Patent sharks
Patent trolls or sharks have been in the news recently. Verizon, Google, Cisco, HP and other companies have created a joint effort to buy up patents that trolls might otherwise use against them. It will be interesting to see whether this strategy will take bad patents off the market or whether it might, instead, simply increase demand, thus increasing the rewards to obtaining overly broad patents, encouraging even more disputes and litigation.
Also, the June issue of the Harvard Business Review has a nice piece on patent sharks by Joachim Henkel and Markus Reitzig. They point out that the strategy of amassing large “portfolios” of patents does not work against trolls,since the trolls have no business that can be threatened with a countersuit. Moreover, they suggest that this strategy may have contributed to the current problems large firms experience with trolls. Because they flooded the patent office with thousands of applications for patents on trivial inventions, these large firms might well have contributed to the decline in patent standards that has allowed patent sharks to flourish.
Tim Lee has an interesting post on a paper by Gerard Magliocca that compares patent sharks of the 19th century to modern day trolls. Lee writes,
The best patents—pharmaceutical patents, say—apply to a well-defined industry. Pharmaceutical companies need to monitor pharmaceutical patents in order to determine what they’re allowed to do. In contrast, every business on Earth uses software and “business methods.” Therefore, every business on Earth is a potential target. That means it’s much easier for trolls to find potential victims. It also means that the targets—many of whom don’t think of themselves as being in the software industry or the “business method industry”—will be ill-equipped to respond to the lawsuit.
Precisely the same observation applies to 19th century patent sharks. Because most people in the 19th century were farmers, patents on farm tools were likely to be infringed by millions of individual farmers who lacked the expertise to evaluate the patent and the resources to hire lawyers to defend themselves.
