Law professor Colleen Chien has been doing some good work lately in trying to address the problem of patent trolling. She's now written up an interesting article for Forbes, in which she notes that the system clearly needs to be fixed, but in the meantime, wonders if there's a way to use the very aspects of what makes patent trolling profitable to defeat patent trolls
. The full article is worth reading, in that it lays out the basic structure and economics of why patent trolling is such a profitable business. But the real question is if the same factors that work for patent trolls can be made to work in the other way:
- Trolls succeed because their lawyers only get paid when the patent holder wins. Under the traditional billing model, defense lawyers get paid no matter what. What about tying defense payments to the successful and low-cost resolution of cases? Success payments, outcome-based billing and other forms of “contingency defense” give the main source of transaction costs – lawyers – incentives to reduce them.
- Trolls also succeed by capturing economies of scale. Purchase, assert, repeat. In contrast, few lawyers specialize exclusively in defensive tactics like invalidation, reexamination and joint defense. Expertise that is developed within a firm is guarded as proprietary. But defensive tasks like prior art searching could become cheaper and more reliable if done on a larger scale. Firms with expertise dealing with certain patent assertion entities or certain venues better understand what is needed to efficiently dispose of a suit.
- When trolls show up now, companies fold individually because its easier to do than fight collectively. But the gains from collaboration can be substantial, and would be even more so if approaches were standardized and made more efficient.
- The greatest advantage trolls have is their ability to focus exclusively on assertion. A lack of customers, partners and operations endow trolls with a freedom to litigate not enjoyed by practicing companies. The makers and users of technology should consider doing the same and investing in their own non-practicing entity – a nonprofit. While on a day-to-day level, companies need to resolve disputes and move on, a more long-term and sustained focus could yield longer-term payoffs. Trolling is a big enough issue that diverse stakeholders including small and large companies, across sectors, should be able to find common ground.
As a starting point for something to do now
while the system is still very, very broken, that seems like it might help. I do wonder how effective it can really be however. That first point -- contingency defense lawyers -- could definitely help, since trolls rely heavily on the cost of defending against their bogus assertions to get paid. But... it requires lawyers willing to buy into such a contingency defense, and that seems like a tough sell.