Patents

by Mike Masnick


Filed Under:
definitions, patent troll, patents



Defining The Patent Troll

from the definitions-matter dept

Recently, the IP Troll Tracker blog decided to try to officially define "patent troll" to a level that might satisfy a patent holder who insists that there is no such thing as a patent troll. For many years, we here at Techdirt avoided using the phrase "patent troll" because it did seem rather undefined, but it became so commonplace that we eventually gave in and used the phrase regularly. The term has showed up in all sorts of places, including courtrooms and discussions on legislation. In some circles, policy makers often use the term "non-practicing entities" (or NPEs) instead of "patent trolls" but that upsets some who feel that there are "NPEs" (like universities) that do research that they wish to license off, but which will never be "practicing entities." Some have also called them "Patent Assertion Entities" (PAEs) to describe companies who do nothing more than assert patents. At least that leaves out universities -- but then that also leaves out companies who do other things but who also, do some patent trolling (including, frankly, some universities, since we're discussing them).

Stephanie Kennedy, who runs the IP Troll Tracker blog, came up with the following definition:
Patent Troll, n -

1/ A company or individual who, using patents that either never should have been issued or are broadly constructed (intentionally for the purpose of misuse, or as a result of poor USPTO patent examination practices), sends letters to various and sundry companies and/or individuals that simultaneously request license fees and threaten legal action if the recipient fails to respond correctly by paying up and who will, in the face of inaction by a demand letter recipient, actually file suit in Federal District Court, the District of East Texas being the most popular venue.

2/ A company set up to act as a cover for large corporations who try to breathe new life into older patents which they would ordinarily let expire but, as a result of greed and/or pressure from Wall Street, have decided are ripe for assertion or litigation.

3/ Intellectual Ventures

I recommend not clicking on the link for number three.

Anyway, I like this formulation a lot better than the simplistic "NPE" designation, because I think there are lots of "practicing entities" that do trollish behavior (Microsoft being a big one). The problem with patent trolling tends to be that it's little more than a classic shakedown. Trying to get companies to pay up because the cost of paying up is usually a lot less than the cost of going to court to explain why you shouldn't have to pay up.

There is, not surprisingly, a fascinating discussion in the comments to the IP Troll Tracker's definition. A lot of it is people quibbling with who's to blame here -- arguing that there may be problems with the Patent Office granting patents it shouldn't or with some form of "litigation abuse," but that patent trolls aren't the "problem." That's... questionable at best. While it may be true that patent trolls aren't doing anything "illegal," it doesn't take any special economic skills to recognize that what they are doing is a deadweight economic loss.

Anyone who's spent any time exploring the murky underworld of patent trolling knows what is mostly happening. Quite frequently it's lawyers -- often former patent attorneys -- who absolutely know they're abusing the system for profit and they don't care about it at all. They buy up a few patents that they know are just vague enough and then they just start sending out the settlement letters and wait for the cash to come in. This is not "promoting the progress." It is not advancing any innovation. It is purely about taking money away from those who actually innovate, and handing it over to trolls and their investors, not to reinvest in any sort of innovation, but to reinvest in trolling.

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  • identicon
    Anonymous Anonymous Coward, 4 Dec 2014 @ 3:02pm

    Founders

    Beneath this all is the argument that we should be following the intent of the founders more closely than the actual phrasing in the documents they prepared. One issue with this is the wide variety of interpretations of what the founders meant.

    If we enforce the plain language of the documents, we might be closer to what we are looking for, but there is plenty of dissonance around what the plain language means as well.

    I believe the answer lies elsewhere. Remove money and political parties from politics (and the influences those provide) and we will, eventually, get to where we really want to be. Like trying to get the FCC to fix the internet when the true answer lies in creating more competition, which is in the FTC's bailiwick.

    To do either of those is gonna take a whole lot of something, which I have yet to figure out.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Dec 2014 @ 4:04pm

    "I recommend not clicking on the link for number three."

    Ah... The old reverse psychology trick!

    reply to this | link to this | view in chronology ]

  • identicon
    Shmerl, 4 Dec 2014 @ 4:11pm

    About trolls

    Patent troll doesn't need to be an NPE. It just needs to be a patent aggressor who extorts money from others. Whether that aggressor also produces anything or not isn't that important.

    reply to this | link to this | view in chronology ]

    • icon
      tqk (profile), 4 Dec 2014 @ 6:09pm

      Re: About trolls

      It just needs to be a patent aggressor who extorts money from others.

      How can they do that with a workable patent law situation?

      Patent trolling is a symptom, not the disease we should be concerning ourselves with. The law is being an ass, as usual. Why? Because we allow it.

