[Adam Mossoff, guest-blogging, May 5, 2009 at 4:55pm] Trackbacks
Patent Thickets and Patent Trolls:

One of the features of the Sewing Machine War that makes it appeal to our modern sensibilities is that it is the first patent thicket in American history in which a non-practicing entity — the inimitable "patent troll" — played a fundamental role at each important point in the story.

With respect to the role of "patent trolls" in patent thickets, and in patent litigation generally, the parallels between Howe and modern non-practicing entities are palpable. An oft-cited example of a "patent troll" at work was the recent Blackberry litigation. In this case, the patent-holding company, NTP, Inc., successfully sued Research in Motion Ltd. (RIM), the manufacturer of the Blackberry, for infringing NTP's patents on wireless email communication. NTP was a non-practicing entity who was not actively commercializing its technology; its sole source of revenue was the royalties it was seeking from RIM. As such, many commentators believe that NTP is an exemplar of a modern "patent troll," since it was a non-practicing entity that used an injunction to compel RIM to pay for a license. In fact, in the "patent troll" debates, NTP is the most commonly cited example of a "patent troll." Thus it seems that NTP is one of the few examples, if not the only one, to which this term best applies (or at least applies without generating tremendous controversy).

If NTP was a "patent troll," then Howe certainly was a "patent troll" — a non-practicing entity using injunctions to compel licenses from actual manufacturers of the completed commercial product. As I noted in an earlier post, some commentators don't believe that it is legitimate to call Howe a patent troll, because he tried to commercialize his invention, or, as some put it, he was acting in "good faith." But if attempts to commercialize one's patented invention prevents one from being deemed a "patent troll," then NTP is not a patent troll either. NTP also tried to commercialize its technology, something it repeatedly pointed out in its court filings in its litigation against RIM. In fact, similar to Howe, NTP failed to find a firm willing to invest in its technology, and, similar to Howe, NTP belatedly discovered RIM's Blackberry several years later and initially demanded a license from RIM. As in Howe's lawsuit against Singer, NTP sought and successfully obtained an injunction against RIM only after RIM rejected NTP's request to enter into a license. Moreover, just as in Howe v. Singer, RIM tried to invalidate NTP's patents in separate hearings at the Patent Office (called "reexamination proceedings"). The correlation between Howe v. Singer and NTP v. RIM is strikingly robust.

In sum, if Howe is not a patent troll, then NTP is not one either, and thus we're left with an epithet that refers to few, if any, actual patent-owners in the real world. One problem is that a "patent troll" is often defined simply as a non-practicing entity that has no intent on manufacturing a product. But the problem with this definition is that it includes universities that license technologies created by their professors. Yet, among those who use the term "patent troll," no one seems to consider universities to be bad actors deserving of this epithet. Universities, like Howe, seem to be imbued with that aura of "good faith" that makes the "patent troll" epithet seem inappropriate.

If one then (re)defines a "patent troll" as an entity that did not invent the patented invention, but rather bought it from the actual inventor for the sole purposes of licensing it, then this just creates other problems for using this term. As a preliminary matter, it would now exclude NTP, which was a corporation solely owned by the inventor. In fact, many individual inventors incorporate themselves, and then transfer their patents to these newly formed holding companies, for liability and tax purposes. Moreover, this new definition would now include many corporations, such as IBM, which collect patents, not for manufacturing purposes, but to use them as a shield against patent infringement lawsuits. (Coincidentally, two commentators to my prior post on incremental invention mentioned IBM's practice of hoarding patents.) In sum, IBM, which has long been one of the largest owners of patents in the country, uses patents defensively. Its policy has been one of "mutually assured destruction," i.e., if someone threatens to sue it for patent infringement, then it promises that it can find a patent in its massive patent portfolio with which to countersue for infringement. This policy has worked marvelously well for IBM, which has mostly avoided patent infringement lawsuits and has been left free to devote its time, energy and money to developing new products and services that it offers in the marketplace. But IBM's policy of hoarding patents is certainly "patent troll"-like behavior — patents are being used solely for litigation purposes and not for development of actual products sold in the marketplace.

