Patent trolls often help the little guy
Updated 4:26 pm, Friday, March 8, 2013
President Obama criticized companies known as "patent trolls" in a Google+ Hangout last month while answering a question about software patents. "They don't actually produce anything themselves," the president said. "They're just trying to essentially leverage and hijack somebody else's idea and see if they can extort some money out of them." The president then called for "smarter patent laws."
If the president would take a closer look, he would see that the "hijacking" of innovation is often taking place at the hands of multibillion-dollar corporations. History is filled with examples of innovation coming from individuals and small companies - and efforts by larger companies to misappropriate those inventions. David Sarnoff's and RCA's attempts to steal the early television system from inventor Philo Farnsworth (who transmitted its first image at a lab at 202 Green St. in San Francisco) and the Detroit automakers' outright theft of Robert Kearns' intermittent windshield wiper are just two of many examples.
In the case of my company, two large Taiwan companies, each with a history of predatory conduct, are charged in U.S. District Court for the Northern District of California with conspiring to steal patented technologies that CopyTele spent years to develop.
The framers of our Constitution recognized the importance of promoting and protecting innovation, which is the basis for our patent system. Where does the Constitution say that big corporations are more entitled to enforce their patents than a small company or an inventor who seeks the assistance of a so-called patent troll? (Trolls are, more correctly, referred to as nonpracticing entities or NPEs, whose business is to acquire patents for the sole purpose of enforcement on behalf of the inventor, without the intent of making or selling products.) Isn't a company that uses its market dominance and vast financial resources to try to steal innovation and steamroll the inventor the one engaging in troll-like behavior?
As for smarter laws, the final provisions of the first major patent legislation in more than 60 years, the Leahy-Smith America Invents Act, are set to go into effect Thursday. It made several changes to the patent system, most notably changing from a "first to invent" to the "first inventor to file" system. Instead of attempting to further tilt the patent system in the favor of large corporations, here are five suggestions to level the playing field and strengthen our patent system:
Let the U.S. Patent and Trademark Office keep more of the money it generates: In the first version of the America Invents Act, the patent office was supposed to keep all of that revenue, but Congress couldn't resist the urge to reappropriate that money. A better-funded patent office, with the ability to attract and retain the best patent minds, would be a win for all inventors, regardless of size.
Eliminate anonymous re-exam requests: Under the America Invents Act, anyone can seek to have a patent re-examined on an anonymous basis. This anonymity leads to second and third attempts by large companies to sabotage patents that already have made it through the patent office multiple times. This wastes time and burdens both the inventor and the patent office.
Make companies that flood the patent office with applications pay: Last year, the top patent filer, IBM, received 6,478 patents from the patent office, or 1 every 18 minutes per workday. Forget about hijacking inventions from small inventors, these large corporations are hijacking the patent office. Any company that is innovative enough to invent something every 18 minutes can afford to pay extra issuance fees after its 2,500th issued patent.
Pass laws that encourage parties to work out their patent issues without suing: Since a 2007 ruling by the U.S. Court of Appeals for the Federal Circuit, patent holders have been forced to take a "sue first, talk second" approach. Any attempt at friendly licensing now can be viewed as a "threat" and result in a lawsuit. The same licensing discussions that happened before a suit was filed now only occur after months of costly litigation.
Companies: Don't take someone else's invention and expect to get away with it: Freedom-to-operate searches, which reveal if a product or technology infringes on the patents of others, rarely are made by large companies anymore. They would rather ignore the rights of small inventors than pay a reasonable up-front license fee. It is hypocritical for large corporations to turn a blind eye to the inventions of others and then complain loudly when they are sued for their transgressions.
So who are the real trolls and hijackers - nonpracticing entities or big corporations? Just as it's not right to portray all big companies as monopolistic, predatory, invention-stealing thugs, it's equally unfair to cast all nonpracticing entities, and the small companies and inventors they assist, as trolls. The truth is we would all be better off by dropping the name-calling and fixing what really needs to be fixed.
Robert A. Berman is the president and CEO of CopyTele Inc., a publicly traded company specializing in patent monetization. Send your feedback to us through our online form at sfgate.com/chronicle/submissions/#1