President Barack Obama has declared that it is time to get tough on “patent trolling.” Paul Marks at New Scientist writes that when ordinary activities like using Wi-Fi in a coffee shop or updating smartphone apps provoke lawsuits you know something is seriously amiss with the legal system. Firms that buy up obvious patents that the US Patent and Trademark Office (USPTO) should never have granted in the first place are called patent trolls according to the author.
The troll then “asserts” these patents by threatening to sue businesses that infringe them. Many will then settle out of court and pay an often business-crippling license fee.
As followers of Bach Seat know, there are a number of patent troll lawsuits related to wireless. In 2011, Boston University’s law school estimated that dealing with patent trolling cost businesses in the US $29 billion (rb- which I originally covered here).
President Obama says the cash should have been spent on generating products, services, and jobs. So the White House is asking Congress to force the USPTO to narrow the scope of patents within the next six months so that whole fields cannot be trolled. Mr. Obama also wants to prevent patents from being asserted against the users of technologies, like coffee shops, rather than manufacturers. The White House says trolls will have to come clean about their identity, and not hide their “abusive litigation and settlement extraction” behind a thicket of shell companies.
“This is a bold step forward by President Obama, and if these legislative proposals are enacted the playing field will be leveled,” Alan Schoenbaum, general counsel for the troll-fighting web hosting firm Rackspace told New Scientist. What’s crucial, Mr. Schoenbaum says, is that the President’s changes make sure trolls have something to lose when they fail in court. In essence, the U.S. legal system is unbalanced. In the UK, for instance, the loser pays. “That keeps frivolous lawsuits down to a minimum,” he says. “But ‘loser pays’ is rare in the U.S.“
The author asks how can patent trolls be identified? Rackspace’s Schoenbaum says there are plenty of ways, “Trolls don’t invent, make or develop anything. Between 70 and 90% of their patents are software or business-method patents, and in virtually all cases the patent is invalid.“
But San Francisco-based, “patent buster” Gregory Aharonian, who invalidates patents by finding previous inventions using the same ideas, told New Scientist he thinks it will be trickier to identify patent trolls. He told the author, “It is going to be hard for Obama to deal with the troll definition problem … Anyone who asserts an invalid patent, under any conditions, is a troll.” Mr. Aharonian says that some large technology firms behave like trolls when they assert overly broad or obvious patents they never exploit.
The only move that will crush the troll phenomenon is vastly improved patent quality, Mr. Aharonian says. “What upsets people 
more is not the assertion tactics, but the crap being asserted.”
rb-
This story barely had a full news cycle. The opportunity is dead and lost as the White House spin machine deals with the PRISM spying scandal.
Related articles
- Stop Patent Trolls (sweenylegal.com)
Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.
Since they have no tangible assets, the shell companies are not vulnerable to countersuits, meaning their victims often fold their cards and pay a licensing fee for the troll to go away and not risk the cost of a prolonged lawsuit even though