Musings on Patent Trolls & Bad Patents

In an article titled Reexamination Would Stop Patent Trolls, I criticized the just announced plan of Article One Partners, who will pay individuals for prior art they come up with if they believe the prior art could be used to invalid patent claims. Since that time I have had a number of detailed conversations with Cheryl Milone, the President of Article One Partners.  I have been honest with her that I am not sure the way that Article One is pursuing the problem will ultimately be successful because while offering a bounty for the discovery of invalidating prior art seems like a great idea, it is not a worthwhile reward for those who are professionals because of the costs associated with undertaking a search.  Cheryl has told me that the idea of Article One is to provide a reward for those who have particular knowledge and make it worthwhile for them to come forward.  So the original plan was to look for non-patent prior art, figuring that if someone knew what was necessary to invalidate a patent then they might just have non-patent prior art in a file or be able to find it quickly.  It is an interesting concept, and one that I don’t think this alone will solve the problem of bad patents, but it certainly does seem worthwhile. It is unlikely that any one particular solution will be the silver bullet, so why not give this a try as a part of broader efforts to reform the patent system?

I was also critical of Article One because I thought that the way the reward was described the awarding would be rather subjective.  On the contrary, if you come forward with prior art that appears promising Article One will have it reviewed by independent experts and that is how they will make their determination on issuing the reward.  So there is an objective component to the decision, which is certainly very positive.  I also must admit that I am pleased that Milone has taken the time to listen to my thoughts and I do get the sense that she and Article One are trying to do something quite valuable, so to the extent that any comments I may have made in the past question her or Article One I think it wise to retract those comments.  I have a feeling that Article One might be more successful than I orginally anticipated, and even if that is not the case at least they are trying to do something productive about the growing problem of bad patents.  So I applaud Article One for the effort and wish them well.

I do still believe that reexaminations are the way to go if companies are really interested in stopping patent trolls, and perhaps moving forward there will be a merger between the prior art found by Article One and attempts to get the Patent Office to review previously granted patents.  In any event, according to USPTO statistics, 9.2% of requests for ex parte reexamination result in all claims being canceled and 59% of the time certificates issue with at least some claims being changed. Even more dramatic, 74% of requests for inter partes reexamination result in all claims being canceled and 14% of the time certificates issue with at least some claims being changed. The answer to dealing with patent trolls is to go after them with reexaminations, not to try and build a useless defensive patent portfolio.

Nevertheless, attempts are still being made in many corners to build defensive patent portfolios.  Even the portfolio created by Intellectual Ventures, which contains some 20,000 patents, is not going to be at all useful against patent trolls because the trouble with patent trolls is that they do not do anything other than acquire patents and enforce them. They are not engaging in any particular activities that could ever be considered to be infringing, so what good is a defensive patent portfolio? Exactly no good at all!  A defensive patent portfolio is only useful when one is being sued by a firm that is doing something that could potentially be infringing upon patents held by the accused infringer. The accused infringer sues the patent owner and says while I might be infringing you, you are infringing me.

Because of the perception that Intellectual Ventures is the way to move forward many others are trying to get into the patent portfolio business.  I wonder whether it is really because they think that building a defensive patent portfolio is the right thing to do or because they are preparing to become Super Patent Trolls in the future.  Regardless, one recent attempt is that of RPX Corporation.  If you take a look at the RPX website you will see that as of today they have over 150 patents and more than 60 applications in their defensive portfolio and they have spent $40 million, which does not seem to me to be a good investment calculated to succeed.

My opinion is that companies that complain about patent trolls don’t really want them to go away. Patent trolls are extremely valuable to these big tech companies because they are an identifiable and unsympathetic villain. They can be paraded about as evil and help these large tech companies pursue legislative reforms that would cripple other industries but which would eliminate the patent troll problem. Of course, the goal is not to eliminate the patent troll problem, it is to make the patent system weaker, have fewer patents granted that cover less ground and make it all much more expensive. You see, the goal is to make it difficult if not impossible for small companies and start-ups to obtain patents, thereby ensuring the market dominance of the mega-tech companies. Brilliant really, and if it didn’t mean that pharma companies and companies that actually build real products would be devastated mega-tech would have already achieved their agenda.

Moving forward into the new year watch for patent trolls to be back on the patent reform agenda.  Those that are the major complaining parties are not going to be calling them patent trolls though.  The new term of choice is “non-practicing entities.”  The reason is those who complain about patent trolls really don’t want reforms limited to trolls, but rather to anyone or any entity that does not practice and seeks only to license.  Keep your eye on this changing language because it could make all the difference in the world to Congress.  I for one plan on embracing the term “patent troll” after fighting it for a long time.  I want to make sure that those who might consider adopting reforms understand that federal laboratories, Universities and research & development companies are patent trolls if the focus in on non-practicing or licensing.  Something tells me that even Congress won’t fall for that.

About the Author:

Gene Quinn is a patent attorney and the founder of and is a member of the PLI Patent Bar Review faculty.

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