Another commentator mentioned that Jerome Lemelson was a patent troll, but this is mixing two different concepts in patent law — a "patent troll" and a "submarine patent." Lemelson exploited procedural loopholes in the regulations governing how patent applications are processed at the Patent & Trademark Office. Traditionally, patent applications were kept secret until the patent issued. The result of Lemelson's procedural machinations was that he was able to keep his patent applications secret for decades, while firms invested hundreds of millions of dollars in technology that they believed was in the public domain. Lemelson then let his patents issue, and he sued the companies for patent infringement. Many of the firms settled, but some fought back. Ultimately, the courts dealt Lemelson (or, more precisely, the company formed after his death) a blow when they used the doctrine of laches to prohibit his enforcement of his patents. Moreover, Congress changed the law on patent applications in 1999, and now patent applications are publicly disclosed 18 months from the date of filing.

So, the problem with Lemelson was not that he was a patent troll, but that he was using submarine patents — patents that were kept secret and then surfaced to sink established companies with the threat of litigation — to game the system in his favor. Courts and Congress have now closed the legal loopholes that made Lemelson capable of using submarine patents. Moreover, Lemelson was the inventor of all of his patents, and thus he would fail the other feature of a "patent troll" — the patent-holding company is not the inventor.

In sum, the problem is that the term "patent troll" is so amorphous and protean in its usage that it's effectively meaningless in conveying anything other than the fact that the person using the phrase thinks some practice in patet law is bad. But if this is the case, then one should precisely identify the practice that one thinks is improper, rather than use this epithet. The term "patent troll" is ambiguous and indeterminate, as its referents constantly change and nothing is constant except for its negative normative connatation. In this respect, the term "patent troll" is tantamount to what the logical positivists, such as A.J. Ayer, thought of all normative terms; in essence, the logical positivists believed that to call something "bad" was the cognitive equivalent of an emotional ejaculation, such as yelling, "Boo for that!" (Conversely, Ayer explained that to call something "good" was cognitively the same as yelling, "Yah for that!")

It seems as if the term "patent troll" confirms the logical positivsts' assessment of normative terms. It becomes impossible to respond to it, because whenever one thinks one has it nailed down in its meaning, it changes its referents to accommodate some other bad practice or to differentiate some practice people think is good for the patent system. The result is a game of normative whack-a-mole, and a vague general feeling that property-owners can act badly. But that's just a tautology, as the freedom provided by property rights permits people to act badly or properly, such as an annoying neighbor who uses property disputes (trespass, nuisance, etc.) as a proxy for his own personal grudges.

This point about landowners acting badly thus highlights the one feature of the "patent troll" debate that is noticeably absent — an actual sense of how bad "patent trolls" are and whether it's been empirically established that they now trump the benefits derived from the patent system generally. This is important, because most critics of "patent troll" behavior (whatever this might be) are calling for systemic changes to the patent system, whether it is changes to remedy doctrine, licensing rules, validity determinations, or all three. So, as Hamlet put it, here's the rub: Do we really want to make systemic and structural changes to the entire patent system based on an amorphous and ill-defined rhetorical epithet? Even assuming that "patent trolls" are an actual problem, are these calls for patent reform comparable to calling for systemic changes to our real estate system given the ability of some troll-like landowners to exploit trespass, nuisance and other doctrines so that they can harass their neighbors? Without definitive empirics to help us understand the scope of the problem — and the empirics will be almost impossible to come by as long as it remains virtually impossible to define the "patent troll" term with any precision — this is a dangerous game that we are playing with the system that is responsible for promoting and securing property rights in innovation.

In contrast to the widely accepted picture of difficult property-owners who hold out against all entreaties, requiring some type of public-ordering response from Congress, the courts or the Patent and Trademark Office, the Sewing Machine Combination confirms that voluntary patent pools are not just theoretically possible, but have occurred in the real world. There was no Patent Reform Act of 1856 that prompted the formation of the Sewing Machine Combination by eliminating Howe's ability to get injunctions, limiting his royalty payments, or imposing restraints on his or other patentees' commercialization rights. (At the time, such measures may have been deemed to have constituted an unconstitutional taking of the sewing machine patentees' property under the Fifth Amendment. For further elaboration, see here.)

