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
Am I missing something obvious?
6/20/2013 1:37:01 PM
It seems like one of the most obvious fixes for this abuse is to require that you demonstrate that you are working to develop the IP into a product.
Isn't that the original rationale for the patent?
"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)
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
Microsoft Announces the First Steps in Its "Universal Apps" Program
April 15, 2014, 7:59 PM
Amazon Fire Phone Prototype Leaks, Will Feature 3D Camera Interface
April 15, 2014, 1:33 PM
Toshiba's $1,500 Satellite P55t Notebook Supports 4K Resolution
April 15, 2014, 10:27 AM
Xbox One April Update Now Available
April 15, 2014, 9:13 AM
Windows Phone 8.1 Developer Preview Goes Live
April 14, 2014, 4:46 PM
Report: Eight More Nokia Microsoft Phones Waiting in the Wings
April 14, 2014, 2:22 PM
Most Popular Articles
Cities to Carpoolers: Sharing Your Car is Illegal, We Will Seize Your Cars
April 4, 2014, 9:17 PM
Taiwan's AOU Claims to Have World's Highest-Res. OLED Smartphone Display
April 11, 2014, 1:44 PM
iPad Exploiter is Freed by Federal Appeals Court
April 11, 2014, 7:40 PM
It's Very Likely Neanderthals and Humans Had Sex, Produced Offspring
April 10, 2014, 8:40 PM
Cops at Historically Troubled LAPD are Sabotaging Digital Recording Devices
April 9, 2014, 11:10 PM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information