Before I begin this post, I really need to share this:
Great version of a great song.
As some of you may know, outside of being a world-renowned blogger, I live a secret double life as an intellectual property (“IP”) lawyer. I’m not joking! It’s my 9-5, just a little something I do on the side to pay the bills. I’ve been tempted in the past to write about IP-related issues, but I hesitate because if I were to write a post about IP law, I’d have to include a disclaimer that explains that I AM NOT YOUR LAWYER and NOTHING I WRITE HERE SHOULD BE TAKEN AS LEGAL ADVICE and of course NOTHING I WRITE HERE IN ANY WAY REPRESENTS THE VIEWS OF MY EMPLOYER, and I’d have to mention that YOU SHOULD NOT AND CANNOT ASSUME THAT ANYTHING WRITTEN IN THIS POST IS ACCURATE and that HALF OF THE SHIT IN HERE IS MY OPINION—HONESTLY, CAN YOU NOT FIGURE THAT OUT? And I’d need to mention that THIS POST AND ALL TEXT HEREIN IS DELIVERED “AS IS” AND I DISCLAIM ALL WARRANTIES, EXPRESS AND IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE and most importantly, I AM NOT RESPONSIBLE OR LIABLE FOR ANY LOSSES OR DAMAGES YOU SUFFER AS A RESULT OF RELYING ON THIS POST.
In other words, if you read my post and then get in an argument with your extremely irritating libertarian uncle at Christmas and he pulls out his iPad and provides evidence disproving one of your arguments that is based on something you read in this post, then I am not responsible for any pain, suffering, humiliation, or distress that you may suffer. Besides, you probably interpreted my post wrong. Schmuck.
But enough fine print. As I mentioned above, this post is about IP law. The story of how this anti-technology Luddite became an IP lawyer is kind of bizarre—I tried to become an environmental lawyer and got lost along the way. I will say that in the end, even though I often bitch about my job, I find the field of IP law to be endlessly fascinating. Technology is evolving at an insane and unprecedented rate, and the law is struggling to barely keep up. Unlike environmental law where there are clear bad guys and good guys, the distinction between right and wrong in IP law is not as easy to demarcate, and I often find myself taking both sides in solo philosophical arguments (a.k.a. “two-handed mental masturbation”) after I hear of a new case or issue. If I’m on Muni at the time, this causes people to stare at me…standing on a packed train car, muttering something about copyrights and the right of first sale to nobody in particular. It happens.
Today’s “audible conversation between J and J” had to do with the new anti-patent troll legislation, H.R. 3309: The Innovation Act. Don’t worry, you don’t need to read the whole thing…I didn’t. As I discussed the merits and problems with the bill (speaking in a low, gorilla-like voice for the “yay” side and a chirpy, squirrel-like voice for the “nay” side), I recalled that in the past few weeks, I’ve had to explain the concept of “patent trolls” to three laypeople. In my mind, that was enough to justify writing a blog post on the subject…so here it is!
Hold onto your hats and glasses; I am now going to completely over-simplify some very complicated concepts.
First thing’s first: What is a “Patent Troll”?
No, it’s not that. In short, a “Patent Troll” is an asshole.
Wait, before we get any further: What is a patent?
I think we should probably settle this first. Unless you’re an inventor or an IP lawyer, you probably think that a patent is a piece of paper that says that you created something and own it. This is not quite true. A patent is nothing more than a right to exclude. It’s the right to say, “I invented this whatchamahoozit, and for the next 20 years, you’re not allowed to use it, make it, sell it, offer to sell it, or import it unless I allow you to, bitch.” If somebody wants to do any of the aforementioned verbs with your invention, he or she (or more likely, it) needs to obtain a license from you in order to do so. You can give away licenses for free, or you can receive payment in a lump sum or in the form of royalties (i.e., for every whatchamahoozit you sell, you owe me five dollars). If somebody uses, makes, sells, offers for sale or imports your invention without a license, that person (or company) is infringing your patent, and you have the right to sue his or her (or its) ass in court.