      Fix the law, and the problem disappears.

      reply to this | link to this | view in chronology ]

      • identicon
        JEDIDIAH, 5 Dec 2014 @ 7:57am

        Re: About trolls

        The law isn't just abused by NPEs. Some people just focus on NPEs to deflect blame from their favorite pet corporation.

        Bad patents are the problem, not people exercising their legal rights.

        Patents are abused by everyone because the system allows it. Everyone involved seems to think that they can slack off and that someone else will fix whatever mess they make.

        Of course it's rather obvious that the system needs to be fixed.

        reply to this | link to this | view in chronology ]

      • icon
        Steph Kennedy, IPTT (profile), 5 Dec 2014 @ 9:38am

        Re: Re: About trolls

        How would you fix the law? Institute "use it or lose it" for patents? That's one thing I wish #patentreform were about...

        Cheers,

        Steph

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Dec 2014 @ 4:34pm

    Full-screen youtube ads are killing Rick-Rolls

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Dec 2014 @ 4:50pm

    A lot of it is people quibbling with who's to blame here -- arguing that there may be problems with the Patent Office granting patents it shouldn't or with some form of "litigation abuse," but that patent trolls aren't the "problem."

    To see how questionable the statement is, let's replace a few terms.

    A lot of it is people quibbling with who's to blame here -- arguing that there may be problems with the statutory damages or with the standards of evidence, but that Prenda isn't the "problem."

    Yeah, no. You bring a lawsuit you're not supposed to, you're a troll, law or otherwise.

    reply to this | link to this | view in chronology ]

  • icon
    tqk (profile), 4 Dec 2014 @ 6:27pm

    Fix the law.

    ... there may be problems with the Patent Office granting patents it shouldn't or with some form of "litigation abuse," but that patent trolls aren't the "problem." That's... questionable at best. While it may be true that patent trolls aren't doing anything "illegal," it doesn't take any special economic skills to recognize that what they are doing is a deadweight economic loss.

    Intellectual Ventures' shareholders disagree, and the so called "free market" disagrees. Apparently, society disagrees too, or it would get fixed.

    If we're unwilling to outlaw predatory behavior, some of us will get eaten from time to time. You can't blame the predator for wanting to eat. If we make it impossible to eat us, they'll go eat something else. With patent law as it is, we're the easy meal.

    I don't understand why anyone thinks this is complicated. We created the patent trolls by wandering around looking like an easy meal.

    I think granting patents is just asking for trouble, but what do I know? If we must have patent law, make it a *good* patent law.

    reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 4 Dec 2014 @ 8:23pm

    Patent Troll is too offensive a term

    Using the term Patent Troll is so offensive as to poison the discussion before it gets started.

    I recommend using NPE (Nauseating Putrid Excrement) which all parties to a discussion can agree puts the NPEs in a much more positive light.

    reply to this | link to this | view in chronology ]

    • icon
      Coyne Tibbets (profile), 4 Dec 2014 @ 10:52pm

      Re: Patent Troll is too offensive a term

      How about vexatious patent litigator. Is that better now?

      reply to this | link to this | view in chronology ]

    • identicon
      JEDIDIAH, 5 Dec 2014 @ 8:04am

      Re: Patent Troll is too offensive a term

      Patent troll is a perfect way to put it.

      It's a great metaphor for what's going on. People are trying to demand payment for something they don't own or shouldn't be allowed to own. Closely following this metaphor also allows us to not get distracted by people that want to ignore the most relevant abusers.

      Insisting that only NPEs are trolls distracts from the real issues and makes it less likely that the real problem will ever be fixed. (bad patents)

      Of course a thief will be offended by being referred to as such. So will any sort of criminal or sociopath.

      reply to this | link to this | view in chronology ]

  • icon
    Coyne Tibbets (profile), 4 Dec 2014 @ 10:59pm

    Demand for non-disclosure
    As part of the demand, requires the recipient to enter into a non-disclosure agreement. Patents are explicitly public, for good reason; a company that insists on a non-disclosure before identifying the patents involved in the claim, is evidence of a vexatious patent litigator.

    Demand for contractual recognition
    As part of the demand, requiring the recipient to contractually recognize the validity of the patent in addition to paying, is evidence of a vexatious patent litigator.

    Demands against users but not manufacturers
    Demands made against the users of a device, in the absence of claims against the company that manufactures it, are evidence of a vexatious patent litigator. This is particularly true when manufacturer has the resources to litigate effectively and users do not, indicating that the goal is not enforcement but simply money.

    reply to this | link to this | view in chronology ]

  • icon
    Richard (profile), 5 Dec 2014 @ 3:16am

    Microsoft

    Anyway, I like this formulation a lot better than the simplistic "NPE" designation, because I think there are lots of "practicing entities" that do trollish behavior (Microsoft being a big one).

