This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/commentisfree/2013/jun/05/patent-trolls-threat-innovation

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Patent trolls are a serious threat to US innovation Patent trolls are a serious threat to US innovation
(4 months later)
At last, some good news about America's dysfunctional patent system: the White House has noticed there's a problem.At last, some good news about America's dysfunctional patent system: the White House has noticed there's a problem.
Actually, the news is even better. The Obama administration issued a batch of executive orders and legislative recommendations aimed to reform a system that has spun wildly out of control. What was designed by America's founders as a way to "promote the progress of science and useful arts" now serves mostly as a money machine for lawyers and intellectual property vampires – people and entities commonly known as "patent trolls". The executive orders aren't nearly enough, as the White House acknowledges, but they are a decent start after years of indifference under administrations of both parties.Actually, the news is even better. The Obama administration issued a batch of executive orders and legislative recommendations aimed to reform a system that has spun wildly out of control. What was designed by America's founders as a way to "promote the progress of science and useful arts" now serves mostly as a money machine for lawyers and intellectual property vampires – people and entities commonly known as "patent trolls". The executive orders aren't nearly enough, as the White House acknowledges, but they are a decent start after years of indifference under administrations of both parties.
The trolls are the chief target of the new measures. As an accompanying report by the National Economic Council and the Council of Economic Advisers (pdf) explains, many of the trolls create nothing and, via a maze of shell companies, are taking advantage of the system's notorious inefficiencies in ways that do the opposite of encouraging innovation; they discourage it, because they create uncertainty in every startup. They are a tax on big enterprises and innovators alike – and, by extension, all of us:The trolls are the chief target of the new measures. As an accompanying report by the National Economic Council and the Council of Economic Advisers (pdf) explains, many of the trolls create nothing and, via a maze of shell companies, are taking advantage of the system's notorious inefficiencies in ways that do the opposite of encouraging innovation; they discourage it, because they create uncertainty in every startup. They are a tax on big enterprises and innovators alike – and, by extension, all of us:
"'Patent Assertion Entities' (PAEs) often abuse the US intellectual property system's strong protections by using tactics that create outsize costs to defendants and innovators at little risk to themselves. The PAE business model is based on the presumption that in many cases, targeted firms will settle out of court rather than take the risky, time-consuming course of allowing a court to decide if infringement has occurred."'Patent Assertion Entities' (PAEs) often abuse the US intellectual property system's strong protections by using tactics that create outsize costs to defendants and innovators at little risk to themselves. The PAE business model is based on the presumption that in many cases, targeted firms will settle out of court rather than take the risky, time-consuming course of allowing a court to decide if infringement has occurred.
"The practices of this group of firms, which has come to file 60% of all patent lawsuits in the US, act to significantly retard innovation in the United States and result in economic 'dead weight loss' in the form of reduced innovation, income and jobs for the American economy.""The practices of this group of firms, which has come to file 60% of all patent lawsuits in the US, act to significantly retard innovation in the United States and result in economic 'dead weight loss' in the form of reduced innovation, income and jobs for the American economy."
People in the technology world, in particular, have long known that the system is a mess. (Some of the biggest tech companies have themselves been long-time abusers, using their clout and deep pockets in anti-competitive ways.) In recent years, the situation has become more widely understood as tech activists and a few prominent news organizations have raised alarms.People in the technology world, in particular, have long known that the system is a mess. (Some of the biggest tech companies have themselves been long-time abusers, using their clout and deep pockets in anti-competitive ways.) In recent years, the situation has become more widely understood as tech activists and a few prominent news organizations have raised alarms.
In the latter category, special props to National Public Radio's "This American Life" program. Over the weekend, the network's "Planet Money" correspondents revisited the issue with a report, incorporating an earlier program, that highlighted some of the system's flagrant drawbacks. In particular, it made abundantly clear the effect of one such "troll": Intellectual Ventures, which is headed by a former Microsoft chief technology officer and is widely loathed by Silicon Valley firms.In the latter category, special props to National Public Radio's "This American Life" program. Over the weekend, the network's "Planet Money" correspondents revisited the issue with a report, incorporating an earlier program, that highlighted some of the system's flagrant drawbacks. In particular, it made abundantly clear the effect of one such "troll": Intellectual Ventures, which is headed by a former Microsoft chief technology officer and is widely loathed by Silicon Valley firms.
For all the value in the new executive orders – and they are useful at the very least – the Obama administration's efforts won't make much difference unless something else changes: the US Patent and Trademark Office itself. The USPTO has for years applied beyond-lax standards in examining applications, and has issued ridiculously over-broad patents for non-innovative, obvious "inventions", giving the trolls the ammunition they've needed.For all the value in the new executive orders – and they are useful at the very least – the Obama administration's efforts won't make much difference unless something else changes: the US Patent and Trademark Office itself. The USPTO has for years applied beyond-lax standards in examining applications, and has issued ridiculously over-broad patents for non-innovative, obvious "inventions", giving the trolls the ammunition they've needed.
Usefully, the administration has said the USPTO will (belatedly at best) improve its procedures. If this actually happens, it will be a shock to everyone who has been watching this arena over the past several decades.Usefully, the administration has said the USPTO will (belatedly at best) improve its procedures. If this actually happens, it will be a shock to everyone who has been watching this arena over the past several decades.
If Congress doesn't get serious about this, however, don't expect major real improvement in any case. In one key recommendation, the White House urged lawmakers to force patent holders and applicants to disclose who they actually are, rather than allowing the shell company games to continue. And if Congress cares at all about these abuses, it will quickly enact a law preventing the trolls from going after end-users – people who buy or use gear that allegedly contains infringing technology and are themselves the targets of the trolls' quasi-extortion.If Congress doesn't get serious about this, however, don't expect major real improvement in any case. In one key recommendation, the White House urged lawmakers to force patent holders and applicants to disclose who they actually are, rather than allowing the shell company games to continue. And if Congress cares at all about these abuses, it will quickly enact a law preventing the trolls from going after end-users – people who buy or use gear that allegedly contains infringing technology and are themselves the targets of the trolls' quasi-extortion.
Nowhere in the administration's recommendations is one that already applies in Europe: an outright ban on software patents, which are among the most widely abused. This is trickier than it sounds: software is increasingly integral to the kinds of machines that have traditionally been patented by actual inventors. How do we separate one from the other?Nowhere in the administration's recommendations is one that already applies in Europe: an outright ban on software patents, which are among the most widely abused. This is trickier than it sounds: software is increasingly integral to the kinds of machines that have traditionally been patented by actual inventors. How do we separate one from the other?
One reason we're seeing even modest action, of course, is that there's some big money on the side of reform. The deep-pocketed constituency for reform has had enough. There's a long way to go, but let's be glad for this much progress.One reason we're seeing even modest action, of course, is that there's some big money on the side of reform. The deep-pocketed constituency for reform has had enough. There's a long way to go, but let's be glad for this much progress.
Our editors' picks for the day's top news and commentary delivered to your inbox each morning.