In short, the point of the patent is to allow you to make and sell a product you invented without worrying about others doing the same and taking away your business. I repeat: the point of the patent is to allow you to make and sell a product you invented without worrying about others doing the same and taking away your business. I wrote that last sentence twice and put it in italics because it’s a very important concept that we will return to later. Here is the most amazing video ever made about patents (although it’s cut off):
A patent seems really helpful right? You invent something cool, some jerk steals your idea, and then all you have to do is wave your patent around in court and you get all sorts of cash money—easy peazy lemon squeezy, right? It would be…except there’s one thing you need to take into account. That jerk who stole your idea is probably going to hire a lawyer. The lawyer will stand in the front of the courtroom, and say, with a straight face, “ladies and gentlemen of the jury. The plaintiff’s claim of infringement is completely preposterous, absurd, and downright insulting. The plaintiff has a patent for a mousetrap in which a mouse tugs on a piece of limburger cheese and a 500-gram lead weight is released onto the mouse with a steel spring. This is not remotely similar to my client’s mousetrap, in which a mouse tugs on a piece of limburger cheese and a 500-gram lead weight is released onto the mouse with a titanium spring.” And if the lawyer is expensive enough, the jerk will probably win, and will possibly have your patent invalidated in the process.
The US Patent and Trademark Office will tell you that filing for a patent costs somewhere between $200 and $2000 (depending on a variety of factors we need not get into). What they don’t tell you is that in order to obtain a patent that’s worth anything in a courtroom, you need to have an expert attorney draft the dang thing, and that’s going to cost you between $20,000 and $200,000 depending on the complexity of the invention. And then once you obtain the patent, if you want to use it to sue somebody, you have to prove infringement, and as my boss told me early on in my career, “proving infringement is a one-to-three million dollar endeavor.” Why? Because lawyers, that’s why.
So if obtaining and enforcing a patent is so bloody expensive, who the hell can afford to use the patent system to actually protect their inventions?
Very wealthy corporations.
Oh. That sucks. Well, can anybody else use the patent system to get money?
Yes indeedily-do. It’s time to talk about the focus of this post: PATENT TROLLS. As I mentioned before, patent trolls are assholes. Why? Allow me to explain.
There are two kinds of people in the U.S.: makers and takers. This is a very simple concept that the Republicans have been chanting for years, and yet it’s pathetic how few people have actually espoused the philosophy. It’s pretty intuitive: makers are people who make things, and takers are people who don’t make anything and just mooch off of makers. One would think that society would reward the makers and punish the takers, and yet we do the exact opposite.
Consider the example of the dude who works at McDonald’s. He makes hamburgers, thus, he is what we’d call a maker. I am not a huge fan of McDonald’s hamburgers, but I acknowledge that the company has served billions of hamburgers to hungry customers over the years. These hamburgers are not made by robots (yet); there are human beings required for the hamburger cooking and assembly. And how do we reward these makers, without whose hard work millions of people would starve each and every day? By paying them the bare minimum required by law, which is not anywhere near enough to support a human being.
McDonald’s justifies this by repeating the taker mantra—that every dollar given to a maker is a dollar taken away from the shareholders, who are more important than those serving on the front lines. These shareholders are the ultimate takers—in the past they have acquired large sums of money (perhaps by being makers themselves), and now they can sit back and do absolutely nothing, while taking money from the makers (because if anybody needs more money, it’s the rich). Do investors deserve some kind of return on their investments? Yes. Should it come at the expense of the makers? Absolutely not. As the wise Republicans have taught us, we cannot live in a society where the makers are forced to give up money that is rightfully theirs to the takers.
Patent trolls are another form of takers. They obtain patents through various means, occasionally by inventing something, but usually by just waiting for somebody else to invent something and patent it and then buying the patent from the inventor. Once the patent troll has obtained a patent, it does not use the patent to make and sell a product it invented without worrying that others will do the same and take away your business, which you will recall is the bloody point of having the damn patent in the first place. Instead, the troll will wait for another person or company to make and sell a product that might be similar to the product covered by the patent, and then will sue said person or company. This other person or company likely does not even know that the patent exist, because the patent troll is not making anything that is covered by the patent. In other words, rather than making anything, the patent troll will use the patent solely for the purpose of taking from others who make. The worst part: by bringing these suits, the patent trolls have fundamentally changed the patent system, as now more than half of all patent lawsuits are brought by patent trolls.
