Changing the Presumption: Shifting U.S. Patent Policy From a ‘Bad Actor’ to ‘Rational Actor’ Model (Part II of II)

“The rational actor model rests on one major economic principle and insight: the success and evolution of institutions (patent litigation in this case) rise and fall with one primary factor—transactional costs.” Part I of this article, we discussed the underpinnings of U.S. patent policy today: the fundamental assumption that our patent problems stem from a bad actor (patent troll) that takes advantage of the system. Based on this ideological premise, Congress and the Judiciary have structured patent policy to prevent this bad actor from taking advantage of the system, i.e., increasing enforcement hurdles to deter the bad actor.

Rather than helping, this policy has led to the systemic weakening of U.S. patent rights over the past decade+ – so much so that it has undermined the United States as a viable jurisdiction to enforce patent rights.

Here in Part II, we’ll discuss how the ideology of the bad actor came to be, how a rational actor model provides a more realistic framework, and how we can use economic underpinnings of a rational actor to create an economically rooted patent policy.

Origins of the Bad Actor

Viewing our patent problems through the lens of a bad actor (i.e., patent troll) has its own underpinnings. It stems from a cultural ideology known as the villain archetype.

The villain archetype is found in almost every story, across all cultures and times. Nearly every story told to children features the villain archetype.

The villain is the antagonist, someone people despise. A villainous character is someone that creates fear, is selfish and greedy, and even dangerous.

We fabricate archetypes because they are an important part of storytelling. They stir emotion and create a personal connection.

When we employ archetypes to explain other people’s behavior, we are telling ourselves a story to help us understand the world around us.

To frame their understanding of our patent system, all three levels of our government created a story – the story of the villainous patent troll.

But this story misidentifies the problem with our patent system and is inapposite to sound economic policy.

Rational Actor Model

Rather than framing our understanding of the patent system based on a character archetype used for storytelling, we have another framework in which to establish our understanding: economics.

If we frame the problem from an economic perspective, we can then begin to use economic principles to implement patent policy.

The economic principles we can use originate from the work of Douglass C. North, winner of the 1993 Nobel Memorial Prize in Economic Sciences, due in part to his 1992 paper “Transaction Costs, Institutions, and Economic Performance.”

Using North’s Nobel Prize analysis, we can use a rational actor model to frame our understanding of our patent system and approach to patent policy.

The rational actor model rests on one major economic principle and insight: the success and evolution of institutions (patent litigation in this case) rise and fall with one primary factor—transactional costs.

Transactional costs are all costs incurred in the operation of an economic system. In the case of patent litigation, it is all costs involved in a patent holder obtaining a reasonable royalty or settlement from an alleged infringer.

In his work, North cites numerous examples of institutions throughout history that either succeeded or failed based on transactional costs. He observed that “economies with high transaction (and production) costs . . . prevent[] economic growth.”

The table below gives an overview of the transactional costs North identifies and how they relate to patent litigation:

(see here for a more in-depth analysis of North’s economic framework applied to patent litigation).

From North’s economic framework, patent litigation is a grossly unproductive institution. In it, enforcement costs both swallow and drive informational and bargaining costs. Enforcement and its threat are prerequisites to determine the scope and value of a patent and for parties to reach an agreement. Moreover, it costs millions of dollars and years of litigation to determine basic attributes of a patent—its scope and value. Due to this prohibitive transactional-cost structure, North would likely conclude that patent litigation fosters an extremely unproductive and backwards patent system.

Next, North recognized the existence of rational actors, namely entrepreneurs. In a system with high transactional costs, rational actors adapt to market conditions by engaging in exchanges that reduce transactional costs, to create an ideally zero-cost exchange.

In patent litigation, these rational actors are the ones that recognize its prohibitive transactional-cost structure and mitigate such costs by approximating a zero-cost exchange, which is represented by early settlements. These early settlements reduce uncertainty of patent infringement, reduce invalidity risk, and lower enforcement and defensive costs.

Put another way, early settlements in patent litigation are an economic phenomenon to increase transactional efficiency in a highly inefficient patent litigation-institution.

Foundation for Policy

At the heart of it, North recognizes a rational actor acts predictably in response to economic factors. As opposed to a bad actor archetype who is irrationally evil, a rational actor’s behavior can be influenced through changes in economic conditions (i.e., changes to transactional-cost structures). Hence, we have an opportunity to structure patent policy around the rational actor, by creating favorable economic policy.

