I'm referring to Patent Trolls, which by my definition are NOT companies staffed largely with engineers, technicians, specialists, etc. all working together creating products and in doing so building a legitimate patent portfolio to protect trade secrets and a competitive advantage for x number of years.
To me, Patent Trolls are those organizations that state that at one point in time in the past they tried to productize a product; however, now their business consists of buying portfolios of patents and suing companies that they claim infringe upon those patents—drawing primary revenue from damages plus royalties. Typically these companies consist mostly of lawyers, paralegals, legal assistants and throw in an engineer or two to check infringing technology and serve as experts. They'll often try to hire industry experts and personalities (fulltime or otherwise) to bring the appearance of ethics to what they do.
Dealing with even the threat of a suit is just a waste of money for legitimate companies, and can kill small ones, IMHO. That's not to say that there aren't legitimate patent suits out there. It is not to say don't be an expert witness in patent suits. I think folks need to be mindful of who they are being an expert for and that they hopefully they are doing it for the just reason rather than simply $$$$. The spirit of the patent system is to protect the little guy or gal genius inventor from the big, bad corporation stealing a patent. That spirit has been corrupted, IMHO. I saw it when I was a reporter and it continues today.
So Mike, if a company decides that they will not continue to build product in a certain area (assume they have in the past), should they be forced to give up their patent right, to give up their rights to sue companies that infringe. If they had people licensing those patents, must they stop collecting royalties from them. If they do decide to litigate or continue to receive license fees, they are a NPE in that field and by your assertion, they are wrong.
IMHO I think the big difference for me is one thing that Rick points out: Did the "patent holder" actually try to create a technology or product with it (make a real effort) or did they just acquire a portfolio of patents (related or unrelated) and are now turning that into a business. Years ago, I attended an EDAC event for emerging companies and there were two guest speakers. The first was an attorney encouraging EDA startups to use their patent portfolios as "an alternate stream of revenue" and to "patent in the path of innovation." The second speaker was an insurance broker who sold companies insurance policies to protect companies from folks like the first speaker. It was surreal and optimizes the absurdity of patent trolls (and the insurance companies, infrastructure and entire townships) that are built supporting this type of patent litigation.
I am not sure I believe it is that clear cut. If the legal company were employed by the company who owned the patent to sue infringers, who would question if that is wrong. If we argue that, then we arguing the value of the whole patent system and I am going to be morally guided by the industry in that respect. Now, the difference in the two cases is who is taking on the risk. In the first case it is originating company who pay the lawyers to do their bidding and if successful take any spoils. In the case of the NPE, the originating company gets a fixed amount no matter if the NPE wins or loses. The NPE pays its own costs and takes the risk.
Note, that I decided before I did any work that this was not a non-ethical troll who would target unsuspecting companies with baseless claims and extort money out of them. I believe that to be morally wrong. They wanted me to assess the liklihood that certain company products infridged on particular patents.
I think if you have to ask yourself "is it wrong?" you pretty much already know it is. I had a wise US Government teacher who pointed out that everything the Robber Barons did in terms of company stores, monopolies, etc. was legal at the time, but completely, heinously morally wrong. Many and most of the business practices became regulated over time but not before they reaped massive wealth from it to the detriment of millions of people—lending greatly to the Great Depression. IMHO patent trolls are little about protecting inventors and more about greed and extortion...stymying innovation to the benefit of humanity. Hopefully patent reform will come soon addressing many of the morally corrupt issues Rick points out related to Patent Trolls. Until those regulations are passed, I think you have to look inside yourself and make the call if you want to actively encourage this morally corrupt facet of the electronics business to simply pay the bills.
You make some very good points Buck-on-Bass. Maybe the fact that the patent holder was actively attemting to license it is an indication of its usage. It is not just sitting there. As for a patent that is not yet economically manufacturable, then it is a much more grey area. I do not believe that someone should be allowed to patent an idea that they think may become useful in the future and then lay in wait for someone to actually do it. I was once asked to write some patents on something that the company I worked for would never actually make, but thought they may be valuable patents some ways down the road. I declined to do it.
I recall a patent issued for a device to reduce injuries from a circular saw that was invented by a user. After not being able to reach an agreement in 5 years with any saw manufacturers, a company was founded to manufacture saws with the device. In this case, should the individual lose the patent after 3 years? Should the saw makers be allowed to "wait out" a shortened patent life to avoid licensing the invention? What about the safety of users during this period?
What about patents for things that are economically unaffordable in the marketplace with current manufacturing technologies but become economically viable to produce after five years of improvements in manufacturing technology?
It's not an easy call when the inventer is not tied in with a big manufacturer or when the economics of production determine what will and will not be produced today or in the future.
A startup with new technology inventions that comprise a large percentage of the company's book value is hardly a NPE -- it's almost the opposite of a NPE, even if the company is still in the angel funding or Series A funding stage and not yet able to go to market with products using that technology.
Without a doubt, there are difficulties to work through regarding any sort of accelerated public domain rules for dormant patents and closing loopholes that could allow those rules to be circumvented. The primary aim would be to safeguard patent protections for inventions that are deployed or are in the process of being deployed in real products, while recognizing a lesser value (by way of accelerating release to the public domain) of patents that are no longer being practiced or never were practiced by the original inventor or his assignee.
I am not sure the suggestion was that the patent life reduction would happen through acquisition, but if the patent rights were sold to a 3rd party organization and no longer practiced by the original inventing company.
As we unveil EE Times’ 2015 Silicon 60 list, journalist & Silicon 60 researcher Peter Clarke hosts a conversation on startups in the electronics industry. Panelists Dan Armbrust (investment firm Silicon Catalyst), Andrew Kau (venture capital firm Walden International), and Stan Boland (successful serial entrepreneur, former CEO of Neul, Icera) join in the live debate.