Have The Courts Done Enough To Stop Patent Trolling?

from the not-yet dept

As we've noted recently, a series of Supreme Court decisions over the past decade, culminating in the big Alice v. CLS Bank ruling in July, has clearly put a serious crimp on the patent trolling business. Vague, broad, dangerous patents are falling like flies, new patent trolling lawsuits are on the decline and the US Patent Office is rejecting a lot more questionable software and business method patent applications. All good news. But is it enough?

There are some who are claiming that the courts have effectively "solved" the problem -- so no new legislation is needed. Of course, it seems interesting to me that these same individuals often appear to be those who insisted there never was a problem in the first place -- and who are also arguing that the courts have gone too far. Economist James Bessen -- who has done tremendous work in detailing the problems of patent trolls -- has an article in the Atlantic where he notes that, for all the positive advancements thanks to the Supreme Court, there's still much more to be done, as plenty of patent trolling lives on:

But don't shed too many tears for the patent trolls just yet. While these changes are a real positive step, they are also limited. While it's true that the Patent Office is granting several hundred fewer business method patents each month, it is still granting record numbers of software patents overall. Most of the litigation is over software patents, not business method patents: One study estimates that business method patents constitute only 10 percent of the patents used in lawsuits by “non-practicing entities” including patent trolls. And while the number of lawsuits has decreased, there are still over four times as many as in 1990, before the surge in software patenting began following court decisions in the mid-1990s. Furthermore, Matt Levy of the Computer and Communications Industry Association told me that in only one case has a victorious defendant recovered legal costs—thanks specifically to the April Supreme Court decisions.

It’s possible that the Supreme Court decisions will eventually have a greater impact on patent trolls than they have so far. For example, the Alice decision pertains to abstract software patents generally, not just to business method patents. It all depends on how the lower courts, particularly the Court of Appeals for the Federal Circuit, interpret and apply these decisions. But that is the very court which has allowed so many broad and vague software patents starting from the 1990s.

Indeed, the efforts by the Supreme Court have been helpful in moving things in the right direction, but so far it's only been a slight course shift, rather than really fixing the underlying problems of the patent system. Trolls are still able to get away with shaking down companies over questionable patents, because it's still ridiculously expensive to fight back -- even if there's a marginally better chance of recovering fees in truly egregious cases. Too many questionable patents are still getting through, and even if courts may finally be more willing to reject questionable "on a computer" patents, it's still a risky and expensive proposition to go to court.

Patent trolling is still a serious problem that many actual innovators face. The Supreme Court may have opened the door to fixing some of the very worst problems, but that doesn't mean all of the problems have gone away. In fact, nearly all of the problems are still there in some form.

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  1. identicon
    Anonymous Coward, 17 Dec 2014 @ 6:28pm

    Re: And what about the small guy vs Google

    Show me on the doll where Google hurt you.

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