Don’t Feed The Patent Trolls

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Mytheos Holt Policy Analyst
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It is looking increasingly likely that Congress will take action to deal with the threat of patent trolls sometime in the next month. Reliable sources indicate that sometime before Congress’ August recess, Virginia Republican Rep. Bob Goodlatte’s Innovation Act will hit the House floor, and early forecasts suggest that it will perform very well.

So perhaps that’s why trolls, and their liberal defenders, are starting to get pretty desperate. Exhibit A would be an absolutely hysterical column by Democratic Iowa Senate Candidate Bob Krause, which features such passages as the following:

The so-called “patent troll” fabrication is part of the script. While there are lawyers that specialize in patent defense, there are specialists in many fields of law. Each requires a client that has a need for justice that falls in a specialized legal field.

But now, for the first time in our history, inventors and their counsel are considered villains for defending hard-earned patent rights. Companies that steal patents from inventors are called our innovators. The innovation world has turned up-side-down.[…]

Now, Senator Grassley’s new proposed PATENT Act extends this abstract straw-man of the feared patent troll, and transmogrifies the alleged evil troll into something that Congress does not intend, but big business does – the troll that stands at the courthouse door.

Now, I don’t want to ruin Krause’s fun. After all, I’m sure the trial lawyers who blocked patent reform the last time around (despite its being the most bipartisan idea in recent memory) are grateful to have someone so unashamedly parroting their line. So, I’m sure, are Big Pharma and the lobbyists for the university system.

However, as is often the case when an argument’s biggest exponents are the architects of Obamacare and trigger warning-happy universities, this attempt to gloss over the real problem of patent trolling is utterly untrue. Patent trolling — ie, the practice of registering patents, then using patent lawsuits to extort settlement fees — is alive and well. Not only that, but business is booming for trolls.

A more technical definition of patent trolls comes from the group PatentFreedom, which classifies trolls as “Non-Practicing Entities” (NPEs), in other words, as companies that don’t use their patents for anything other than demanding licensing fees, or for lawsuits. According to data from the RPX Network, NPE lawsuits have spiraled over the past year. In May of 2014, 199 lawsuits were filed by them, whereas this May, that number more than doubled to 418 lawsuits. NPEs have also multiplied, with 192 being in operation during May 2014, and 397 this year. As a percentage of patent lawsuits, NPEs account for 70 percent of all patent lawsuits filed this year.

And those new troll companies aren’t slowing down. One in particular, Oberalis LLC, filed 50 lawsuits this month alone. You almost have to admire the brazenness; after all, since patent trolls are likely to come under scrutiny soon, a more politically conscious group might decide to lay low and try to look harmless. But like a child at a going-out-of-business sale at the candy factory, trolls can’t seem to stop themselves from screaming “I want that, and that, and that” in courtrooms.

Contrary to the liberal narrative that paints them as heroic little guys standing up against nasty, evil corporations, NPEs are nothing but leeches, and the sorts of leeches who dirty the name of the legal system, to boot. Congress should move forward, unashamedly, in crushing their business model. In the words of millions of internet commenters, Congress, don’t feed the trolls.