Pigs Fly, Hell Has Frozen Over, and the New York Times Supports Small Inventor and University Patenting

By Kevin E. Noonan --

Admittedly, only on its Op-Ed page.  But last Saturday Joe Nocera wrote a remarkably sane and reasoned column, entitled "The Patent Troll Smokescreen," pointing out that "big companies with large lobbying budgets" are using the patent troll meme to change patent law in their favor (but in ways that will not increase innovation, benefit the country or "promote progress" for anything other than their bottom lines).

The column was prompted by the paradox that for some, like the Electronic Frontier Foundation, anyone who is a non-practicing entity (or NPE) and asserts a patent is a patent troll.  Mr. Nocera clearly understands the received wisdom about patent trolls:  they are NPEs that "use [their patents] not to further innovation or manufacture a product but to conduct a kind of legal extortion racket," based on patents that are "sometimes absurdly vague."  He cites as an example the Lemelson bar code patents (which of course were never accused of being vague but this is journalism so, close enough).  Patent trolls, Mr. Nocera writes, are "sand in the engine of commerce."

But it is clear that Mr. Nocera has been taken aback by the rhetoric that patent trolls should include universities because "[w]henever the university's scientists come up with innovations -- which they rarely intend to use to manufacture a product -- WARF [who licenses patents from the University of Wisconsin] applies for a patent and then seeks to license it, just as trolls do."  Naively, he then states that "of course, nobody thinks a university is a patent troll" based on his (correct) understanding that "[u]niversities are supposed to come up with new ideas, not manufacture new products.  That's what companies do."  And he further understands that even anti-troll champions like Hastings College of Law Professor Robin Feldman recognizes the social utility of encouraging universities to license their patented technology, because it will "encourage the commercialization of new products."

The social utility could be hampered, Mr. Nocera realizes, if the bills in Congress aimed at curtailing the type of "trolling" he disparages ends up "having huge negative consequences for legitimate inventors."  Or if "a series of Supreme Court rulings make matters worse, putting onerous burdens on inventors while making it easier for big companies to steal unlicensed innovations."  (The latter has, of course, already happened; see "The ACLU, Working for the Man").

According to Mr. Nocera, those decisions and the AIA have created a situation where "big companies can now largely ignore legitimate patent holders."  And the companies doing it "don't call it stealing"; instead, they call it "efficient infringing" according to Robert Taylor, a patent lawyer for the National Venture Capital Association.  The result:  the big company expropriates patented technology and then has "top-notch" patent lawyers working for it to invalidate any patent asserted against it.  And "[b]ecause the courts have largely robbed small inventors of their ability to seek an injunction [] the worst that can happen is that the infringer will have to pay some money.  Which, for a rich company like, say, Apple, [is] no big deal," according to Mr. Nocera.  In Apple's case, the piece states that Apple has a policy, expressly stated on its website, that "the company can lay claim to any unsolicited [note, not unpatented] idea."  He then describes the lawsuit between Wisconsin and Apple and the $234 million judgment the WARF obtained against Apple for patent infringement.  But he mentions that this doesn't make Wisconsin whole, due to lost opportunity costs, stating that WARF didn't have the chance to license the technology exclusively to an Apple competitor, and in addition had to risk infringement litigation to obtain any recovery at all.

The piece ends with a reminder that bills remain pending in both the House and Senate that "will [] effectively tilt the playing field even further toward big companies with large lobbying budgets" and states:

For the sake of real innovation, and in the name of the small inventor, who holds a special place in America's mythology, the pendulum needs to start swinging in the other direction.

Perhaps a measure of sanity will return to the patent law debate, if the Times Op-Ed editors saw fit to publish Mr. Nocera's column.  Patentees would do well to send a copy to their Senators and Representatives in Congress, and perhaps take the opportunity to engage legislators in a discussion of these issues.

Because we can be sure that those "large lobbying budgets" are not going unspent by companies engaging in "efficient infringement."

Comments

[EG]

Hey Kevin,

By gosh, "hell hath frozen over"! BTW, we do have the Flying Pigs Marathon here in the Queen City.

[William T. Semple]

Honestly, I think it would behoove us to send your comments as well. The reason is that the paradox you point out can only be resolved in Congress if the law applies only to "patent trolls" and not to universities and colleges, which would effectively grant constitutional rights to one patent owner over another based on whether the originator was a university or a business. There is a point where a right becomes so restricted by the law that it is no longer a right, which is where current patent reform is headed.

As an inventor who successfully licensed technology over twenty years after our business failed, not every NPE is a troll, notwithstanding the defendant's (and Congressional) take on the matter. Prosecuting our applications required every remaining dollar we had. At one point, we considered allowing the defendant's defamation to come into trial, because we believed so strongly that after hearing our story, the jury would decide that though we may have been struggling businessmen, we still had rights to our patents, and that calling the struggling small inventor or failed start-up a patent troll would be seen for what it has become.

It is not news to me that big companies view patent infringement as a cost of doing business. They don't get overly concerned of a big final judgment, as in the recent Apple case, because rarely, if ever, do those ever reach final judgment and a collectible payout.

[A Rational Person]

Although in general I agree with Mr. Nocera's op-ed, he is factually wrong with respect to say that no one would call WARF a patent troll. In fact, Mark Cuban, one of the people financing the EFF, called WARF a patent troll in the comments section of a IP Watchdog article:

"Mark cuban October 14, 2015 8:55 pm
Some of the logic is crazy. If someone breaks in? Turn to the legal system for partents, not the break in

But Gene oh Gene. Look at the date of the IOHAWk filing.

And Mr Stein. As far as the EFF, I obviously agree with them . The number of times I have asked them or told them to write aBout a topic, person, place or thing

ZERO

I think I have had maybe 3 interactions other than them asking for more money over the years

I don’t need to dictate anything. The material is plenty

And of course today we had another victory for the trolls over apple with WARF

An instruction set from 1998. I’m sure apple search for every potential option and stole the idea from the inventor and they waited more than a decade so it would appear it wasn’t willful, right ?

Justice was served everyone, right ?"