PublishedJune 10, 2013

Talking Points Mau-Mau: Sununu Objects to Reform on Patent Trolls

Former Sen. John E. Sununu has an op-ed in the Boston Globe today that perfectly encapsulates the talking points of those who oppose efforts to clamp down on patent trolls.

First is the “Patents Are a Constitutional Right” argument:

A patent is a property right, written into the Constitution by the Framers to encourage innovation. The trolls have legally bought and own their patents. Arguing that some patent holders have full rights to sue while others do not flouts the principle of equality under the law.

This has been debunked so many times, it’s hard to believe it keeps coming up. Article I, Section 8, Clause 8 says,

Congress shall have power … To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;

That is, Congress has the power to grant a limited monopoly to inventors in order “to promote the progress of … useful arts.” There is no right to a patent, much less a property right. Congress has no obligation to grant patents at all, and it certainly has the power to define the nature of the “limited monopoly” it grants.

Then, former Sen. Sununu moves on to the “Blame the PTO” argument:

The deeper problem begins with bad patents. When the US Patent and Trademark Office issues a patent that is overly vague, broad, or trivial, it invites uncertainty and litigation. The administration’s instruction to require more clearly defined patent claims illustrates this point. Don’t blame the person who made the application; blame the government that granted them 20 years of exclusivity.

Really? That’s like saying a con artist isn’t guilty because the victim fell for it. And even if it were the PTO’s fault, why should society subsidize someone who got a patent he shouldn’t have gotten?

Next, comes the “Sure, There’s Abusive Litigation, but Reform Is Hard. And Also Trial Lawyers!” argument:

Frivolous lawsuits are equally at fault. But nuisance lawsuits plague every corner of our legal system. The solution isn’t fixing the trolls; it’s fixing the courts. In fact, the most meaningful of all the White House recommendations would give judges more power to shift legal fees onto plaintiffs filing “abusive” litigation. Good luck with that. Even modest “loser pays” proposals have been thwarted time and again at the federal level by the American Trial Lawyers Association.

Again, if bad actors are gaming the system, why shouldn’t we try to stop the bad actors? While it’s true that trial lawyers have opposed fee-shifting, there’s much more to the White House’s recommendations than just fee-shifting. (On the legislative side, there is, for example, the expansion of the Covered Business Method review, which I’ll post about later this week.)

Not to mention, how is this an argument against reform? “Well, the courts are the problem, and the trial lawyers will block one of the things the President proposed, so we should just give up.” We should give up because reform is hard? This is a concern troll protecting patent trolls.

Of course, we have the “Look! Over There!” argument:

The anti-trolls lament that the cost of litigation “hurts the economy.” Indeed it does. By far the biggest costs, however, are borne when the giants go head-to-head. The day of the White House announcement, the front pages were filled with the latest chapter in the patent battle royale between Samsung and Apple. Ruling against the latter, the International Trade Commission halted imports of the iPhone 4 and several models of iPad as well.

Of course, court decisions in other cases have favored Apple over Samsung. So who’s the troll there?

What do Apple and Samsung have to do with patent trolls? Nothing. But it’s a nice attempt to distract from the real issues.

And no anti-reform piece would be complete without the “But Universities!” argument:

Some of those suppliers are applied research firms developing everything from algorithms that process digital signals to genetic sequences for disease-resistant crops. They are in business to develop new ideas, build a portfolio of proprietary technology and patents, and license or sell rights to the highest bidder.

Pure research also abounds at colleges and universities. Today, most big schools maintain sophisticated licensing offices that earn royalties from patented technologies developed in campus laboratories year after year.

Look, no one is grouping legitimate R&D companies or universities in with patent trolls. It’s disingenuous to think that President Obama was referring to such entities when he said that patent trolls “don’t actually produce anything themselves.” R&D companies and universities do produce something, namely valuable research.

And finally, let’s look at the “What About Individual Inventors?” trope:

And lastly, what about individual inventors struggling to perfect innovations of their own? Without the resources to pursue every company that may try to use their idea without authorization, selling patents to someone with deeper pockets often represents the best way to guarantee the income they deserve.

It’s like a scene out of Dickens, isn’t it? The poor, struggling inventor, beaten down through no fault of his own, with no choice but to sell his patent to a patent troll. Bah, humbug!

Since when does anyone “deserve” income for failing to develop a successful business? In this case, I have to agree with the person who said that, “governments are setting expectations, without saying so explicitly, that [inventors] will be rescued, supported, or coddled when things go wrong.”

Of course, former Sen. Sununu said that, although to be fair he was talking about banks, not inventors.

But this isn’t about pointing out hypocrisy. It’s about examining incentives. What kind of incentive is it if a person can make a fortune simply by getting a patent, instead of having to develop the patent into a business? We won’t get more innovation; we’ll just get more patents and more lawsuits, which is exactly what’s happened.

As the Obama Administration’s recent study showed, for every dollar a patent troll makes, the defendants who paid them lose ten dollars. That’s a net loss to the economy. Clearly, the incentives are wrong. We should be incentivizing entrepreneurship, not patent lottery tickets.

And that wraps up our quick analysis of former Sen. Sununu’s op-ed. You’re going to be hearing these same talking points over and over again as the push for reform gets stronger, so you might as well practice batting them down. This fight is just getting started…


Matt Levy

Previously, Matt was patent counsel at the Computer & Communications Industry Association

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