What We Should Really Fear From Patent “Trolls”

Published December 5, 2015

A growing number of people have begun to appreciate the damage done to small business and innovators by so called “patent trolls.” Some of the arguments about those who take advantage of the patent system have been conjecture, some no more than name calling, but much has been well grounded with empirical studies. A recent literature review of all the studies has brought into a clear bright light the damage of the marauding trolls.

As reported in the Washington Post, “During the past five years, academic researchers have published more than two dozen empirical studies on patent litigation and its economic impacts. These studies have been conducted by researchers with diverse views and using different methodologies. The preponderant economic picture presented is that patent litigation now imposes substantial costs, particularly on small and innovative firms, and that these costs have tended overall to reduce research and development, venture capital investment and firm startups. Not one study of the economic impact of current patent litigation concludes that the effects are negligible.”

Substantial costs of patent troll actions directly leading to a decrease in research and development. Let that sink in. Today’s patent troll, and trial lawyer, activity skimming the economy is directly stealing our future economic well-being. A few are gathering wealth, taking it from every U.S. citizen. Research and development, almost by definition, is about discovering the future. When that is hindered, all citizens are negatively impacted, with an economically prosperous future being stolen by those seeking to only line their own pockets.

The article continues, “Although each of these studies has limitations and none is conclusive by itself, a consistent picture emerges: The patent system provides strong protection against excessive litigation in some sectors (such as pharmaceuticals), but substantial evidence highlights serious problems with patent litigation in many other industries.”

This fact explains why some industries are satisfied with the current system, afraid that any change could negatively impact their current standing. At the same time, for others the current system hosts an existential threat. A system that works for all is what is needed, not a system that works only for some.

Finally, as described in the article, only rarely are those accused of some patent violation really a bad actor. Rather, the patent system results in bad actors because the system is confusing with little transparency. When patents are unclear, in other words when the boundaries of a patent are vague, then people cannot adequately check whether their innovations infringe. If they have no reliable means of checking then innovators will find it hard, likely impossible, to design around a patent, or even to seek an appropriate patent license.

Better patent grants are, in part, the answer as is patent litigation reform, to change the economic incentives at play. The fuzzy, opaque lines drawn around software patents, so called business method patents and increasingly on design patents, need to be made clear. Tangible innovation should again be the focus, not expression. For example, protect an algorithm not a function. This fix deprives the trolls of the uncertainty they need to extort the patent system.

To secure an economically and innovation filled future, to maintain a patent system that provides an incentive for creators, the problems in the must be addressed. A strong patent system, one cornerstone of adequate intellectual property protection, is a must. What should we really fear from patent trolls? That they will successfully devour our future while Congress sits idly by.