Patent News

Mar. 11, 2015

The Hill Op-Ed: Patent trolls, patent thieves, and the future of innovation, by Rep. Dana Rohrabacher (R-Calif.) and Rob Arnott

This post originally appeared in The Hill on March 11, 2015.

The “troll”: an unlikeable, irritable ogre who hides under a bridge and eats unwary passers-by. Yecch. An inside-the-beltway media campaign in favor of so-called “patent reform” has appropriated this “troll” image to reframe the debate on patent protection. What was once a “patent assertion entity” (PAE) has now been derisively but effectively rebranded as a “patent troll.”

Consider HR 9, the Innovation Act. Superficially, the bill has a reasonable purpose, namely, to punish firms that assert patent claims in bad faith with large fines. Example: A shell corporation sends out letters to firms unwittingly using proprietary technology without licensing the patent. Those letters demand, and often generate, compensation. It can be a sneaky con game because it is often less hassle for a small business owner to pay the fee demanded than incur the expenses and time to litigate.

Most in Congress don’t even realize that the Federal Trade Commission (FTC) has already dealt with this situation and is targeting those who abuse this practice. Any illegitimate letter is now subject to a $16,000 fine. And that’s for every single letter, to every recipient.
That should be the end of the story. However, the push to pass HR 9 has not abated – because the “troll” narrative was always a sideshow, a phony pretext. The real goal is to make it easier for “patent thieves” to steal another’s intellectual property, using “trolls” as the excuse to make wide-ranging changes in patent law seem urgent.

Let’s back up a moment: An inventor labors for years to turn a great idea into a patent, hoping to commercialize it, or sell it to someone who can bring it to market, and to protect it against theft. Patenting is a lengthy, expensive process. And there is always the risk that some company might try to use the idea without paying for it. If that happens, the inventor can sue.

But such litigation is often a David-and-Goliath scenario. Individual inventors, investors in the development of their ideas, tech startups, and university tech-transfer departments are no match for any jumbo companies that steal their ideas.

Unfortunately, this means that for some large corporations, stealing intellectual property is a worthwhile proposition. Often, especially against “little guys” who lack resources and full-time legal staffs, it is clearly more cost-effective to steal a patent than to pay for it. Even a court settlement with an inventor on the brink of bankruptcy might significantly reduce the licensing fee.