11.17.11

Gemini version available ♊︎

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

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

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.

DecorWhat Else is New


  1. Links 17/1/2022: More Microsoft-Connected FUD Against Linux as Its Share Continues to Fall

    Links for the day



  2. The GUI Challenge

    The latest article from Andy concerns the Command Line Challenge



  3. Links 17/1/2022: digiKam 7.5.0 and GhostBSD 22.01.12 Released

    Links for the day



  4. IRC Proceedings: Sunday, January 16, 2022

    IRC logs for Sunday, January 16, 2022



  5. Links 17/1/2022: postmarketOS 21.12 Service Pack 1 and Mumble 1.4 Released

    Links for the day



  6. [Meme] Gemini Space (or Geminispace): From 441 Working Capsules to 1,600 Working Capsules in Just 12 Months

    Gemini space now boasts 1,600 working capsules, a massive growth compared to last January, as we noted the other day (1,600 is now official)



  7. [Meme] European Patent Office Space

    The EPO maintains a culture of illegal surveillance, inherited from Benoît Battistelli and taken to a whole new level by António Campinos



  8. Gemini Rings (Like Webrings) and Shared Spaces in Geminspace

    Much like the Web of 20+ years ago, Gemini lets online communities — real communities (not abused tenants, groomed to be ‘monetised’ like in Facebook or Flickr) — form networks, guilds, and rings



  9. Links 16/1/2022: Latte Dock 0.11 and librest 0.9.0

    Links for the day



  10. The Corporate Cabal (and Spy Agencies-Enabled Monopolies) Engages in Raiding of the Free Software Community and Hacker Culture

    In an overt attack on the people who actually did all the work — the geeks who built excellent software to be gradually privatised through the Linux Foundation (a sort of price-fixing and openwashing cartel for shared interests of proprietary software firms) — is receiving more widespread condemnation; even the OSI has been bribed to become a part-time Microsoft outsourcer as organisations are easier to corrupt than communities



  11. EPO's Web Site Constantly Spammed by Lies About Privacy While EPO Breaks the Law and Outsources Data to the United States

    The António Campinos-led EPO works for imperialism, it not only protects the rich; sadly, António’s father isn’t alive anymore and surely he would blast his son for doing what he does to progress his career while lying to staff and European citizens



  12. Links 16/1/2022: Tsunami and Patents

    Links for the day



  13. IRC Proceedings: Saturday, January 15, 2022

    IRC logs for Saturday, January 15, 2022



  14. Links 16/1/2022: Year of the GNU/Linux Desktop and Catch-up With Patent Misinformation

    Links for the day



  15. Patrick Breyer, Unlike Most German Politicians, Highlights the Fact That Unified Patent Court (UPC) and Unitary Patent Are Incompatible With EU Law

    A longtime critic of EPO abuses (under both Benoît Battistelli and António Campinos leadership), as well as a vocal critic of software patents, steps in to point out the very obvious



  16. Links 15/1/2022: Flameshot 11.0 and Libvirt 8.0

    Links for the day



  17. Blogging and Microblogging in Geminispace With Gemini Protocol

    Writing one’s thoughts and other things in Geminispace — even without setting up a Gemini server — is totally possible; gateways and services do exist for this purpose



  18. Links 15/1/2022: Raspberry Pi in Business

    Links for the day



  19. IRC Proceedings: Friday, January 14, 2022

    IRC logs for Friday, January 14, 2022



  20. Gemini Clients: Comparing Moonlander, Telescope, Amfora, Kristall, and Lagrange (Newer and Older)

    There are many independent implementations of clients (similar to Web browsers) that deal with Gemini protocol and today we compare them visually, using Techrights as a test case/capsule



  21. 2022 Starts With Censorship of Christmas and Other Greetings at the EPO

    The nihilists who run the EPO want a monopoly on holiday greetings; to make matters worse, they’re censoring staff representatives in their intranet whilst inconsistently applying said policies



  22. Links 14/1/2022: FFmpeg 5.0 and Wine 7.0 RC6

    Links for the day



  23. White House Asking Proprietary Software Companies That Add NSA Back Doors About Their Views on 'Open Source' Security

    The US government wants us to think that in order to tackle security issues we need to reach out to the collective 'wisdom' of the very culprits who created the security mess in the first place (even by intention, for imperialistic objectives)



  24. Links 14/1/2022: EasyOS 3.2.1 and Qt 6.3 Alpha

    Links for the day



  25. Scientific Excellence and the Debian Social Contract

    The Debian Project turns 30 next year; in spite of it being so ubiquitous (most of the important distros of GNU/Linux are based on Debian) it is suffering growing pains and some of that boils down to corporate cash and toxic, deeply divisive politics



  26. Links 14/1/2022: openSUSE Leap 15.2 EoL, VFX Designers Are Using GNU/Linux

    Links for the day



  27. IRC Proceedings: Thursday, January 13, 2022

    IRC logs for Thursday, January 13, 2022



  28. 2022 Commences With Microsoft-Themed (and Microsoft-Connected) FUD Against GNU/Linux

    A psychopathic Microsoft, aided by operatives inside the mainstream and so-called 'tech' media, keeps spreading old and invalid stigma about "Linux" and Free software; few people still bother responding to these fact-free FUD campaigns, which boil down to ‘perception management’ PR/propaganda



  29. Between January 2021 and January 2022 the Number of Active Gemini Capsules Nearly Quadrupled Based on Publicly-Available Catalogue of Capsules

    Geminispace has grown to about 2,000 known capsules and 1,600 of them are active, permanently online, fully accessible; in January last year these numbers were about 4 times smaller



  30. Links 13/1/2022: NetworkManager 1.34 and Everett 3.0.0

    Links for the day


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