Patent Trolls Ramp Up Lobbying Efforts

from the good-luck-with-that dept

As it looks like the government might actually move towards real legislation to at least try to tackle the patent troll problem, the patent trolls are realizing that they need to ramp up their lobbying efforts with Congress. The article is kind of funny in a variety of ways, arguing that the patent maximalists haven't had the ear of Congress forever:
The attack on so-called trolls has obscured the complexity of patent-rights issues, said Adam Mossoff, a law professor at George Mason University School of Law. That’s in part because “patent companies weren’t active in lobbying or PR,” Mossoff said. “They let patent skeptics in the academy and in think tanks and firms that oppose them set the terms of the patent policy debate.”
No offense, but that sounds like someone who just joined the discussion here. From 2004 until 2011, there was a long, intense debate about patent reform, with early proposals having some aspects that might have curtailed at least some of the trolling problem. But they all got squeezed out because massive patent holders absolutely were extremely active in lobbying and PR. Yes, in many cases it came from the pharmaceutical side of the fence, as the pharma industry effectively killed patent bills every Congressional session, but the idea that patent maximalists haven't had their say is simply untrue.

Then there's this, from Intellectual Venture's new boss lobbyist, Russ Merbeth:
The current debate about patent trolls “seems to create uncertainty around patents generally,” said Russ Merbeth, chief policy counsel at Intellectual Ventures. “From our perspective, that’s going to have a long-term negative impact on American competitiveness.”
That's an up-is-down, day-is-night kind of statement. The uncertainty around patents has always been whether or not (and when) actual innovators were going to get sued for doing something obvious by patent trolls and hoarders like Intellectual Ventures. That's the uncertainty. The fact that innovative companies had to hire more lawyers than engineers? That creates uncertainty and has a long-term negative impact on American competitiveness. It's the companies that are actually innovating that are getting sued. Meanwhile, companies like Intellectual Ventures, who have never brought a product to market ever, sit back and collect billions of dollars from the actual innovators? That's a recipe for disaster. You're taking money out of the hands of innovators -- those who expand and grow the economy, improve our competitiveness and generally improve our lives -- and giving it to a bunch of lawyers who aren't doing that at all?
Last month, IV’s Myhrvold, the former chief technology officer of Microsoft, made a visit to the Hill to argue that his firm, with its thousands of patents, plays an important role in the tech industry ecoysystem by providing a secondary market for patents. The system is generally working, he said, and the industry should hold off on new changes and let the America Invents Act — the patent reform legislation passed in 2011 — take full effect.

“Fundamentally, the term patent troll gets thrown at anybody that is a plaintiff in a patent case,” he said during an event in D.C. “If you are in favor of invention, I think you have to be in favor of invention rights.”
By the way, remember the Mossoff quote above about how the patent folks weren't active -- does he know why the America Invents Act finally passed in 2011? Because it finally got watered down enough that Intellectual Ventures stopped its shady practices to block the bill. Intellectual Ventures was heavily involved in the patent reform debate last time around, contrary to Mossoff's historical revisionism.

As for Myhrvold's claims here, note his careful word choice. He talks about "invention" -- not innovation. The two are different, but the fact is that Myhrvold isn't even talking about invention. He's talking about patenting, which is the process of getting a monopoly on whatever you can get a monopoly on -- whether or not you've actually invented anything at all. Furthermore, even if you believe in invention, that has nothing to do with supporting patent reform that stops patent trolls like Intellectual Ventures. Patent trolls harm inventors, because they give a patent to whoever got their application through the patent office -- and that harms every other inventor who might be building something much better, and much more valuable to society, by putting a giant tollbooth in its way.

It's much, much better (and empirically more effective for the economy) to reward invention by letting inventors compete in the market. Let the market decide who builds the better product, and go from there.

Filed Under: adam mossoff, lobbying, nathan myhrvold, patent trolls, russ merbeth
Companies: intellectual ventures

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  1. identicon
    bonzo, 3 Oct 2013 @ 9:06pm

    patents okay, need to tax them though

    The problem with patents is that they are too cheap to obtain. What is needed is a system where you pay a certain percentage of the amount of protection you want. Let's say you pay 2% a year, so the cost is $20,000 for $1,000,000 of protection, for a patent that lasts 20 years. Anyone else can license the patent permanently by paying a lump sum of of 5% x insurance amount x number of years left on the patent.

    Example: you're a small company and patent your idea and pay $20K/year for $1 million protection. A big company pays a lump sum of $50K x number of years left and thus obtains permanent rights to the patent and hence can compete with you. You can either go out of business, and thus stop paying your $20K/year and pocket the lump sum. Or you can stay in business and use the lump sum to offset your $20K/year fees and also allow you to price your product somewhat lower.

    It's easy to pick holes in the above scheme. Someone with a micro-economics background could do a much better job. But the basic idea is that small companies need protection from competition, otherwise they will be reluctant to make big investment. But they should have to pay the government (and thus the consumers of the united states) for this protection, since this protection reduces competition and thus hurts consumers. The amount they pay should depend on how much protection they want. There should be a way for other companies to automatically license patents, at a reasonable cost. The licensing scheme should not be one that allows big companies to license for just a year, drive the small company out of business, then stop licensing, hence the lump sum scheme. The licensing fee should be depend both on the amount of insurance the inventor purchased and the number of years left in the patent.

    Patent trolls would be crushed by the system I just described. Inventors would no longer profit from inventions, but only from businesses built around those inventions. However, inventors would be able to protect their fledging companies better than in a system with no patents. The huge amount of fees produced by this system could be used to pay for much better staffing at the patent agency, both to reduce junk patents and to assist small inventors file their patents properly and to automatically translate and file US patents in foreign countries at no cost to inventors who are American citizens.

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