The Fight Against Patent Trolls Is About Principle

REUTERS/Yuri Gripas

Mytheos Holt Policy Analyst
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Until recently, patent reform was probably the most bipartisan issue of our current hyper-partisan era. However, judging by the fight over Rep. Bob Goodlatte’s (R-VA) Innovation Act, which was recently delayed due to concerns over the bill, that consensus might be breaking down. That it is breaking down is a sign of the success of an otherwise very dubious public relations campaign seeking to cast the idea of patent reform as a giveaway to corporate interests and the Chinese.

In this framing, a secretive cabal of massive tech companies led by Apple and Google are seeking to increase their profit margins on the backs of small inventors, whose precious ideas they will steal unrepentantly. Only a principled defense of property rights, the argument runs, stands between the rapacious techies and their ill-gotten gains.

It’s a rhetorically effective narrative, but it’s completely backwards. In point of fact, the shoe is precisely on the other foot. First of all, for those fighting patent reform, the issue is all about the unprincipled exploitation of the profit motive. Witness the army of firms designated as non-practicing entities (NPEs), who do nothing with their patents other than sue actual innovators.

And that’s not even touching on the companies that exploit their ownership of often dubious patents as a means to increase their market share. Securus Technologies, a Texas-based firm that makes its money by extorting dollars from the family and loved ones of people in the penal system, is a particularly vile example. Specifically, Securus claims to own a patent on any and all video calling from prison, but so far has offered no explanation for why the “from prison” qualifier distinguishes this allegedly unique invention from regular old Facetime.

But secondly, and more importantly, the fight for patent reform is about principle. Specifically, it’s about a principle that should be the starting point of any conversation about litigation: The rule of law itself.

Perhaps nothing illustrates this better than the current lawsuit fight between Apple and Samsung, in which Apple claims that Samsung has infringed on its patents on concepts like smartphone shape. If the argument from critics of patent reform were true, and this were all about tech companies circling the wagons in order to produce a “patents for me, but not for thee” regime, one would expect Silicon Valley’s giants to side with Apple in this case.

In fact, the opposite has happened. Household names like Google, Facebook, HP, and Dell have all resoundingly come out in favor of Samsung and called on courts to throw Apple’s lawsuit out.

These companies apparently realize that a law that fails to acknowledge present-day reality is a law that is incapable of governing anyone. And as it happens, it is just such an outmoded provision of patent law that Apple is relying on in order to make its case. The Washington Post explains:

Apple’s claim is based on what is known as the “total-profit rule.” That rule authorizes a court to assess the total profits earned by the defendant from the infringement of even a single design patent.

The total-profit rule derives from an 1887 statute enacted by Congress to protect the makers of decorative items such as carpets and wallpaper, where the design itself forms the basis for all or most of a consumer’s decision to purchase the product.

But “the reality for complex modern technologies,” the tech coalition argues, is that design, while a factor in consumer choice, ranks far below functional qualities including processor speed, memory and connectors.  And a single design feature, such as the shape of an icon, may represent only “a few lines out of millions of lines of code,” and may “appear only during a particular use of the product, on one screen display among hundreds.”

Today’s smartphones contain thousands of component parts and may encompass thousands of patents.  Congress in 1887 could not have imagined such products, let alone the possibility that a single design feature would account for their total value.

In other words, Apple’s argument more or less boils down to the idea that if Samsung’s phones look at all like iPhones, or resemble the elements of an iPhone interface in even one respect, then all of Samsung’s profits are forfeit. To say that this 19th-century legal norm cannot possibly apply in the world of modern day software parents is putting it mildly.

You would think Apple would know better. After all, they’re the number one target of patent trolls, so doing trolling of their own seems counterintuitive. But then, where is it written that opportunists turn on each other?

However, Google, Facebook, HP, and Dell all have faced patent trolls themselves, and all could probably stand to make similar profits if they went after their competitors with the same legal theory as Apple. That they are not doing so speaks to the fact that for tech companies, the right to innovate trumps the right to profit from the legal system, however opportunistically.

In other words, in the fight over who wants to abuse the legal system for profit, patent trolls have beat a world record for chutzpah in their attempt to take the moral high ground on innovation. And this speaks to the failure of the tech world to make their principles heard outside of courtrooms. True, it might be a hard sell, but nowhere are the principles of respect for innovation and the rule of law needed than in the halls of Congress.