The Sewing Machine Combination was initiated by private actors for their private benefit — within the governing rules of a property system that provided strong property protections to the relevant entitlement owners. For this reason, the Sewing Machine War and its resolution in the Sewing Machine Combination is an important empirical case study that teaches important lessons for understanding the theory of how non-practicing entities function within patent thickets.

In my next post, I will discuss the concerns expressed in the patent literature and in many comments to my prior posts about the allegedly unique problems with patent litigation today, such as the difficulties in determining what is a patented invention for computers. Alas, nineteenth-century case law is replete with similar complaints, which perhaps suggests that the old adage — all things old are new again — is actually true.

Ken Arromdee:
As I pointed out before, this isn't a unique problem with the phrase "patent troll", but rather a well known problem in defining just about anything at all. "A chair is a device with four legs and a back designed for people to sit on". What, you didn't include three legged chairs, or beanbag chairs? Is a chair intentionally created as a store display, which was never intended for anyone to sit on it, still considered a chair? Is a dollhouse chair a "chair"? Is a car seat a "chair"? If you set up a prank which causes the chair to collapse when someone sits on it, have you now turned it into a non-chair? What if you are reading a story describing an object where the author never gave you all of the information you'd need to know if it fits the definition, but it would qualify as a chair using common sense? What's the boundary between a big chair and a short bench, or a low chair and a stool?
5.5.2009 5:35pm
einhverfr (mail) (www):
A couple points of (reasonably limited) agreement:

When we look at habitual patent trolls (defined as companies expecting to make money primarily off of suing many other companies for royalties), the two best examples which come to mind in recent history were Lamelson and Rambus. These go through a remarkably consistent pattern whereby they become very disruptive until someone manages to invalidate the patent. After that, if the company is lucky (and survives) it becomes a tiny player in the industry.

The second point that is worth making is that patent trolls are remarkably easy to work around. They are the exception of patent holders, not the rule. In software, it is easiest to wait until a genuine habitual patent troll is in the news and then work around the issues. Consequently, usually the result is that these burn out quickly. Unisys threatened to sue over GIF-related patents? Everyone stopped using compressed GIF's...... Also as soon as lawsuits are filed, everyone gets to see which patent is being enforced in which way.

Now as to Howe and NTP.... Sure these are patent trolls but they are one-off-patent trolls. They sue one company, get royalties, and then live comfortably for a while if they are successful. They aren't really a major threat because unless you are successful enough to pay royalties when you lose, there is absolutely no point for them to suing you. If someone starts out by suing Microsoft, IBM, Backberry, etc. I don't worry about it.

My big concern over software is that this is not the intended way the patent system is supposed to work. Fortunately public perception is what keeps things under control now. People don't look at Microsoft's patents as property rights that they SHOULD enforce and would get upset if such suits would get filed.
5.5.2009 5:46pm
I am intrigued by the many comments to your series of articles that refer to "software" and "software patents". Just like "troll" is used casually, the same can be said of "software" and "software patents". Absent a common definition understood and accepted by both parties to an argument, I see no way that any discussions involving these terms can enlighten any of its participants.

Mike Slonecker
5.5.2009 5:55pm
einhverfr (mail) (www):

I build Free/Open Source Software business tools to support processes. While "software" is somewhat of a vague term, the problems of software patents are limited to programmable instructions running as parts of a complex, general purpose computing machine. This is at the heart of what I do.

Software patents are less of a problem for "firmware" such as BIOS instruction sets, firmware for computer expansion cards (PCI or PCMCIA), etc. even though these can be properly classed as "software."

