pageok
pageok
pageok
Patenting Patent Trolling:

As many of you know, "patent trolls" are parties that buy up issued patents for the sole purpose of using the patents offensively to collect licensing fees (or, failing that, to sue for infringement) from 3d parties. There's been lots of writing about the phenomenon over the past several years and about what it says about the (sorry) state of our current patent system.

In a new wrinkle, it appears that Halliburton, Inc., has filed a patent application claiming a patent for the process of patent trolling! Pretty cheeky!!

Here's the actual application at the PTO website. According to the WSJ law blog, Halliburton claims that it does not intend to "apply the technique offensively" -- i.e., it's not trying to monopolize the business of patent trolling -- but rather it "intends to use any patent that may issue from this application defensively to discourage entities that engage in such tactics."

There is, incidentally, approximately 0% chance that the patent will be granted. For one thing, it's very hard to see how Halliburton would establish that is has come up with a "novel" process (as required for the issuance of a patent), and in any event, the recent decision by the Federal Circuit Court of Appeals in In re Bilski almost certainly renders inventions like this one (and other "business method" patents the PTO has been handing out in recent years) unpatentable. [In Bilski, the court held that a process is "patent-eligible" if "(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." Hard to see how patent trolling methods fit the bill . . .

[More commentary on this patent filing is here at madisonian.net and patently-o]

Tremendo (mail):
I have yet to see someone effectively refute Kinsella's "Against Intellectual Property."

Cute examples like this just add fuel to the flame of reason.
12.4.2008 5:13pm
Arkady:

[I]t appears that Halliburton, Inc., has filed a patent application claiming a patent for the process of patent trolling!


Patent nonsense.
12.4.2008 5:18pm
Curt Fischer:
What's the problem with patent trolling?

In theory, can't we conclude that the troll is a better judge of worthwhile technologies or lucrative patents than were the 3rd party "victims" who were unwilling to buy up the patent rights on their own when they had the chance?

I ask because I am really curious. I have not done a lot of reading in the area.

But I applaud the IP focus of some of the recent VC posts. Very interesting, to me at least.
12.4.2008 5:44pm
Lior:
It's worth noting that the PTO only started out "handing" business method patents after the CAFC ruled that such inventions were patentable, overruling the PTO.
12.4.2008 5:44pm
one of many:
The real problem with granting this patent would be that China would most likely not enforce it, resulting in China being the major country producing patent trolls. As an American, I must decry this attempt to cut hard working Americans out of contention from the business of patent trolling.
12.4.2008 5:49pm
DDG:
Pedantic, but important, point: it's not the applicant's burden to show that the claims are novel. It is the PTO's burden to show that the claims are not novel or are otherwise unpatentable.

The "troll" phenomenon is a bit more complicated than you let on. It's quite difficult to distinguish between a "troll" and a legitimate non-practicing entity that exists to license a patent portfolio -- like a University.

Patent trolls would probably just go away if we applied the English rule on attorney fees to patent cases.
12.4.2008 5:49pm
gattsuru (mail) (www):
In theory, can't we conclude that the troll is a better judge of worthwhile technologies or lucrative patents than were the 3rd party "victims" who were unwilling to buy up the patent rights on their own when they had the chance?


Generally, yes, but they're doing so in order to prevent (in the case of those who can't afford a license for 'their' patents) or burden (in the case of those who can pay the fee or loophole around) the use of worthwhile technologies. That seems rather contradictory to the purpose of patents: specifically to encourage an inventor to both develop and produce a device or process.

I like patents (although I think modern copyright terms are ridiculous), but some uses for which they have been applied are rather counterproductive.
12.4.2008 6:24pm
BChurch:

it's not trying to monopolize the business of patent trolling


Are we sure on this? Maybe someone should write them and ask-- anyone know from which secret volcano island they're operating now?
12.4.2008 6:37pm
LTEC (mail) (www):
I know that "patent trolls" must be bad, just like "union scabs" and "bridges to nowhere", but I am confused about why.

Countering gattsuru, inventors are being encouraged, since they can earn money by selling their patents to trolls, or by becoming one. Also, patents are public information, which can be used by others (for a fee). If I learn about a technology from a patent and decide to exploit that technology and don't bother to get a license, why am I a good guy, and why is the patent holder a "troll"?