Patent trolls come in a variety of flavors.
In the interest of time, I am going to focus my analysis on just two: the “Nagging Little Bitch” patent troll and the “Big Fatass” patent troll.
1. The Nagging Little Bitch Patent Troll
I mentioned above that proving infringement is a one-to-three million dollar endeavor. The corollary to this statement is that defending yourself against somebody who is trying to prove patent infringement is also a one-to-three million dollar endeavor. While this is great for lawyers, it is not so good for a maker who doesn’t happen to have one-to-three million dollars saved up. The Nagging Little Bitch patent troll (“NLB”) is well aware of this fact and will use it to his advantage. For years he lay in wait, watching the rich drive up the costs of patent litigation. Once it got to the point that the average Joe could in no way afford to enforce a patent or defend against a patent suit, he pounced, and as noted above, he has completely fucked up the patent system.
Here is the general idea: he finds somebody who is making a product that bears a modicum of similarity to what is covered by his patent (for example, if the patent is for a paperclip, he might sue a company that makes devices for fastening paper, such as staplers and brads). Even if the case is absurd, the defendant does not have the time or money to fight the suit, so the NLB offers to settle. The settlement will likely not be completely crippling, but it still sucks to have to pay somebody just because you’re actually making something, while he sits on his ass armed with nothing more than a lawyer. If the defendant refuses to play ball, the NLB will continue to file motions and push the lawsuit forward. It’s like when you get a rock stuck in your shoe and it’s really bothering you but it’s not quite worth the energy to remove your shoe and dump out the rock. Then the rock gets bigger and more uncomfortable and you have to pay a few thousand dollars to make it go away.
The worst part is that these NLBs don’t just go after makers, they also go after customers of makers. And the worst worst part is that there are lawyers out there who will assist them in their efforts to make the world a shittier place. As I am wont to say, the 95% of lawyers who are assholes make the rest of us look bad. If you are looking for another reason to dislike those members of the “noblest profession,” this article is a good one—it seems that some guy has claimed that he invented the concept of sending scanned documents as emails and claims that every single person who has ever hit “send” on a scanner owes him money (so yes, that includes you).
NLBs are little pains in the ass, and are the reasons that most people hate patent trolls. But what most people don’t realize is that there are much larger patent trolls out there who are taking millions upon millions of dollars from large tech firms and driving up the costs of nearly all consumer goods (and certainly electronic devices). These trolls, which are huge, multi-national companies, seem to avoid all of the blame associated with other patent trolls, and are skillfully avoiding all of the current legislation. So what exactly do they do? Allow me to introduce…
2. The Big Fatass Patent Troll
One thing that has always bothered me is that as a society we demonize small-time crooks but allow, nay, encourage, theft of millions if not billions of dollars to occur on Wall Street every day. There is a parallel concept in the patent troll world where the House has passed the Innovation Act, which is mainly targeted at NLBs, and yet nothing is done to address the biggest patent trolls who do their best to make life miserable for large companies and consumers alike while contributing nothing to society. Whereas some of the NLBs may have at least made something at some point, the Big Fatass patent troll (“BFA”) simply has a lot of money, and does what those with a lot of money do best—takes from others in order to make even more money.
BFAs lurk around, waiting for companies to go out of business, and then snatch up as many patents as they can from these vulnerable companies that need quick cash. BFAs will also sometimes buy patents from smaller inventors, pointing out that enforcing a patent is very expensive, so it’s worth it to take a smaller pay-out. BFAs have a ton of money and are not afraid to litigate. In fact, they’re able to expend most of their resources on litigation because they’re not busy actually making anything.
