Patent News

Feb. 9, 2015

IPNav: The Wrong and Right Way to Handle Patent Reform

This post originally appeared in IPNav on February 9, 2015.

We’re not against patent reform and we predict we’ll be seeing some in 2015. But we are against misguided patent reform. There’s a wrong and a right way to go about it.

The wrong way casts all or most patent owners (including companies that acquire patents) as the villains and displays ignorance about the nature and extent of the “patent troll” problem.

The National Retail Federation (NRF) recently launched United for Patent Reform, a coalition of thousands of retailers and about nine technology companies, including Oracle and Dell.

The NRF consists of associations in the hotel, retail, restaurant, and (a few) technology industries and says it represents “Main Street Merchants.” But its board of directors includes executives from Macy’s, JC Penney, and BJ’s Wholesale Club, giant businesses that are responsible for the closure of many true “Main Street” small businesses.

The NRF defines patent trolls as companies that buy:

overly obscure, general or vague patents with the sole purpose of extracting licensing arrangements and settlement payments by threatening businesses and companies with claims of patent infringement.

But what could be more “obscure, general, and vague” than the phrase “obscure, general, and vague”? A lot of patents look “obscure, general, and vague” to anyone other than a patent lawyer.

As for the scope of the “problem,” the NRF cites the BU Law School Professors’ study that trolls cost the US economy $30 billion per year.

But that $30 billion figure is hooey, as we explained in this blog and as so eloquently stated by Joff Wild in this article in iam (Intellectual Asset Management) magazine about how BU is itself now a “patent troll” according to its professors’ definition:

It boils down to this: if you quote that $29 billion as a sum which trolls cost US companies in 2011 you would have to believe that Boston University is a troll. And if you believe that Boston University is a troll then you have to believe that high-quality patents which underpin popular products are not worthy of protection, unless their owners also make products themselves. And does anyone credible seriously believe that?