Of course, patents that are not really new or are things that just about any knowledgeable person could do, are a bad idea. And I'm sure there is much wrong and counter-productive with patent law.
12.4.2008 6:41pm
einhverfr (mail) (www):
LTEC, in general patent trolls drive up costs and so forth. Furthermore, I think that patent trolling ends up being generally risky and counterproductive to everyone (including the patent troll).

The goal of the patent system is to encourage development of inventions by providing inventors a bit of a head start from their competition (the duration of the patent). If the result becomes that someone else buys the patent and then seeks to do anything other than develop the idea into products, then the system is harmed.

A good idea of the potential problems was raised in the recent case, Symbol v. Lamelson regarding barcode scanners (Ok, I must now consider myself a non-lawyer law geek). Basically the patent troll was further deliberately delaying the process of patent approval so that the patent would never actually be accepted, and therefore would be perpetually pending. The pending patent was eventually invalidated by a new doctrine of patent laches introduced in this case (as far as I can tell). While this extreme is uncommon, it does occur.

What we really need though isn't more control on patent trolls, but more control on what can be patented. Personally, I don't think algorithms themselves should be patentable and there needs to be more control over what can be patented in the computer hardware and software markets (some hardware and software patents make sense. Most do not. The sheer number of them makes *any* non-trivial software almost certainly infringing on various patents which escape review at the time of initial development).
12.4.2008 7:03pm
Fub:
Curt Fischer wrote at 12.4.2008 5:44pm:
What's the problem with patent trolling?
This WikiPedia article on the subject will provide some information. Another is here.

One technique, now obsolete by changes in law, was the submarine patent.

This early 2008 report of a patent troll attorney's suit for defamation gives some background (through links) on patent troll tactics, and their favorite federal circuit.
12.4.2008 7:21pm
Jim G (www):
Another problem with patent trolls is that they mostly make money on patents that shouldn't have been issued in the first place.

Trolls don't make money by turning inventions into products. They make money by waiting for others to independently create products that use the inventions, then using the patents to get licensing fees.

The patent system isn't intended to reward all inventions—only those inventions that result from patent incentives. If something would have been invented without the ability to get a patent on it, it's economically costly to give that invention a patent anyway. That's one of the reasons we have the obviousness requirement, for example.

But patent trolls rely almost exclusively on patents for inventions that would have been invented without the patent system. A patent troll makes money when there's conflict between a patent and some other product—which was probably created without knowledge of the patent. That the other product (call it "widget B") was invented is evidence that the troll's patent was a mistake. If widget B wasn't patented, it shows that a patent wasn't needed to encourage this particular invention, and the patent was wasteful. Even if widget B was patented, if it was invented without actual knowledge of the troll's patent, it casts doubt on whether the invention was really non-obvious. The only time the troll's patent makes sense is when widget B was created with full knowledge of the troll's patent—if that ever happens.

There's nothing wrong with transferring and licensing patents. The problem with patent trolls is that they don't actually improve innovation.
12.4.2008 7:31pm
EIDE_Interface (mail):
This is more "distractions" from the reality of Haliburton's mass murdering ways in Iraq.
12.4.2008 7:39pm
Curt Fischer:
Thanks Jim G. That was informative.


Even if widget B was patented, if it was invented without actual knowledge of the troll's patent, it casts doubt on whether the invention was really non-obvious. The only time the troll's patent makes sense is when widget B was created with full knowledge of the troll's patent—if that ever happens.


Can the inventors or IP-rights-holders of Widget B challenge the validity of the troll patent on the basis of obviousness, using their non-reliance on the troll patent as evidence?

