This is going to be a multi-part post over the next week or two. And I'm taking a bit of a provocative stand for a reason: I'm getting tired of the debate over patent trolls and I think people are missing the forest for the trees... Just last week, our friends in the House had an oversight hearing on "Patent Trolls: Fact or Fiction" and the topic has gotten plenty of press. Let me begin by stating a hypothesis I'm naming "The Game Theory of Patents". My thesis is thus: patents, standing alone as property, can be only two things: threats or insurance. Insurance, in the absence of a risk, is worthless. Therefore, from a value perspective, patents, standing alone as a property right, can only be threats.
The above is a bold assertion, but I believe as you peel the onion you'll see the self-evidence of it (successful contingency lawsuits by patent holding firms, patents pursued solely for the purpose of counterpunching (or nuclear bombs as some think of them, etc.)). I won't belabor this post with a long discourse on the logic thread, as I want to get to my main points.
Point #1: Assuming the above is a truth, as a (pending) patent owner, if you can't make a credible threat, align your patent rights with someone who can.
Point #2: threats can be either business attacks or legal attacks.
Let's first dispose of the case of when products that are covered by the claims in a patent are already in the market. This almost always means a legal attack (or threat thereof). In the absence of a legal attack, business norms and behaviors are not aligned to promote re-apportioning of value streams as the patent is essentially ignored. To re-state, the invention disclosed in the patent is already in the marketplace and the know-how described therein is already known and combined with the means of production to put it on the shelf. Since nothing more is needed from the business perspective, the legal attack is the only road open.
Therefore, in a world where the established market dominant player enters the market, if a small firm/inventor doesn't have resources, a patent troll is the only option. Let's not niggle about the semantics of those who never intend to enter the market anyway (as some have tried to do to distinguish "evil" trolls from the merely impoverished inventors who use contingency law firms to pursue "good" ends). We can debate that argument offline as I think anyone who is consistently good enough to put themselves in the center of future successful products should indeed be handsomely rewarded and furthers the very ends that patents are designed for -- promoting the disclosure and advance of new technologies. And recall my prior comments about Google enabling one to find almost anything now -- the world of new products moves faster because it can move faster... Patents are published and searchable within 18 months of filing...
In sum, I think the world requires some semblance of patent trolls. I think it was right that RIM had to pay a small fortune to NTP to make that case go away. They tried to stomp over a small inventor, could have settled for a small amount and gambled. As much as I don't always like the result, the reality of the market dynamic requires a counterbalance to thievery and trespass, intentional or otherwise...
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