Recent Posts

The License on Transfer Network is a LOT of Good

A coalition of tech companies (Google, Canon, SAP, Newegg, Dropbox and Asana) recently announced a new private initiative to disarm patent trolls: the License on Transfer Network (LOT). This is essentially an extension of Google’s Open Patent Non-Assertion Pledge (OPN) that I wrote about in my very first Patent Progress post last year. In the OPN, every included patent carried a non-assertion pledge that traveled with it. Selling off the patent doesn’t remove the pledge. Once a patent is in the OPN, it’s in for good, meaning it can’t be used by patent trolls. The LOT Network is a coalition of companies who have all agreed to one basic idea: if a company in the coalition sells a patent, all the other companies are automatically licensed to the patent. This still allows any coalition member to sue another member directly for patent infringement. But they won’t privateer against each other, and even if their patents end up in trolls’ hands, every coalition member is protected. LOTlogoBecause we’re talking about thousands of patents, the coalition members have made a dent in the patents available for patent trolling. MORE >>

MIT Professor Finds That, Yes, There Is a Patent Troll Problem

Patent reform may have stalled in the Senate, but the damage from patent trolls only continues to grow. A few weeks ago, Lex Machina released a report showing that patent assertion entity litigation is on the rise. And remember that day in April when patent trolls filed nearly 200 lawsuits? And yet, we’ve continued to hear anti-reformers complain that the patent troll problem is overblown and overstated. All the evidence is anecdotal, they say. Which is why CCIA commissioned a study by an MIT economist, Catherine Tucker. She used publicly available data and objective measures to examine the relationship (if any) between venture capital investment and patent litigation. We released the study yesterday. Professor Tucker, using standard economic regression analysis, found that PAE litigation has a strong negative impact on venture capital investment and startups. Joe Mullin at Ars Technica has a nice explanation of the study’s findings. Given the study’s conclusions, it’s no surprise that we’re seeing responses like this from patent trolls: It’s certainly theoretically possible that a drop in venture capital investment causes patent trolls to file more lawsuits. But it’s hard to figure out how that might work. On the other hand, it’s easy to see how more patent troll lawsuits would discourage VC investment: more troll lawsuits means greater risk. The truth is, patent trolls are continuing to damage American businesses, especially startups. The evidence is undeniable at this point.  And the Senate’s failure to provide relief, even after the House did so overwhelmingly, means that the tab will keep running up. This is why we can't give up on reform. While we may not have gotten over the finish line this year, the patent trolls won’t stop, and neither will we.

The Scorpion and the Frog, or, If Intellectual Ventures Is For Something You Should Oppose It

Comprehensive patent reform has stalled in the Senate. You might think that would be enough for the patent trolls. But no, they’re still trying to kill real patent reform for good. How? By pushing for legislation in the House and the Senate that addresses the contents of demand letters without litigation reforms or patent quality improvements. Vague demand letters from patent trolls are a huge problem. Any legislation intended to deal with patent trolls has to address them. Unfortunately, if we try to fix the demand letter problem in isolation, there is a risk that we’ll actually make things worse. Without comprehensive reform that changes pleading standards, a lawsuit can be as vague as ever, so patent trolls have an easy way to work around demand letter rules: simply file a lawsuit and send the complaint instead of a demand letter. In other words, we’d be encouraging even more patent troll lawsuits. (If you doubt this would happen, remember the patent troll who filed 87 lawsuits in one day just to avoid the heightened pleading standards that were in the Senate bill.) The fact is that there is no simple solution to the patent troll problem. To be effective in stifling the patent troll business model, any bill has to include tools to level the litigation playing field. Otherwise, trolls still have enormous leverage to extort quick settlements. There’s another good reason to be cautious of bills that only address demand letters. Intellectual Ventures, for one, has been promoting this as “targeted legislation,” and that alone should be raising red flags. Intellectual Ventures says it’s just offering a compromise “that stops the spread of abusive patent demand letters and discourages frivolous lawsuits against small businesses – without unnecessarily harming all patent holders…” That does sound reasonable. But I’m reminded of a fable that goes something like this: MORE >>