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Why Tech Vendors Fund Patent Trolls
Lucas123 writes "Major tech vendors are funding patent trolls, companies that derive the bulk of their income, if not all of it, from licensing huge libraries of patents they hold as well as by suing companies that use their patents without permission, according to an investigation by Computerworld. Tech companies — including Apple and Micron — have railed against patent 'nuisance' lawsuits, only to fund or otherwise support some of the patent trolls. Because of patent trolls, more politely called mass patent aggregators, patent litigation has in part increased by more than 230% over the past 20 years. 'Most of the major tech companies are backing a troll in some way, probably financially,' says Thomas Ewing, an attorney who has authored reports on what he calls 'patent privateering.'"
This is what it looks like when you decide that labor is unnecessary and all you need is capital. Who needs to do real work, anyway? Viva la capitalism!
Send lawyers, guns, and money.
Although industry best practices avoid the gunplay part, leaving that to surrogate enforcement agencies.
Does that just mean licensing some of their patents, or does it mean funding them directly?
-- Two men say they're Jesus. One of them must be wrong. - Dire Straits
Because if you can't beat them join them.
The problem is obvious patents, not who owns and enforces those obvious patents. All big tech companies own and enforce obvious patents, so how is this worse than companies that produce nothing doing the same thing? We need a fix to obvious patents. Shorter time limits for (de facto) software patents, and peer review are the only workable solutions that have been proposed.
"patent litigation has in part increased by more than 230% over the past 20 years."
Math check... a 4.2% increase, per year, over 20 years yields 230%.
Is 4.2% per year so much? Given the changes in technology in the past 20 years, that seems quite modest to me.
It's all part of a 'mutual assured destruction' strategy. A large corp has to have a lot of patent bombs available to use on competitors to discourage competitors from using patent bombs.
Because of patent trolls, more politely called mass patent aggregators, patent litigation has in part increased by more than 230% over the past 20 years
The number of patent cases has increased almost exactly in lock step with the number of patents granted (see page 8). The growth rate for litigation since 1991 is 4.9%, whereas the rate for patents granted is 4.5%. There is not a lot of evidence that there are more patent cases because of non-practicing entities. For example, litigation rates have been relatively flat since about 2003, despite numerous patent aggregators only coming into existence in that timeframe (see page 8 again).
NPEs also tend to lose cases more often than practicing entities (see above, page 24 and 32). NPEs win about 23% of the time overall, and PEs win about 39%. When NPEs do win the awards are higher, but that's to be expected. The primary value of litigation for an NPE is to get money, either as a damage award or as a license agreement. The primary value of litigation for a practicing entity is to exclude a competitor. Damages are nice, but the real point is the injunction.
That loss rate is a good example of why more fee-shifting (i.e. loser pays the other side's attorney's fees) in patent cases would be beneficial in eliminating frivolous, "shakedown," and otherwise questionable patent suits brought by NPEs.
Someone should start a White House e-petition!
simple answer: it reduces competition by raising the costs to new entrants to impossible levels
...by suing companies that allegedly use their allegedly valid patents without permission.
The way patents work almost forces companies to pursuit the aggregation of huge numbers of senseless patents. How else can a company defend itself against companies doing exactly the same and suing the shit out of them? The patent trolls are not the ones to blame - the problem is the legal framework around patents that allows "trolls" to exist in the first place and build a profitable business on it.
My karma ran over your dogma
DVD, bluray, 3GPP, JEDEC, the list goes on. you write a check, send in your patents or agree to license them cheap to anyone who asks and you are part of a standard
the trolls or whatever you want to call them want to be the standards body. why let a non-profit collect membership checks when you can start a PAE and do the same?
because they are short sighted and stupid
Either you pay them to fight on your side or they end up working for your competitor, working against you. Its basically a protection racket.
Have gnu, will travel.
If anyone accuse you of patent infringement, check the patent calmly. If the patent is something obvious like "I invented the rounded corners", shoot the lawyer (twice, for sure) and send his head (only the head) back to the owner of the "patent", and repeat this until the owner of the "patent" runs out of lawyers.
Religion: The greatest weapon of mass destruction of all time
Chart 6d on page 22 shows that patent trolls (non practicing entities) receive vastly higher damages in software. The median for software is ~$143, while that for the runner-up (computer hardware) is ~$48.
Combine this with unavoidability of accidentally using obvious software patents and you can see why there are only a few big players that control the software market.
Chart 2c shows that the Lucent got awarded over $1500 million in damages from Microsoft for MP3 techology. I was not aware of this case from 2007 before. The damages are larger than the Eolas and i4i cases combined.
DNA is the ultimate spaghetti code.
Say you're a manufacturer and you'd like to keep competition away. You could sue, but that would invite potentially damaging counter suits; it's like launching a nuclear missile. So you fund a terrorist organization to do what you need done. The counter suits are directed at them, not you. Profit!
Solution: companies should counter sue the funding source, not the troll. You don't deter terrorists, you deter their enablers. And legislators should facilitate this as needed with tweaks in the law, though fixing the PTO would be a better solution; there seem to be some serious adverse incentives there due to congress making them self funding through fees.
Since the guy who had his patent stolen was a non-practicing entity, I guess he would not have had any recourse.
Is that fair?
The trolls chose to become extortionist.
Stop patenting trivial, obvious, processes and the like.
Make a law that you have use your patent, or have a good reason why not.