” said another person in relation to this.

Here’s a portion from the article:

There is no doubt we are living in turbulent times, fraught with controversy and anger. One of us is a Democrat, the other a Republican. Yet when cooler heads prevail, we find ourselves in agreement on many issues. Perhaps it’s time we focus on the common good, rather than what divides us. And regardless of political affiliation, patent reform is something we should all support.

Patents serve to safeguard American ingenuity and ensure our nation’s entrepreneurs have the legal protection they need to continue to invest in innovation, create jobs and bolster our economy. Yet through legal loopholes, patent assertion entities — companies that own patents but never use them to make anything, better known as “patent trolls” — increasingly use patents as weapons to extort businesses.

Each year, these trolls file thousands of baseless patent infringement claims, most targeting startups and smaller businesses. The trolls’ goal is to leverage a quick settlement, knowing that victims do not have the resources for a prolonged and costly court battle. Indeed, the cost of getting a frivolous lawsuit thrown out of court can be well over seven figures, often making it impossible for innocent victims to recover.

Thankfully, Europe does not yet have many trolls, but the number of troll cases grows rapidly in lieu with UPC hopes. The one good thing about Brexit (there’s hardly anything good about it) is that it can drive many law firms out of business, as their media openly admits this month. Well, they create nothing anyway; we won’t miss them. They enable ‘legalised’ extortion.

“That’s extortion and we should call it what it is. To say, as Ballmer did, that there is undisclosed balance sheet liability, that’s just extortion and we should refuse to get drawn into that game.”

Mark Shuttleworth

“Microsoft is asking people to pay them for patents, but they won’t say which ones. If a guy walks into a shop and says: “It’s an unsafe neighbourhood, why don’t you pay me 20 bucks and I’ll make sure you’re okay,” that’s illegal. It’s racketeering.”

Mark Shuttleworth

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