With the Goodlatte bill circulating in Congress (more on that soon), state governments taking up the fights against the trolls and a generally renewed concern with the scope and cost — economic and otherwise — of patent litigation, keeping up with patent litigation news has become like trying to sip from a fire hose. In order to help retailers identify some of the best and most valuable information, here are links to some valuable articles and posts with my thoughts:
- How patent trolls doomed themselves by targeting Main Street. At Ars Technica, Boston University Lecturer James Bessen looks at the recent focus on patent trolls. He points out what retailers already know — trolls prey on legitimate businesses and too many prefer to focus upon smaller entities with less ability to fight — in the form of money and/or knowledge about the accused product or system. Bessen argues that an increasing trend of trolls suing small business has exposed the troll model more clearly to the public. That exposure is, at least in part, fueling the current interest in patent reform targeted at reducing the troll problem. I share Bessen’s ultimate concern — patent reform will help to end the most egregious troll activity, but it will not solve the problem.
- Troll-Killing Patent Reform One Step Closer. The Electronic Frontier Foundation (“EFF”) writes about House Judiciary Chairman Goodlatte’s draft patent reform legislation. While I will have more on the legislation soon, EFF provides a brief, but thorough overview of the key points. EFF identifies two key deficiencies: 1) a watered down attorney’s fees provision; and 2) a weak customer-suit exception/immunity. Retailers should be particularly concerned with the latter problem.
- Attorneys General, the First Line of Patent Reform? Anyone following patent troll issues has seen reports of state Attorneys General taking action to stop abusive patent troll cases. Vermont went first, followed by Minnesota and Nebraska. Minnesota reached a settlement with the scanner troll, MPHJ Technology, which has been going after very small businesses nationwide. Pursuant to the agreement, before sending letters to any Minnesota business, MPHJ must give the Minnesota Attorney General sixty days notice and get his or her consent. Nebraska has taken a different approach. Nebraska’s Attorney General, under threat of suit, ordered a troll’s counsel not to sue any other defendants in the state. The troll took the issue to the courts and overturned the Attorney General’s order because a party has the right to choose its own counsel.
- Arguing for America to Abolish Software Patents. The Washington Post’s Timothy B. Lee — he writes frequently about troll issues and is a great, informative read — points to New Zealand, who recently abolished software patents, and argues that the US should follow suit. Lee points out that 89% of the increase in patent suits between 2007 and 2011 stem from software-based patents. And software patents create a disproportionate amount of litigation because, among other things, software is so widely used. Lee’s example of widespread software use is retailers. Lee also points to unidentified startups and VCs that told him they did not apply for patents in early stage companies because of the cost and drain on resources. Specifically, they suggested that R&D is cheaper than the patenting process.