Patent Trolls

Patent Trolls, you know, the companies who make money by suing rather then innovating, is big time business as articulated by the NYTimes in a post titled Have Patent, Will Sue: An Alert to Corporate America.

Mr. Spangenberg’s company, based in Dallas, helps “turn idle patents into cash cows,” as it says on its Web site. A typical client is an inventor or corporation, with a batch of patents, demanding a license fee from what it contends is an infringer, usually a titan in the tech realm. His weapon of choice in this business — the brass knuckles of his trade, so to speak — is the lawsuit.

In the last five years, IPNav has sued 1,638 companies, according to a recent report by RPX, a patent risk management provider, more than any other entity in the patent field. “To get companies to pay attention, in some percent of the market, you need to whack them over the head,” Mr. Spangenberg said. “In our system, you can’t duel, you can’t offer to fight in the street, which would be fine with me.”

The problem with this centers on the fact, only the lawyers profit, not tech, and certainly not innovation as seen by the stupid interface lawsuits going back and forth from Apple and Samsung.

This is partly because the number of patent infringement suits has more than doubled in recent years, to 4,731 cases in 2012 from 2,304 in 2009, according to that RPX report. The cost to businesses, which pass along the expense to consumers, is immense. One study found that United States companies — most of them small or medium-sized — spent $29 billion in 2011 on patent assertion cases.

“And only about $6 billion of that money wound up in the hands of inventors,” said James Bessen, a co-author of the study and a professor at the Boston University School of Law. “As for the other $23 billion, most of it goes to legal expenses, both for defendants and patent troll companies, with the rest going to operating expenses of the trolls — overhead and marketing — and finally, patent troll company profits. That’s why we call this type of litigation a tax on innovation. It discourages innovation much more than it encourages it.”

Yours truly has a patent pending, maybe when it goes live, I can either take the low road and become a patent troll or the high, by innovating. I'll take the 2nd because innovating is a hell of lot more interesting and beneficial then the first option, a course akin to getting something for nothing, something that just seems wrong if you ask me.