7 ms·
Patent Troll: Bloomberg calls it what it is
- aptimpropriety 16y agoWebsite of the newly founded company: http://www.roundrockresearch.com/index.html http://www.roundrockresearch.com/index.html Very little content, but interesting to look at the design of the top graphic. According to article, logo was designed by his 14-year old daughter.
- wmeredith 16y agoIt looks like it was designed by a 14 year old. I think it's hilariously appropriate for this venture–literally adding no value to the world whatsoever, not even aesthetically.
- gloob 16y agoFor what it's worth, I'm sure that many lawyers would think that most of the legal analysis on this site is comparable to that of a 14-year-old as well.
- grellas 16y agoThere is so much here that is just sad: 1. One of the nation's top patent lawyers (a "top earner" at Kirkland & Ellis - one of the nation's most prestigious firms - who served for the past 6 years on its management committee) walks away from his position in order to capitalize on buying a patent portfolio from Micron, setting up a holding company for those patents, and positioning himself in his own boutique firm to use that portfolio (we assume) either to file a multitude of infringement actions or to exact royalties on threat of legal action - vividly underscoring what is wrong with a patent system that hugely rewards "non-practicing entities" that specialize in litigation far more than in any form of true inventing. 2. A patent system that so skews money incentives that the best and the brightest (and, yes, by all accounts, Mr. Desmarais is a highly likable and much admired and talented fellow) would be drawn to the seamy side of this business in this way. 3. What this illustrates about how a patent nightmare scenario can so easily arise from the fall or decline of a traditional tech company. Here, it was Micron. What happens, then, when Novell auctions its IP assets to private equity firms who in turn parcel them out to firms such as this? Developments such as this can raise significant threats for Linux and the open source community, among others (see the write-up here on this issue: http://url4.eu/3p37m http://url4.eu/3p37m - "Novell auction could be patent troll bonanza"). 4. How easy it would be for Congress to make simple modifications to the patent laws so as to preclude this type of trolling, as for example by imposing a simple test that an invention be truly "useful" (and not merely theoretically so) before qualifying for patentability (see a recent proposal to this effect here: http://ip.jotwell.com/patent-utility-reduxit/ http://ip.jotwell.com/patent-utility-reduxit/). 5. How patent drafting in large corporations can become as much a function of the legal department as of legitimate engineers who are actually inventing things. 6. How this sort of activity does not promote inventions or the useful arts in the slightest and yet characterizes so much of the day-to-day activity in the patent world. Patents generally have had a useful role in our society, whatever their limitations, but this side of the business basically makes one want to scream.
- thatoneguy 16y agoThanks for the great summary. IANAL, but I've been wondering lately if it wouldn't be prudent to borrow from the Lanham Act and try to add a requirement to US patent law that patents must always be defended by their owners or they're invalidated. What do you think?
- mjgoins 16y agoCan you point to some evidence that patents generally have had a useful role in our society, other than pharmaceuticals, which is the usual (and also incorrect) answer?
- potatolicious 16y agoSure. I've worked in manufacturing in the past - in the automotive context. Patents are incredibly important there: the safety regulations and requirements, along with the innate costs of producing a tangible physical product, make it incredibly expensive to bring a new technology to market. Tens, if not hundreds of millions. If anyone could simply reverse engineer your work and produce it willy nilly, there really would be no incentive to innovate. The patent system is broken, no doubt about it - but IMHO the view that all patents are evil/useless is myopic, and really only possible from the perspective of someone who doesn't have any experience with fields with high intrinsic costs (e.g., software, where marginal cost is basically nil).
- deleted 16y ago[deleted]
- ZeroGravitas 16y agoSome research I read recently suggested that it's not software that's the exception, it's chemical and pharmaceuticals (and even there it's not a clear win, nor is it based on high costs, but rather the specificity of patents in those fields creating clearly delineated property rights). In every other industry surveyed the patents may be felt necessary under current conditions but aren't considered useful in the sense you describe for rewarding innovation (e.g. defensive patents to stop others from blocking access to your own innovations). I believe the research was cited in Eric von Hippel's Democratizing Innovation, ah here we are from, Chapter 6, " The real-world value of patent protection has been studied for more than 40 years. Various researchers have found that, with a few exceptions, inno- vators do not think that patents are very useful either for excluding imita- tors or for capturing royalties in most industries. (Fields generally cited as exceptions are pharmaceuticals, chemicals, and chemical processes, where patents do enable markets for technical information (Arora et al. 2001).) Most respondents also say that the availability of patent protection does not induce them to invest more in research and development than they would if patent protection did not exist." link to the full (and very good) book: http://web.mit.edu/evhippel/www/democ1.htm http://web.mit.edu/evhippel/www/democ1.htm
- rudin 16y agoHow does the world tolerate these kind of people? This kind of stuff makes me boil over in anger.
- jrockway 16y agoThe market is efficient. When this sort of thing starts causing real problems, the problem will be made to go away. He just need to pick on the wrong big company, and patents are all over.
