An inventor, long on imagination but short of capital, patents a wonderful invention. He approaches several companies to help him fund, manufacture and market his idea but is repeatedly turned away. Eventually, exhausted, he gives up on his invention. A few years later, he buys a product manufactured by one of these companies and, lo and behold, this product embodies his invention to the letter. The inventor offers to license the patent to the company but is turned away. He then files a lawsuit against the infringing company.
The lawsuit process is tough. The company lawyers use all the tricks in the book, but the claims of his inventions have been expertly written. The inventor scores a court victory and eventually the company must settle. Frustrated, one of the company executives calls the inventor a patent troll, implying that the company should get all the credit for bringing the invention to market and that he did not do any productive work, likening him to those unpleasant creatures who hide under bridges and exact a toll from unlucky travelers.
This lawsuit took place in 2006. The company was Intel. The inventor was represented by TechSearch, a company engaged in the business of purchasing, licensing and enforcing patents. Are you surprised?
The news media ran with the troll story: American Lawyer publication had an article beginning with “In the sleepy village of Santa Clara, there lived a very wealthy but very frightened giant named Intel. Intel was plagued by a fearsome band of evil trolls – patent trolls to be exact – who wanted a glittering pot of gold in exchange for doing absolutely nothing. They were very powerful because they said they owned the patent on some of the magic Intel used to become rich.”
The metaphor of patent trolls was used by large corporations such as Intel and Microsoft to spur Congress to change the patent system and adopt the patent reform act possibly more appropriately dubbed “the anti-patent reform act.” The Texas congressman stated: “I think patent trolls are abusing the system.” The aim of this act was to introduce changes that would reduce the rights of the small inventors. This bill which favors infringers and large companies at the expense of the small inventor is currently before Congress. It includes:
1) Provisions that will give defendants additional ways to combat infringement allegations and limit damages.
2) A “first to file” system to replace the “first to conceive” system. This will favor large companies with readily available attorneys at the expense of individual inventors.
Large companies are the biggest trolls of all. They use their large patent lawyer teams to eliminate competitors using methods such as:
1) the ‘’Shotgun’’ strategy: obtaining as many patents as possible in a particular area of technology;
2) the “Blanketing” and “flooding” strategy: turning an area into a minefield of patents, for example by systematically covering with patents every step in a manufacturing process;
3) the “Picket Fence” strategy: erecting a patent fence against competitors to block them from making any improvement to their products;
4) the “Surrounding” strategy: walling in an important patent with lesser patents to block the effective commercial use of the central patent, even after its expiration; and
5) the “Scarecrow” strategy: filing patents to discourage competitors from investing in a technical area to be protected. More information about patent strategies are available on the Web
Calling small inventors trolls and changing the patent system to reduce their rights will only weaken our innovation strength and our competitive advantage in the world.
We are living in the age of the Internet and have the tools to make the patent marketplace readily available. We ought to encourage the flow and sharing of information including the availability and marketability of patents. There is no excuse for a large company to deny funding to a small inventor of a good idea simply because he does not have the means to defend himself in court.
If small inventors behave as patent trolls it is because too often they are faced with the “Not Invented Here” Dragon. Instead of chasing the troll, let’s slay this dragon by making sure that the patent marketplace is open for all to see.
For archived newsletters and a lot of information for the small inventor go to: www.patentsandventures.com.
If you have any question you can contact me at (858)259-2226 or email me at glevy@patentsandventures.com.
This newsletter should not be construed as legal advice. ©2009 by George Levy
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