Can we rein in the patent trolls?

by Uwe B. Meding

They are anonymous and blackmail internet companies: patent trolls are a plague that can plunge businesses into unthinkable troubles. We need to make it more difficult for these patent trolls to sue.

The patent troll have only one goal: they want to register or buy trivial or very wide technology patents and then attempt to cash in on license fees from other companies. They file lawsuits that many defendants — such as smaller technology companies — often can not afford.

Upcoming executive orders should help prevent some of these chicaneries. According to the Wall Street Journal, rights holders must be disclosed in future law suits. So far, many law suits have been filed by third party companies. More often than not it has been unclear whose rights a defendant was supposed to have violated. One of the plans is to disclose the rights holder, and other patents they may hold. In addition, the plaintiff will be sanctioned if a suit turns out to be a money grabbing scheme.

A short while ago, Google, Red Hat, and Blackberry submitted comments to the Federal Trade Commission (FTC) to complain about US patent system: it is increasingly more damaging. According to a study of all patent litigation in US courts in 2012, more than 50% of all suits where filed by patent trolls.

This American Life, (through NPR and PRI) have a very interesting one hour podcast on patent trolls. The makers take the history of one patent that was used to extort an estimated $100M from various companies. Only one company fought back — with success.