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

08.12.17

Growing Unrest Over Patent Trolls Goes Political

Posted in America, Patents at 6:22 am by Dr. Roy Schestowitz

Senator Eric P. Lesser on Patent Trolls

Summary: Encouraging signs for scientists and technologists: The push for the end of patent trolling (patent assertion by parasitic opportunists against vulnerable people who cannot afford legal defense)

RECOGNITION of the problem is growing. It’s growing so fast in fact that judges who are rightly perceived/believed to favour patent trolls were being called out by leading US politicians, who dubbed them "reprehensible". The role played by the patent office is the granting of low-quality patents such as software patents, which patent trolls use almost all the time (some estimates say 70% of the time). This correlation is well documented.

Four days ago, writing in an AOL news site, Senator Eric P. Lesser wrote the above piece, a fragment of which can be found below:

In a recent episode of the HBO series “Silicon Valley,” Richard Hendricks is getting his tech startup off the ground when he comes face to face with a patent troll: an unscrupulous lawyer who claims Richard’s new company is committing copyright infringement.

The lawyer knows his claim is bogus, but also knows Richard would have to pay him in a legal settlement to avoid battling it out in court.

This is not just the stuff of TV fiction. This is real life, and it’s costing billions of dollars in frivolous lawsuits and lost business opportunities.

With an average lawsuit costing $1.6 million, the deceptive actions of patent trolls add up quickly. In 2015 alone, trolls robbed companies of $7.4 billion. One study puts the number much higher, costing companies $29 billion per year.

The author of this article is not some arbitrary pundit; he describes himself as “the Senate Chair of the Joint Committee on Economic Development & Emerging Technologies, Vice Chair of the Joint Committee on Financial Services, and leads Millennial Outreach for the Massachusetts State Senate. He represents the First Hampden & Hampshire District in Western Massachusetts.”

So this guy operates quite specifically in the fields affected. He speaks to people in that area. They tell him about the trolls. If they manage to abolish software patents for good, everywhere in fact, that would eliminate the lion’s share of trolls, but the debate in media has been centered around “trolls”, not software patents, especially over the past 5 years. Only yesterday in fact Bloomberg published this article titled “How to Slay the Patent Trolls” — an article which tells the story of some small businesses. Here are some portions:

In a recent episode of HBO’s sitcom “Silicon Valley,” a lawyer tries to extort money from a struggling startup by threatening to sue it for patent infringement. The troll, who understands nothing about the underlying technology, owns a patent so broad as to be unenforceable, but knows that the victims of his perfectly legal extortion scheme lack the financial resources to fight him in court.

A recent research paper by economists Ian Appel, Joan Farre-Mensa and Elena Simintzi shows that the show’s humorous scenario isn’t that far from real life. Appel et al. note that patent infringement lawsuits have increased by a factor of 10 since 2000, and that so-called non-practicing entities — basically, companies that own patents but don’t use them to produce anything — account for more than two-thirds of the increase. The cases that go to court obviously represent just a fraction of the times that NPEs put pressure on tech companies — their more typical mode of operation is to send threatening letters. Small businesses are the most common targets. Most of the time, companies cough up the cash, viewing the trolls as merely one more cost of doing business.

[...]

NPEs, or patent trolls, could be one of the forces crushing dynamism in the U.S. A large body of research documents the potential harm that they can do to young, growing companies.

But state governments are fighting back. As of 2016, 32 states had passed laws aimed at limiting NPEs’ use of demand letters. Typically, if courts decide a patent holder’s demand letter was unreasonable, it can impose penalties on the person or company making the threats.

Appel et al. study the impact of these laws on small businesses. The results look encouraging. States that adopted these laws saw a 2 percent increase in employment at small, high-tech companies, and a 14 percent increase in the number of companies receiving venture-capital funding. In states with a larger VC presence — for example, California — the increase in the number of tech startups was particularly pronounced. Information-technology companies — just the kind depicted in “Silicon Valley” — were particularly helped by the laws.

We expect patent reform to further accelerate now that the mainstream media and politicians are eager to make it happen. This is why we see growing desperation and signs of misery in the patent microcosm; they might need to find another kind of job. They might even need to stop harassing (sometimes bankrupting) small businesses.

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

What Else is New


  1. Links 17/11/2017: KDE Applications 17.12, Akademy 2018 Plans

    Links for the day



  2. Today's EPO and Team UPC Do Not Work for Europe But Actively Work Against Europe

    The tough reality that some Europeans actively work to undermine science and technology in Europe because they personally profit from it and how this relates to the Unitary Patent (UPC), which is still aggressively lobbied for, sometimes by bribing/manipulating the media, academia, and public servants



  3. Links 16/11/2017: WordPress 4.9 and GhostBSD 11.1 Released

    Links for the day



  4. The Staff Union of the EPO (SUEPO) is Rightly Upset If Not Shocked at What Battistelli and Bergot Are Doing to the Office

    The EPO's dictatorial management is destroying everything that's left (of value) at the Office while corrupting academia and censoring discussion by threatening those who publish comments (gagging its own staff even when that staff posts anonymously)



  5. EPO Continues to Disobey the Law on Software Patents in Europe

    Using the same old euphemisms, e.g. "computer-implemented inventions" (or "CII"), the EPO continues to grant patents which are clearly and strictly out of scope



  6. Links 16/11/2017: Tails 3.3, Deepin 15.5 Beta

    Links for the day



  7. Benoît Battistelli and Elodie Bergot Have Just Ensured That EPO Will Get Even More Corrupt

    Revolving door-type tactics will become more widespread at the EPO now that the management (Battistelli and his cronies) hires for low cost rather than skills/quality and minimises staff retention; this is yet another reason to dread anything like the UPC, which prioritises litigation over examination



  8. Australia is Banning Software Patents and Shelston IP is Complaining as Usual

    The Australian Productivity Commission, which defies copyright and patent bullies, is finally having policies put in place that better serve the interests of Australians, but the legal 'industry' is unhappy (as expected)



  9. Patent Trial and Appeal Board (PTAB) Defended by Technology Giants, by Small Companies, by US Congress and by Judges, So Why Does USPTO Make It Less Accessible?