Has anyone ever proposed a time-window limit to "obviousness"? Say someone applies for a patent on Widget B. Wouldn't it make sense for the patent to be automatically invalidated on obviousness grounds if any subsequent patent application or "public disclosure" by non-inventors of Widget B occured within a year of the Widget B patent filing? If no one thinks of your novel contribution for a year, you get a patent. Otherwise, no one does.
12.4.2008 7:49pm
Allan Walstad (mail):
If patent trolls are buying the patents from the inventors, then are they not providing an incentive for more invention? Suppose I'm a basement inventor--I invent a number of useful gadgets deemed worthy of a patent. If I can sell these patents, it benefits me and my inventiveness.
12.4.2008 8:02pm
Allan Walstad (mail):
If patent trolls are buying the patents from the inventors, then are they not providing an incentive for more invention? Suppose I'm a basement inventor--I invent a number of useful gadgets deemed worthy of a patent by the patent office. If I can sell these patents, it benefits me and my inventiveness. Let someone else specialize in watching for infringements and collecting fees.

In practice, the law may need some tweaking to get the incentives right. Or, maybe, we should do away with patents altogether. But in principle, how is the patent troll any different from other middlemen who buy and sell or rent things to make money, and thereby oil the wheels of commerce?
12.4.2008 8:09pm
Skyler (mail) (www):
Obviousness doesn't apply to subsequent inventions. It's kind of hard to understand why a system designed to reward the first person to invent something should then go about rewarding subsequent people who claim to have independently invented it.

Furthermore, the idea that there should be a one year waiting period would work to counter the intent of patenting. Why should I invest sweat, time, brains and money into an invention if the guy who comes in tenth place gets the same benefit?
12.4.2008 8:23pm
Curt Fischer:
Skyler: I'm not sure you understood my (admittedly probably half-brained) idea. No putative "inventors" who report their invention after the first guy would be rewarded.

Instead their claim, if valid, would serve only to nullify claims of non-obviousness on the part of the first-inventor. For the idea to work, obviously the first inventor would need avoid public disclosure of his work and for the publication of patent applications to be delayed by one year.

Now that I think about it, one year might be too long. No researcher would want to suppress their best results for a whole year. Maybe four months would be enough. More likely, this idea might be fatally flawed at the fundamental level.
12.4.2008 8:44pm
markm (mail):
The issue is how you define "inventor". I would use it only to describe someone who has the capability and intention of developing a novel idea to an actual design for a useful product, and attempting to market it. That development process is brutally hard work, and expensive even if you count your own labor as free, but it's what actually advances technology, not dreamers sitting around and thinking of things that might be cool to have...someday.
12.4.2008 8:45pm
MCM (mail):
If patent trolls are buying the patents from the inventors, then are they not providing an incentive for more invention? Suppose I'm a basement inventor--I invent a number of useful gadgets deemed worthy of a patent. If I can sell these patents, it benefits me and my inventiveness.


Because the "basement inventor" archetype is irrelevant today. Instead you have companies racing to patent every possible substance/molecule/chemical/etc., sometimes without even knowing what they'll exactly be used for, just in case, one day someone somewhere has a use for it. It's an absolute morass, with some fields being worse than others. And it's even more difficult to get policy changes enacted because people are walking around with this idea that patents are about inventors building better mousetraps.
12.4.2008 8:50pm
Curt Fischer:
MCM:

If the costs of prosecuting patent applications were lower, to the point where it was affordable to not only big companies but also the basement types, do you think a place would re-emerge in our innovation ecosystem for basement inventors?
12.4.2008 9:05pm
Skyler (mail) (www):
markm, I think what you're referring to is "reduction to practice." As the laws currently stand reduction to practice can be done in two ways. Either by building a workable model of the invention or by describing it sufficiently to patent it. So essentially, applying for a patent is reduction to practice and some might argue is rewarding paper pushing dreamers instead of grease monkey builders. But . . .

. . . I'm not so sure that this is a bad scheme. Sometimes it's not really feasible to build an invention without massive capital or other requirements. For instance, say you invent the atom bomb. Should you really be required to build it and demonstrate it in order to patent it, or can a very thorough scientific explanation be enough? The requirement to build it certainly favors a government employee. The requirement to merely describe it favors an Einstein with a massive brain but no money. What if the invention is a method of landing a spaceship on Jupiter? It's a bit much to require an actual working model.
12.4.2008 9:11pm
MCM (mail):
Curt Fischer:

Not really, no. The cost of prosecuting a patent application can vary quite a bit but you're probably looking at $10,000 or less for something you can invent in your basement.

Basement inventors are irrelevant because modern technology requires large amounts of capital to even do the basic research necessary, especially in medical-related fields.