It is impossible, on the other hand, to structure policy around a bad actor, because a bad actor is a one-dimensional, character archetype. They are selfish, greedy, and incapable of redemption. The only policy for a bad actor is one of deterrence and punishment at any cost, even at the cost of the patent system itself.


Let’s see how the bad actor archetype and rational actor model play out using North’s economic analysis to patent policy:

If we frame our understanding of patent law using a bad actor archetype, we would characterize early settlements as “nuisance litigation” which is perpetuated by the villainous patent trolls. Following this framework, the remedy is to deter and punish the bad actor and prevent it from taking advantage of the system, i.e., by increasing enforcement costs.

This isn’t a solution at all. From Nobel-acclaimed economic principles, it’s a step in the entirely wrong direction, one that increases transactional costs. This approach serves to undermine the effectiveness and utility of our patent system.

The current outcry against 101 jurisprudence is the manifestation of a decade+ long, systemic patent policy driven to increase enforcement costs. This policy has resulted in an abomination that has undermined the integrity of the U.S. patent system, creating more unpredictability and confusion (see Finnavations Case Study and IBM’s comments on 101 law).

If we instead use a model rooted in economics, we would understand early settlements as an economic response to reduce transactional costs within the context of patent litigation, not nefarious conduct perpetuated by evil doers.

Using North’s economic principles, we would recognize the problem to be high transactional costs in patent litigation. Most importantly, we can frame a policy-based solution: reduce such transactional costs.

Namely, the solution rests in lowering informational costs. Instead of costing millions of dollars and taking years to determine whether a patent is infringed and its value, can we create a cheaper alternative?  Can we create a reliable method for determining basic, informational attributes of a patent without needing to spend years and millions of dollars in patent litigation?

These are the questions we need to be asking ourselves. This should form the foundation of our U.S. patent policy.

Beyond the Villain

Culturally, we have a bias to create the villainous archetype. It gives us someone to despise and blame for all the problems. Psychologically, demonizing the villain fuels us with passion and emotion.

But if we continue to use stories centered around character archetypes to frame patent policy, what hope does the U.S. patent system have? We need to refine our understanding beyond the bad actor story we have been telling ourselves.

Even if Congress fixes 101 law, if we continue to believe a villainous character is the root cause of our patent problems, we will continue down a self-destructive path that increasingly cripples our patent system.

But if we instead use economic principles to frame our understanding of patent policy, we can help create a solution based on sound economic principles.

North set forth a simple, yet profound observation: “The success stories of economic history describe institutional innovations that have lowered the costs of transacting and allowed more of the gains from trade to be captured, thereby permitting the expansion of markets.”

To improve our patent system, we need to think in terms of transactional costs, and its improvement stems from lowering transactional costs, not demonizing and obstructing archetypal characters that we fabricate.

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Copyright: gromaler 


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Join the Discussion

30 comments so far.

  • [Avatar for angry dude]
    angry dude
    January 13, 2020 05:14 pm

    Curious @29

    The idea to file for patents in China and NOT in the US came form Paul Morinville and I believe he knows what he’s talking about
    I laughed at the idea first cause I remember what China was in 1987 when I was there last time..
    Boy, times have changed since then … for better in China and for worse.. much worse in the US

    While I agree with most of your points about need to fix US patent system the task is so daunting at this very late stage that I just have no idea how they are going to approach it.. assuming some in Congress even want to tackle the ugly mess
    Scotus already washed their hands off 101 and other niceties they created themselves … like a little child that poops on a carpet and then runs away leaving the stinky mess behind for parents to clean up

  • [Avatar for Curious]
    January 13, 2020 12:17 pm

    I just want to get some gratification for my invention
    As do all inventors — whether it is the recognition that a patent provides and/or the monetary value a patent can provide.

    While I know the “take my invention to China” has become a rallying cry for some, what does that really provide? Unless you file in the US, you’ve abdicated any rights for products manufactured/sold in the US. As for protecting products made/sold in China, I find that to be a daunting prospect. The Chinese do what is best for the Chinese — don’t expect justice to be blind. Moreover, there exists a high percentage of charlatans in China. Buyer beware.

    I don’t see patenting something in China to be a better option — just a different option with different downsides.

