7 ms·

"...patent trolls — also known as non-practicing entities because they simply stockpile patents without making anything with them..." I never liked that defini

"...patent trolls — also known as non-practicing entities because they simply stockpile patents without making anything with them..." I never liked that definition. It sounds like ordinary specialization in an economy, to me. "The latest effort would have required the loser in a lawsuit to cover the winner's legal fees and for NPEs to state more clearly what was being infringed at the outset." Now we're talking: address the real problem. The real problem is not NPEs; the real problem is that they can impose huge costs on others at little cost to themselves, which sets them up perfectly for an extortion-like racket.

rayiner 12y ago
This sort of discussion reminds me of the hypothetical: an alien race, passively observing the earth, notices people frantically shopping in December, and also celebrating Christmas at the end of the month. They thus conclude that the shopping caused Christmas to happen. Obviously they get the causation wrong: anticipation of Christmas caused the shopping to happen. Now, when discussing NPE's, people say something along the lines of: "they can't create any value, because any invention they buy already exists." Obviously this is fallacious: the anticipation of selling a patent portfolio, to an NPE or some other party, can cause people to engage in expensive R&D. Indeed, all contractual and property rights operate in this way. Litigation might come after a transaction goes sideways, but anticipation of having the option to litigate allows transactions to occur that would not otherwise occur. NB: The above should not be taken as an argument that the value created by the existence of NPE's outweighs the costs imposed by troll suits.
- lotsofmangos 12y ago
  I want a troll suit.
ScottBurson 12y ago
Yes, I've posted to this effect several times on HN, and the point generally encounters a fair amount of disagreement. I'm glad to see your post at the top of this page. All trolls are NPEs, probably, but not all NPEs are trolls. Universities and independent inventors are generally NPEs, but AFAIK rarely engage in trolling behavior. The paradigmatic troll, I think, is the company suing people for infringing its scan-to-email patent. What we have here is (a) a patent that never should have been issued [0]; (b) an NPE suing defenseless small companies (c) whom it has no direct evidence are infringing. That, to me, is trolling. [0] I long for a ruling from the Supreme Court that makes the obviousness test meaningful again, since the Federal Circuit has so thoroughly gutted it. They had a perfect setup in Alice, but blew it, in my opinion, by making the patentable subject matter test the basis of their ruling (which I think will fail to give the lower courts any guidance they can understand). I would rather they had said that simply computerizing an existing manual process is, in 2014, thoroughly and unarguably obvious.
- JoshTriplett 12y ago
  > All trolls are NPEs, probably, but not all NPEs are trolls. I'd disagree with the characterization that all trolls are NPEs, as well. A company that technically produces a product implementing a patent, but nonetheless engages in trollish tactics (e.g. barratrous lawsuits inviting quick settlements for just under the cost to litigate; scattershot lawsuits against large portions of an industry; or in general tactics that stifle innovation and suppress development activities) still qualifies as a troll. And on the other hand, I wouldn't give universities and similar organizations a free pass to being patent-fueled leeches. Then again, I'm not convinced that there's such a thing as a legitimate patent lawsuit, either.
  - rayiner 12y ago
    > And on the other hand, I wouldn't give universities and similar organizations a free pass to being patent-fueled leeches. Universities are a major source of the basic innovations that companies profit from commercializing. So who is leeching off who?
    - JoshTriplett 12y ago
      Every innovation builds on previous innovations; innovation does not happen in a vacuum.
      - logfromblammo 12y ago
        James Dyson would disagree.
      - rayiner 12y ago
        Sure, but there is a definite directionality to the overall idea flow here versus money flow. The ideas tend to flow from academia or R&D shops while most of the money flows to companies that take those ideas and build consumer products with them.
        12y ago
rhino369 12y ago
I think it's a bad definition too. But the problem is mostly unique to NPEs. There are definitely some NPEs that I wouldn't call a troll, like universities and R&D firms. I think I could even support a patent monetization entity as long as it relied on legitimate patents and went after legitimate infringers. The issue is few, if any, NPEs actually do that. They resort to extortion-like demand letters or use hopelessly weak patents.
- jeffdavis 12y ago
  That's probably mostly true (I don't have the numbers). But getting the cause wrong often results in the wrong solution -- and the problem remains and/or new avoidable problems are created.
masklinn 12y ago
> It sounds like ordinary specialization in an economy, to me. It also runs counter to the purpose of patents: patents are originally a time-limited and governmentally defended monopoly on an invention to encourage its full publication[0] and ultimately the progress and improvement of society as a whole[1]. When entities can exist to do nothing but defend such monopoly against independent reinventions the incentives are completely out of phase with the original purpose: patents assumed the invention (and its trade) is the important object, not the monopoly itself. [0] rather than trade secrets, espionage and other such focus on anything but progressing [1] not only because the invention is available at all but because once the monopoly runs out it becomes a new baseline[2] for further invention [2] in that it's free, it is possible to license the invention to build upon it during the monopoly phase, but I think it reasonable to assume increased activity once the invention becomes literally free for all
- deleted 12y ago
  [deleted]
- a-priori 12y ago
  This is why it seems to me that the core problem with the current patent system is that it's too cheap to obtain and hold large patent portfolios. There's an analogy here to land ownership. Land is a public good. It is owned collectively by the nation-state that contains it, and the people rent exclusive rights over parcels of land. I'm talking here about the difference between allodial title (typically owned by the state) and fee simple title (owned by individuals). We do this so that the owners have an incentive to use and improve it, and everyone benefits when it owned by the people who can best do so. Patents are similar in many ways, since inventions are also a public good. That's why patents exist in the first place: to promote the advance of our technology for the benefit of all, by granting exclusive rights to the use of a technology. And, like land, you want patents to be owned by the people who can best use it.However, in order for the system to work, there needs to be a cost to holding rights to the property to encourage people to sell the rights to someone else. With land, this is property tax; land owners have to pay a percentage of the land's value each year for the continued right to use the land exclusively. We need a property tax for patents. Patents should have an assessed market value, and a patent owner should have to pay a percentage of that value yearly as 'rent' on the exclusive use of the invention. If they no longer feel that it's worthwhile to pay that tax for the benefit they get from holding the patent, then they can sell it to another party. It could be (and probably should be) a closed system, where all taxes collected should be put into a fund that the government uses to buy patents itself. When it does so, the patent gets returned to the public domain, and anyone can use it from then on. In that way, you may be able to get rid of patent term lengths.
bobcostas55 12y ago
The real problem is that bogus patents are being granted in the first place.

