Many of
us have walked through that long dark corridor with insults being hauled at
you, food hurled at your face, and for no good reason. If the idea is to shame
you, I would stand by it but then again why shame me if you are already
bullying me for no good reason? I guess that’s what runs into the young minds
of young bullying victims as they question their existence.
If you
ask a child-bully why he/she does what he does, well they wouldn’t be to
forward about what is going on in their lives and they wouldn’t give a reason
formidable enough to accuse their sufferers for steering the offender actions
towards the victim.
I guess
sometimes we can’t leave our pasts behind, especially if you are a smart
inventor, though operating low on funds. When you create and invent a new idea,
am sure you are well informed about the patent process and you will advance to
protect your intellectual property with a lawyer, however it gets trying when
faced with a patent suit without millions of dollars to facilitate legal fees.
The
overall awareness of the value of intellectual property has increased with a
corresponding increase in patent filing, lawsuits and licensing.
In
response to the increasing perceived value of intellectual property and
patents, particularly in the world of electronics, two distinct types of patent
predators have emerged; patent trolls and patent bullies.
Who is a patent troll
A
patent troll is somebody who tries to make a lot of money from a patent that
they are not practicing and have no intention of practicing and in most cases
never practiced, (Peter Detkin, former assistant general counsel at Intel,
quoted in Trolling for Dollars, The
Recorder, July 30, 2001). Generally they are not inventors, they’re
entrepreneurs or finance people.” The majority of patent lawsuits in the United
States today are filed by entities that don’t make products. Their business
model is based on extracting money from those who do make the products.”
The
trolls are spoken ill of because of the perception that their legal tactics are
more likely to hold back innovation than spur it on.
They
acquire patents for the sole purpose of collecting licensing fees. Usually,
patent troll companies produce no actual products. Ironically, those who defame
patent trolls often practice this same patent monetization strategy with their
own patents that cover technology, from discontinued businesses or acquired
businesses, which their company no longer practices.
These
trolls date back more than a hundred years for example, the Selden patent
(US549, 160), with an invention date of 1877 and an issue date of 1895, covered
a few of the basic concepts of the automobile. The inventor of record, George
Selden, was a patent lawyer. No Selden automobile was ever built. Selden’s
patent holding company collected royalties of between 2.5% and 5% from almost
all US car manufacturers until 1911 when the patent was ruled invalid. This
example elaborates how a company might invent or purchase a patent and sit on
it as it wheels in money from licenses for the idea.
The Patent troll’s “Nothing out of the” behavior
Patent
troll licensing strategies are usually quite simple – generate the maximum
money in the shortest time at the least expense. Troll organizations purchase
or acquire control of patents from single inventors, small corporations or
bankrupt companies.
Desirable
patents are ones that cover an invention that is used in a large market with
many players.
Many
trolls start with a shotgun approach that is distributing claims in allegation
letters to numerous manufactures, suing opportunistically in hopes that an
imperfect legal system will rule in their favour.
License
fees may be set initially at a low level to induce companies to settle without
performing sufficient due diligence – as the due diligence may be more costly
than the settlement. However, if a troll can present a stronger argument that
is supported by claim charts, then the license fee is set higher, at the
threshold of pain for a target organization. This maximizes the troll’s return
while causing the potential licensee to consider whether it will be cheaper to
take an early license that may cost much less than the legal fees required for
a defense. Once the troll organization established a litigation fund, it can up
the ante by filing lawsuits listing large numbers of defendants or targeting
one or two highly profitable market leaders. However, despite the bullying and
troll game being ruthless in the business world, it can be a good business
strategy.
Let’s talk about the Patent Bully
Patent
bullies are corporations with large intellectual property holdings that seek
strict enforcement of their patents in the market place. They create assertive
licensing campaigns to enforce their patent rights by using intimidation and
their size as leverage. Their strategic objectives may simply be revenue
generation, but they more often employ strategies to protect a market they
dominate or to raise a competitor’s cost base. This activity is a legitimate
means for large corporations with huge R&D investments in technology to
obtain a return on their investment and establish an even playing field.
Today,
almost any business that uses basic technology is a possible target of trolls.
In some cases, trolls are forcing business owners to choose between paying
employees and paying legal fees