    The solution to the problem in the US is not to go to China. It is to fix was has been broken here — broken by those in the judiciary, who want to engage in policy-making, which should be out of their purview. While there are situations in which the judiciary should step in situations in which fundamental rights are at stake, patent law is not one of those situations.

    The patent law system is a government-instituted economic system that provides incentives for a certain class of individuals — inventors (and their assignees). Once that system has been put in place, any decisions by the courts that weaken patent rights (see, e.g., KSR & EBay amount a myriad of others) are policy decisions that favor infringers over innovators. These decisions aren’t based upon the courts protecting some fundamental rights. Rather, these decisions are ones that simply pick economic winners and losers. The same applies to 35 USC 101. The Courts aren’t “interpreting” 35 USC 101 — they are picking the economic winners and losers. In this instance, the economic winners are those big-tech (mostly software) oligopolies who can overwhelm any potential competitors because of their size. The economic losers are those compete with the likes of Google, Facebook, and Apple. These companies have little competition because the competition cannot create distinguishing and protectable features that may have consumers to choose one company over another. Another set of loser are medical research companies.

    It is the roll of Congress — not the judiciary — to pick the winners and losers. Congress answers to the people. The judiciary answers to no one. While Congress isn’t perfect, at least everyone has a chance of being heard.

  • [Avatar for Anon]
    January 13, 2020 06:14 am

    Your sense of self-gratification and reliance on emotion rather than reason is simply not helpful.

    You keep on telling me that I am clueless, when your own message betrays just which of us is the clueless one.

    And that would be you.

    Maybe if you actually read my posts you would see that I am well aware of the negative right nature of the patent property (as well as the ‘lavish’ added criminal penalties in the realm of copyright). You seem to be unaware of my stance in those regards and only seek to emotionally react to my pointing out that you are acting as a mouthpiece of the Efficient Infringers with your plainly asinine “just quit” message.

    How can you repeatedly NOT grasp that your message is what the Efficient Infringers want?

  • [Avatar for angry dude]
    angry dude
    January 13, 2020 01:30 am

    Anon @26


    You are really clueless and annoying

    I am not marketing anything anywhere at this point

    I just want to get some gratification for my invention which btw has dual use: civilian AND military (as many inventions do – computer-implemented or not)

    US Patent System (as created by the Founding Fathers) has nothing, ABSOLUTELY NOTHING to do with manufacturing or marketing

    It’s only a NEGATIVE right, the RIGHT TO EXCLUDE OTHERS from making, selling, profiting etc

    And only through this exclusive right individual inventors (and small under-capitalized startups) can get gratification for their inventions – there is simply NO OTHER WAY

    I just want to exercise my EXCLUSIVE right as enshrined in the US Constitution

    Money is not even an issue at this point .. other than being an instrument of inflicting financial pain on those corporate thiefs … until there are criminal penalties for WILLFULL and INTENTIONAL stealing of someone else’s intellectual property (they have it for copyrights… why not patents ? – I know why but go figure it out yourself…)


    Fool me once – shame on you, fool me twice – shame on me

  • [Avatar for Anon]
    January 12, 2020 11:21 pm

    Whether or not China shares their patent submissions with the USPTO absolutely misses the point.

    The point concerns coverage (and what a patent anywhere covers, notably protection in the sovereign to which the patent was granted.

    A patent in China does nothing for you here. If your market is here, what is your reason for filing in China?

  • [Avatar for angry dude]
    angry dude
    January 12, 2020 08:02 pm

    [email protected]

    Patents in China used to mean absolutely nothing when I was visiting there last time (in late 1980s)
    I myself could not believe the recommendations by some very knowledgeable folks in this blog (Paul Morinville) to file for patent protections in China and elsewhere in the world BUT NOT in the US
    Maybe this gruesome fact is still lost on Congress critters…
    Someone needs to make it stick, and painfully stick it to them – cause it amounts to real threat to US national security in many areas like AI, 5G etc whether those idiots in black robes proclaim those inventions patentable or not in their idiotic court decisions – WHO CARES ?
    There is objective reality that if any US inventor files patent application on e.g. superior algorithm for e.g. face (“target”) recognition in China but not in the US then China has an upper hand in developing sophisticated military technology – e,g smart robots shooting only at certain predefined people – this is just one practical example
    And I’m quite sure it happens already, it’s just not publisized
    Almost every tech (except Bunch-o-Balloons… maybe… but I’m not so sure) has some potential military application
    Do you really think that China automatically shares all their patent submissions with USPTO ? Do you ? :):):)

  • [Avatar for Anon]
    January 12, 2020 06:35 pm

    angry dude,

    Again, emotion without reason is just not a good combination.

