Every patent has value, as long as you can find a small to medium sized company you can sue who might be doing something vaguely similar to what is claimed in the patent. Clever practitioners of this business model don't go after the big guys -- the ones that have the financial means to defend themselves -- because that is risky. Far better to go after a smaller fish and price the royalties such that it is cheaper for him to settle with you then to defend himself in court.
Also, you can also add that if a big company owns a patent, the value goes higher since they are not likely to sell for cheap. Rather, they may license if they want. The technology could be the same but the person that controls it adds mutiples to the valuation of a patent.
The problem with the statement from Chip Lutton is the imagination that patent has value by its own right. No. If Apple owns a particular patent, the intrinsic value of that patent is higher than if a startup owns that patent. You look at the recoverables on infringement. More people will wish Apple infringes on them than a startup. That is why it is not just the technology, you look at the owner.
Two of the primary culprits: making both software and business practices eligible for patents. The traditional view (explicit in the previous patent laws) was that both of these were essentially algorithms that were intangible and thus not eligible for patents. They were considered to be equivalent to artistic expressions, and like those eligible for copyright protection, not patent protection. This change also broadened the category of "design patents" (as opposed to "utility patents"). A HUGE proportion of the deluge of applications fall into those categories: the typical smartphone app can have a separate "design patent" for each screen!
Mhrackin: Hmmmm....you're blaming Congress for creating this mess and oppose new laws (Quote: "It wasn't broke, so why attempt to fix it?"). I would tend to blame the trolls and others who are abusing the system. And I think Congress needs guidance from the true inventors of the world on what new laws are needed to thwart abuse.
And if the USPTO is overwhelmed by a flood of inventions, or ill-equipped to handle the sophistication of new devices, would you recommend expansion of the agency? And how would that be financed?
Fundamentals: And I like your idea for a royalty cap of 0.01% for non-producing patent holders.
You know, I've been following this debate over technology patents for something like 20 years, when I first attended a USPTO public hearing in San Jose. Little new thinking has emerged in those two decades that would compare well with the good ideas that have surfaced on our message boards over the past two days.
What other ideas should we add to the patent laws to make them more equitable and reduce the trend of patent trolling?
You have captured exactly the same thoughts I had when I saw the headline of this story. IMO, this is the inevitable and foreseeable result of the last two "reform" initiatives re the US patent system. It wasn't broke, so why the attempt to "fix" it! A large portion of the "inventions" recently issued patents are trash pure and simple, issued because the Patent Office is completely overwhelmed now as indicated by the "hockey stick" curves in the story. What hath Congress wrought?
I agree with Tom Murphy 100%. The easiest way to save the patent system is to pass a simple law that restricts the royalties when the patent holder does not design, build, manufacture or sell a product which competes with the product on which the lawsuit was brought on. I suggest a royalty cap of 0.01% of the sales. This cap should have no effect if the patent holder has a competing product in the market place. Then the existing patent laws would apply as usual.
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