Former Patent Troll Admits That Patent Trolls Are Bad For Business And Innovation

from the speak-up dept

I've spoken to a few patent attorneys who have fought against patent trolls who have admitted to me that, at times, it's quite tempting to give up and join the other side, since patent trolling is fairly easy and incredibly lucrative. You just have to sell your soul and give up the idea that you're doing anything productive or good in the world, and instead become a pure bottom feeder. Someone who did exactly that is apparently Ira Blumberg, who is now speaking out about his experiences working on "the dark side" of patent trolling. Blumberg didn't end up going to one of those tiny patent trolls, but rather left a job at Intel to go work for Rambus, a company not everyone considers to be a patent troll, but which certainly has a history of being an aggressive patent litigant. From Rambus, Blumberg then joined the world's largest patent troll, Intellectual Ventures. He eventually left IV and is now at Lenovo. So he's been actively on both sides of the patent troll situation -- as an active participant in suing operating companies while working for companies that did nothing but license, and at companies that are relentlessly pursued by patent trolls.

And he's now willing to speak out and say that patent trolling is just bad. He mostly uses the more politically correct "PAE" or "patent assertion entity" rather than patent troll throughout the article.
It is now abundantly clear to me that PAEs are, in net, detrimental to business and innovation. Despite what they say, trolls are not making the world a better place for anyone. It is time they lay down their arms and allow companies to use the patent system in the way in which it was intended.
He also has no problem admitting the reality of most patent trolling: that it's not about quality patents. In fact, crappy patents are pretty good for trolling:
The sad reality is that the patents used by trolls do not need to be good for IV, or any PAE, to make money. Quality is not an issue when it costs $2-$3 million to find out whether a patent claim has merit, whereas settling costs “just” $500,000-$1 million. Trolls often aggressively push for extortionate settlements that far surpass the value of the IP because they know many companies will choose to settle rather than get embroiled in an expensive and drawn-out lawsuit. Their actions can wreak havoc on tech companies of all sizes.
Blumberg does note that patent trolls and their supporters claim that such companies are the only way to get independent inventors paid, but notes that this is not what's happening in reality:
In theory, there is some validity to this argument. It is true that individual inventors and smaller companies are not always well-compensated for their inventions. But in reality, the harm businesses suffer on this front is significantly outweighed by the harm caused by the exorbitant costs of patent litigation lawsuits. The settlements IV gains from tens of thousands of patents is vastly out of proportion with the value of the innovation being licensed.
Of course, he could go much further than that. First off, there are lots of ways for inventors to make money other than selling out to trolls. If their invention is really good, they can work with a company (or build one) to produce it. Some respond that some people don't want to do that, and to some extent the response is "too bad." There are lots of people who don't want to work for a living, and we don't necessarily say that companies have an obligation to pay them anyway. But, even if someone just wants to invent, they could easily team up with another entity to pass off their ideas and let that other company build them with a contractual agreement for royalties or some similar arrangement. The idea that you need patent trolls to provide liquidity is greatly exaggerated.

And this doesn't even get into the issue of how valuable patents are, really. It's quite rare that patents are actually disclosing true inventions in the tech space. Almost all patent disuptes are ones involving totally independent invention, where it's not the invention that's important, but the execution. And yet, patent holders and patent trolls like to pretend the idea is much more valuable than the execution.

Either way, it's good to see people like Blumberg recognize how dangerous his former employers have been to the world of innovation and to speak out about it. He's asking more people to speak out as well.
As someone who has spent time on both sides, I feel a call to speak out against frivolous and overpriced patent litigation. The work I did for both PAEs and corporations was certainly legal, but not the same: While I was always on the right side of the law, I prefer being on the right side of innovation.

Companies want to create technologies that matter five years from now and beyond, so patents continue to matter. Frivolous lawsuits and those demanding damages far in excess of the value of the allegedly infringed patent detract from our ability to push innovation and better products forward. I hope that many more voices in tech will join mine in decrying the harmful effects of needless patent litigation — our future depends on it.
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Filed Under: harm, innovation, ira blumberg, patent troll, patents
Companies: intellectual ventures, lenovo, rambus

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  1. icon
    Mike Masnick (profile), 14 Jun 2016 @ 10:38am


    By the way, it's always interesting to see claims (like Blumberg's) that the costs outweigh the benefits, yet nobody ever seems to quantify the benefits. Strange that you don't point out this obvious flaw.

    There are tons of studies highlighting the massive costs to the patent system. As well as the very tiny benefits. That you apparently can't find them perhaps says more about what you're paid to say rather than reality.

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