Of course this all depends on the field of endeavor. Anybody with a pen and paper could come up with a new business method patent.
12.4.2008 9:18pm
NicholasV (mail):
Basement inventors are irrelevant because modern technology requires large amounts of capital to even do the basic research necessary, especially in medical-related fields.

What about software? Companies I've worked for have patented software techniques I've developed personally. I'm not sure such things should be allowed but apparently they are.
12.4.2008 9:33pm
Allan Walstad (mail):

If patent trolls are buying the patents from the inventors, then are they not providing an incentive for more invention? Suppose I'm a basement inventor--I invent a number of useful gadgets deemed worthy of a patent. If I can sell these patents, it benefits me and my inventiveness.


Because the "basement inventor" archetype is irrelevant today. Instead you have companies racing to patent every possible substance/molecule/chemical/etc., sometimes without even knowing what they'll exactly be used for, just in case, one day someone somewhere has a use for it. It's an absolute morass, with some fields being worse than others. And it's even more difficult to get policy changes enacted because people are walking around with this idea that patents are about inventors building better mousetraps.

I'll have to take your word for it, at least for now, that basement inventors are effectively extinct. But the rest of your response seems to be concerned with patent law problems that go way beyond patent trolling, and arguably don't have much specifically to do with it. Maybe it should be harder to get a patent. Maybe some of the things being patented shouldn't be patentable. But if the ground rules for getting a patent were right, then it's not clear to me that patent trolling must be dysfunctional.

Maybe my more radical libertarian friends are right, just get rid of patents altogether.
12.4.2008 9:37pm
Curt Fischer:
MCM: You might be interested to learn about these guys. Because the costs of nucleic acid sequencing and synthesis are falling so rapidly, they envision a future full of "citizen scientists" doing recombinant DNA experiments in their garages and basements.
12.4.2008 9:39pm
MCM (mail):
Allan, I should have explained more clearly. The whole purpose of racing to grab as many patents as possible is that you can then examine all of your competitors' subsequent products and try to come up with an infringement claim.

Just look at the Halliburton diagram. It's obvious that plan works better if you have more patents. This is classic rent-seeking behavior.
12.4.2008 9:50pm
MCM (mail):
Curt Fischer: I hear the same thing about nanotechnology. It seems very cool and potentially very scary.
12.4.2008 9:51pm
subpatre (mail):
Allan Walstad said: "Suppose I'm a basement inventor--I invent a number of useful gadgets deemed worthy of a patent by the patent office. If I can sell these patents, it benefits me and my inventiveness."[emphasis added]

Therein lies the rub. Patents are awarded on originality, not usefulness. Patent trolls attempt to gather enough of a portfolio to entirely 'cover' areas of inventive design. This portfolio may be entirely useless inventions; it is to the patent trolls' benefit if so, as the purchases are cheaper.

The patent trolls then use ownership of these patents to suppress or burden other patents --not only those that they find from patent searches-- by examining actual products: those items that are useful enough to see the light of the market. As in any action, production and marketing of an item signifies deeper pockets than ownership of a patent alone.

So patent trolling --to some degree-- rewards the patenting of multitudes of useless ideas, and discourages useful inventions.
12.4.2008 11:14pm
High Tech Blackstone (mail):
It is better that ten patent trolls assert bogus patents than one breakthrough innovation be kept as a trade secret.

Keep patents accessible.
12.5.2008 12:12am
MCM (mail):
Wow, talk about a false choice...
12.5.2008 1:23am
John Moore (www):
Basement inventors are not gone, but current patent practices hurt them.

In the software field, almost everything that has been patented was completely obvious, except to the patent examiners. The PTO examiners looked for prior art, but nobody published these obvious techniques, so there wasn't any. The PTO also refused for many years to hire software engineers. The result was ridiculous.

I doubt if it is possible today to write a significant software program that doesn't violate patents. It's really that bad.

So all sorts of truly unoriginal things have been patented. Patent trolls then use these government granted presumptions of originality to extort those who are trying to do useful work.

