Opinions and Editorials

Aug. 9, 2020

RealClearPolitics: Revisiting Big Tech’s Patent Troll Boogeyman by David Kline

Late last month the CEOs of four of the most powerful tech companies in the world — Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, Apple’s Tim Cook, and Sundar Pichai of Alphabet, which owns Google — testified before the House Judiciary Committee, which has spent a year investigating their companies’ alleged anti-competitive and monopolistic practices.

That’s quite a fall for Big Tech, which just a decade ago was viewed by Congress as an unalloyed social good. With every aspect of Big Tech’s behavior now under review, perhaps it’s also a good time to revisit its “patent troll” narrative. This is the notion, unlikely on the face of it, that somehow the richest and most powerful companies on the planet have become the “victims” of a handful of small-time bad actors using the threat of patent litigation to extort settlements and supposedly “stifle innovation.”

To be sure, a decade ago there were a few shady characters, such as the infamous troll MPHJ, who threatened mom-and-pop businesses with patent suits to extort cash settlements. But to the extent the patent troll problem ever really existed, it has clearly now been solved. Patent suits against Big Tech companies are down by as much as 50% compared to earlier in the decade. Meanwhile Big Tech’s revenues and market value have skyrocketed by 40% and 58%, respectively. Big Tech is hardly the “victim” here — each of the four companies testifying last month is worth more than the GDPs of all but the 16 largest nations in the world.

Nonetheless, Big Tech’s lobbyists have deftly deployed this patent troll narrative over the last decade to achieve what economists call “regulatory capture.” They secured the passage of the America Invents Act of 2011, got the Obama administration to appoint Google deputy counsel Michelle Lee as director of the patent office, and forced a variety of other regulatory and legal changes that weakened patent rights. This includes the creation of an administrative tribunal known as the Patent Trial and Appeal Board (PTAB) to cancel already-issued patents.