Posted on 02/03/2006 10:18:58 AM PST by Willie Green
For education and discussion only. Not for commercial use.
ARLINGTON, Va.—They're known as trolls and they turn the predator-prey relationship in the business world on its head.
They are the weak who slay the mighty. Critics call them extortionists.
Their homes in office towers give them the sheen of legitimacy, but some do their work in dingy basements or garages and then slip their weapons into the back of cluttered drawers.
The ongoing BlackBerry battle between Waterloo-based Research In Motion and NTP Inc. of Arlington, Va., has focused new attention on the so-called "patent troll" in the U.S., and sparked calls for reforms to outdated American patent law.
The Canadian company has renewed the age-old American debate about entrepreneurial spirit as it hurtles toward a Feb. 24 showdown which could silence its hand-held service to millions of users in this country.
Legislators and lobbyists for the high-tech industry here define the patent troll as an individual or company holding a patent without any designs on marketing an idea. Instead they wait for another company to shed the sweat and take the risk, then jump out and claim patent infringement.
In some cases, they buy up weak but still valid patents at bargain-basement prices and parlay them into a windfall. Sometimes they stumble upon something after flooding patent offices with applications.
They usually win.
In one east Texas jurisdiction — the venue for many of these infringement cases — patent owners have won 88 per cent of all jury trials and three-quarters of all bench decisions over the past 11 years.
Lawyers who used to deal with personal injury litigation in Marshall, Tex., have created a new industry handling intellectual property — a move Corporate Counsel magazine calls the switch from PI to IP.
But, even though the NTP-RIM fight might look like a patent troll taking on a successful company, it is never that simple.
"Tom Campana is not a troll, he is an inventor," said Don Stout, counsel for NTP.
Stout and his late partner, Campana, co-founded NTP and had been holding patents for a system that could send messages from computers to wireless devices for years before the BlackBerry became an indispensable communication tool.
Stout said major corporations such as International Business Machines and General Electric patent many products they never intend to market. People don't call them trolls, he said.
IBM received 2,941 patents last year, more than any company in the U.S. The top 10 patent list is sprinkled with household names, including Canon, Hewlett-Packard, Samsung, Intel, Hitachi, Toshiba and Fujitsu.
"The only thing Tom Campana did not do is to create a RIM. If people are calling you a troll because you did not successfully commercialize your product, I reject that," Stout said.
"RIM is saying that you cannot protect a patent unless you make a successful product and that is just plain wrong. That was never the intention of the Patent Act in this country."
As a lobbyist for the Information Technology Industry Council, Josh Ackil is not targeting the big or the small company, but trying to eliminate the troll.
"In our court system, the troll always has the upper hand," he said. "Courts and juries are always leaning toward issuing the injunction. It forces companies to spend money on settlements, rather than face their products being taken off the market."
That forces technology companies to spend too much on defending their products and settling litigation, and too little on research and development, Ackil said. "It is a chit against our country competing in the global market place."
A 2004 report by the National Academy of Sciences showed the number of patent-infringement lawsuits resolved in federal courts doubled between 1998 and 2001. A new patent bill has stalled in the House of Representatives, but its sponsor, Texas Republican Lamar Smith, said it is coming back.
"These ... trolls can extort settlements from manufacturers by threatening to shut down assembly lines in the course of infringement suits," Smith said.
The U.S. Patent and Trademark Office received 376,810 patent applications last year, and issued 187,170 patents. Its backlog is such that if it took no new applications for two years, it would barely catch up.
The RIM case has spurred calls for a patent law overhaul.
Reed Hundt, a director at Intel and former chair of the Federal Communications Commission, in a commentary for Forbes magazine, described the patent system as a mess. He said the four-year NTP-RIM battle is the most recent illustration of a malfunctioning system, and one of the most expensive.
Some analysts suggest NTP could win as much as $1 billion (U.S.) from RIM, which would be the fourth richest licensing award in U.S. history.
"Is this any way for a capitalist economy to treat one of its most effective new inventions?" Hundt asked. "The U.S. ought to chuck this 18th-century relic and start all over again."
The RIM-NTP battle heads back into a Richmond, Va., courtroom on Feb. 24, when a judge will hear NTP's request for an injunction to shut down the sale and operation of all but the most essential of American BlackBerries.
U.S. Technology Prowess?
Alan Tonelson
Thursday, February 02, 2006
The most competitive economy in the....
