Problem Child – A Third-Grade Approach to Patent Owners


Gene QuinnLast week on, I published a five-part series that debunked many prevalent myths about patent trolls. See A Fractured Fairy Tale: Separating Fact and Fiction on Patent Trolls, written by Steve Moore of Kelley Drye. While a bit long, it should be considered mandatory reading if you want to understand the underlying facts instead of just buying into the hype and hyperbole associated with the so-called “patent troll problem.”

Moore, with co-authors Marvin Wachs and Timothy Moore, concludes that when you really look at the facts and underlying dynamics of patents and patent litigation, there really isn’t a problem at all. Perhaps there is litigation mischief in some cases, but overall what you see in the hard, factual data is not at all surprising. There really is no patent troll problem at all, and despite what many charge, the quality of the patents asserted by non-practicing entities is quite high, at least if you remove from consideration patents asserted by independent inventors.

But is there a problem? Yes. I think there is clearly litigation abuse, and some of that abuse probably does rise to the level of patent misuse. But we have laws on the books to handle that kind of litigation misconduct, which is exactly what it is — litigation misconduct. To try and sweep an entire class of patent owners together in a pile in order to address the few, easily identifiable miscreants is just plain stupid. We all knew that it was wrong when we were in third grade and the teacher punished everyone because one or two kids didn’t follow the rules.

Perhaps those crying wolf and claiming there is an enormous problem that requires a heavy-handed approach that punishes all patent owners didn’t learn that lesson like the rest of us.  Perhaps those who want to punish all patent owners, weaken all patent rights and fundamentally alter the patent system as we know it didn’t learn the same lessons in grade school because they were the “problem child” (to quote AC/DC) that led to us all losing recess in the third grade! Or maybe they were that clueless third-grade teacher who just didn’t have the sense or patience to figure out who the problem children really were. Let’s just punish everyone (queue evil laugh track)…

The truth is that there is no problem with the patent system, and the problem is not with bad patents being issued. The patents in the software space that are too broad issued more than 10 or 12 years ago. The Patent Office long ago clamped down on bad software patents, so the justifiable ire for these bad patents is a relic of what transpired at the Patent Office more than a decade ago. Thus, to claim that the Patent Office today is the problem because they issued these patents is ridiculous. It shows a lack of understanding of the issues and ignores the reality that today the Patent Office has clamped down so tight in certain Art Units that they routinely reject patent claims that really should issue. The problem today with the Patent Office is likely more that they issue too few patents in the software space.

Litigation abuse is a problem, but that does not mean that there is a problem with the patent system or patents. Certain nefarious bad actors use a patent as part of a shake-down to force defendants to settle for pennies on the dollar or pay hundreds of thousands of dollars (at a minimum) to mount a defense. But is that a problem with the patent system? No, absolutely not! The problem is with using judicial inefficiencies and the sloth of the system to force settlements.

You might say that if you were sued with a bogus lawsuit you would defend, but it only costs a few hundred dollars to institute a federal lawsuit, so the bad actors can ask for $10,000 or $20,000 and still make a great return. If you don’t pay and seek legal representation, you will almost certainly be required to provide a retainer deposit that is at least $50,000, likely much more. So what do you do? Many choose to settle, but all that does is paint a target on their back so others now know that they are easy prey.

We don’t need new laws or speeches from the Rose Garden.  Federal district court judges need to take a stand and use the laws and powers at their disposal to prevent the bad actors from using their courtroom as the venue for a modern-day Chicago-style shakedown that would make Al Capone blush.

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