Defending innovation in America
Let me introduce you to the digital world’s latest hobgoblin: the patent troll. Kin to the cybersquatter, trolls are entities that hoard software patents with the sole intention of leveraging them in court for a quick payday. What is troubling about these entities is that they manipulate and abuse the spirit of the patent protection system by masquerading circumvention and other ancillary matters as true innovation. Undoubtedly there is a proper context for patent protection and litigation which protects true innovation, however these trolls produce nothing but headaches, and can unfortunately bring business to a grinding halt. In recent months, an angry storm has swept through the tech world over these gremlins. The vitriol doesn’t surprise me; as a longtime champion of hard work and building value, I share it. But I was surprised when a company that I have supported, MacroSolve, was unexpectedly thrust into the role of standard-bearer for patent defense, and suddenly found itself caught in the crossfire of the patent wars.
MacroSolve filed suit earlier this year against big guns like Wal-Mart, Marriott, and Facebook over app-related patent infringement, and the critics immediately cried troll. Yet MacroSolve’s continuing 15-year record as a player in the mobile technology market suggests otherwise, and it highlights a crucial point: Not every company that brings suit for software patent infringement is an exploiter. Some are genuine tech innovators with a real historical and financial investment in their ideas. To conflate these two situations, as many opponents of software patent litigation do routinely, unfairly maligns companies that deserve to reap the fruits of their labor. Worse, it comes at a time when the market shift toward mobile devices should finally produce the reward many of these businesses have waited years to harvest.
Right now, some of the biggest companies in the world are only just starting to see the light when it comes to the business power of mobile. According to a recent study by ABI Research, users of enterprise B2E (business-to-employee) and B2C (business to consumer) smartphone and media tablet mobile applications are forecast to grow at a compound annual growth rate of nearly 90% — and exceed 830 million active users by 2016. The rush is on: with business rapidly shifting to mobile platforms, and billions in market share at stake, these apps need to be done yesterday.
But what’s lost in the rush is that many of the software breakthroughs that underpin these apps were created years before the boom, when only a handful of companies could see the code’s revolutionary potential. Now, bigger companies are scrambling to catch up, and in their anxiousness they are missing or ignoring the origins of the fundamental components that make their apps possible. The violations can quickly spiral out of control, as companies race to copy each other without realizing that their competitor’s app is itself derived from software created by an original patent holder. Such runaway proliferation makes it even harder for small patent holders to keep their grip on the rights and returns they deserve.
You might see this oversight as inevitable in a world where you need to move fast to stay alive, and in which many tech products share basic code elements. But giant, multinational companies should know better. They’re big enough to employ legal and research staff to do the homework when it comes to the foundations of their app software, and to license those ideas accordingly. Treating these ideas as common property simply because they are basic or fundamental building blocks of an increasingly popular product ignores a critical fact: someone spent time and resources to develop them and deserves to profit from that investment.
This concept has been recognized since the very first software patent was issued to a man named Martin Goetz in 1968. Goetz worked for a company called ADR, and the patent was for a flowchart application that ADR was trying to market. Trouble arose when IBM manufactured a similar but inferior app and gave it away for free by bundling it with its hardware. ADR sued IBM for antitrust violations and won, but here’s the important piece involving patents: Because Goetz had patented his program, IBM couldn’t simply take the code and build its own copycat version. Instead, IBM ended up licensing ADR’s program and in doing so allowed the company to thrive and survive to make further innovations.
That’s what’s at stake now for small tech companies like MacroSolve. Nobody (well, almost nobody) likes lawsuits, but swift and forceful legal action is the only way to slow the sprawl of corporate copycat apps and protect the rights of individual and small-group innovators. Such action has long been the prerogative of patent holders in pre-digital times; it follows from the very purpose of patent law in the first place: to allow those who dream big and work hard to reap the rewards of their effort, and to foster innovation in a capitalist system.
To smear innovators by lumping them with “trolls,” who produce nothing and leech off the system, is to twist the logic of patent law against itself. We need to be careful to distinguish between those who stand in the way of progress, and those on whose shoulders progress has been built.
Donald J. Trump Jr. is an executive vice president at The Trump Organization.