Nor are they as much of an issue for a programmable but single-purpose system, such as a nuclear power plant control system.
5.5.2009 6:07pm
Roger Schlafly (www):
The problem with Lemelson was not just that he had submarine patents. He was claiming patents on things that he really did not invent. Or at least that is the opinion of a lot of people. If so, it seems reasonable to call him a patent troll.
5.5.2009 6:22pm
gattsuru (mail) (www):
As a non-lawyer and an individual subject to both sides of patent law (particularly the software side of things), I've always used and seen used the phrase "patent troll" to refer to non-practicing entities who have little or not intent or even capability to successfully practice the patent in the future, and moreover typically fall on the side of obviousness (as even the worst NPE who discovers something otherwise unlikely to be discovered during the duration of the patent is causing beneficial results), with an emphasis on getting money from existing companies and purposes rather than developing new ones for a given patent. Detkin's definition during his 2001 popularization of the term "make a lot of money off a patent that they are not practicing and have no intention of practicing and in most cases never practiced" may be apt, as long as it is recognized that practicing includes both producing a market with the ptantent itself, or even attempting to license the patent to companies who have yet to find an adequate solution to a problem.

I'd consider NTP, Inc among those definitions, and few if any legitimate groups to be. Several (in fact, entire branches of huge companies) came up with an allegedly similar design without knowledge of NTP, Inc's designs or patents, and were only made aware of that patent a long period of time after they had produced products. It is difficult to honestly claim that they were attempting to sell the product; the company involved a total of one person and no employees, and did not present their patented device to any company until after the company had already rediscovered the matter -- in the case of RIM, the allegedly infringing technology appears to have been in the application since the first device's release, years before NTP sent their notice. Attempting to force a company to accept a license long after a company has developed a similar method not a defense, but an actual part of the accusation.
5.5.2009 6:27pm
gattsuru (mail) (www):
I should clarify that NTP inc likely did not originate as a patent troll, and had attempted to display a product early in its lifespan; it was only after the death of a co-founder that the company removed any attempts to develop products of its own or license its patent to those who had yet to develop the technology of their own, unrelated research.
5.5.2009 6:50pm
iplit09 (mail):
The description of IBM's licensing practices doesn't really seem to be "patent troll"-like behavior. Unlike most so-called "patent trolls, IBM apparently is not trying to "monetize" its patent portfolio -- i.e., engaging in patent litigation (or patent licensing through implicit or explicit threats of litigation) to obtain revenue from an allegedly infringing company. Rather, from what Adam says, IBM seems to be using its patent portfolio for a different, defensive purpose -- to act as a deterrent from being sued itself for patent infringement. Only if this deterrent breaks down would IBM then assert its own patent rights in litigation. This seems to be fundamentally different from what so-called "patent trolls" are doing.

Moreover, I'm not convinced that IBM is using its patent portfolio "solely for litigation purposes and not for development of actual products sold in the marketplace." Given IBM's thousands (tens of thousands?) of patents, one would think there's a strong likelihood that it commercially practices at least *some* of them.

Maybe "patent licensing firm" or "patent litigation firm" would be a more accurate, less pejorative label than "patent troll."
5.5.2009 7:10pm
einhverfr (mail) (www):

Moreover, I'm not convinced that IBM is using its patent portfolio "solely for litigation purposes and not for development of actual products sold in the marketplace." Given IBM's thousands (tens of thousands?) of patents, one would think there's a strong likelihood that it commercially practices at least *some* of them.

IBM is not:
1) Suing others for patent infringement (unless sued first!)
2) Seeking license fees for most of their patents.

IBM is:
1) Using its patents defensively
2) Licensing its patents to users of Free/Open Source software free of charge.

It seems to me that, if IBM is not using its patent portfolio solely for litigation purposes, then the secondary purpose is PR and investor relations.

What would IBM be doing differently if software patents were not available in terms of product development?
5.5.2009 7:16pm
einhverfr (mail) (www):
(noting software patents for IBM because they also have a large number of hardware patents which presumably they have for other reasons of defending their place in the market as well)
5.5.2009 7:53pm
Michael F. Martin (mail) (www):
I think we need to locate the distinction between troll and NPE in how much the disclosure that supports the claims actually taught those of skill in the art -- or at least the publications and know how that were available to the public as a result of the filing of the patent. Isn't that what Commissioner Mason ended up looking at in this case?

Of course, if Congress follows the suggestion of some commentators and makes independent invention a complete defense to patent infringement, then the patent system will become irrelevant to many fields of engineers instantly.

