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posted by martyb on Monday October 10 2016, @06:33AM   Printer-friendly
from the nice-words;-now,-how-about-some-action dept.

TechDirt reports

For quite some time now the FTC has been making lots of noises about the problems of the patent system and patent trolls in particular. While the US Patent Office itself has done little to address the problem, the FTC has recognized the harm patent trolling is doing to innovation and consumers. More than five years ago, the FTC released a big report on patent trolling and the problems it causes--suggesting that the Patent Office should start getting rid of vague patents with "indefinite" claims. That has happened a little bit, but much more because of the Supreme Court forcing the issue, rather than the USPTO listening to the FTC.

However, since then, it's appeared that the FTC has only grown more concerned. Basically every year we report that the FTC is investigating patent trolls in some form or another. [...] Since [2013], though, it's been mostly crickets.

[...]And now, finally, after all these years, the FTC has released its big report. It appears that 22 patent trolling operations responded to the subpoenas, though many had "affiliates and other related entities" allowing the FTC to study many more patent trolling operations overall. The study lumps patent trolls (they prefer the euphemistic "Patent Assertion Entities" or PAEs) into two categories: litigation trolls and portfolio trolls.

In short, litigation trolls are the smaller guys with just a small number of patents, who would threaten and sue companies (and quickly reach settlements) over those few patents. It's more of a "mom & pop" shakedown kind of business.

Portfolio trolls are the bigger, well funded operations, that have a massive portfolio of patents and play a more comprehensive shakedown game, going to lots of big companies and basically saying "you infringe on some of our patents, so give us a bunch of money to not figure out which ones." Think: Intellectual Ventures or Acacia.

[...]The study also looked at wireless chipset manufacturers (i.e., companies that actually implement products) to compare them to patent trolling operations. The key question here: do the actual implementers use patents in the same way to "protect" their business. As you might expect, they don't act very similar at all:

[Continues...]

We observed that Wireless Manufacturers sent demand letters before executing licenses, while Litigation PAEs sued before licensing their patents. Wireless Manufacturers and NPEs also sent nearly three times as many demand letters as all of the Study PAEs combined. Litigation PAEs brought nearly two-and-a-half times as many patent infringement cases involving wireless patents as Wireless Manufacturers (which collectively accounted for approximately 90% of worldwide chipset sales), NPEs, and Portfolio PAEs combined.

Wireless Manufacturer and Litigation PAE license characteristics also differed markedly. Wireless Manufacturer licenses frequently included field-of-use restrictions, cross-licenses, and complicated payment terms, whereas Litigation PAE licenses involved simple lump-sum payments with few restrictions, if any.

In short, the trolls' activity is inconsistent with the activity of actual innovators.

[...]All of the people who insist actual innovators need patents to protect their business, and that patent trolling is just a form of the same thing are full of it.

Previous: CAFC Judge: Software Patents Are Against the First Amendment


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  • (Score: 1, Interesting) by Anonymous Coward on Monday October 10 2016, @06:45AM

    by Anonymous Coward on Monday October 10 2016, @06:45AM (#412331)

    How about limit to the total percent of a product's price that goes to software patents. Right now licensing is all or nothing. That often means only big oligopolies can afford the licensing fees for multiple aspects of a product (often using counter threats), stifling small co's.

    Most software "inventions" are encountered during specific product development, not via big research labs like those of Thomas Edison or pharmaceuticals. Thus, it doesn't provide an incentive for research like patents are supposed to do. It incentivizes lawyers, not inventors.

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  • (Score: 0) by Anonymous Coward on Monday October 10 2016, @06:20PM

    by Anonymous Coward on Monday October 10 2016, @06:20PM (#412559)

    Or how about we give everyone a pony and have christmas every day of the year?!

    With sparkles!

    All that has happened is that patent trolls are pissing off companies who make campaign donations. The industry thought that patents were only benefitting them but have realised it is increasing the cost to do business.

    So they are trying to find a way to only let them use them for unfair market advantage and not these others.

    If you think that the lawmakers are running about trying to find the "best", most "sensible" solutions and simply lack knowlege of how to do it "better" you have not been paying attention...

    IOW: makig inane suggestions about how it "should be" is completely redundant.

    • (Score: 2) by maxwell demon on Tuesday October 11 2016, @07:14AM

      by maxwell demon (1608) on Tuesday October 11 2016, @07:14AM (#412841) Journal

      Or how about we give everyone a pony and have christmas every day of the year?!

      Disapproved. I don't have a need for a pony (and if everyone got one, I'd probably have trouble selling mine). And I wouldn't appreciate to have to buy Christmas presents for every day in the year.

      --
      The Tao of math: The numbers you can count are not the real numbers.
  • (Score: 2) by maxwell demon on Tuesday October 11 2016, @07:25AM

    by maxwell demon (1608) on Tuesday October 11 2016, @07:25AM (#412844) Journal

    Another idea: Forbid the selling of patents. The only way you are able to hold a patent is if you are the/an inventor, which has to be a natural person (so, no companies holding patents, and nobody can amass patents by buying them). You can still monetize your patents by licensing them, so you cannot say the inventor is not fairly compensated. And employment contracts can contain clauses about licensing of patents you created in your work, so there's also no disadvantages for honest companies.

    --
    The Tao of math: The numbers you can count are not the real numbers.