Posts Tagged: "Patent Trolls"

FTC report recommendations largely legislative in scope in new patent assertion entity report

The Federal Trade Commission’s (FTC) recently released report on patent assertion entities (PAEs) includes a number of key findings made by the agency on the business model of such companies. The FTC identified two different business models employed by PAEs which differ in terms of litigation and licensing activity. Most of the FTC’s recommendations are legislative in scope but the report does include some advice for the country’s judicial system. For example, the report also includes a number of recommendations to deter what the FTC calls “nuisance litigation.”

Move over Patent Trolls, Efficient Infringement has arrived on the Hill

But now, after quickly dispatching with the patent troll meme as much ado about nothing, we can, should and must now unleash a more simplified counter attack by referencing a commonly deployed patent abuse known as “efficient infringement.” This deliberate disdain for patent property is the business model driving mega-tech IT incumbents to continually pressure Congress to enact measure such as HR 9 and S.1137. Efficient infringement is a cold-hearted business calculation whereby businesses decide it will be cheaper to steal patented technology than to license it and pay a fair royalty to the innovator. This cold-hearted business approach to stealing intellectual property resonates when it is conveyed properly. Here is a simple script for research universities to use when they communicate with candidates’ pre-election and Staffers and those who prevail after the election. These arguments are easily adaptable to all pro-patent advocates.

Why should litigation costs of the infringer be relevant to determine if a license is fair or just a nuisance?

Why should the costs of the tortfeasing infringer be relevant in determining whether the extracted value from a settlement is fair? The fact that law firms charge a lot of money to defend patent infringement cases, and don’t particularly have any incentive to settle cases early, somehow translates into certain settlements being for nuisance value without any consideration of whether the settlement is a fair value for the rights trampled upon by the infringer? The FTC has quite a lot of explaining to do, because it seems they picked an arbitrary number that is a function of what attorneys ordinarily charge infringing defendants through discovery. I don’t see how that is a function of the value of the innovation, or how it says anything about the merits of the infringement case, the damages case, or the tactics of the patent owner. In fact, it seems as if the $300,000 figure is completely irrelevant.

Lies, Damn Lies and Media Bias: Fortune Misrepresents FTC Report on Patent Assertion Entities

Simply stated, Fortune is wrong. The FTC report did not have harsh words for patent trolls. In fact, the FTC had harsh words for those who use the term “patent troll” to vilify patent owners! At the risk of upsetting the predetermined narrative obviously favored by Fortune, allow us to interject some facts into this discussion… Perhaps Fortune confined their coverage of the FTC report to the press release accompanying the report, which conspicuously leaves out any mention of patent trolls, or that they view the term “patent troll” as being unhelpful and prejudicial. Seriously, if you are going to cover a report shouldn’t you at least read all of Chapter One?

Ars Technica reports confuse “patent troll” with legitimate patent owners enforcing property rights

To be fair, the coverage by Ars Technica doesn’t take the same vituperative tone as other voices who have concerns related to abuses of the U.S. patent system. However, it’s paramount for those who are covering the patent world to be judicious in their use of the “patent troll” designation, especially as the problem has been used to support legislation proposed in both houses of Congress… Ars could absolutely be accused of having a knowledge of the U.S. patent system that fails to account for some important nuances in patent licensing and enforcement. Indeed, they would do well to take into consideration the FTC’s recent admonition in the long awaited PAE report: “In the Commission’s view, a label like ‘patent troll’ is unhelpful because it invites pre-judgment about the societal impact of patent assertion activity without an understanding of the underlying business model that fuels such activity.”