The question we need to ask ourself as a nation is whether we want to move our patent system from the Gutenberg era (that the Patent Act of 1952 was designed for) into the Internet era. Do we actually believe in the quid pro quo for patenting -- say, of software -- or do we believe we'd be better off without mucking around with a market free of government sponsored exclusionary rights?

Before answering, consider how many creative ideas there are for how to improve the PTO's mechanisms for recording and making available disclosures -- social networks, youtube, improved search algorithms, more help for independent inventors with marketing. The PTO could look very different now. The rule behind Section 102(e) became part of the common law on the reasoning that patent applications, in principle, COULD be published on the day they were filed. And they can now.

But we have to get used to the idea of using the patent system as a clearinghouse as a source of knowledge, not just a source of legal rights for lawsuits. Claims shouldn't be restricted to one English sentence. Why not a diagram? Why not a piece of source code?

None of the creative ideas, the ideas that would really reduce social costs and promote the progress of innovation -- none of those ideas are on the table right now. Why not?
5.5.2009 9:59pm
the federal white-collar criminal:
I think you are asking the wrong question. Your question seems to be: can the patent system work decently well with patent trolls? But the real question is, is there a class of people whose we can avoiding giving patents without damaging innovation? Surely you must agree that, seeing as patents are statutory monopolies against independent inventors, we should only give them out if it is necessary for innovation.

First, what did Howe contribute to innovation in your narrative? Absolutely nothing. Singer did not rely on him in any way to create his machine and, had Howe disappeared before his licensing demands, things would have happened exactly the same way. So why should he have a patent right? What good did it do society? (And yes, I know that independent invention is no defense, but it certainly reflects on how much the patent actually contributed to social welfare.)

Despite your contention that "submarine patents" are no longer a problem, there is simply no statutory bar against obtaining a patent, doing nothing with it for several years while others independently invent what it teaches, and then popping up to demand a license. What possible benefit to innovation does that serve? Are you against modifications to the patent system to prevent this type of behavior?

You seem to act as if all the patents involved actually meet the statutory requirements. They rarely do. But having a very good idea that troll couldn't have invented something and proving that there was prior art are very different things, particularly considering the deference given once a patent has been approved. Would you support shifting the burden of proof on these issues to the patent-holder?

You also ignore a major distinction between the period you are talking about and today. In that period, there were several orders of magnitude fewer patents than there are today, with a much larger PTO staff relative to patent numbers. At that time, looking at a patent's enabling disclosure was a realistic way to start a competing business as soon as the term expired. Today, it is nearly impossible to monitor patents being filed just to avoid infringement, let alone learn anything from them.

Just because the patent system limped on from previous problems doesn't mean that there are not reasonable changes to the patent laws that would make them more effective.
5.5.2009 11:03pm

First, what did Howe contribute to innovation in your narrative? Absolutely nothing.

If I recall the articles correctly, Mr. Howe is associated with the creation of the means by which a lockstitch could be mechanically achieved. Assuming my recollection is correct, it would be inaccurate to say that his contribution was "absolutely nothing". Quite to the contrary, this would have been an important step in the process that led to the eventual production of sewing machines for the consuming public.
5.5.2009 11:40pm
Soronel Haetir (mail):
I'm also not certain I would say universities operate in good faith. And certainly not if you consider public schools and they state that funds them as part of a single operation.
5.5.2009 11:42pm
einhverfr (mail) (www):

Why not a diagram? Why not a piece of source code?

For that matter, why not a system of applied mathematics? Too bad Codd didn't patent relational algebra and relational calculus! Yet, these are not currently believed to be patentable while the software elements which embody these mathematical systems are. That doesn't make a great deal of sense.

Now as to the issues with submarine patents, I do think this problem is largely solved. They are an annoyance right now but they are not blocking issues. When Unisys made noise about enforcing the patents on GIF compression, everyone who cared simply stopped compressing GIF's. In rare cases I think it might be possible to launch a single submarine infringement claim for the short term, but really: a) one would only get one shot because EVERYONE in the industry is afraid of the problem and b) your target would move away from infringement as soon as you bring it up, unless it is something really, really central to their products.

