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back to article Fearless slayer of lawsuit-lovin' patent trolls steps forward from shadows

After years of inaction on patent law, a new bill has been introduced to the House of Representatives that could curb the scourge of patent trolls that is costing American businesses billions every year. The Innovation Act [PDF, summary] was put forward by House Judiciary Committee chairman Bob Goodlatte (R-VA). The draft law …

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Coat

lobbying spending

Is this how they call "bribery" now?

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Re: lobbying spending

America has the finest democracy money can buy.....

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Plenty of jobs . . .

"The tens of billions of dollars spent on settlements and litigation expenses associated with abusive patent suits represent truly wasted capital – wasted capital that could have been used to create new jobs . . . "

But it is creating new jobs - lawyer's jobs.

Lawyers are highly-paid people and, as any Republican could tell you, more money for the wealthy means that everyone wins! Right?

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Re: Plenty of jobs . . .

What do you call 500 dead lawyers at the bottom of the ocean? A good start.....

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Big Brother

Re: Plenty of jobs . . .

"Lawyers are highly-paid people and, as any Republican could tell you, more money for the wealthy means that everyone wins! Right?"

So Lawyers = bad = Republicans, is that it?

Then why is it that lawyers as a class massively support Democrats over Republicans? And why am I even responding to this, got better things to do...

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Re: Plenty of jobs . . .

"So Lawyers = bad = Republicans, is that it?"

Not quite.

Patent lawsuits = more money for lawyers

Lawyers = rich

More money for the rich = 'trickle-down' economics

'Trickle-down' economics = discredited but still-cherished Republican policy.

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Corporate lockdown.

"...make litigants pay full costs if their lawsuits are unsuccessful"

Now nobody can sue the big boys, it would just be too much of a risk. Small patent owners, get used to being walked on. Sorry, I mean get used to not even mattering now, you won't even be noticed to be walked on.

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Re: Corporate lockdown.

Can't see it making a difference. They'll move the patent to a $2 company and then go bankrupt if they lose. They do that now....

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Re: Corporate lockdown.

Small patent owners with legitimately unique products under patent protection will have no trouble defending them. They never have, as there are plenty of law firms that will peruse the case with nothing out up front, it's always been that way. It's the stuff that's nearly impossible to defend as unique, and should never have been patentable to begin with, that'll have troubles. Frankly, that doesn't bother me.

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Re: Corporate lockdown.

"Small patent owners with legitimately..."

It cuts both ways. What about large patent owners with illegitimate patents? A small company could never fight for fair use if they accidentally used a illegitimate patent unintentionally. Little guys will always be on the defense taking a hammering from the big players, big players that can still choose their targets (ie. small players).

I'm not saying the system shouldn't be changed, but it should change without hindering the ability to file and defend a patent for all equally.

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Re: Corporate lockdown.

Patents need to be harder to get but easier to defend

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Anonymous Coward

Re: Corporate lockdown.

Quote: "They'll move the patent to a $2 company and then go bankrupt if they lose"

Works quite well if you want to do destructive patent litigation.

Not so well if you want to recover the spoils of your conquests. How are you going to get them back on your company balance sheets? You cannot buy back a company that is now worth 200 million (just as an example of a very successful troll) for 2$. If you have a couple of transactions like that, the IRS (or whatever is its equivalent in your countryt) will run a steamroller over you on a money loundry suspicion.

In any case, the "original patent owner" clause (if done right) should deal with it. Big "if" of course. IMHO it will be much better to limit the scope of the patents in the first place - no software, no business methods, no UI, etc. Only for real stuff that has a real "technical effect" (as defined in the patentability rules).

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Re: Corporate lockdown.

"In any case, the "original patent owner" clause (if done right) should deal with it. Big "if" of course. IMHO it will be much better to limit the scope of the patents in the first place - no software, no business methods, no UI, etc. Only for real stuff that has a real "technical effect" (as defined in the patentability rules)."

Software is going to be patentable. Copyright cannot cover a clean-room translation (think the PC Clone BIOS), nor can it cover an algorithm that's then implemented in silicon (making it hardware instead). Instead, limit the scope by limiting the terms. All the problems have emerged in fast-moving industries, so simply shorten them to something like four years. Long enough to make something of it but not long enough that it's worth trolling over (your patent would expire too soon to run it through the courts, and any kind of restraint would be temporary at best).

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Re: Corporate lockdown.

"It cuts both ways. What about large patent owners with illegitimate patents? A small company could never fight for fair use if they accidentally used a illegitimate patent unintentionally. Little guys will always be on the defense taking a hammering from the big players, big players that can still choose their targets (ie. small players)."

But these guys run the risk of targeting someone who then hires a contingency lawyer (meaning eh client's not on the hook for losing) who wouldn't mind risking eating the costs because shooting down one of those illegitimate patents would mean excellent press and reputation (meaning more business). Plus groups like the EFF would likely back them up because they're for the little guys in the electronics world.