    Do you recognize that your suggestion here of “only China” only gives you sovereign protection IN China (and free reign everywhere else)? It’s not like a patent in China means that practice of the innovation is limited to China.

  • [Avatar for angry dude]
    angry dude
    January 12, 2020 03:37 pm

    [email protected]

    Not just “withhold” important inventions from USPTO but offer them to China instead…
    AND very publicly blame DC critters for this accusing THEM of
    HIGH TREASON no less

  • [Avatar for Anon]
    January 12, 2020 03:26 pm


    To the extent that your “to withhold our innovations” Is nothing more than “just quit,” your advice is that of the Efficient Infringer who would love for you to “just quit.”

    If you want to “celebrate” by identifying with angry dude — and nothing more, then you deserve the same characterization as being an Efficient Infringer mouthpiece — and nothing more.

    It is interesting on a piece about “narratives” and “protagonists and antagonists,” that YOU seek to “set” the narrative in a way that is simply not aligned with reality (in either the “just quit” aspect or the aspect that “no one was listening/saying anything”).

    Many of us that blog here regularly — including myself — have been criticizing the unfolding state of Patent Law for many years now.

    I will further posit that posts such as your one here do a disservice to the extent that you paint such an obviously false picture that those who may wish to advocate for weak patents (thinking particularly of TFCFM), have been given ‘validation’ to a degree in their attempted portrayal of people wanting to strengthen (or restrengthen) patent protection as having some type of overblown martyr complex.

    Being angry is fine.
    Letting anger overcome any sense of reason or proportion is not.

    When your post engages in a hyperbole of “no one has listened or done anything” when such is so obviously untrue, you only hurt the message that you say you want to support. YOU come across as the unreasonable one — and take this as coming from one is amongst the most pro-patent and pro-innovation bloggers in the entire patent blogosphere.

  • [Avatar for Eric]
    January 12, 2020 12:54 pm

    @ 20, “Disenfranchised Patent Owner”:

    Try “inventor assassins”.

    BTW, I advocated for “IP Pirates” over three years ago.

    I forewarned the contributors to and readers of this blog about five years ago, that their perceptions of the current state of affairs in the U.S. patent doamin, was unreasonable optimistic.

    Only after the SCOTUS Oil States decision, did the rhetoric posted by commentators to articles appearing on this blog, begin to match nearly word-for-word, the rhetoric previously rejected here, that I had so staunchly advocated.

    Recently, by a couple of months, I revealed a potentially effective strategy for the inventor’s community to consider, in the face of what amounts to economic warfare, perpetrated by the so-called ‘rational actor’ SiliCON Valley type moguls.

    Such advice was summarily ignored by all except for ‘angry dude’.

    Until a sufficiently large proportion of inventors take on the difficult, uncertain and uncomfortable actions to withhold our innovations in unity of mutual organization according to all of our rational economic interests involved, there can be little chance of ever redressing the outrageous harms and iniquities perpetrated against us.

  • [Avatar for Disenfranchised Patent Owner]
    Disenfranchised Patent Owner
    January 11, 2020 12:10 pm

    [email protected] — Efficient infringers indeed are the real “bad actors.” Turning their own rhetoric around and applying it to them makes all the sense in the world.

    What would be an appropriate, rational term for unconstitutionally appointed PTAB death squad judges… “mercenary executioners”?

  • [Avatar for Rational]
    January 10, 2020 05:08 pm

    Josh @16 – Turning the “patent troll” beast back on the thieves that unleashed it is brilliant.

    Glad to hear that you are getting traction with this tactic.

    Again – I believe this deserves its own post. A rallying point is mandatory to get the pro-patent community on the same page.

  • [Avatar for Gautham Bodepudi]
    Gautham Bodepudi
    January 10, 2020 04:19 pm

    Curious @8 — great point re SC balancing tests contributing to informational / transactional costs.

  • [Avatar for Anon]
    January 10, 2020 02:21 pm


    Interesting comment, as that “hijacks” the very large amount of propaganda expanded by the very people that you would turn that phrase against.

