MythBusters: Patent (Troll) Litigation Explosion Edition

It’s always fun when something starts to get national attention after some of us (*cough* *cough*) have been banging the drum on that same issue for, oh, 12 years now.  Detractors and proponents seem to come out of the woodwork, citing studies and statistics as if any of it really means anything.  Adam Mossoff, he of the claim that there really isn’t $29 Billion in costs associated with patent trolling because how could there be, when the whole shebang is myth anyway, is at it again.  Hi Adam, long time, no blog post refuting pretty much everything you’ve said!  Hugs!

Mr. Mossoff would have us believe that the whole increase in patent troll litigation is a myth.  I was right there with him until the second sentence.  OK, ok, that’s mean.  The second paragraph, where he waxes poetic about the number of patents being issued because why? I’m not sure, and this quote doesn’t help:

A simple comparison to population growth, especially taking into account the explosive growth in the innovation industries in the past several decades, could as easily justify the claim that we haven’t got enough patents issuing today.)

Why would we compare the number of patents to the number of people?  Is there some magic number of patents per person that is right and  good for society and another number that isnt’?  I don’t get this.  I mean, yes, the number of patents would theoretically increase the number of potential patent infringement lawsuits in much the same way that number of cars on the road at rush hour increases the number of potential drivers I have to flip off honk at merge with.  But beyond that, huh?

Adam's Nirvana

An infographic of the mythical but precisely perfect mix of patents to population.

Moving along:

Unfortunately, the mythical claims about a “patent litigation explosion” have shifted in recent months (perhaps because the original assertion was untenable).  Now the assertion is that there has been an “explosion” in lawsuits brought by patent licensing companies.

Instead of just saying that patent litigation has exploded because that would be wrong, we are now hearing people say that there’s an explosion in patent litigation brought by trolls.  That feels an awful lot like a semantic red herring, but we’ll go with it for now.

This, however, is just poppycock:

’ll note for the record here that patent licensing companies are often referred to today by the undefined and nonobjective rhetorical epithet of “patent troll.”

You may claim that the terms used to negatively refer to patent licensing companies are complicated and don’t always apply across the board, or that they are at times ill-defined.  But you can’t claim that terms are undefined because hello?  I defined them.  Also, “rhetorical epithet”?  Nicely done.  Excellent wordsmithing there, 10 points in your favor!

I’m not going to cut and paste the next quote because it’s long I’m lazy but the gist of it is that with the America Invents Act, of course the number of patent litigation suits is going to go up.  Joinder clause, anyone?  We knew that, but I don’t think you can say that’s the whole reason that the numbers are higher because wait…didn’t you say the numbers weren’t higher?  That increased patent litigation is a myth?  Is that circular logic, is that why I’m getting dizzy?  “The numbers are not higher but when they are higher, it’s because of the AIA.”  Please step away from the merry-go-round, my friend.

MerryGoRound

If you didn’t play on one of these growing up, two things:
1. I hate you for being younger than me, and 2. You *totally* missed out.

The article also takes aim at “secret data” spouted by the likes of RPX and Patent Freedom, with regard to litigation statistics.  I really hope those guys are wearing their flak jackets, that’s a serious BOOM there.  I know the RPX folks are because they’re in San Francisco and OMG, how is it possible that you have to wear a fleece in July in that town?  A flak jacket is not heavyweight enough, I don’t think.  Still, he makes a valid point which is who’s funding their data collection efforts and what stake do they have in the outcome being very high?

The thing is, lawsuits are a matter of public record.  If you don’t trust the data from those sources, then go to  Lex Machina if you feel they are not funded by people with a vested interest, or commission a study of your own!  That’d work, no?  But it’s not quite fair to just shoot the messenger.

As has been discussed on this very blog in the past and right there in the Backgrounder link, it’s not a secret that the small-ish inventor in this country can have trouble monetizing their patent, especially in larger technological sectors.  Patent licensing companies do serve an unfilled need in the economy and no one I don’t think would argue that they don’t so yeah, we get that.  Likewise, we get that you don’t have to make a product to be considered a valid owner of a patent.  Over on IP Watchdog, Steve Moore makes a big “to do” about this.  Again, we get it.  And in fact, that’s one reason that the term NPE is not the same as the term Patent Troll.   All patent trolls are NPE’s, but not all NPE’s are patent trolls.

What articles like this do though, is negate that there really is a problem with companies going after business for the sole purpose of extracting licensing fees over patents that are either old and worthless or that the targets are not infringing on.  Those are the trolls we’re after, and they make up a significant portion of the increase in patent litigation in recent years.  If you believe there’s been an increase, I mean.

It’s fair to question statistics and the motives of those behind them.  It’s fair to criticize people who only want legislative relief of the problem in the form of more laws from Congress because they (incorrectly, in my view) believe that that is the only way out of the problem, or even a good way out.

But you can’t just throw the baby out with the bathwater and say that because a few statistics are misquoted or unfounded or skewed by the companies putting them out that there isn’t really a problem.  All you need to do to verify that there is is to ask the Dittos and the Farks and the TMSofts.

They’ll tell you that, increase in patent litigation or no, there IS a problem.

JustSayin_small

IPTT

{Merry go round image found here: http://www.webanswers.com/for-fun/what-was-your-favorite-playground-equipment-in-elementary-school-f1f9f9}

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2 thoughts on “MythBusters: Patent (Troll) Litigation Explosion Edition

  1. Pingback: Actions of US Government Shut Down Groklaw Pre-emptively; Observing the US’ Sanctions Economy and the Danger of Expansion to Europe | Techrights

  2. There is a report from Cotropia, Kesan and Schwartz which used non-proprietary data where they publish their full dataset, methodology, etc.:

    http://www.ipo.org/wp-content/uploads/2013/11/PAEsReport_11.14.13.pdf

    This report shows smaller percentages of patent infringement lawsuits from their PAE categories of Large Aggregators and Patent Holding Companies compared to reports from RPX and Lex Machina (including the GAO report), though when looking at the number of defendants (parties in suit excluding plaintiff) they show an increase from 31.59% in 2010 to 36.75% in 2012. The growth is still there, but the absolute numbers depend on how one categorizes a PAE. In their report, operating companies represented nearly half of patent infringement lawsuits in both 2010 and 2012 in terms of number of defendants.

    As for why this non-proprietary study shows lower absolute numbers for PAE categories, a clue is given in footnote 54 on page 29 that explains why Uniloc was coded as an Operating Company. “Uniloc USA Inc. provides a good example of how our coding may differ from others. A Google search for Uniloc USA Inc. returns a link for http://www.uniloc.com. From here, if the link to NetAuthority is clicked, the website for http://netauthority.com is provided, where products related to the patents in suit are clearly being sold by Uniloc USA Inc. Accordingly, Uniloc USA Inc was coded as an operating company.” Well, if you click on the link to NetAuthority you get a “You have reached the future home of…” web page.

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