Wednesday, October 10, 2012

Why is it so hard to stop patent trolls?

In the right hands, patents are good for inventors and for society. The monopoly they give allows for companies to do R&D work and commercialize that work, creating things that are a net gain for all of us.

The problem is, there are also companies out there that never make anything. They just see an issue, think about what kinds of things might somehow be related that issue, and then file patents based just on the description of how something should work rather than on something they've actually done. They never manufacture anything using that patent. They never even have any intention of doing it. Their definition of "doing business" with their patent is to find people who they think are doing something similar to the things described in their patent, contact them, and offer to license or even sell the patent. Meanwhile the companies that license or buy the patent just keep doing what they were doing, making things to try to help the world.

I have, of course, just described startup pharmaceutical companies.

In a nutshell, that's why it's so hard to stop patent trolls (or if you want to be nice, non-practicing entities or NPEs). Because in order to be able to stop something using a law, you have to be able to distinguish it from any legitimate business practice. Otherwise you end up stifling things that the patent system is designed to protect.

I've spent a lot of time thinking about this issue. It's maddeningly difficult to find a way to describe patent trolls in a legalistic way that doesn't accidentally capture legitimate companies that are researching or otherwise working on real technologies that are expensive to bring to market and just don't have the capital to do it. After all, startup pharmaceutical companies
  • Have no intention of manufacturing products
  • Can't afford the necessary testing to be allowed to sell products
  • Have an end game of licensing or selling their patents
All of these are identical to patent trolls. The real difference is intent: pharma companies would carry their discoveries across the line if they could, and patent trolls never intend to do that. And it's very difficult to legislate intent. Want to put a condition in the law saying you have to intend to create something in order to keep a patent? Won't work: too easy to say "I would but I can't because this infringer came first and stole my market". And sometimes that argument is even true.

Believe me. There are companies with giant litigation and lobbying budgets out there that are thinking about how to stop patent trolls without all the expense of litigation. Right now they're spending millions of dollars every year on these suits: a patent lawsuit costs about $1M in fees to defend, that's why many companies will settle a case they know they can win. If there was an easy way to distinguish between the trolls and the legitimate businesses, they'd have found it.

And if you've got thoughts, feel free to leave them in the comments.

8 comments:

  1. What if a person filed a patent based on their idea, but they have a certain amount of time to show the development of said invention ("x" years)...or if the intention is to sell the patent, that the sell must be made within a said amount of time ("y" years) and at the start of that sell, the buyer has "x" years to develop said invention. Although I guess there'd need to be a protection put on the inventor so that the company couldn't turn around and just wait for that "y" time period to expire and just nab the patent for themselves for free. Just thinking outloud...

    ReplyDelete
    Replies
    1. Thanks for reading. I think this raises 3 issues:
      1. What would happen after the period? Presumably the inventor would lose the patent. But what happens next?
      2. What if it's just a really expensive and long thing to make and the time period isn't enough? And how do you avoid abuse of this?
      3. What happens to people in the interim? If a troll goes and grabs a patent, why should legitimate companies have to wait a long time before they can start working? And if they don't; that's #2.

      Delete
  2. 1. Maybe after that period, the patent expires, and then it becomes public domain.
    2. If it is really expensive, but the company can show legitimate progress on producing the invention in some way, the patent could be extended after review.
    3. If a troll grabs a patent, he/she needs to have used it to really create something unique within the time period, or the patent expires, and becomes public domain. So if a person intends to troll, they can only use the hold on the patent for a short number of years.

    If someone is clearly abusing the patent system, maybe there could be some sort of fine for stifling innovation, as it really does hurt our country, and it's setting us back?

    Again, just brainstorming here.

    ReplyDelete
    Replies
    1. Hmm... interesting. I'm not sure how #3 would work, but this is food for thought.

      Delete

Thanks for commenting. Posts and comments aren't legal advice; requests for legal advice in the comment probably won't get answered. Sorry to have to do this but someone someday is going to make me glad I did...