FTC Will Probe "Patent Troll" Problem, But Won't Sue Anyone
June 20, 2013 10:03 AM
comment(s) - last by
Trolls say they serve a valuable roll protecting inventors and business partners
In response to
a request by Congress to wage war on so-called "patent trolls"
-- also know as a patent assertion entity (PAE) or non-practicing entity (NPE) -- the
U.S. Federal Trade Commission
is expected to consider solutions to the problem via a 6 (b) probe, a type of federal investigation.
I. Prepare to Be Probed
This kind of probe is authorized under the aforementioned section in the FTC Act (specifically,
15 USC § 45
), the law that created the Commission back in 1914.
FTC Chairwoman Edith Ramirez in recent months has opined that the patent system is growing too big to reasonably enforced. The technology of a smartphone, for example, was
likely covered by tens of thousands of patents
(many of which it was in infringement of) she said.
Her organization had taken a soft approach with the so-called patent trolls in
held December 10, 2012 in the capitol, co-hosted by the
U.S. Department of Justice
(DOJ). But since then Congress and the White House have been under pressure by their donors in the tech industry to take aggressive action against the trolls, who are leeching away industry profits.
The U.S. FTC is probing "patent trolling". [Image Source: TheNextWeb]
President Obama issued
five executive orders
earlier this month targeting the trolls.
The FTC will now vote on whether to launch the follow-up to its December workshop, a full probe. Given the unilateral pressure from lawmakers, this seems virtually certain.
II. Trolls Fight Back
The "trolls" have long rebuked that title and claim they play a valuable role in protecting small inventors and helping some larger firms monetize their portfolios (or liquidate investments) via lawsuit-or-license schemes.
Companies like Intellectual Ventures
, the alleged troll founded by former Microsoft Corp. (
) chief technology officer Nathan Myrhvold, and semiconductor licensing technology firm Mosaid Technologies Inc. (
Nathan Myrvhold -- an ex-Microsofter -- heads one of the largest alleged "patent trolls", Intellectual Ventures. [Image Source: ZUMA Press]
Mosaid's chief intellectual property officer Scott Burt comments, "There are companies that are engaged in spurious lawsuits, seeking settlements that are less than the cost of litigation. But not us. We are a patent-licensing company."
The NPEs (or trolls, if you prefer) are responsible for 60 percent of the roughly 4,000 patent lawsuits filed last year (up from a mere 29 percent in 2010). And many of the lawsuits push the bounds of credibility -- such as the company who patented scanning a document and emailing it, and then proceeded to sue thousands of small businesses on the East Coast. One major problem is that it often
takes more money to fight a bad patent in court
than to simply pay a small settlement to a troll.
Ms. Ramirez says the verdict on NPE's utility is still out, commenting, "A central empirical question, which we will continue to examine, is whether P.A.E.’s encourage invention or instead hamper innovation and competition."
Her board is currently short-staffed due to a deadlock in nominating a fifth commissioner. Currently there are two Democrats and two Republicans on the FTC. However, the trolling issue is arguably outside party lines as the tech companies affected donate to both parties.
The only concern about an inquiry is that it could broadly expose business information and trade secrets of alleged NPEs.
Assuming the inquiry proceeds, it's important to remember that no action will be taken -- the inquiry would only be for the purpose of generating recommendations to Congress. Congress has been sluggish in acting on the issue. But once the FTC finishes up, it may be budged into action at last.
The New York Times
This article is over a month old, voting and posting comments is disabled
6/20/2013 1:03:30 PM
Maybe I'm way off base here, but to my mind it seems like patents should be non-transferable. They were created to protect the inventor so that they could make use of their own intellectual property and work. For this reason, I would propose that if an individual patent holder dies, or a company holding patents (that they filed themselves) goes out of business, the patent should be void since it is no longer necessary to protect the inventor. This could become a bit murky if, say, a company is bought by another company, but I'm sure that sensible solutions to this type of situation could be found.
6/20/2013 2:33:25 PM
Unlike copyrights, patents only last 21 years. So transferrable or not, there's really not much difference.
The problem is the USPTO is granting so many stupid patents. NTP got a patent on email by adding the words "over wireless" to it, then successfully used it to squeeze more than half a billion dollars out of RIM (maker of Blackberries). So as someone already said, the real fix is to fix the USPTO.
But if you do want a technical fix rather than an organizational fix, limit awards to damages suffered. Since a patent troll doesn't make any products, it doesn't actually use the patent, and thus it suffers no damages when someone else uses the patent. The only way you could collect any damages for patent infringement then is if you make a competing product using your patent. The infringer's product then reduces the marketability of your product, and you suffer damages.
"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
Apple, Google Surrender to Patent "Troll"; Vizio and Toshiba Fight It and Win
June 11, 2013, 4:17 PM
House Punts on Patent Trolls, Asks FTC to Deal With the Problem
June 7, 2013, 6:54 PM
ITC Review Upholds Apple's Ban on Samsung Nexus, Galaxy Tab Shipments
April 9, 2013, 1:42 PM
Tech Giants Form Super League to Fight Patent Suits
July 1, 2008, 1:40 PM
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
The Samsung Galaxy S7
September 14, 2016, 6:00 AM
Apple Watch 2 – Coming September 7th
September 3, 2016, 6:30 AM
Apple says “See you on the 7th.”
September 1, 2016, 6:30 AM
Apple sued because of iPhone 6 Touch Disease
August 31, 2016, 7:00 AM
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Most Popular Articles
Are you ready for this ? HyperDrive Aircraft
September 24, 2016, 9:29 AM
Leaked – Samsung S8 is a Dream and a Dream 2
September 25, 2016, 8:00 AM
Yahoo Hacked - Change Your Passwords and Security Info ASAP!
September 23, 2016, 5:45 AM
A is for Apples
September 23, 2016, 5:32 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Latest Blog Posts
Burlington Gun Attack
Sep 27, 2016, 5:00 AM
Who is in Risk of Getting Oral Cancer?
Sep 23, 2016, 6:02 AM
France Bans Plastic Eating Utensils in Restaurants
Sep 18, 2016, 10:49 AM
Progress Against Acute Myeloid Leukemia
Sep 17, 2016, 5:30 AM
Apple Watch Series 2 - Number 1 in the Customer Satisfaction.
Sep 7, 2016, 6:19 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information