    It would be no small irony, since those people are the ones that “mass-marketed” the phrase to begin with (and they certainly had the benefit of one group in mind: themselves — but very much in a “Rational Actor” mode, as has been commented upon).

  • [Avatar for Josh Malone]
    Josh Malone
    January 10, 2020 01:55 pm

    We should call the villains patent trolls. I have tested this shorthand with a diverse audience and they understand it refers to large corporations that abuse the patent system. This is true for working class citizens to senior lawmakers. It is an extremely small and increasingly irrelevant circle that considers inventors to be patent trolls.

    It is time to stop patent trolls like Apple, Google, and Amazon from stealing inventions. Ask your Representative to co-sponsor H.R. 5478 The Inventor Rights Act

    Try it and let us know how it goes. If they hesitate or seem a little confused, just repeat it. You will find it is a very effective and appropriate shorthand for referencing the true bad actors.

  • [Avatar for Rational]
    January 10, 2020 01:08 pm

    Anon @7,

    Thanks for the clarification on where the term originated. That said, I maintain that pro-patent rights advocates are doing themselves a huge dis-service by adopting this term to describe the behavior of IP thieves.

    People/Corporations that steal patent protected inventions need to be revealed as the true “bad actors” in the narrative. Calling them “efficient infringers” falls well short of this mark.

  • [Avatar for Curious]
    January 10, 2020 01:05 pm

    I would like to challenge this forum (perhaps Gene could devote an article directly to this) to come up with a better term for those that steal IP
    I disagree. I believe the term “efficient infringement” accurately describes that infringing (i.e., a bad behavior) is what is optimal (i.e., efficient) in the current patent system. It highlights the problem that the current patent system is set up to promote infringement — not innovation.

    If you have anything remotely useful to do with your time, move along.
    Yet the patent infringer apologist keeps showing up … why is that?

    Nothing to see in this mess.

    The article presents a very sophisticated analysis regarding transactions costs and the impact those transaction costs have on rational actors and you dismiss it as nothing but a “mess.” That tells me a lot about your intellectual sophistication. The underlying justification for having a patent systems is all about economics.

    The efforts of serious folks are better spent trying to figure out a sensible basis for bounding patent eligibility. Fairy tales from wannabe-martyrs are not such a basis.
    To repeat Anon’s statement, why should patent eligibility be bounded anymore than the DELIBERATELY EXPANSIVE bounds already set by Congress? Moreover, if there are bounds to be placed on patent eligibility, those are POLICY DECISIONS that are left to Congress. Setting the bounds of patent eligibility is the province of the law-making body of the US — not the judiciary. However, the judiciary cannot seem to keep their dirty paws off of it.

    As for the “efforts of serious folks,” these folks should be considering the economic consequences of the current patent system, which you so blithely ignore.

  • [Avatar for angry dude]
    angry dude
    January 10, 2020 12:47 pm

    Rational @7

    I think “IP Pirates” will do – it’s short enough and combines all kinds of stealing of someone else’s IP – whether its patented tech, trade secrets or copyrighted code

    It would be nice to introduce the same level of punishment – CRIMINAL – for willfull infringement of patents, copyrights or deliberate stealing of trade secrets – there is no difference to me, they are all on the same level

  • [Avatar for angry dude]
    angry dude
    January 10, 2020 12:35 pm

    Anon @5

    My suggestion is very reasonable and practical – stop throwing good money after bad

    That’s what all independent inventors and small hi-tech [email protected] startups in this country should do to bring the attention of the higher ups to the root of the issue – uncontrolled and unabated stealing of IP by the largest US corporations from small (and not so small lately – see Sonos vs Google) US patent holders

    Better yet, start filing patent applications in China but NOT in the US
    and publicly state it so those DC critters can read it in newspapers AND very publicly put the blame on them – for HIGH TREASON no less…

  • [Avatar for Anon]
    January 10, 2020 11:52 am

    Excellent post, Curious.

    One may then wonder (in view of the attempted narrative), WHY the Supreme Court acts in a manner reminiscent of the self-christened “the only valid patent is one that has not yet appeared before us” well-known anti-patent Supreme Court of the 1930s-1940s.

  • [Avatar for Anon]
    January 10, 2020 10:51 am

    Rational @7,

    I “get” your impression of the term, but the term has a legal derivative (efficient breach) from contract law.

