About That Hearing On Capital Hill Yesterday…

I learned something very valuable yesterday regarding this hearing:  I learned that if I have my cell phone on mute, I won’t hear calendar reminders.  Can you even believe that?? As a result I was only able to catch the last 10 or so minutes but thankfully, I have Twitter and a list of hashtags to peruse, courtesy of Ali Sternburg at Patent Progress.  (If you don’t want to take the jump, they’re #trollhearing, #patentreform, #fixpatents.)  For those of you who are likewise smart-phone impaired, or who didn’t know about it in advance, you can view the archived hearing here.

The point a lot of the panelist seemed to be making, save for poor Mr. Mossoff who seemed woefully alone in his defense of the Dark Arts, is that there must be some sort of government mandate surrounding the demand letters that patent trolls send out.  They should be required to contain certain information, and they should be entered into a national database so that others can see them.

JustABill_Nope

Negative, Ghost Rider.  The pattern is full.

The idea that there should be some sort of mandate on sharing the letters, either by forcing the assertion entity to register it or (worse) requiring the recipient to do so, is silly, not to mention unenforceable. It puts too big of a target on the backs of the smaller companies to admit when they got a letter because then they’re fair game for more trolls. The bigger companies don’t need to share because, unless they’re going to fight publicly, they just pay and it goes away.  Still, they have the same fear of transparency and becoming an even bigger target.  Besides which, as the letters are pre-lawsuit, they’re not now, and shouldn’t be in the future, public information.

The whole idea is that people should want to share, in whole or in part, redacted or not, so that it benefits the collective good. What companies get out of sharing is access to all the other collected information so that they can contact other recipients and collaborate on defense.  Or, at a bare minimum, get a read on the MO of the trolls in aggregate and figure out their own individual plan of counter-attack.  Also, there’s the idea that just simply seeing the demand amount offered to other victims gives any other recipient a little bit of leverage:  “Hello, Scanner Dudes?  You’re extorting $1500 from me but only asked for $500 from Victor Victim #2.  What the hell?”

But it can’t be forced. You have to show people the value, first for themselves and then for others, of sharing and shining a light on these trolls or they won’t do it.  You can’t coerce them with some scary new law that will undoubtedly have a horrible unforeseen side effect that you’ll then have to make yet another law to clean up.  We don’t need more laws, we have trouble enough enforcing the current ones, for heaven’s sake.

Just to give the dead horse one last beating, I am not a fan of the government stepping in, really at all on this issue. I admit to liking a lot of the Goodlatte bill, and surely there is something to be done about the glut of bad software patents (which, who are we kidding, really don’t need the “bad” qualifier) and that is a government area for sure. But beyond that, the Feds will only screw this up.

Having said that, I think the State Attorneys General position on this issue is exactly the correct use of the government. Hit them with consumer protection laws, which are already on the books!  And as part of the process, require that they disclose their letters in discovery.  That I can get behind, and it’s why all three states that are taking this approach made it into the Patent Troll Fighters Heroes Gallery.

I have a website called That Patent Tool that was set up to collect information about demand letters.  It also allows users to create a unique and un-identifying forum user name with which to post questions and ask for feedback in a secure forum.  The whole idea is to get people to put information in, as much or as little as they’re comfortable with, and then start digging into the data and see what we find.  I’ve posted twice now (here and here) about what’s been entered so far.

It’s not a huge data set yet, but I still believe that individuals and companies will become more comfortable with sharing information over time, particularly when they’re able to get with other recipients as a result and see how they can best attack the trolls.

It’s exciting that the dialog about patent trolls has reached such a fevered pitch that Capital Hill has noticed.  I’m just not convinced that making demands about demand letters isn’t too demanding of an approach.

JustSayin_small_New

IPTT

{Cute little Schoolhouse Rock bill image found here.}

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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}

Hold the Phone, Someone Put Out Bad Numbers?

