Wednesday, October 12, 2011

Patent Trolls aka NPEs or Non Practicing Entities

I wear three hats in my professional life:
I have spent 33+ years in the computer industry, 23 years of which were at Sun Microsystems.  In that time period, the primary theme at companies that I have worked at has been around innovation.  I would argue that no company was more innovative than Sun Microsystems.

A very disturbing trend of late is the increase in what are called NPEs or Non Practicing Entities or Patent Trolls.    Wikipedia defines a patent troll as:

Patent troll is a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered by the target or observers as unduly aggressive or opportunistic, often with no intention to manufacture or market the patented invention.
 Here is another snippet from Wikipedia:

Patent troll "companies have no interest in using the patents... but instead hope to reap large sums of money from the lawsuits themselves."[32] This gives them an advantage over manufacturers since they are relatively immune to the typical defensive tactic large entities use against small patent plaintiffs, because the cost of litigation tends to fall more heavily on an accused infringer than on a plaintiff with a contingency-fee lawyer, and because trolls have an almost-unrestricted ability to choose their preferred plaintiff-friendly forums, most prominently the Eastern District of Texas.[21]
There are few things that are more innovation killing and job-killing than patent trolls.  

Here is some interesting insight (various snippets - please read entire post at from the smart folks over at on patent trolls:
 The PTO receives over 520,000 patent applications a year. That’s about 1,425 applications a day. The agency’s approximately 6,500 patent examiners are overburdened; on average each patent gets only about 16 hours of review. Virtually all experts agree that this is nowhere near enough time to properly assess a patent. More fundamentally, patent examiners are rewarded for processing applications – and the easiest way to clear a file is to approve a patent. The PTO’s examiners don’t get paid to say no. They’re incentivized to approve.

But there’s a third, more interesting reason so many people seek patents that have a high probability of being found invalid. As it turns out, invalid patents may be worthless as innovations, but they can be very nice bargaining chips.
Any patent the PTO grants enjoys a legal presumption of validity. To overturn this presumption, defendants in a patent infringement case must prove the patent’s invalidity by a high standard of “clear and convincing evidence.” It takes a lot of lawyer fees to do that. And the result is that defendants often pay rather than fight, even when they think they could ultimately have the patent invalidated. More than 97% of patent infringement suits are settled before trial.

The patent system exists to encourage people to invent – to add, in Abraham Lincoln’s words, “the fuel of interest to the fire of genius.” But as this post suggests, there’s a dark side to the patent system. Just as good patents advance innovation, bad patents retard it. And even bad patents can be valuable to a patent troll. Every penny that goes to license an invalid patent, or settle a meritless lawsuit, is a tax on innovators.

There are some groups that are looking out for what is best for the United States of America and one of these groups is the Electronic Freedom Foundation (EFF).  Something EFF is doing that I absolutely is EFF's Patent Busting Project!    As EFF describes this Patent Busting Project:

An EFF Initiative To Protect Innovation and Free Expression
Tired of bogus software patents? So are we! To combat these annoying and often dangerous legal weapons, EFF has launched the Patent Busting Project to take down some of worst offenders.

We need your help! Take a look at the Top Ten Most Wanted culprits on our list, and let us know if you have any leads on technology that predates them (called "prior art") that we can use to challenge their validity. Click on a patent to find out more.
Go get those damn patent trolls and PLEASE HELP EFF so we can save the United States of America for those true innovators who are the real job creators and not the bottom feeders of society like patent trolls!

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