One reason there is an explosion in patents is not an increase in creativity, but rather a need by companies to have enough patents in their "portfolio" to be able to trade patent rights with anyone threatening them with infringement suits. Hence the patent system forces substantial costs of defensive patent acquisition the same way the medical malpractice tort system causes huge defensive medicine expenses. Needless to say, this favors large established companies over small, young and creative ones.


Another problem with the patent system is that it doesn't adequately deal with the dramatically different time and capital investment scales in modern inventions. It takes no significant capital investment to come up with, and implement an original software idea - yet it gets the same protection as another patent born of millions of dollars of research funding and years of effort. A sensible system would have much shorter expiration dates for some patents (such as software ones) than for others.

Fortunately, the idiotic business patent ruling was thrown out. Under that now discredited doctrine, one could patent any business process that had not been previously patented. So the first first person to patent the process of pimping could monopolize the world's oldest trade!

But if you really want to see nonsense, check out copyright law.
12.5.2008 1:27am
Skyler (mail) (www):

This portfolio may be entirely useless inventions;


Um, if they were useless, there wouldn't be any profit in trolling with them, now would there?

John Moore, I think you're a bit off here. You can't really patent software, per se.


A process that consists solely of the manipulation of an abstract idea is not concrete or tangible. See In re Warmerdam, 33 F.3d 1354, 1360, 31 USPQ2d 1754, 1759 (Fed. Cir. 1994). See also Schrader, 22 F.3d at 295, 30 USPQ2d at 1459.



It takes no significant capital investment to come up with, and implement an original software idea - yet it gets the same protection as another patent born of millions of dollars of research funding and years of effort.


That is an incredibly elitist statement to make. So only the big companies should be allowed to profit from inventions?
12.5.2008 8:50am
Aultimer:

DP wrote: For one thing, it's very hard to see how Halliburton would establish that is has come up with a "novel" process.

Such trivialities never stopped maxi-trolls Lemelson or Katz from using applications as weapons.


Skyler:
Um, if they were useless, there wouldn't be any profit in trolling with them, now would there?

There's this little thing called "nuisance value" that changes your calculation. It's kind of funny to watch pro-patent geeks get dragged through litigation. I've never had one come out pro-patent, myself included.
12.5.2008 11:28am
markm (mail):
Skyler, the point is that the patents filed by trolls such as Lemelson don't really constitute "reducing to practice". Rather than describing a practical way of doing whatever, they'd file as vague a patent as the patent office would allow, and then wait for someone to actually reduce it to practice - and sue. The effect is not to encourage the progress of the useful arts, but to impede it - as the people actually doing the work of advancing technology have to always beware of traps lurking in the patent files.

The second form of patent trolling in recent decades has been to file for patents without real originality. For instance, take a procedure businesses have been following for centuries, and write a patent for doing it with a computer. Or (until the "business method" door was closed, again) file a patent on the method itself. The trouble here was that the patent office rarely looked outside of it's own files for prior art - and since such things had not been patentable at all before the 1970's, you weren't going to find the prior art in the patent files. True, a patent that just repeats what you could find in dusty tomes at any business school library should fall the first time someone fights it in court, but for any one company, taking the troll to court was far more expensive than paying them off. (Once again, why don't we have loser pays?) And there is a risk in taking a case about complex technical issues before a jury even though it's a slam-dunk to any honest expert in the field...
12.5.2008 9:42pm

Post as: [Register] [Log In]

Account:
Password:
Remember info?

If you have a comment about spelling, typos, or format errors, please e-mail the poster directly rather than posting a comment.

Comment Policy: We reserve the right to edit or delete comments, and in extreme cases to ban commenters, at our discretion. Comments must be relevant and civil (and, especially, free of name-calling). We think of comment threads like dinner parties at our homes. If you make the party unpleasant for us or for others, we'd rather you went elsewhere. We're happy to see a wide range of viewpoints, but we want all of them to be expressed as politely as possible.

We realize that such a comment policy can never be evenly enforced, because we can't possibly monitor every comment equally well. Hundreds of comments are posted every day here, and we don't read them all. Those we read, we read with different degrees of attention, and in different moods. We try to be fair, but we make no promises.

And remember, it's a big Internet. If you think we were mistaken in removing your post (or, in extreme cases, in removing you) -- or if you prefer a more free-for-all approach -- there are surely plenty of ways you can still get your views out.