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Patent Trolls

Posted Tuesday, March 17, 2009 by Jim Ruttler

The term Patent Troll is commonly used to describe somebody who obtains a patent and then deviously waits to “ambush” an innocent victim who commercializes the invention. The argument generally goes that Patent Trolls contribute nothing and wrongfully extracts value from companies who actually make things for society.

This position ignores several facts. First, the so called Patent Troll received a patent because he or she was arguably the first person to conceive of the invention. If the “innocent” producer wants to be the first to file a patent application for an invention, there is absolutely nothing stopping them from doing so prior to the Patent Troll. Second, most patent applications undergoing examination and all issued patents are publicly available and searchable without any charge from the U.S. Patent Office website. Thus, it is hard to make the argument that one is an innocent infringer when the patents being infringed are readily available without any charge directly online. Third, there is inherent value in introducing new ideas to into the public domain because doing so enriches the standard of living for everyone over time more quickly than were new ideas not rewarded or kept private.

My impression is that these Patent Troll complaints are misdirected as the core of the problem resides outside the practice of awarding patents to the first inventor or sitting on issued patents. For example, the “innocent victims” could address some of the problems they complain of by dedicating resources to monitoring pending patent applications and issued patents prior to embarking on multi-million or multi-billion dollar projects much as a land developer would verify title to property prior to building. It would be silly to hear of a land developer complaining of losing a building he built to the actual property owner because the land developer failed to learn that the land he was building on wasn’t his to build upon. Also, tighter, timelier, and more thorough examination would help to avoid the circumstances where questionably new inventions were granted patents. There are many times when patents are granted for questionably new inventions and these patents can cause severe economic loss to companies who are forced to defend themselves for using old technology. If patents were reliably issued only for truly novel innovations and contributions to society, then it would be hard to hear complaints against having to compensate the true innovator. Lasltly, efficient markets for intellectual property would help avoid the difficulty that most patent owners face in selling their patents. It is hard for me to believe that patent owners would prefer to hire some of the most expensive attorneys around to sue another company for infringement with the risk of losing the lawsuit over selling or licensing the patent to the company at an earlier date. The problem for most patent owners is that there is no truly efficient market for patents as there is for stocks and land and that it is easier to wait and sue a company than to sell the patent in the first place.

In short, the real issue isn’t with so called Patent Trolls ambushing innocent producers, rather it is with the questionable patents that issue, the lack of market efficiency, and the current practices of embarking on signficant ventures without due diligence.

Patent Trolls ›› Ruttler Mills PLLC