Now, even if we dont want to prevent the enforcement of patents against software products in wholesale ways, we could still institute a number of reforms which would help avoid obvious patents. The code caching patent (7,530,058) strikes me as sufficiently obvious as to be possibly legally obvious based on recent Supreme Court cases (really, no different than the patent on the drive-by-wire component the Supreme Court recently invalidated on obvious grounds---this consists of well known and previously used techniques merely applied to a slightly different environment).
5.6.2009 12:40am
Jens Fiederer (mail) (www):
To me, the term "patent troll" has little to do with whether an "entity" is practicing or not (This is speaking from the perspective of a software developer, not a lawyer). It is a matter of whether the patent in question is an actual invention that adds value to society, or whether it is (like what seems to be the majority of the cases) an attempt to stake out a claim on practices that are obvious, especially when they are pretty much the only way to get something done.

When a mathematician patents a useful encryption procedure, I have no beef at all with their deriving a profit, or for that matter, non-practicing entities to whom they may sell the patent. When somebody invents a new storage or communication method (an example: the CD, TCP/IP), and some third party then patents "storing information on a CD", "using TCP/IP to send mail", especially in large sweeping combinations, THEN I find it objectionable.

It is not so much the actual language of the law, it is the absurdly low barriers set to something being novel and non-obvious.
5.6.2009 11:18am
einhverfr (mail) (www):

When a mathematician patents a useful encryption procedure, I have no beef at all with their deriving a profit, or for that matter, non-practicing entities to whom they may sell the patent.

Why stop there? Why not allow new fields of math (relational algebra, relational calculus-- both derived by Edgar Codd, information algebra, and the network security algebra/calculus I am working on) to be patented?

Yet these things are not patentable under current law. One of the things I am working on I think could be truly revolutionary (a mathematical system for accessing network security) and yet I am opposed to even being ABLE to patent it.
5.6.2009 11:39am
Jens Fiederer (mail) (www):
I think that is a separate discussion from the pejorative use of "Patent Troll". I am generally opposed to software patents, but not likely to call people that use them bad names - if you DID patent your system and it IS as you describe it, I might argue against it, but I wouldn't call you a "troll".

Unlike property in general, I don't think patents really have a moral component (i.e., there is no moral reason why somebody in California should be prevented from using a method they invented just because somebody else invented it in Georgia first). If we had no IP protection, inventors could STILL derive value by being the only user of their secret methods, but encouraging the information to be spread around a bit benefits society as a whole, so there is a strong utilitarian component.

The utility of that IP protection is very dependent on grades of obviousness and usefulness, so in general people that use the law as intended "To promote the Progress of Science and useful Arts" are admired and people that abuse the law to obstruct or stifle progress are despised.
5.6.2009 11:58am
Fiederer makes an important point that I want to riff on a bit.
It is difficult to precisely define "patent troll", just as it is difficult to precisely define "chair" (as Arromdee point out).

However, it seems that patent trolls have one important thing in common: they have been issued patents that are broader than the specific discovery they have made. Patents are easier to abuse, the broader they are drawn. A systematic change in how narrowly patents are drawn would thus fix the problem without having to identify specific malfeasors - and the more narrowly, the better. It seems strange that in a world where IP provides a smaller and smaller proportion of the incentive to innovate, that its reach should become broader and broader. The reverse ought to be true.
5.6.2009 2:26pm
einhverfr (mail) (www):
Jens Fiederer wrote:

Unlike property in general, I don't think patents really have a moral component (i.e., there is no moral reason why somebody in California should be prevented from using a method they invented just because somebody else invented it in Georgia first).

I know Massoff might disagree with me here, but I think that "moral" or "natural" rights relative to property are cultural rather than natural. For example, a tribe in the jungles of South America might not have private property rights if this doesn't fit into the way they look at the interplay between the material, the society, and the individual. This doesn't always mean that there are human rights violations in this way. "Natural rights analysis" really is a misleading approach. Really this is "inalienable rights determined by our ethical culture."

