Patent News

Jan. 7, 2015

Ars Technica: Troll fatigue: Earnest debate on patent abuse at CES, by Megan Geuss

This article originally appeared in Ars Technica on January 7, 2015.

LAS VEGAS—On Tuesday at the Consumer Electronics Show in a meeting room above the show floor, a panel of six tech industry actors hashed out their quite contentious views on patent reform in front of an audience.

Although this time last year it looked as if momentum was growing in Congress to pass rules that would crack down on patent abusers, 2014 ended disappointingly for the lawyers and lobbyists that were working to curb the frivolous claim letters made by patent holding companies. The popular bill that would have enabled those rule changes, called the Innovation Act, was killed by its own creator, Senator Patrick Leahy (D-VT), in the eleventh hour after facing massive resistance from trial lawyer lobbies and pharmaceutical companies.

This year, the fervor of patent reformers is no less real, but the complications that the Innovation Act faced in Congress seems to have stilted some of the patent reform euphoria. In the discussion at CES on Tuesday, six panelists from many sides of the patent reform debate offered wildly differing views on how much, if any, reform is needed.

Newegg’s Chief Legal Officer Lee Cheng (whom we’ve profiled here on Ars) was one of the strongest voices on the panel in favor of a renewed effort to change how patent holding companies can sue supposed infringers. Newegg has made it company policy to fight patent demand letters rather than settling with the holding companies to avoid costly court battles. “If you pay off one outlet, you have to pay off all of them,” Cheng told the audience, adding that since Newegg started fighting patents in trial, the company doesn’t “get sued anymore,” because “these patents suck.” Sally Washlow, President of Cobra Electronics, represented patent reformers that don’t have the resources to fight patent assertion letters. She said she was tired of receiving “extortion letters” and explained that such letters have cost Cobra millions of dollars, as well as jobs.

The panel also included some very vocal reform skeptics—a change from the first time a CES panel tackled this subject in 2013. Bill Merritt of research company InterDigital argued to largely leave patent law as-is, indulging in only “very surgical” reforms. “We’re pure research,” Merritt said of his company. “We don’t actually produce products, but ultimately the value of the company is based on patents.” Vice President of Government Affairs at Qualcomm Laurie Self joined Merritt in his refrain. “We want to pursue targeted rational reforms to the system… but we don’t believe you go about it by eviscerating the patent system,” she said. “The implications for our economy are profound.”