Forbes: Thank heavens for those patent trolls
This article originally appeared in Forbes on January 24, 2014.
It’s the new year, a wonderful time to reflect on all of the things we can be grateful for. Contrary to popular opinion, it’s time to spare a kind word and thought for the blessings that patent trolls bring to our nation and to our prosperity. No, this is not Jonathan Swift’s “A Modest Proposal.”
As a libertarian I weep for the patent trolls as the lynch mobs gather. Full disclosure: I don’t have a dog in this hunt, nor have I ever worked with or against a patent troll. But they serve a genuine need in the marketplace. Patent trolls are often the buyer of last resort for an inventor who cannot afford to develop his or her invention into a product.
It bears asking: Who invented the name? Was it perchance patent thieves who conveniently coined the name “patent trolls” to deflect attention from their own nefarious activities?
Suppose I’m an inventor, not part of a multinational behemoth. I develop a wonderful innovation that will revolutionize software, banking, telecommunications and the Internet in one deft stroke. Unfortunately, I can’t bring this idea to market alone; it’s best done by one of the jumbo players in one or more of these fields. I take my idea to Google, to Microsoft, to Goldman Sachs or perhaps to AT&T. They dismiss me and my idea. Fair enough. So I turn to their competitors, and face the same reaction. But then products begin to appear that could exist only if my idea is being used.
But suppose I’m a little guy. I don’t have the resources to take on a multinational behemoth. Patent aggregators–er, trolls–to the rescue! They have deep enough pockets to do battle with the exploiters of my invention. They pay me good money for my intellectual property. Maybe they even let me tag along with the promise of some residual participation in their winnings.
Now get this: The trolls start winning!
Hypothetical patent thief Research In Motion settles for $612 million. But not before a judge imposes an injunction, which shuts down all of the BlackBerrys on which Wall Street and the U.S. government seem utterly reliant. The outrage during the appeal process is palpable. The departments of Justice and Defense weigh in, but the Supreme Court dismisses their concerns. The Wall Street Journal and many others on the right and the left excoriate the patent owner, not the infringer. After the case is settled Congress quickly singles out patent law as one of the only parts of tort law in which courts cannot offer victims of patent theft injunctive relief.
But wait–there’s more.
Not satisfied with ending injunctive relief, Congress passes a law that singles out patent plaintiffs for “loser pays” treatment. This sounds great, unless the battle is between a small inventor and a multinational behemoth, and the battlefield is tilted sharply against the patent owner. The inventor is now constrained to a very expensive discovery process, in which the plaintiff has to know exactly what evidence will show infringement in order to have the right to ask for that evidence. Unique to patent law, a provision of “joinder” allows the winner to seek restitution of costs from anyone with a legal or financial interest in the patent or from the patent owner, which will have a chilling effect on investment in patents and innovation.
In an effort to rein in perceived abuses from so-called patent trolls–whose primary affront would seem to be their victories over patent thieves–our nation seems ready to turn its back on two centuries of leading the world in invention and innovation.
So let’s take a moment to thank the trolls for their role over these 200 years as buyers of last resort whenever patent thieves had deeper pockets and more determination than the inventors.