    In spite of the popularity of PTAB and the growing need/demand for it, the US patent system is apparently determined to help it discriminate against poor petitioners (who probably need PTAB the most)



  10. Declines in Patent Quality at the EPO and 'Independent' Judges Can No Longer Say a Thing

    The EPO's troubling race to the bottom (of patent quality) concerns the staff examiners and the judges, but they cannot speak about it without facing rather severe consequences



  11. The EPO is Now Corrupting Academia, Wasting Stakeholders' Money Lying to Stakeholders About the Unitary Patent (UPC)

    The Unified Patent Court/Unitary Patent (UPC) is a dying project and the EPO, seeing that it is going nowhere fast, has resorted to new tactics and these tactics cost a lot of money (at the expense of those who are being lied to)



  12. Links 15/11/2017: Fedora 27 Released, Linux Mint Has New Betas

    Links for the day



  13. Patents Roundup: Packet Intelligence, B.E. Technology, Violin, and Square

    The latest stories and warnings about software patents in the United States



  14. Decline of Skills Level of Staff Like Examiners and Impartiality (Independence) of Judges at the EPO Should Cause Concern, Alarm

    Access to justice is severely compromised at the EPO as staff is led to rely on deficient tools for determining novelty while judges are kept out of the way or ill-chosen for an agenda other than justice



  15. Links 14/11/2017: GNU/Linux at Samsung, Firefox 57 Quantum

    Links for the day



  16. Microsoft: Sheltering Oneself From Patent Litigation While Passing Patents for Trolls to Attack GNU/Linux

    Another closer look at Provenance Asset Holdings and what exactly it is (connection to AST, part of the cartel Microsoft subsidises to shield itself)



  17. The Patent Trolls' Lobby is Losing the Battle for Europe

    The situation in Europe is looking grim for patent trolls, for their policies and the envisioned system (which they lobbied for) isn't coming to fruition and their main casualty is the old (and functioning) EPO



  18. Unitary Patent (UPC) is Dead to the EPO and ANSERA is Not the Answer as Patent Quality Declines and Talented Staff Leaves

    EPOPIC comes to an end and the EPO does not mention the UPC 'content' in it; ANSERA, in the meantime, raises more questions than it answers and IP Kat makes a formal query



  19. Why Honest Journalism on Patent Matters Barely Exists

    Media coverage in the area of patent law is still appalling as it's dominated if not monopolised by those who benefit from patent maximalism



  20. Patent Maximalism Around the World

    A roundup of stories or spin observed over the past week, mostly favouring those who profit from patents rather than creation of anything



  21. Links 13/11/2017: Samsung’s DeX Revisited, Linux Kernel 4.14 Released

    Links for the day



  22. Time for the Court of Appeals for the Federal Circuit (CAFC) to Disregard Rulings From the Eastern District of Texas

    A look at the latest developments at the Federal Circuit and some bits about Microsoft's extortion using software patents (even after Alice)



  23. Alice (De Facto Ban on Software Patents) Remains Untouched in 2017 and Likely in 2018 As Well

    The patent microcosm (people like Dennis Crouch) is trying to find cases that can contradict Alice (at the higher levels, especially the US Supreme Court) but is unable to find them; as things stand, suing anyone with a software patent seems like a losing/high-risk strategy



  24. The USPTO's Joe Matal (Interim Director) Sounds Serious About Improving the Patent Quality and Services

    An expressed desire to improve the US patent system rather than treat is like a money-making machine, as illuminated in recent days by Patently-O



  25. Patent Trial and Appeal Board (PTAB) Defends Firms From Bogus Patents and US Congress Hears About How PTAB Dodgers Misuse Immunity

    The debate about PTAB is being lost by the patent microcosm, whose attempt to dodge and demonise PTAB merely serves to reinforce PTAB's importance and continued success



  26. Links 11/11/2017: Mesa 17.2.5 and Wine 2.21 Released

    Links for the day



  27. Benoît Battistelli Gives Power to Željko Topić, Not Just to António Campinos

    Topić still derives power from Battistelli, who treats him like his right-hand man



  28. Next EPO President Will Continue a Cooperation Which Does Not Exist

    Kluwer Patent Blog is nitpicking the words of António Campinos and expressing scepticism about progress to be made by Campinos



  29. More Microsoft AstroTurfing by Association for Competitive Technology (ACT) and Mingorance

    ACT, now led by Morgan Reed rather than Zuck, is still meddling in European policy (software patents agenda) and other familar front groups appear at the scene in an effort to influence DG Competition



  30. Consensus Around the High Likelihood That the Unitary Patent (UPC) is Dead and Backlash Against Deniers of It

    Online discussions about the UPC have rapidly shifted to assume, quite correctly in fact, that the UPC is facing mortal danger from which it may never recover


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