Patent News

Apr. 17, 2014

San Jose Mercury News Opinion: The bogeymen destroying the patent system, by Bob Zeidman

This post originally appeared in the San Jose Mercury News on April 17, 2014.

Bob Zeidman is an inventor, entrepreneur and founder of Zeidman Consulting, a firm in Silicon Valley that consults for law firms about intellectual property disputes. He wrote this article for the San Jose Mercury News. 

Lately Congress has been passing legislation to combat “patent trolls,” a derogatory term for a nonpracticing entity or “NPE,” an entity that owns patents but does not produce a product. But who is a patent troll?

Is it a company that extorts small mom-and-pop stores for $1,000 under threat of a patent infringement lawsuit? Does the term include a company that went bankrupt and is attempting to monetize its intellectual property to compensate its investors? How about a university conducting state-of-the-art research and protecting the results of that research? Is it a large corporation collecting low-quality patents and using them to extract high fees from deep-pocketed companies? What about a large corporation buying up patents from individual inventors that do not have the resources to license their inventions to large companies? There is no accepted definition; this is not by accident but rather by design.

I recently attended the Patent Trolls and Patent Reform Conference at Stanford Law School. It was attended by a few industry people like myself, but mostly by law professors from major law schools nationwide. From the title alone, it was clear where the participants stood on the issue, but it was still not clear what the issue was. There were discussions about large aggregators of patents, about secondary markets for patents, and about companies sending threatening letters to thousands of small businesses.

A study on patenting by universities, where 50 percent of the study participants gave impossible, contradictory answers, was held up to show that universities lost money on patenting and patent licensing. Why was there no consistent definition of patent troll among these people studying the issue? Why do law professors from elite schools tolerate such vagueness? Why do large corporation sue each other for billions of dollars and then complain when they themselves are sued by trolls? It is because there is a real effort among certain groups to simply weaken the patent laws. Patent trolls make a great, shadowy bogeyman to convince politicians and the public that things must change and they must change right now.

Consider that patent rights are guaranteed in the U.S. Constitution Article 1, Section 8. U.S. patent law is older than the Bill of Rights and as important to the Founding Fathers as was the free market for trading goods including patents. It also accounts for over 200 years of greater innovation than in any place and time in the history of mankind.

Do some entities abuse the patent system? Yes. Practicing entities abuse it as well as nonpracticing entities. Just as people and corporations abuse other laws. Some individuals make fraudulent insurance claims. Some corporations continue to sell products that are known to be defective and unsafe. Some doctors perform unnecessary procedures that hurt people’s health or take their lives. In fact, personal injury and product liability suits outnumber patent suits by roughly 10 to 1 in any given year. All of these abuses are handled by better enforcement of existing laws, but never by limiting the rights of some types of people or some types of companies.

The solution is to make the system more efficient. The patent office needs to quickly weed out invalid patents and quickly allow patents for novel, useful, and non-obvious inventions. This can be accomplished by better training of patent examiners and by giving them better technology to help them do their job.

Rather than demonizing and restricting certain perfectly legal business practices, improving the patent office will do much more to protect American ingenuity for the future.