In response to the patent troll threat, large companies have purchased their own patent portfolios. For example, Apple, Microsoft, Nokia and others paid $4.5 billion for the patents of the bankrupt company Nortel. The patents help them to fight suits and can be used to threaten other companies to ward off litigation. However, this defensive strategy does little to promote new ideas. It might even tempt these corporations to engage in troll-like behavior themselves [source: Salmon].
To curb the actions of NPEs, people like Daniel McCurdy, chief executive of Patent Freedom, a company that researches NPEs, have advocated for patent-related reforms [source: McCurdy]. These reforms include the following:
- Better patents. When patent suits actually come to trial, 40 percent of patents are invalidated by courts [source: Raustiala]. That means they should never have been issued in the first place. They aren't original, aren't specific enough, or cover ideas that are too obvious. If the Patent Office set higher standards, patent trolls would be less able to bring suits based on vague patents with little merit.
- Compulsory licensing. Reformers have advocated rules requiring patent holders to license an idea for a reasonable fee if the holder fails to develop it after a certain amount of time. This would prevent a patent troll from waiting until a product was profitable before jumping in with a suit. And target companies could take out a license to avoid a suit.
- Loser pays. Some patent troll critics have advocated requiring a plaintiff who loses a patent suit to pay the defendant's costs. This would put a serious damper on those suits that lack merit but that might be settled to avoid litigation expenses.
- No jurisdiction shopping. NPEs tend to bring suits in jurisdictions, like the federal District Court for the Eastern District of Texas, that have a record of favoring plaintiffs [source: Joyce]. Banning this practice could reduce the leverage of the trolls by giving target companies a better chance of winning lawsuits.
These reforms might help to slow down the NPEs and speed up innovation, but they're not on the immediate horizon. And the patent reform legislation passed by Congress in 2011 addressed few of them. For the time being, it seems patent trolls will continue to lie in wait under the bridges of technology, ready to exact their fees.
Read on for more information about patents and patent trolls.
- Bessen, James. "The Private and Social Costs of Patent Trolls, BU School of Law, September 19, 2011. (October 14, 2011) http://www.bu.edu/law/faculty/scholarship/workingpapers/documents/BessenJFordJMeurerM091911.pdf
- Chappell, Bill. "Alleged 'Patent Troll' Hit With Large Fine In Appeals Court," NPR, August 8, 2011. (October 14, 2011) http://www.npr.org/blogs/thetwo-way/2011/08/08/139219324/alleged-patent-troll-hit-with-large-fine-in-appeals-court
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- Lowensohn, Josh. "Angry Birds maker targeted in Lodsys suit," Cnet.com, July 21, 2011. (October 14, 2011) http://news.cnet.com/8301-27076_3-20081625-248/angry-birds-maker-targeted-in-lodsys-suit/
- Lutts, Chloe. "Good Patents," Dick Davis Investment Digest, September 6, 2011. (October 14, 2011) http://www.dickdavis.com/2011/09/06/good-patents/
- McCurdy, Daniel P. "Patent Trolls Erode the Foundation of the U.S. Patent System," Science Progress, January 12, 2009. (October 19, 2011) http://scienceprogress.org/2009/01/patent-trolls-erode-patent-system/
- Newman, Jared. "Trolled: iOS Developers Threatened With Patent Lawsuits," PC World, May 13, 2011. (October 14, 2011) http://www.pcworld.com/article/227878/trolled_ios_developers_threatened_with_patent_lawsuits.html
- Plumer, Brad. "Innovation's down, but patent trolls are thriving," Washington Post, September 21, 2011. (October 14, 2011) http://www.washingtonpost.com/blogs/ezra-klein/post/innovations-down-but-at-least-patent-trolls-are-thriving/2011/09/21/gIQABGdKlK_blog.html
- Popper, Ben. "Patent Trolls Come in All Shapes and Sizes," Betabeat, August 8, 2011. (October 14, 2011) http://www.betabeat.com/2011/08/08/anatomy-of-a-patent-troll/
- Quinn, Gene."Intellectual Ventures Becomes Patent Troll Public Enemy #1," IPWatchdog, December 9, 2010. (October 14, 2011) http://ipwatchdog.com/2010/12/09/intellectual-ventures-becomes-patent-troll-public-enemy-1/id=13711/
- Raustiala, Kal. "How 'Patent Trolling' Taxes Innovation," freakonomics.com, July 11, 2011. (October 14, 2011) http://www.freakonomics.com/2011/07/11/how-patent-trolling-taxes-innovation/
- Salmon, Felix. "The cost of patent trolls," Reuters, July 24, 2011. (October 14, 2011) http://blogs.reuters.com/felix-salmon/2011/07/25/the-cost-of-patent-trolls/
- Watson, Jason O. "A History of the United States Patent Office," historical-markers.org, April 17, 2001. (October 14, 2011) http://www.historical-markers.org/usptohistory.cgi
- Wordspy.com. "Patent troll." (October 14, 2011) http://www.wordspy.com/words/patenttroll.asp