“Patent Troll” Hypocrisy and a New Patent Reform

By Alexander Poltorak, Founder and President of American Innovators for Patent Reform

Recently, Rockstar Bidco sued Google and seven other manufacturers of Android smart phones for infringing patents it bought for $4.5 billion from bankrupt Nortel. A former in-house patent counsel for Intel, Peter Detkin, who coined the term "patent troll," defined it as someone who acquires for the purposes of litigation a patent they did not invent and do not practice. Rockstar seems to be a perfect example of a "patent troll" − they bought the patents they did not invent and do not practice; and they bought it for litigation. The thing is, Rockstar Bidco is a consortium of several technology companies that includes Microsoft, Apple, Ericsson, Sony and Blackberry. So, are Microsoft and their partners at Rockstar "patent trolls," too?

Don't get me wrong, in my opinion, there is absolutely nothing wrong with Rockstar bringing a lawsuit for patent infringement. They paid a lot of money for these patents and they need to monetize them. What's wrong is the hypocrisy of Microsoft and other tech giants who malign those who dare sue them as "patent trolls" while doing the same.

There has been much talk in the press lately about patents, "patent trolls," non-practicing entities ("NPEs") and the need for patent reform. The ink has not yet dried on the previous patent reform enacted in 2011, and Congress is busy entertaining a slew of new reform proposals. There are no less than six patent reform proposals pending in Congress. Even the President chimed in with an unprecedented speech against patent trolls. The nation of Edison and the Wright Brothers fell out of love with patents. So, why not abandon patents altogether? This would solve all the problems with patent trolls and NPEs in one fell swoop!

The trouble is, without patents companies would have no incentive to disclose their inventions. Keeping inventions a secret would put a serious damper on the progress of technology as everyone would be reinventing the proverbial wheel. Public disclosure of inventions promotes the progress of technology. To induce inventors to disclose their inventions to the public, the U.S Constitution offers them a limited monopoly (more precisely, public franchise) in exchange. In fact, a patent, by definition, is a bargain between an inventor and the state whereby the state grants limited exclusionary rights to the inventor in exchange for the public disclosure of the invention.

This was well understood by our Founding Fathers, who laid the foundation for our patent system in the U.S. Constitution. This simple idea, however, is lost on our legislators who debate various versions of patent reform, all directed to making it difficult for a non-practicing entity (e.g., a university or an independent inventor) to enforce their patents in court. "Non-practicing entity" has become a synonym for everything wrong with our patent system. However, the practice of an invention (or lack thereof) has no place in patent law. A patent is a quid-pro-quo for the invention disclosure, not for its practice! To require an inventor to practice his or her invention is the same as requiring a song writer to sing her songs on stage or to require an architect to build the house he designed.

At the core of the proposed new patent reform is the fee-shifting provision − the loser pays the winner. What about the long-standing American tradition of equal access to justice for all? Microsoft and other tech giants, who act as patent trolls themselves when it suits their needs, can well afford their legal fees and that of their opponents, in case they lose. Universities, small R&D companies and independent inventors − the so called NPEs − cannot! Microsoft and other high tech giants spent many millions lobbying Washington to put "patent trolls" out of business. Actually, the well-orchestrated lobbying campaign coupled with a public relations blitz are aimed at preventing inventors from asserting legitimate claims against them.

I am not surprised that our lawmakers bought into this conspiracy, sold to them by lobbyists on the payroll of these tech giants − after all, American Democracy is the best democracy your money can buy. I am surprised and disappointed, however, at how easily the American media bought into this hypocrisy without giving it a second thought.

The American Invents Act, made into law in 2011, considerably weakened our patent system. There was little there for inventors, but much for habitual patent infringers. The current proposals aim to put small patent owners − independent inventors, universities and small businesses − at a significant disadvantage. If passed, the reform will deform the American patent system and devalue millions of issued patents. Patents are the currency of the knowledge-based economy. Devaluing this currency is not what our economy needs.