# of U.S. companies among top 10 U.S. patent recipients, 2005: 4
# of Japanese companies among top 10 U.S. patent recipients, 2005: 5
# of Korean companies among top 10 U.S. patent recipients, 2005: 1
# of patents won by U.S. companies in patent top 10, 2005: 7,848
# of patents won by non-U.S. companies in patent top 10, 2005: 8,840
Source: Calculated from "USPTO Releases Annual List of Top 10 Organizations Receiving Most U.S. Patents" Press Release #06-03, January 10, 2006, U.S. Patent and Trademark Office,
ping
I thought all of NTP's patents had been found to be invalid.
That's where he's wrong:
Promoting successful products is PRECISELY the point of having a Patent Office, and is also why the Patent Office falls under the Commerce Department.
Patents were never intended to be simple intellectual games or badges of academic achievement.
Sometimes the patent lawyers use obscure and questionable patents to intimidate and knock the small competitors out of business. Look at Bose for example.
Lawyers are right up there with liberals and terrorists, maybe ahead in areas like these, with regard to damaging the US.
We need legal reform in so many areas - and we need to find a way to do it despite lawyers.
It looks like if the big guys can't win in court they move to Plan B: Change the law.
The Patent Office just issued rulings killing all of NTP's patents, but NTP continues to appeal.
Patent trolls practice predatory law, they should be outlawed.
The law SHOULD be changed if we wish to promote innovation, technical superiority, and free market economics in our democracy.
My uncle, who is employed by a foreign company but works in the US has over a dozen patents on his inventions. While his employer is not a US company, he is an American working in America.
Also have another uncle with several patents. Including one invention that is in the Smithsonian.
Now, how many of the patents were by non US companies that are not in the US and no Americans were involved in the invention process?
I can't get excited about this.
"Patent trolls", in basements, can go look up dead patents and buy them for a song, but huge multinational corporations with billions of dollars in assets can't do the same thing?
They could.
They just don't want to.
What they want to do instead is to make what their own R&D comes up with and sell it, and not give royalties to somebody who came up with it first (they consult the patents on the books to see what's there - let's not be naive here). They make the profit, and roll the dice. Either the guy with the original patent will come forward, and they can settle with him, or they can outlast him and outgun him in a fight.
So, it goes to juries, and the big companies lose because it's obvious that the guy who has the patent came up with the idea first and patented it.
Oh, and the patent "troll" was able to buy the patent from the guy, so why couldn't the company whose business it is to invent things in that sector have done the same thing, at a slightly higher price?
The simple answer is that they don't WANT to.
Sounds to me like the patent system is working precisely as designed.
BUMP
Sent a link to #1 son.
We've done ok for the last couple of hundred years.
seems to me that it is a matter of not having the money to market a product.
Corporations usually don't tell little guys their research plans.
In addition how about those corporations that do research, find a similar patent and then try and reverse engineer a new but different design.
Seems most of this is just complaints about an even playing field.
Listen and learn.
On July 13, 1943, my father submitted a patent application for his invention: the first portable room window airconditioner that heated and cooled, dehumidified, and cleaned the air of pollutants. On January 6, 1948, he was awarded U.S. Patent 2,433,960.
Immediately after his patent was granted and made public information, General Electric stole it and put my father's invention into production. Over the years they made billions of dollars on his advention. My father, obviously upest, brought a suit against General Electric. As the suit dragged on, GE lawyers met with my father and delivered a message: "We'll drag this out in court until you are bankrupt and have to withdraw your suit." Then, for good measure, they had my father fired from his job as a graduate, licensed mechanical engineer (Massachusetts), license 1185 of July 19, 1945. GE then black-balled him and kept him from getting another job as an engineer. He spent tha last years of his life as a grocer.
So PLEASE, no crap about "patent trolls." My father was cheated out of his life's work, fired from engineering, and never received a dime in royalties for his invention of the airconditioner you now have humming in your window. He said his mistake had been getting a patent and thus making public his work.
I don't see any mention of RIM doing a patent search prior to implementing their product. Their defense as far as I have kept track of it has been that U.S. patent law doesn't apply to them because they are a Canadian company. I think NTP will and should prevail. Of course if you own a Blackberry, you will interpret the law differently.
I hold the patent for web forums. My lawyer will be contacting Jim Robinson.
Hey, isn't that a freeper word? ( After the Brothers Grimm...)
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