Oh, Intellectual Asset Management Magazine, You Silly Thing, You!

You slay me, I AM.  A while back you published this article about a study that came out, touting the damage that patent trolls do to start ups.  OK, not necessarily start ups, but “entrepreneurial activity”.  And not necessarily “patent trolls”, but NPEs/PAEs/Euphamisms-of-the-Month.  But whatever, we all know what we’re talking about here and if you don’t, I have no idea what would land you on this blog other than a search for Big Derrieres.  And if that’s the case, well then let me introduce you to Mr. Charles Barkley.

Disclaimer: Mr. Barkley is not a patent troll and even if he was I wouldn't call him one because dude is huge.

Note: Mr. Barkley is not a patent troll and even if he was I wouldn’t call him one because dude is huge, and I value my life.

 

Back to the article, Mr. Joff Wild says the following:

I am not going to argue with the idea that VCs would have ploughed more money into certain companies if they had not been hit with lawsuits by PAEs. That seems pretty self-evident to me – VCs, like any other kind of investor, dislike uncertainty.

So we’re on the same page then, right?

Only no.  No we are not, because he goes on to say:

However, what I did not see in the study is any evaluation of the merits of the cases brought by the PAEs Tucker writes about. Instead, I saw a few anecdotes about what seem like egregious cases, but nothing that demonstrated these were typical. It seems inarguable to me that PAEs willing to spend millions of dollars taking their cases to court when they cannot get someone to take a licence believe that their patents are being infringed and that they have a good chance of convincing the court to agree. Thus, it could just be that Tucker has spent her time and the CCIA’s money discovering that VCs are unlikely to sink money into companies whose products infringe patents.   I could be wrong, of course; but we don’t know because Tucker does not look into it.

You’re forgetting something:  With patent trolls, the merits of the case don’t matter.  That’s sort of the whole point of all the railing against them.  Whether the patent is invalid or infringement occurred matters not to the entrepreneur looking for money:  once you’re sued by a troll you have to respond, and that eats time and resources that would have been better spent on things like growing a business and hiring employees.  Tucker didn’t spend her time deconstructing the cases?  Probably because she likes to spend it doing something worthwhile.  Like making the point that patents can be used as a weapon to slow down start ups and innovation.

As for the patents themselves, Mr. Wild notes:

Furthermore, the patents that PAEs seek to license and are sometimes forced to litigate do not just appear out of the ether.

No they don’t.  They appear out of the USPTO, who has clear issues with their patent examiners.  See my three-parter here:  Interview With a Patent Examiner Series.  Sorry it sorts them Part III first.  Dunno what’s up with WordPress on that…

I do agree with Mr. Wild on one thing though:

All in all, therefore, this study does not come close to making a case for legislative patent reform.

Right.  Well, “right” in the sense that I don’t think patent reform is going to solve the patent troll problem.  Certainly things are ripe for updating in the grand ol’ US of A patent system, like how examiners are vetted and hired and what skill sets they have and by that I mean you need to hire lawyers at the USPTO so they can fight off the lawyers that the companies hire to get their client’s stuff patented.  I think we can agree on this.

Finally, I want to address this comment:

It might not be ideal, but it is a whole lot better than passing sledgehammer laws based on anecdotes and flawed research.

I’m aware that the plural of anecdote is not “data”.  I’m also aware that all research is inherently flawed, if it’s done by humans, that is.  We all bring a sense of bias to our research, I’m not sure that will ever not be the case.  That doesn’t mean you throw it out and decide unilaterally not to make decisions based on it.  Again,  I agree that “sledgehammer laws” are stupid and ineffective but articles like Catherine Tucker’s highlight that the problem does in fact exist, even if it doesn’t delve into every level of detail that I AM would like to see.

In closing, though I like to make great sport of people who do not completely agree with me, I do want to say thank you for this:

None of this is to say that there are not problems and issues to address with regards to abusive patent litigation in the US, clearly there are.

There are real problems and real issues with patent litigation today.

I happen to think Ms. Tucker’s article does a great job of highlighting a specific one, even if you and Barry don’t agree with me.

JustSayin_small

IPTT

{Sir Charles image found here.}

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2 thoughts on “Oh, Intellectual Asset Management Magazine, You Silly Thing, You!

  1. Once again you assume all PAEs are “patent trolls.” Sure there are some scam artists looking to make a quick buck based on the asymmetry of filing/defending patent lawsuits. But you don’t sue Google, Apple, or Facebook with a weak case. They don’t cave so easy. They will cost you millions in fees. “Real” PAEs only bring legitimate cases. Cases they can win in court.

  2. Hi Barry!

    Great point, but I often get the feeling that Joff thinks *no* PAEs are trolls. As usual, the truth is somewhere in the middle. I agree, and have said in my backgrounder (link in menu) that PAEs are a necessary part of the process to get your idea in front of bigger companies.

    As far as trolls with weak cases not suing Google, et al, they very much used to. The thinking was that Big Money Companies wouldn’t spend a ton of money to fight, they’d just take a license and “make it all go away”, Michael Clayton-style. They didn’t take a license at the highest price point the trolls asked for, I’m sure, but it was enough to feed the business model, weak patent or not.

    Cheers,

    Steph

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