Sunday, January 13, 2013

Enough with the "Patent Troll" Canard

The term “Patent Troll” was first introduced (or at least popularized) by Intel's then-general counsel Peter Detkin as a replacement for his previously-preferred term, "patent extortionist".  Early in the development of the term, it was defined as "companies that obtain patents only to license them, often using the threat of an injunction to extract a high price from infringers."  It has come to be far more broadly defined (Wikipedia defined it as "[p]atent troll is a pejorative term used for a person or company who conducts patent litigation against one or more alleged infringers in an aggressive or opportunistic manner, with no intention to manufacture or market the patented invention" on the day I posted this).

I'm not alone in believing that large corporations -- companies that infringe more technology than they invent -- have pushed a strategy of using it as a pejorative, vilifying term to create momentum for legislation that limits patent rights.  In part, mission accomplished.  Really.

So lets walk the term back.  What is a troll?  A “troll” sits under a bridge, contributes nothing to society, and demands money of those who wish to cross the bridge.  One of the most popular troll stories, ironically, is a cautionary tale for patent owners that they should go after small entities first, but lets assume that is not what those using the term are shooting for.  

How did the bridge get there?  Somebody built it.  Did the troll build it?  The story doesn't say.  Does the troll own it?  Unless the troll stars in a property law final exam, probably not.  So the troll in the fairy tales is a lawbreaker, extorting people (or billy goats) for money (or billy goat meat) in exchange for crossing a bridge he does not have legal control over.  At least one entity has accused a patent owner of extortion, but that is based on a rather unique fact pattern.

Application of the term to the patent world does not involve illegal acts of extortion, but would more or less fall along these lines:

"troll" is the current assignee of the patent;
"bridge" is the patent itself;
"crossing the bridge" is using the technology covered by the patent;
"bridge builder" is the inventor.

So now we retell the story, but follow the fact pattern of a "patent troll":  

An inventor toils away for months or years, designing a bridge.  The inventor pays for the land and the rights to build the bridge (patent office fees) and for the construction crew to do the work of getting the bridge put into place (attorney fees).  Because of a quirk of how the law works in this magical kingdom, the inventor has to pay all of these fees without any guarantee of actually obtaining the land or the rights to build the bridge.  The inventor thinks of trying to sell some big bridge company on the idea, but he knows that without some kind of protection, the big bridge company could just steal the idea, build a bridge way before he could, and probably bankrupt the inventor in the process. 

After many years of waiting (one of my brother's inventions took more than 13 years to issue), and after spending money year after year without ever knowing whether the bridge would be built, one day the inventor gets a letter saying that the bridge is complete.  By now, a decade or so later, the inventor has moved on to other projects and has developed new inventions -- nobody could reasonably expect the inventor to just stop everything while waiting to find out about the bridge.  How would the inventor feed and clothe his family?

Now that the bridge has been built, the inventor is free to sell it.  He has risked his capital, time, and effort for years on this project, and he wants to see the bridge used.  He just does not want to operate it himself.  To do so would mean abandoning all of the projects he has started during that decade the bridge was being built.  What inventor has time to sit under the bridge and ask every passing person for a toll?  What about big trucks, big companies, who refuse to pay the toll?  Does the inventor really have the money or time to give up inventing, shutter his other businesses and turn all of his resources to stopping the trespassers?  Of course not.

The inventor puts the bridge on the market, and to his surprise, Troll Corp. is interested.  They pay the inventor for rights to the bridge (and maybe give the inventor some part of every toll collected).  The inventor is thrilled, and plows that money right back into new inventions, hiring employees for his companies, hiring patent lawyers to protect new inventions (or paying back what he already owes the patent lawyers), and generally pumping new ideas and new capital into the economy. 

For its part, Troll Corp. knows it is taking a risk.  Nobody offers "bridge insurance", and there are dozens of different ways that the bridge could be found to be defective, owned by somebody else, or even non-functional.  It has taken a risk in buying the bridge, but it thinks it is statistically likely they will make a profit.  Troll Corp, however, specializes in bridges, and is able to use economies of scale to make sure that people do not trespass on its bridges.

Now the infringers approach the bridge, and Troll Corp. tells them that they can cross, but it is private property and they have to pay.  Troll Corp lets them know that trespassers are prosecuted.  Some infringers find another bridge, some pay the toll, and some trespass.  Troll Corp. sues the trespassers -- and Troll Corp. is the bad guy?

It is one thing to believe that there should be no private property, but it is quite another for somebody to walk right through your house every day because it is a short cut to their destination.  

If a company does not want access to patented ideas, they are free to not license them – but that does not leave them free to steal them.  For those holding the simplistic view that anybody who ever sues on a patent is a “troll”, ask yourself whether a landowner who paid to buy and maintain a bridge should really be powerless to complain when the biggest companies in the land regularly trespass over the bridge.

The American Dream is something that is written in the hearts and minds of creative, driven human beings -- not something written in the small print of an SEC filing.  When a corporation's purchase of private property (a patent) helps an inventor's dreams come true, when a corporation offers to free an inventor to create new technology, bring life to new ideas, that corporation should not be vilified simply because they are more efficient at utilizing that private property than the inventor was.  

If the independent inventor gave up his dreams, instead working as an employee of the same corporation, developing the same inventions, nobody would vilify the corporation for enforcing the resulting patents.  Have we really come to a place where we demonize corporations for buying and then using things developed by individuals and small businesses -- but give those same corporations a free pass when they develop the technology themselves?

I do not mean to minimize the potential for damage caused by bad patents or even stupid, heartless enforcement of good patents.  In future posts I will address some solutions.  But "patent trolls" are not the problem with the patent system.

What term do I use when discussing non-practicing entities?  I like to think of inventor-owned companies as PIE -- "Pure Invention Entity".  For non-inventor-owned, non-practicing entities?  Maybe "Creativity Support Entity" or "Invention Encouragement Entity".