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An ancillary issue in current US patent system reform discourse asks “what is a patent troll?” Having reviewed some of the literature, I argue that consistent with the established concept of division of labor, as well as common and necessary practices in the technology industries, non-manufacturing firms and firms that do not compete in markets in which they hold patents should not be considered patent trolls.
The attributes commonly used to call out a patent troll include: abuse of the patent system, litigious, non-contributing of ideas, non-manufacturing, seeking exorbitant licensing fees, spending nothing on development. Still, as Nathan Myhrvold states: “nobody knows what a patent troll is.”
I know what a patent troll is not. Innovators who risk substantial investment in R&D and then patent their work, who do not specialize in production capability; thus, I would not call research universities patent trolls when they license or "spin-off" rather than manufacture inventions. Further, patent holders who seek to license their patents arguably help develop products, and thus should not be vilified. It does not matter if they actually compete in markets in which they seek to license. California Congressman Howard Berman does not refer to these parties when he talks about patent holders that "misuse the patent system." Thus, after setting aside various entities in the "is-not-a-troll" category, what is left that we can call a patent troll?
Paul Misener, Amazon VP for Global Public Policy, spoke before the House Committee on the Judiciary in June 2006 and claimed that the patent system can be reformed without defining what a troll is. However, Misener admitted that the term “vilifies entities that simply are taking advantage of the current, flawed patent litigation system.”
Elsewhere, there seems to be a vague consensus on the intent of the term “patent troll.”
Professor Donald Chisum refers to trolls as those who have patents but “do not produce anything under the patent or even enter into prospective, cooperative licensing arrangements.” Instead they "wait under a bridge” for a company to produce a product and then seek exorbitant licensing fees above the value of the patent or threaten litigation. Generally patent holders are mutually inclined to cross-license patents but a troll has no such interest because it develops no products.
I read Professor Chisum to imply that patent holders who license and exchange patents as not being patent trolls. Such patent holders partake in the innovation-patent process.
Nathan Myhrvold’s view that non-manufacturing patent holders “have long been a part of America’s engine of innovation,” refines Professor Chisum’s position. He states: “it is important to note that the vast majority of patent holders who don’t make products are perfectly honorable." Myhrvold finds the central characteristic of patent trolls as those who manipulate or abuse the intent of the patent system.
Myhrvold fits some definitions of patent trolls "waiting under a bridge," however he points out that his company, Intellectual Ventures, has not filed a single suit, making it (jokingly of course) at least a non-effective troll.
Dean Kamen, inventor and licensor of patents for the Segway scooter, in testimony to the House Judiciary Committee, also found himself fitting the description of a patent troll. He explains his position however:
When I walk into that large company, they've got marketing, they've got distribution. If I show them what I've got, the only thing I have on my side of the table is that patent. The only way to get them to commit huge resources to turn that into the product, is to say to them, 'You exclusively have the right to do this.'
Inline with Myhrvold’s view of trolls holding ill-motivation regarding the patent system, Professor Mark Lemley contributes to the debate on what is a patent troll: “(Trolls) use the patent system not to develop and make products but to squeeze money out of those who do.” Lemley also acknowledges that large corporations are often the target of patent trolls. He differentiates these patent owners from trolls, citing that trolls “pop(ing) up years or even decades later and try(ing) to fit an old patent to a different purpose.”
There is sufficient description of what constitutes a "patent troll" to know what one is without vilifying parties that otherwise risk substantial investments and hold patents as the primary means of commercial and technological exchange. Although some claim resolution of "patent troll" is not important, the increasingly divergent definitions arising out of policy discourse often confuse productive activities for those that patent system reform aims to fix.
posted by Noel Le @ 1:39 PM | Patents
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