As periodically happens, the media have picked up on the activities of so-called ‘patent trolls’ in the US. Of course, the world of patent law is far removed from the usual scope of popular news, so what has prompted investigation into the subject?
In brief, a ‘troll’ in this regard is someone who uses a patent in their possession solely for the purpose of threatening companies or individuals using similar technology with litigation, with a view to extracting a licence fee from the target so as to avoid a costly legal proceedings.
Unsurprisingly, the article raises the question of morality with regards to the activities of the ‘trolls’, seeking to damn them by association with the sort of callous investment bankers who instigated the financial collapse of 2007, a provocative charge in an era of austerity.
But surely, people profiting solely from the endeavour and inventiveness of others is immoral? The answer, as ever, is somewhat complex.
To consider the American position, we need to consider what exactly a patent is. There is a clue in the title of ‘Intellectual Property’; a patent is treated as property, and as such, can be sold, licensed, mortgaged, given away, abandoned, developed, or held as investments without being developed. It is the last of these which has provided the fertile ground for breeding ‘trolls’. Investors are able to purchase patents, and hunt for people who may be infringing upon said patent with the intention of extracting license fees from them.
The moral dilemma is whether or not the above constitutes a legitimate practice – as stated in the article, it is no different in reality to protecting oil exploration rights on your land – or whether it is akin to extortion. It is a complex area, weighing up the property rights of an individual against the all-too-likely prospect of an inhibition in inventiveness due to parasitic legal cases.
It would appear at first glance that this practice is indeed perfectly acceptable. To obtain the patent in the first instance, the investor must have purchased the patent from the proprietor, which will likely be the inventor, and will only have done so under the assumption that there is a profit to be made in the patent. As such, the proprietor will still have profited from their invention by virtue of the sale of the patent.
So far, so moral. However, a greater issue arises where the investor has purchased a fairly poorly defined patent in a highly complex field, commonly biotechnology or computing. The most widely reported cases in the US have come about where investors have bought up patents which appear to cover commonly used products or processes, such as in the infamous infringement suits filed against coffee shops and restaurants offering free WiFi.
One would imagine that the providing of WiFi would not be covered by a patent, given how commonplace it is. However, someone must have invented WiFi at some point, why shouldn’t they profit from the invention?
The underlying sense of wrong in a case such as this is that you could conceivably be using a commonplace product or process, which would appear at first to not be covered by a patent due to its widespread nature, and at some point in the future be confronted with infringement proceedings from an investor with no interest in doing anything other than forcing you to pay them a lump sum in lieu of having to mount an expensive legal defence.
The UK court system has attempted to guard against issues with the potentially unfair and proportionately expensive costs associated with infringement cases brought for somewhat suspect patents. The Civil Procedure Rules provide directions on how to deal with cases justly, fairly and proportionately. There is also the Patents County Court, which is the designated forum for small value infringement cases in the UK.
In the US, there can be a certain degree of uncertainty with regards to forum in which infringement cases will be brought. As mentioned in the BBC article, the town of Marshall, Texas is a haven for infringement lawsuits, since there is a tendency to find infringement in the majority of cases.
Whilst the Leahy-Smith America Invents Act shows a willingness by the US government to tackle the patenting system, critics have complained that it failed to tackle the problem of ‘trolls’, leaving innovators at risk. What is for sure, is that the discussion will not vanish, and that the practice of ‘patent trolling’ will not go away lightly.