  • [Avatar for Anon]
    January 10, 2020 10:49 am

    trying to figure out a sensible basis for bounding patent eligibility

    Why are you so intent on bounding patent eligibility?

    Do you have a specific form of innovation in mind that you would like to constrain from having patent protection?

    Your “dismissiveness” and “so serious” remind me of a polite version of another common anti-patent blog poster. That you would be associated with this person cannot be taken as a compliment.

  • [Avatar for Curious]
    January 10, 2020 10:18 am

    Namely, the solution rests in lowering informational costs.
    The informational/transactional costs involved in patent enforcement involve the following three questions:
    1) Is the asserted patent valid?
    2) Does the alleged activity infringe upon the (valid) patent?
    3) What is a reasonable royalty?

    These questions also have sub-parts. For example, the first question can be broken down into sub-parts, such as:
    1A) Is the asserted patent valid under 35 USC 101?
    1B) Is the asserted patent valid under 35 USC 102/103?
    1C) Is the asserted patent valid under 35 USC 112?

    In each these 3 questions regarding patent invalidity, the Supreme Court has issued decisions (Bilski/Alice/May), (KSR), (Nautilus) that makes it more difficult to answer those questions. Citing the wikipedia article on “Bright-line rule”:
    The Supreme Court of the United States often contrasts bright-line rules with their opposite: balancing tests (or “fine line testing”), where a result depends on weighing several factors—which could lead to inconsistent application of law or reduce objectivity.
    Be eschewing bright-line tests (e.g., what 35 USC 101 used to be) and relying upon multi-factor tests (without no definitions as to what key terms me, e.g., “abstract idea”), the Supreme Court has created law that is both INCONSISTENTLY applied and difficult to apply. Hence, while all asserted patents are already examined under sections 101, 102, 103, 112 and deemed to have pass these sections, Courts routinely invalidate patents based upon these sections. This INCONSISTENT APPLICATION of the law increases informational/transactional costs because rational actors cannot rely upon the USPTO’s decision as to the patentability of the claimed invention. Consequently, issues that should have been addressed at the USPTO are re-litigated in the courts.

    While the existence of prior art not previously considered could justify re-looking at 102/103, once a patent has issued 101 and 112 should be considered decided once and for all. That point aside, the lack of bright-line tests create a disincentive for settlement (i.e., a reduction of informational/transactional costs). When a test can come out several different ways, both sides can have a legitimately-held belief that they will prevail (one need only look at the 101 decisions coming out of the Federal Circuit to know that the outcomes are very panel-dependent). Only irrational actors take clear losers (whether as a plaintiff or defendant) to trial. Clear losers are settled and settled quickly. However, clear losers can rarely be (quickly) identified without a bright-line test.

    Going back to a wiki article, this time on “balancing test,” this is what is written:
    A balancing test is any judicial test in which the jurists weigh the importance of multiple factors in a legal case. Proponents of such tests argue that they allow a deeper consideration of complex issues than a bright line rule can allow. But critics say that such tests can be used to justify any conclusion, upon which the judge might arbitrarily decide.
    The Supreme Court has given us balancing tests with ill-defined terms (e.g., abstract idea, common sense) and consequently, whether a patent is valid (or not) oftentimes appear to arbitrarily decided upon the whims of the particular judge (or panel) that makes the decision. All this serves to increase informational/transactional costs.

    Also, if the rules are so complicated (i.e., difficult to apply) that it takes a judge to determine whether a patent is invalid or whether a patent is infringed, then the parties will naturally go before a judge to get those answers (thereby increasing informational/transactional costs). On the other hand, if the rules are simple to understand and apply, the answers to those questions can be obtained by the parties themselves (thereby reducing informational/transactional costs), which will lead to far more out-of-court settlements.

    The increase in information/trasactional costs (and the resultant degradation of the US Patent system) is a DIRECT RESULT of the Supreme Court’s decision to use ill-defined balancing tests (rather than bright line rules).

  • [Avatar for Rational]
    January 10, 2020 09:54 am

    Very good article, Gau.

    I’d like to point out a couple of additional Symantec points.

    First, the ingenious (read insidious) corollary to the patent troll narrative is that it necessarily paints the thief that steals IP as the Hero.

    Second, it would not surprise me to learn that the term “efficient infringer” was actually created by IP thieves themselves. It is painful to see that this term has been adopted by inventors and IP advocates in their fight. The term “efficient” is an inherently positive adjective while “infringer” is the least impactful term to describe theft of property.