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Re: but not long enough that it's worth trolling over

Same abuse principles will apply, just slightly different semantics. In this case the big boys infringe freely on small players knowing they can run out the clock in court.

The crux of the problem is that it seems like there are no reasonable people involved anywhere in the patent to litigation gravy train.

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@Anon 05:53

The $2 company is a subsidiary of the parent. Let's say Trollco has some patents they own. They create a separate subsidiary for each patent, and the subsidiary borrows money from the parent to go sue happy. If they lose, they say "sorry, we can't pay, we have a negative net worth" and go bankrupt. Trollco gets a tax writeoff for the loss they incur.

Meanwhile another subsidiary successfully sues Apple, Google and Microsoft and nets a billion dollars. As the sole shareholder in that subsidiary, Trollco's owners do the happy dance.

None of this is illegal, and having a subsidiary to shield the parent from liability is actually why corporations exist in the first place. The whole point of a corporation is to give a liability shield to the owners (i.e. shareholders) If you own shares of a corporation, the most you can lose is the value of your investment no matter how much the company owes when it goes bankrupt. If you had a partnership with the same group of shareholders, you are all personally liable for the partnership's debts. That's why corporations are double taxed - otherwise you'd see lawyers incorporate instead of setting up partnerships for their firm.

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Headmaster

Spelling and Grammar checking no longer being used at El Reg?

"The draft law attempts to limit patent claims to a device manufacturer of a technology rather thab the actual users.."

"USA Today reports the firm, which doesn’t engaging in gratuitous trolling..."

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Re: Spelling and Grammar checking no longer being used at El Reg?

Corrections link on all El Reg articles no longer being used by readers?

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Re: Spelling and Grammar checking no longer being used at El Reg?

> Corrections link on all El Reg articles no longer being used by readers?

My eyesight must be failing, Don. I can't for the life of me see the corrections link that.

Can you direct me to it?.

Or is it a quirk of my browser?

G.

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Re: Spelling and Grammar checking no longer being used at El Reg?

Might be blind here, but I'm not seeing any corrections link on this article.

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Send Corrections link

Rippy (and wowfood), the unhighlighted “Send Corrections” link is typically at the top of a comment page, to the right of the highlighted “Post your comment” link and the unhighlighted “House Rules” link.

Don Jefe, of course the link is no longer being used — it’s more entertaining to leave comments about El Reg’s Grauniadisms! (It would probably be used more often if another Send Corrections link were present and highlighted in the “POST COMMENT” box at the bottom of a comment page.)

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Re: Send Corrections link

Ah thanks. I just remembered it always being highlighted and present on the article itself before. Then it disappeared for some reason. Although it seems a bit odd having the 'send corrections' link in the comments section, rather than on the article where it used to be.

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I don't see why patent trolls don't fall under current racketeering statutes already. It's not that dissimilar to any other protection racket.

"So, youse wanna pay a license for owah patence"

"But we don't use anything in your patents."

"Oh ok, youse prefur ta dowit da haad way. Let me introduce youse to owah legal team, dis is Dewey, Screwem and Howe."

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Anonymous Coward

watch this space ...

There's a case underway right now to test whether patent trolling falls under RICO.

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Extortion

So tie patent trolls to chairs and cut off their pinkies, a language they understand.

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Re: watch this space ...

For anyone interested, the bold firm is a California company called FindTheBest. They were sued by a troll firm Lumen View Technology, over US Patent 8069073. FTB turned around andalleged that LVT is engaged in racketeering as a criminal organization (since LVT is a shell company), meaning it could be charged under RICO.

Thing is, this is not the first time a troll has been charged under RICO. Thing is, judges are reluctant to use RICO unless it's a more-traditional case of organized crime, so there's a tough stress test, which the last attempt didn't pass.

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Happy

Re: Extortion

So tie patent trolls to chairs and cut off their pinkies balls, a language they understand.

FTFY!!

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Intellectual Ventures

Great name for a company that neither ventures anything nor is intellectual. An annex to the legislation should force a rename - Cloddish Plodders for example

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This version is too complicated

I have a simpler one : simply index the potential wins to the amount of money the litigator is making on the patent at the time it sued.

In that case, a company selling product containing its IP and making millions will get millions, a patent troll selling nothing will get nothing.

I like that version better, and I think it makes everything a lot more simple.

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Re: This version is too complicated

But what if the troll pounces BEFORE the product gets to market or finds a manufacturer?

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Seconday market for patents

""One of the things we want to do is make sure we are educating lawmakers on what [Intellectual Ventures] is and how the secondary market for patents works," Russell Merbeth, its chief policy counsel."

And herein lies the problem. Secondary market for patents. There shouldn't be one. Patents should protect the original inventor only (whether they produce the product or license the invention is not really an issue)..

Patents should be non-transferrable.

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