rayiner 12y ago

This sort of discussion reminds me of the hypothetical: an alien race, passively observing the earth, notices people frantically shopping in December, and also celebrating Christmas at the end of the month. They thus conclude that the shopping caused Christmas to happen. Obviously they get the causation wrong: anticipation of Christmas caused the shopping to happen. Now, when discussing NPE's, people say something along the lines of: "they can't create any value, because any invention they buy already exists." Obviously this is fallacious: the anticipation of selling a patent portfolio, to an NPE or some other party, can cause people to engage in expensive R&D. Indeed, all contractual and property rights operate in this way. Litigation might come after a transaction goes sideways, but anticipation of having the option to litigate allows transactions to occur that would not otherwise occur. NB: The above should not be taken as an argument that the value created by the existence of NPE's outweighs the costs imposed by troll suits.

lotsofmangos 12y ago
I want a troll suit.

ScottBurson 12y ago

Yes, I've posted to this effect several times on HN, and the point generally encounters a fair amount of disagreement. I'm glad to see your post at the top of this page. All trolls are NPEs, probably, but not all NPEs are trolls. Universities and independent inventors are generally NPEs, but AFAIK rarely engage in trolling behavior. The paradigmatic troll, I think, is the company suing people for infringing its scan-to-email patent. What we have here is (a) a patent that never should have been issued [0]; (b) an NPE suing defenseless small companies (c) whom it has no direct evidence are infringing. That, to me, is trolling. [0] I long for a ruling from the Supreme Court that makes the obviousness test meaningful again, since the Federal Circuit has so thoroughly gutted it. They had a perfect setup in Alice, but blew it, in my opinion, by making the patentable subject matter test the basis of their ruling (which I think will fail to give the lower courts any guidance they can understand). I would rather they had said that simply computerizing an existing manual process is, in 2014, thoroughly and unarguably obvious.