    I would like to challenge this forum (perhaps Gene could devote an article directly to this) to come up with a better term for those that steal IP:

    – Property Pirates
    – Corporate Con Artists

  • [Avatar for TFCFM]
    January 10, 2020 09:47 am

    Unfortunately, “Part II” of the series offers no more evidentiary support for the just-so story of how the patent eligibility tiger got his stripes than did Part I.

    I question the mentality that wastes effort on concocting fantastic stories merely to suggest solutions based on false assumptions that, “I know what the Nefarious Bad Guys are thinking.

    If you have anything remotely useful to do with your time, move along. Nothing to see in this mess. The efforts of serious folks are better spent trying to figure out a sensible basis for bounding patent eligibility. Fairy tales from wannabe-martyrs are not such a basis.

  • [Avatar for Anon]
    January 10, 2020 08:49 am

    angry dude,

    Your “suggestion” is akin to killing the patient to stop a cold.

    You are still having your emotions overwhelm the ability to reason.

    You also seem to mistake the ability to pilfer as being the only driver of the putative Efficient Infringer.

    It is not.

    Take while they can — sure.
    But the real driver is to stop others from competing in terms that may well not be as suitable for the Efficient Infringer.

    This latter aspect is why I will continue to call you out when your mantra sounds in “just quit,” “to the morgue,” or even “only suckers.” Such aligns with the endgame of the Efficient Infringer.

  • [Avatar for angry dude]
    angry dude
    January 9, 2020 11:15 pm


    Efficient infringers exist only for as long there are valuable and in-force US patents to infringe with impunity
    That assumes a new sucker (aka independent inventor) is born every day to invent something new and apply for US patent
    Wrong assumption !
    Once they run out of suckers there won’t be any infringement..
    and no new inventions from independent inventors
    I say give it another 3-5 years
    The end is near

  • [Avatar for Anon]
    January 9, 2020 08:37 pm


    Let me add to your point of:

    and expanding their dominance in the market with not even a slap on the wrist and discouraging any serious threat to their dominance.

    IF (and after great expense), a patent holder DOES manage to convince a court that the other “Rational Actor” was in fact guilty of infringement and survives challenges to validity (in not one but two branches of the government), then the WORST that will likely happen to that other Rational Actor is to pay a nominal royalty of what may typically been “due” all along.

    That’s not even a slap on the wrist.

    What Efficient Infringer would ever not seek to take from those that cannot compete on the non-innovation factors of established size (and bank account)…?

  • [Avatar for Anon]
    January 9, 2020 06:54 pm

    Along the lines of my comment on the prior thread, there is a “villain” already lurking that undermines your narrative:

    When we employ archetypes to explain other people’s behavior, we are telling ourselves a story to help us understand the world around us.

    MISunderstanding may well be more like it for the villain of the propagandist (who may well also BE a “rational actor”).

    There really is (and pretty much ever has been) a philosophical war against patents.

  • [Avatar for Ternary]
    January 9, 2020 05:33 pm

    The independent inventor in the USA was an archetype. One that by applying ingenuity, initiative and persistence achieved success. An example and envy to the world. And one that transformed the USA from a backward agricultural economy to an economic power in a stunningly short 100 years.

    How is it possible that the independent inventor has been transformed into a villain? From a rational point of view, the independent inventor is specifically not a troll or a bad actor. That is not why the independent inventor invents.

    As Anon said in his comment in part 1, the efficient infringer is the ultimate rational actor. Because of the deliberate and planned avoidance of paying for using another party’s IP, the efficient infringer is both a bad actor and a rational one. Being handed by the establishment the tools and means to avoid consequences of infringement (with IPRs and eBay and Alice as recently provided tools), it would be irrational for them to pay royalties.

    Rationally, it makes sense for efficient infringers to infringe. They continue to have access to new IP and no consequences for infringement, thus strengthening and expanding their dominance in the market with not even a slap on the wrist and discouraging any serious threat to their dominance.

    I am pretty sure that this article will not convince them to change or to counter the troll myth, of which the specter is still raised in Congressional hearings, with not a peep about efficient infringers. The transactional costs of efficient infringing are much smaller than the benefits. So efficient infringers will not change their ways. Sounds pretty rational to me.

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