In Defense of the Trolls - Part 4 (Final)

This is my last post in the series, and my objective will be to demonstrate why I think trolls are a good thing, provided that we (collectively) can clean up the issuance of bad patents.

What if we fast forward and ask "what's the world like without patent trolls?" I think we will all be unhappy with the result. It's a world where the only way to profit from your invention is to practice it yourself and build a business. Because in the absence of trolls, BigCos will happily ignore your patent and copy your invention all day long -- it's all upside to them as (a) they don't have to pay a license fee, and (b) they know you can't compete against their scale, relationships, etc. Game-set-match to BigCo; the really smart ones will let you start to build a business and prove the market exists, then crush you when they enter. And without a patent troll on your side, too bad for you -- them's just the breaks small guy.

Pareto Optimality and the more general theme of economic efficiency throw up all over this required linkage between the inventor and the business that makes/sells it. If I simply suck at building and operating a business, shouldn't I still be rewarded for my contribution of the invention? If I'm particularly good at inventing things, and you're particularly good at making/selling them, a troll exists to make sure that the leverage in a negotiation is appropriate to the value of the idea. Those that wish for the elimination of trolls will get a world where the inability to profit from issued patents chills and shrinks the invention and innovation pool and gives existing companies way too much leverage and strength.

The trolls keep everyone honest. If you are late to the innovation party, you have to pay the price of copying other's inventions. You get the benefits of being a fast follower, but you have to pay up for that benefit. For trolls act as free-market police against bad actors who just steal or ignore the rights afforded in a patent. It really is as simple as that.

Do the trolls play a nuisance game? Of course they do. And I'll be as angry and pissed off when I'm subject to a nuisance suit as I am sanguine about my macro view of the importance of trolls. But if you play out the game of chess, I submit that trying to eliminate trolls has a much higher long-term consequence that is negative than finding ways to limit their game to true invention that is worthy of a patent...

I admit that I've stayed at the 50,000 foot view here, and there are some subtleties when you dig into enabling technology patents (where a patent covers a small step in a bigger process/system) and when you live in a world of software patents, which I think is a really challenging area right now. But the world is soooo much bigger than high tech, that we shouldn't let the high tech giants control the discourse on the very important issue of patent trolls...

I look forward to any comments on what I've missed or how to better solve for trolls without having negative long-term consequences for the individual inventor or small startup.

Comments

[mbmccall]

John,

Having been on the wrong end of "evil" patent trolls, I have never fully embraced your zeal for "good" trolls. That said, as with injury lawyers, many of their actions do result in society being a better, safer & fairer place.

That said, I don't know how you set up standards by which "evil" trolls (e.g. lawyers sucking up adjacent patents for the sake of litigating) are washed out of the system. Like pornography, you know it when you see it, but it is hard to legislate.

If left unchecked, the fact that there are some multiple of lawyers out there for each engineer, I fear this Achilles heal will potentially bring company creation to its knees if this "differentiation" of good vs evil is not codified.

Until then, all trolls are evil in my world :)

[ascarroll]

John-

I largely agree with your position on patent trolls and your appropriate diagnosis of the problem as being one of poor patents being issued. When you have an understaffed patent office reviewing 400,000 applications a year and only spending an average of 18 hours reviewing each application you are bound to get bad patents. I think this could really wreak havoc in new areas of science such as biotechnology and nanotechnology.

You will always have problems with the "evil" trolls but the potential negative consequences of weakening patents would cause major disruption in industries such as Big Pharma. Also, the problem with trolls has been blown out of proportion- especially since the RIM fiasco which was largely the fault of RIM's management team. Nathan Myhrvold (now being labeled as the biggest troll of all) did a study on patent litigation and found that only 2% of patent lawsuit filed over the last 5 years involved so called patent trolls.

The key to solving the problem is to develop a system that efficiently ferrets out patents that are too broad and/or rely on prior art.

[edward02]

John -

I agree with your position. There is a distinction between a small innovator's intellectual assets and their intellectual property. Their real value is in their entire asset portfolio - both the articulated innovation which they posess, and their unique skills and insight which will allow them to apply that innovation to novel problems. However, this knowledge is hard to turn into a viabale business proposition alone, and, absent some sort of external protection, hard to license to an established, and more powerful, competitor. Therefore, the real value of patents - for all parties - is in their ability to foster an interaction between small innovators and establhised producers. Regrettably, it is difficult to discern a structural distinction between "patent trolls" and the legal mechanisms which give them hold up power, and legitimate independent inventors who need to strengthen their bargaining position against established licensees, and the mechanisms which do strengthen their position.

You might find the following interesting:

http://law.bepress.com/expresso/eps/1156/