When “Patent Trolls” ARE Innovators


The term “patent troll” conjures up all kinds of images and ideas, but what is a patent troll?  Unfortunately, there is really no universally accepted definition of what a patent troll is, although if you are getting sued for patent infringement by a non-practicing entity, you probably think you are being sued by a patent troll.

My view has long been that companies that complain about patent trolls don’t really want them to go away. Patent trolls are extremely valuable to these big tech companies because they are an identifiable and unsympathetic villain, even if they cannot really be defined in any satisfying way. The image of a patent troll can be paraded about Capitol Hill whenever patent reform is being pushed, or even in front of the Supreme Court, which increasingly seems to be interested in taking them into consideration when reaching decisions, despite them not being involved in the case.

I personally hate the term patent troll, which may come as a shock to many because I use it all the time. I use it to attempt to crystalize the issue, because the term “patent troll” has over time become synonymous with “non-practicing entity,” and not all non-practicing entities are bad. In fact, many are good actors that diligently work against long odds to research and develop new technologies, treatments, drugs and therapies we all want.

For example, universities are non-practicing entities, but the research they do is fundamentally important to our economy. The Bayh-Dole legislation is the most successful piece of legislation over the last 50+ years because it gives incentive to universities to protect their inventions and then license them to businesses, particularly small businesses, who in exchange pay the university, which funds additional research and development. So universities cannot be considered patent trolls, they are the image of what we want to foster.

In fact, since Bayh-Dole was passed in 1980, some 153 drugs based on university research have made it through the FDA process and to market to treat a whole host of diseases, from cancer to hepatitis. Prior to Bayh-Dole, not a single drug discovered at a university ever made it to market. The cause and effect is direct. The bureaucracy was too overwhelming to license technologies. Bayh-Dole unleashed all the good, hard work of universities. Universities do pure research for the sake of science, focusing on research so speculative that it almost certainly would not be done in a commercial setting. It is well past time for the public, and Congress, to realize that universities, federal laboratories and private sector research and development companies are NOT patent trolls. They should not be stopped. Sadly, this distinction has largely been lost on many.

Many of those vilifying “patent trolls,” complaining about all non-practicing entities equally, are simply trying to weaken the patent system for their own perceived advantage. Regardless of what the public has been convinced of, the inconvenient truth is that there is no evidence that a weaker patent system fosters innovation, but there is overwhelming evidence that a strong patent system does foster innovation, leads to growth, investment from abroad and a more prosperous economy.  (For support see hereherehereherehere and here.) Indeed, weak patent rights virtually guarantee innovation simply won’t happen. Where there are weak patent rights, there is no innovation.

Innovation must be the core of growth in the U.S. economy, and a strong functioning patent system is a prerequisite. Discoveries lead to inventions, which lead to new technologies, which lead to the creation of new industries, which leads to the creation of high-paying jobs. None of this is possible without significant investment, which only makes sense if you have secured rights, and that is why a strong patent system is absolutely necessary.

A rising tide lifts all boats. The tide that is going to lift the U.S. economy is the innovation tide, which is long overdue. We need to start focusing on putting in place an environment that will allow innovation to thrive. This means a functioning patent system that provides strong patent rights to anyone who innovates, with those rights being fully alienable. 

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