As I noted in prior posts on this blog, a key conclusion of my forthcoming article Patent Troll Myths is that patent plaintiffs that don’t make anything – pejoratively called “trolls,” get their patents from many companies that did attempt to make something (or from individuals). Thus, I argue that trolls are a mirror of inventive society – and how we feel about trolls should be based on how we feel about the patent system generally.
A common objection to this takeaway is that we can, in fact, think that trolls are worse than other patent holders because they don’t make anything, and that it would be better to let their patents lay fallow. My “official” response to this is that it is outside the scope of my paper. (smile). My unofficial response is that so long as patent rights can be bought and sold, this argument gives way too much credit to practicing entities and too little credit to ex ante incentives to start risky ventures. Â Big companies have interests in and have transferred patents to patent enforcers, and they have used patents to stifle competition.
A post on the official Google Blog this week vindicates my unofficial view. Perhaps it is time to make it official – we are all trolls now. That post criticizes giant companies Microsoft and Apple for acquiring patents from formerly productive companies Novell and Nortel to assert against giant company Google. In short, Google is accusing Microsoft and Apple of doing the same thing that every big company asserts trolls of doing – acquiring patents to assert.
Indeed, the post makes the very same complaint of these huge companies that many make about patent trolls – that these patent holders are abusing the system because they refuse to settle through a cross-license, thus raising costs to the consumer. In short, Microsoft and Apple have obtained patents from similar sources and are asserting them in a similar manner as the so-called trolls that I studied.
There is one, slight difference, of course – Apple and Microsoft make a product. But given that they bought the patents they are asserting from somewhere else, so what? They are gaming the system like everyone else. Perhaps the system needs to be fixed. I’m agnostic about that here; my point is only that fixes shouldn’t be based on a small group of patent assertion entities where troll litigation is a tiny fraction of all patent litigation and where anyone can play the game, and those with the most at stake have more money to play it. I don’t see many trolls spending billions of dollars on patent portfolios.
One caveat. I’m not commenting on the merits of asserting bad patents. Lots of patents are bad – they are obvious, they are overbroad, they aren’t infringed. I spend a lot of time looking for prior art to invalidate patents, and it is remarkable how easy it is to find sometimes.
That said, I find it ironic that Novell and Nortel patents are being called bogus by Google. These were leading edge companies, not followers. Novell especially was a standards setter in its day, and its early technology is often identical to later “inventions” claimed by others. Indeed, I wonder whether Eric Schmidt, Novell’s former CEO before Google hired him away to become its CEO, felt that way about Novell’s patent portfolio. It seems to me that if there are two portfolios that embody the reason why we should have patents, they should be owned by companies like Novell and Nortel that spent a lot of money on R&D over the years (though perhaps too much without a change in direction soon enough – or they would still be active).