    I think that the NPE designation can be maintained because the "practising" is in no way protected by the patents that they use for trolling. After all many burglars have a day job!

    reply to this | link to this | view in chronology ]

  • identicon
    Reality bites, 5 Dec 2014 @ 8:41am

    Call them what they are... Parasites

    Patent Parasites, like a worm, but they talk.

    reply to this | link to this | view in chronology ]

    • icon
      Steph Kennedy, IPTT (profile), 5 Dec 2014 @ 9:36am

      Re: The Truth About Patent Trolls

      I just want to know one thing: what exactly *is* just rewards for one's vision? An enforceable patent? A million dollars? If your vision is so good, why did someone else execute on it first? See, this line of thinking reminds me of the Winklevii.

      This was interesting: "Although i4i does have a business besides enforcing its patents, it is not competing with Microsoft for word processing software."

      I remember that case well, and at no time did anyone (I don't think) consider i4i a patent troll.

      Agree that unethical patent litigators are the new ambulance chaser (hello? blog post title just wrote itself...) and I made reference to that at some point, regarding the lawyers that moved from the mesothelioma "dust docket" to patent infringement litigation.

      Interesting read.

      Just sayin',

      Steph

      reply to this | link to this | view in chronology ]

    • icon
      tqk (profile), 5 Dec 2014 @ 9:56am

      Re: The Truth About Patent Trolls

      Thanks for that. Interesting read. I originally suspected it had something to do with pendulums swinging too far, yada yada. However, tort reform? Yeah, I can get behind that.

      Your premise is correct. Not all patent trolls deserve the epithet. RIM and Microsoft are thieves, and it's a *good thing* they were forced to pay for their malicious greed. IV is just milking broken law for whatever it can get. Don't blame the predator for wanting to eat.

      As for "patent reform", no surprise that's a dog's breakfast that isn't going to help anyone that it should. US' law is broken, and becoming more broken every day.

      reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 5 Dec 2014 @ 3:23pm

        Re: Re: The Truth About Patent Trolls

        "IV is just milking broken law for whatever it can get. Don't blame the predator for wanting to eat."

        You analogy is faulty. IV isn't like a predator in nature. IV is an extortionist -- and I think it's totally OK to blame extortionists for extorting.

        That a broken law allows that behavior is completely irrelevant.

        reply to this | link to this | view in chronology ]

  • identicon
    Paul Morinville, 5 Dec 2014 @ 10:15am

    No such thing as a troll

    The term troll is intended to create an negative image of an inventor asserting hard earned patent rights against a company who infringes them. It is a damaging fairy tale.

    If you break down the 1st definition, it defines a legitimate patent holder protecting their rights. The only part deviating from that is the clause saying that they are asserting an invalid or overly broad patent.

    Here's a little piece of truth... It's not possible to assert an invalid patent because a patent is presumed valid legal instrument. It's also not possible to assert an overly broad patent for the same reasons. It can be invalidated, and once it is it cannot be asserted. I agree that it can be legitimately argued that the PTO has issued many patents that should be invalidated. That argument positions the problem squarely where it exists - at the PTO

    My problem is that the PTO is taking as long as 12 years to allow my patents. This is costing me enormously and encouraging infringement on my inventions.

    If there is a problem in common between the troll fairy tale believers and inventors, it is that the PTO is failing. Fixing the PTO would solve the problem for both sides and we could all live happily ever after.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 5 Dec 2014 @ 3:28pm

      Re: No such thing as a troll

      "It's not possible to assert an invalid patent because a patent is presumed valid legal instrument. It's also not possible to assert an overly broad patent for the same reasons."

      This is pure semantics.

      By "invalid/overly broad patents" what's meant is those patents that clearly should never have been granted, not patents that have been legally declared invalid. So it's 100% possible, and not that rare, to assert an invalid or overly broad patent.

      "If there is a problem in common between the troll fairy tale believers and inventors, it is that the PTO is failing. Fixing the PTO would solve the problem for both sides and we could all live happily ever after."

      Which is precisely what most people here have been arguing. However, the PTO is unlikely to ever get fixed (evidenced by the fact that all the changes we've seen to patent laws so far have been designed to make the whole problem even worse, not better).

      That said, I think it's important to call out the companies that engage in extortion using the patent system.

      reply to this | link to this | view in chronology ]

  • identicon
    Michael Skelps, 22 Dec 2014 @ 10:05am

    At least we were able to beat one of these guys in 2014

    A guy tried to shake down our company this year. It was a textbook example of a vague patent combined with threats and telling us that settling would cost less than defending. Learn more and help us continue the fight at www.endpatentabuse.com.

    reply to this | link to this | view in chronology ]


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