However, suppose we accept this... Does "natural rights analysis" as we currently approach it apply to patents? I think it does for two reasons:
1) if we accept a right of individuals to enter out of free will into contracts of any sort, then this right MUST be extended to a social contract involving patents.
2) However, patents involve restrictions on other individuals "natural" property rights. Thus there is also a "natural" right to use other peoples' inventions without compensating them.

I come back to a somewhat (though not exclusively) Jeffersonian approach to patents, that they are social contracts which are paradoxically and fundamentally both based on and in conflict with "natural" rights. The basis of this sort is is expressed in a wide variety early literature (as Massoff points out) but the conflict is such that these grants of privileged positions in the marketplace must bee of limited terms.
5.6.2009 4:15pm
Bruce Hayden (mail):
First, Lemelson. You appear to misunderstand what was going on there. Yes, he was one of the primary "offenders" with submarine patents, with one issuing some 40 years after its priority date. All legally, of course. But it wasn't the secrecy that was the issue, but rather, his ability to write claims claiming technology invented decades after his priority date that was. The original Lemelson patent applications (the two priority documents) described a very crude machine vision. The ultimate claims in later patents read on bar code readers using lasers. No matter how you define the term "patent troll", Lemelson was one, and, indeed, the one that pretty much every later one tries to emulate. Two things put an end to Lemelson's submarining patent trolling: 20 year patent term; and rediscovery of the Description of the Invention as the third prong of 35 U.S.C. § 112 ¶ 1.

Secondly, IBM is unlikely to fall under any definition of patent trolling. It does try to monetize its patent portfolio, but most of that is in the guise of cross-licensing. What doesn't show up on its balance sheet is the reduction in the patent licensing fees that it would be paying if it didn't have such an immense patent portfolio. So, in essence, it may go to a competitor in some field, with the result that it gets credit for $30 million as a royalty on the other company's products, and owing $20 million as a royalty on its own products to that other company, with the $10 million difference showing up on its balance sheet. Of course, they do this with numerous companies, and that is why their net is so high.

I should note that I have been on the other end of negotiating with IBM concerning cross-licensing of patents several times. Back about a decade ago, they put up one of the first sites where you could search for patents. Since the company was not known for doing anything for free, we were suspicious. And, it turned out, for good reason. They had used the results of our patent searching on their web site to target their cross licensing efforts against us (presumably by reverse looking up our fixed IP addresses). Unfortunately for them, many of the patents asserted against us were irrelevant to our products, apparently since the only use we had made of their patent search site was to look up patents concerning a company that we ultimately did not purchase.

What must be remembered about IBM is that their patent portfolio is both extraordinarily large, and contains a large number of good patents. Yes, it also contains a lot of junk. But its very size has an in terrorem effect on anyone they get into cross licensing negotiations with.

In conclusion, the biggest criterion for being a patent troll for me, is that the patent holder is an NPE, and never really had any real intention or ability to practice the invention. So, yes, maybe I would consider some universities such. But maybe not. The difference may be that universities often actually invented the technology, and others take the technologies from them and run with it. Lemelson's patents had absolutely no impact on the discovery and refinement of the technologies from which he made his hundreds of millions of dollars.
5.6.2009 9:10pm
Bill Sommerfeld (www):

When a mathematician patents a useful encryption procedure, I have no beef at all with their deriving a profit, or for that matter, non-practicing entities to whom they may sell the patent.

Having observed the harm which the patent thicket around public key cryptography did to internet security in the late 80's and well into the 90's, I must say that I profoundly disagree. At a fairly formative time when the internet was expanding rapidly, there was so much FUD about crypto (due to the RSA patents) that it was left out of key protocols. it was much more work later on to retrofit it.

the patent thicket wasn't the only barrier -- cryptographic export controls also contributed -- but the two in combination made things very dicey for the small experimenter wishing to share source code with others.

elliptic curve crypto has its own patent thicket, but the market has largely reacted to this mostly by ignoring -- engineers with lingering scars from the RSA patent mess have long memories. ECC is better than RSA in many ways but it isn't enough better to make it worth anyone's while to spend time and energy licensing the patents instead of building on now-patent-free alternatives which aren't that much worse.
5.7.2009 12:46pm

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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.