Two researchers at the famed London School of Economics & Political Science, Christian Helmers and Luke McDonagh, have released a thought-provoking study of “Patent Assertion Entity” litigation in the UK. From the summary here are the two key findings:
“Firstly, the majority of patent cases which reach a judgment in the UK result in a ruling invalidating the patent. Secondly, the costs regime in the legal system of England and Wales requires that the losing party pay the costs of the other side. In other words, even if its own costs are kept low, a PAE which loses a case may have to spend a substantial amount of money in order to cover the costs of the other side.”
So, will this study increase the snowball rolling downhill to introduce a “loser pays” policy for NPE’s in the US?
This study has other intriguing elements to it as well:
“We also offer interesting insights to the wider debate concerning whether it is likely that in the near future there will be a similar increase in PAE litigation in Europe as has already occurred in the US over the last decade. This article also discusses potential implications for the design of the proposed European Unified Patent Court.”
To read the entire study (and you should) please go to this link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2154958
In an angry post on infoworld.com Simon Phipps eviscerates NPE’s, the patent system, and the NPE toll on innovation. Here is a tiny sample of his rant (with bolding added):
“The cost of litigation for patent parasites must go up; there need to be penalties for failed attempts to monetize the innovation of others. Most important, the mafiosi-grade shakedowns costing America’s economy so much money — and with it the success of innovative startups and the creation of much-needed jobs — has to end.”
Patent parasites? Shakedowns (hmmm second use today)? The inflammatory language campaign against NPE’s continues.
For the entire diatribe, please go to this link: http://www.infoworld.com/d/open-source-software/numbers-dont-lie-patent-trolls-are-plague-205192?page=0,1
The Website motherboard.vice.com has a post by Michael Byrne about NPE Sorensen Research and Devevlopment Trust. Byrne is not a fan of the Trust or Mr. Sorensen (or NPE’s):
“The Sorensen Research and Development Trust is what’s known as a non-practicing entity. It doesn’t make anything or do particularly much of anything outside of courtrooms (at least anything that I can find). Instead, Sorensen sits on his patent(s) and sues people. Patent trolling is a boom industry and Sorensen is at the top of it. According to a paper just out from Lex Machina (the descendant of Stanford’s Intellectual Property Litigation Clearinghouse) and requested by the United States’ GAO, patent trolling has risen to be 40 percent of all patent litigation, nearly doubling in a five year period. And of that 40 percent, Sorensen has been the most furious litigator (of a 500 case sample), beating even Monsanto.”
And, he further blasts the Trust with this missile: “Sorensen’s business model likely revolves around licensing shakedowns: a threat is made to an operating company and, rather than undertake the risk and expense of defending against Sorensen, said company will pay off the patent-holder.”
“Licensing shakedowns”? That is a new but descriptive term.
FOr much more information about the Trust, its patents, and its litigation, please go to this link: http://motherboard.vice.com/2012/10/17/patent-trolling-is-draining-the-blood-from-the-idea-economy-and-it-s-just-getting-worse–2
Distinguished Judge Richard Posner has written a short article on Slate.com regarding patents and Patent Trolls, and it is clear that he is not happy with the current patent system and Patent Troll litigation.
He offers 3 key remedies:
1. “….make the granting of a patent contingent on producing the product or process that incorporated the invention, within a specified time. This would reduce the troll problem, by clearing out patents that are obtained to extort license fees rather than to produce products or processes.”
2. ” Vary the length of patent protection…from industry (or industrial sector) to industry, ranging from no protection at all to 20 years of protection, or even more, for pharmaceutical drugs.”
3. Seek and train “…volunteers among federal district judges to take on more than their share of the patent cases filed in their districts.”
But Posner admits that these remedies are not a complete answer to the Patent Troll problem.
What do you think?
Here is a link to the complete article which is well worth a read: http://www.slate.com/articles/news_and_politics/view_from_chicago/2012/10/patent_protection_how_to_fix_it.html
In a post at technologyreview.com writer Antonio Regaldo reports on a patent that IV has just obtained:
“The patent basically covers the idea of digital rights management, or DRM, for 3-D printers. As with e-books that won’t open unless you pay Barnes & Noble and use its Nook reader, with Myhrvold’s technology your printer wouldn’t print unless you’ve paid up.
‘You load a file into your printer, then your printer checks to make sure it has the rights to make the object, to make it out of what material, how many times, and so on,’ says Michael Weinberg, a staff lawyer at the nonprofit Public Knowledge, who reviewed the patent at the request ofTechnology Review. ‘It’s a very broad patent.'”
Go this link for much more information about the IV patent, DRM, and a thought-provoking report about 3-D printing and the risks: http://www.technologyreview.com/view/429566/nathan-myhrvolds-cunning-plan-to-prevent-3-d/