- potatolicious 16y agoIt puzzles me how an already extremely wealthy man, who is described as being a family man also, would care so little about his legacy and how he is remembered. It's not so much how the world tolerates these people - how do these people tolerate themselves? I can imagine doing some pretty seedy stuff in desperation, but the people participating in shenanigans like this are usually very intelligent, wealthy, and already successful. Surely they have higher-level goals (e.g., leaving a proud legacy, making the world better, etc) than merely more cash? This reminds of the story of the creation of the Nobel Prize: a Parisian paper accidentally published Nobel's obituary early, and having read it he became concerned with being remembered as a merchant of death (being the inventor of TNT). It's one of the main drivers of why he established the prize. Surely smart, already successful people care about what they leave behind?
- dasil003 16y ago“The good story about nonpracticing entities is that they are developing liquidity in the market for these patent rights,” he said. Good fucking god. Have we become so beholden to capitalist buzzwords even after the financial wizards stole reams of cash from the taxpayers and made it impossible for the middle class to afford a home, that we unequivocably deem "liquidity" to be a good thing? Before making such statements there has to be some analysis of whether the sale of said "asset" is beneficial to society in any way—doubly so in the case of government-granted monopolies. Otherwise we may as well just jump right to urging serial killers to become hitmen so we can add liquidity to the murder market and boost the GDP.
- starkfist 16y agoThe true entrepreneurial lesson to be learned from this is that the opportunity is ripe for someone package up the side effects of these patents into complicated IP instruments nobody understands and become the market leader in patent trolling derivative trading.
- megablast 16y agoHopefully he can start up a patent market, where moms and pops can invest in patents they like the look off, in the hope that one day they will make them some money back. That way, say when a new company like Apple gets into making phones, there can be a rush on mobile oriented patents.
- aaronblohowiak 16y agothat's pretty much what patent consortiums like MPEG are.
- EugeneG 16y agoLiquidity is a decent point. R&D is very risky. A company invests a lot of money into R&D. A large part of this money produces no return. Some of this money may yield patents. A liquid market means that a company can take some of these patents (which may be worth nothing in an illiquid market) and convert them into cash. Liquidity increases return on a firm's investment into R&D and so may have the consequence of incentivizing corporate research spending.
- donaldc 16y agoI wonder how many decades it will be before the laws concerning copyright, patents, and all things related are updated to reflect the realities of the information age. I don't see things getting better anytime soon.
- kevinelliott 16y agoDomain squatters, patent trolls, and spammers. They're of the same breed, driven by greed and line the underbelly of the grey/black market border. This highlights a particular exploitation of our legal system, our particular implementation of "free market," and socio-political infrastructure.
- noonespecial 16y agoHe spent so much time trying to beat them that he finally decided to join them.
- megablast 16y agoJust as Bugs Bunny taught me in his informative educational movies. If you can't beat them, join them.
- jcromartie 16y ago"The question of whether allowing nonpracticing entities to litigate is promoting innovation or taxing innovation is a big question" No, it's not a big question.
- aidenn0 16y agoI don't see patent trolls as being as cut-and-dry as most other people. Consider this, if Micron had decided to enforce their patents across the industry would that be bad? They technically wouldn't be a patent troll since they actually are making products. Now they would almost certainly be countersued for patents in their competitors portfolios, whereas this company doesn't work in the industry so has no fear of defensive patents. I could certainly see it funny if their competitors made similar agreements with this company or some similar one and all got sued for patents that had originally been in the hands of competitors. That seems to me to be the equilibrium if what Micron has just done becomes standard industry practice for generating liquidity from R&D. The only thing I can think of that might improve the situation would be to apply something like adverse possession to the patent system. That is to say if someone is openly violating some patent that you have, then you have a limited amount of time to seek compensation. That would fix a lot of the problem with patent trolls: namely that the industry has adopted some innovation wide-scale and suddenly someone shows up with a patent on it from 15 years ago. I'm sure there would be negative consequences too, since every change has those, but I'm not thinking of them at the moment.
- loewenskind 16y ago>Consider this, if Micron had decided to enforce their patents across the industry would that be bad? They technically wouldn't be a patent troll since they actually are making products. Now they would almost certainly be countersued for patents in their competitors portfolios, whereas this company doesn't work in the industry so has no fear of defensive patents. But this is precisely why it's wrong. Micron made patents for things they made. Instead of using them to stop others from using their inventions they chose to use the patents to let them violate other company patents. This was their choice. If they had chosen to enforce those patents, maybe no other company would have violated them. Now someone who wasn't involved gets to flip the table on all those companies who played along. Imagine being a co-founder in a start up where your partner said "I'll never screw you out of anything" and then promptly hires someone else to do it. Would that be cut-and-dry enough for you?
- motters 16y agoI think there needs to be reform of the patent system, so that people who hold the rights to an invention but are not exercising those rights in any way (making or selling products) cannot sue others for royalties. Patents were intended to support inventors, not parasites.