It was bound to happen, and it finally did.  Someone is disputing the claim that patent trolls cost companies $29 Billion in damages.  I’ve used the claim myself so that makes me part of the spread of bad information.  I can see The Internets shaking it’s collective finger at me now, using it’s best “for shaaaaame!” voice. Adam Mossoff has done a pretty good job of ripping gigantic holes in the numerical claim, the people who helped create the number, their methodological failures, and, just to beat the dead horse a little harder, the SHIELD act.  It’s like he dropped a daisy cutter bomb on the whole party.  Ouch. Edit, 12:15 PM CDT:  Adam pointed out that the study of the numbers, linked here, was done by David Schwartz and Jay Kesan.  The article to which I linked is his analysis of it, and I’m glad to have the opportunity to add the link in to their original work.  Also, Adam?  I can one-up you on the geek-o-meter by saying that not only are trolls a hot-button issue now, some of us actually read this stuff for fun.  True story.  You may send my “Geek Goddess of All Time T-Shirt” to me at  505 E Travis St, Marshall, TX 75670.  (Kidding, that’s a Rick-Roll.) Totally with him on the SHIELD act, as we all know.  My reasons differ from his, but whatever, we’re on the same side of that particular battlefield. To the quotes:

The entire U.S. court system is an inefficient cost imposed on everyone who uses it.  Really?  That’s an assumption that reduces itself to absurdity—it’s a self-imposed reductio ad absurdum!

{Clutches pearls and looks around nervously.} ZOMG, did he just use a Harry Potter spell on the Internets?  My Latin is rusty but I think what he means is that we’re all going to get dizzy again trying to follow the logic that the people who drew the $29 Billion conclusion have a vested interest in the number being as high as it is.  Point: Mossoff. Next:

There are several reasons why the extremely broad definition of “NPE” or “patent troll” in the study is unusual even compared to uses of this term in other commentary or studies. First, and most absurdly, this definition, by necessity, includes every universityin the world that sues someone for infringing one of its patents, as universities don’t manufacture goods.  Second, it includes every individual and start-up company who plans to manufacture a patented invention, but is forced to sue an infringer-competitor who thwarted these business plans by its infringing sales in the marketplace.

To the first point in this quote, I’m baffled.  Do we not know the names of the Universities in the US, and can we not exclude them from the study?  I’m not going to do it because, well, it would just be showing off but my guess is that in three clicks or less someone could generate a list that would pretty much handle 90% of the institutions you’d want to exclude from a study like this.  You take this list, match it to the data you have, do a really delete quick query and voila!  They’re disappeared.  I’d love to know the logic behind not excluding them, if that’s in fact what happened. To his second point though, that’s a whole lot harder to quantify.  How do you really know what a company’s intentions are?  And further, what if those intentions change?  A company can, for all the world, “plan to manufacture” all sorts of things that they never get around to for reasons that are anywhere on the scale from Completely Troll-ish to Not At All Trollish.  So excluding companies like that may actually hurt you, if you can even get the names of them at all. Finally,

There are many other methodological flaws in the $29 billion cost study, such as its explicit assumption that patent litigation costs are “too high” without providing any comparative baseline for this conclusion.  What are the costs in other areas of litigation, such as standard commercial litigation, tort claims, or disputes over complex regulations?  We are not told.  What are the historical costs of patent litigation?  We are not told.  On what basis then can we conclude that $29 billion is “too high” or even “too low”?  We’re supposed to be impressed by a number that exists in a vacuum and that lacks any empirical context by which to evaluate it.

Some people, and I may or may not be one of them, contend that any litigation in this particular arena is bad.  That’s an over-simplification and one I freely admit, but I can see why the study labels costs “too high” regardless of the actual number. The question I have though, is does it matter?  Does it matter how much money the trolls have cost companies?  Is there even really a fair and methodologically unquestionable way to get at that information?  Pre-litigation settlement terms and even post-litigation terms are not always discoverable so really, any number that people throw out is going to be questioned, and rightly so. But just because this particular number can be proven to be falsely contrived doesn’t make the whole conclusion that patent trolls are a nuisance without merit.  They clearly are, even if, and especially if, all they cost companies is time.  Time to battle these guys, time to respond to nastygrams, time to consult with counsel, all of those things take resources away from a company’s core business.  Time is the one thing you cannot ever get back.  You can always earn more money…how many times has The Donald gone bankrupt?  And where is he now, besides firing people on Celebrity Apprentice (which, by the way Big D, Bret Michaels totally did not deserve that)?  That’s right: not bankrupt. My point, and I do have one, is that yeah we want all the numbers to be factually correct and all the research to be on the up and up with no bias and no flaws but it doesn’t really matter.  It does not take a genius or a flawless study to tell us what we already know:  trolls are bad for American business.  Full stop. Just sayin’, IPTT