Also, chew on this: in many cases, a large company that owns many patents will refrain from suing another company because that other company owns patents as well, and when we’re talking about the top industry players, you can assume that everybody’s products are infringing on somebody else’s patents. In a way, there’s a bit of mutually-assured destruction (although, obviously, this doesn’t stop a number of large technology firms keeping folks like me in business with patent suits and settlement agreements). BFAs can sue anybody with impunity. After all, they don’t have any products that can possibly infringe another company’s patents…because they don’t actually make anything.
BFAs usually go after big companies that you’ve heard of, and while of course we need not be too sympathetic to an electronics giant that is getting sued, the prices are taken out on the consumer (of course). In other words, your new tablet would be five dollars cheaper if it weren’t for some damn BFA…and would probably be a hundred dollars cheaper if it weren’t for 5 damn BFAs.
What bothers me the most is that BFAs advertise themselves as though they are taking morally righteous positions, like they are the ones responsible for allowing companies to develop technology. If you go to a BFA’s website, it may claim that it spurs innovation…because nothing spurs innovation like getting sued. Perhaps the theory is that launching a patent suit against somebody is analogous to poking her in the ass with a big-ass cartoon trident in order to make her run faster.
Hmm, I was hoping I could find a good image of that with Google, and I did not. However, I did find this:
Alright, so now can we please talk about the Innovation Act, and what it’s doing to stop patent trolls?
Sure! The Innovation Act (which has passed in the House since I began writing this post) will make it more difficult for NLBs to bring patent infringement suits. Here’s a (not-so-helpful-but-kinda-cute) video made by some folks in favor of the bill.
The Electronic Frontier Foundation (“EFF”) has written a pretty good summary of what the Innovation Act will do [https://www.eff.org/cases/six-good-things-about-innovation-act]. Assuming that you’re too lazy to click on the link, the EFF lists six positive aspects of the bill:
1. Heightened Pleading – Patent plaintiffs actually need to specifically state why they are suing defendants in their complaints (they don’t really have to now).
2. Fee Shifting – If a patent plaintiff loses, then it could have to pay the winning defendant’s legal feels (it wouldn’t have to now…which is kinda ridiculous).
3. Limiting Discovery – The Innovation Act limits both the amount of time spent on and scope of discovery. This will lower defendants’ legal fees…which is the main leverage point NLBs use to drive settlement.
4. Transparency – Patent plaintiffs will need to state which patents they own that defendants is allegedly infringing (apparently they don’t have to now…wtf?).
5. Customer Suit Exception – Allows manufacturers to step in to defend their customers (so Hewlett Packard would be able to defend you against that bullshit scan-to-email troll).
6. Covered Business Method Review – I don’t really know what this is all about, and I think it may have been removed from the Innovation Act or limited or something, but I spoke with a patent prosecutor about the bill and this was his favorite part, so it must be good.
Also, if you didn’t click on the EFF link, here’s a rad image that you missed:
The EFF doesn’t mind that I posted that picture. In fact, just about everything on the EFF site is available to copy on an open source basis [https://www.eff.org/copyright]. That’s the thing about the EFF—in general, they are for the abolishment of most intellectual property protections. Dirty socialist hippie commie pinkos…gotta love ‘em.
There are two general complaints about the Innovation Act. The first is that it addresses the NLB problem but does not deal with the BFAs. You can read more about that here. The second is that, just as the Innovation Act makes it harder for patent trolls to bring suits to enforce patents, it also makes it harder for small businesses to do so. Most of what I’ve read regarding this argument has been by Fox News, so I tend to take this position with a grain of salt. However, I admit that it does make sense to me—a patent is only worth something if you can enforce it, and if it’s now even more difficult to enforce a patent, a small business owner will be even more likely to sell off the patent…possibly to a BFA (ugh).
I think I’m generally in favor of the Innovation Act, although my opinion could easily be swayed if somebody were to send me an article arguing the other way written by an intelligent liberal (and if you have any such articles, please feel free to send my way). As for dealing with BFAs, there’s some stuff going on in the wild world of corporate IP law that’s pretty interesting, but I want to wait and see how it develops a bit more before writing a blog post on it. Also, I think this post is way too long, and if you read it all, you are a fucking trooper. Here is my favorite Swedish Chef skit: