FTC Will Probe "Patent Troll" Problem, But Won't Sue Anyone
June 20, 2013 10:03 AM
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
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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
The Galaxy C9 Pro Samsung Smartphone Has 6GB RAM
October 24, 2016, 4:29 AM
The Unlocked Moto Z Play Launches for $449.99 Today.
October 22, 2016, 5:00 AM
Nintendo Announced Next Game Machine to be Portable “handheld”.
October 21, 2016, 5:00 AM
Do you hate to do yard work?
October 20, 2016, 5:00 AM
Smart Technology Mood Collar To Understand Your Dog’s Emotions
October 17, 2016, 5:00 AM
iBeat: A heart monitoring smartwatch that can save lives by Monique C. Bethell, Ph.D
October 8, 2016, 10:25 AM
Most Popular Articles
Car Insurance - The Hidden Discriminatory Practise
October 18, 2016, 5:00 AM
Is Razer Blade Stealth Laptop For You?
October 16, 2016, 5:00 AM
Cyber Hackers Threaten Security of Lifesaving Medical Devices
October 19, 2016, 8:09 AM
Excellent Wi-Fi Camera - Panasonic Lumix DMC-FZ300K
October 18, 2016, 5:00 AM
Problems with Windows 10 – Update Now
October 15, 2016, 7:30 AM
Latest Blog Posts
MacBoo Pro 2016: Release date Oct. 27
Oct 24, 2016, 7:16 AM
Mac Users, Try this if Your Mac is Infected?
Oct 23, 2016, 7:00 AM
Tips to Prevent Smartphones From Overheating:
Oct 22, 2016, 5:00 AM
Nasa Flies Drones at Nevada Airport
Oct 21, 2016, 8:21 AM
T-Mobile Data Problems
Oct 20, 2016, 10:17 AM
Annoying Apple Watch Problems and How to Fix Them
Oct 20, 2016, 5:00 AM
Your Mail May Soon Be Delivered By Robot
Oct 19, 2016, 9:34 AM
2018 Jeep Wrangler Prototype Sells At Junkyard
Oct 18, 2016, 5:00 AM
Samsung Shines with Gold Edition Tablet
Oct 17, 2016, 9:24 AM
Tesla Hints Mysterious Product Debut for October 17th
Oct 16, 2016, 10:14 AM
Samsung Galaxy Note 7 Phones on US flights
Oct 15, 2016, 5:00 AM
Comcast Fined $2.3 Million For Unconfirmed Services Charged To Customers
Oct 14, 2016, 5:00 AM
“American singer / songwriter “Bob Dylan is awarded 2016 Nobel Prize in Literature.
Oct 13, 2016, 10:33 AM
Battery Defect in Medical Device
Oct 12, 2016, 5:00 AM
IBM Bolsters Social Services Sector With Technology Grants
Oct 11, 2016, 5:00 AM
Scientists Sound Alarm on Climate but US Still Toys With Skepticism
Oct 10, 2016, 5:00 AM
IMEX America Trade Show
Oct 9, 2016, 10:00 AM
Phone Wars – Google VS Samsung Free Gifts on Purchase
Oct 6, 2016, 5:00 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information