JoshTriplett 12y ago
> All trolls are NPEs, probably, but not all NPEs are trolls. I'd disagree with the characterization that all trolls are NPEs, as well. A company that technically produces a product implementing a patent, but nonetheless engages in trollish tactics (e.g. barratrous lawsuits inviting quick settlements for just under the cost to litigate; scattershot lawsuits against large portions of an industry; or in general tactics that stifle innovation and suppress development activities) still qualifies as a troll. And on the other hand, I wouldn't give universities and similar organizations a free pass to being patent-fueled leeches. Then again, I'm not convinced that there's such a thing as a legitimate patent lawsuit, either.
- rayiner 12y ago
  > And on the other hand, I wouldn't give universities and similar organizations a free pass to being patent-fueled leeches. Universities are a major source of the basic innovations that companies profit from commercializing. So who is leeching off who?
  - JoshTriplett 12y ago
    Every innovation builds on previous innovations; innovation does not happen in a vacuum.
    - logfromblammo 12y ago
      James Dyson would disagree.
    - rayiner 12y ago
      Sure, but there is a definite directionality to the overall idea flow here versus money flow. The ideas tend to flow from academia or R&D shops while most of the money flows to companies that take those ideas and build consumer products with them.
      - 12y ago

rhino369 12y ago

I think it's a bad definition too. But the problem is mostly unique to NPEs. There are definitely some NPEs that I wouldn't call a troll, like universities and R&D firms. I think I could even support a patent monetization entity as long as it relied on legitimate patents and went after legitimate infringers. The issue is few, if any, NPEs actually do that. They resort to extortion-like demand letters or use hopelessly weak patents.

jeffdavis 12y ago
That's probably mostly true (I don't have the numbers). But getting the cause wrong often results in the wrong solution -- and the problem remains and/or new avoidable problems are created.

masklinn 12y ago

> It sounds like ordinary specialization in an economy, to me. It also runs counter to the purpose of patents: patents are originally a time-limited and governmentally defended monopoly on an invention to encourage its full publication[0] and ultimately the progress and improvement of society as a whole[1]. When entities can exist to do nothing but defend such monopoly against independent reinventions the incentives are completely out of phase with the original purpose: patents assumed the invention (and its trade) is the important object, not the monopoly itself. [0] rather than trade secrets, espionage and other such focus on anything but progressing [1] not only because the invention is available at all but because once the monopoly runs out it becomes a new baseline[2] for further invention [2] in that it's free, it is possible to license the invention to build upon it during the monopoly phase, but I think it reasonable to assume increased activity once the invention becomes literally free for all

deleted 12y ago
[deleted]
a-priori 12y ago
This is why it seems to me that the core problem with the current patent system is that it's too cheap to obtain and hold large patent portfolios. There's an analogy here to land ownership. Land is a public good. It is owned collectively by the nation-state that contains it, and the people rent exclusive rights over parcels of land. I'm talking here about the difference between allodial title (typically owned by the state) and fee simple title (owned by individuals). We do this so that the owners have an incentive to use and improve it, and everyone benefits when it owned by the people who can best do so. Patents are similar in many ways, since inventions are also a public good. That's why patents exist in the first place: to promote the advance of our technology for the benefit of all, by granting exclusive rights to the use of a technology. And, like land, you want patents to be owned by the people who can best use it.However, in order for the system to work, there needs to be a cost to holding rights to the property to encourage people to sell the rights to someone else. With land, this is property tax; land owners have to pay a percentage of the land's value each year for the continued right to use the land exclusively. We need a property tax for patents. Patents should have an assessed market value, and a patent owner should have to pay a percentage of that value yearly as 'rent' on the exclusive use of the invention. If they no longer feel that it's worthwhile to pay that tax for the benefit they get from holding the patent, then they can sell it to another party. It could be (and probably should be) a closed system, where all taxes collected should be put into a fund that the government uses to buy patents itself. When it does so, the patent gets returned to the public domain, and anyone can use it from then on. In that way, you may be able to get rid of patent term lengths.

bobcostas55 12y ago

The real problem is that bogus patents are being granted in the first place.