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Obama declares war on the patent trolls
TECHNOLOGY Insight Invention
The president vs the trolls Barack Obama has declared that it is time to get tough on “patent trolling” WHEN ordinary activities like using Wi-Fi in a coffee shop or updating smartphone apps provokes lawsuits you know something is seriously amiss with the legal system. That has been the state of play for some time in the US – but perhaps not for much longer. Last week, US president Barack Obama announced a series of measures that he hopes will finally end the scourge of “patent trolls”. Identifying these trolls may not be so easy, though. The term patent troll is slang for a firm that buys up obvious patents that the US Patent and Trademark Office (USPTO) should never have granted in
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the first place. The troll then “asserts” these patents by threatening to sue businesses that infringe them. Many will then settle out of court and pay an often business-crippling licence fee. For instance, one troll with an obvious patent related to wireless networking sent letters demanding damages to 8000 coffee shops, retailers and hotels because they were providing their customers with Wi-Fi. Another is demanding that app developers buy licences since it has patents for using apps to make purchases online. In 2011, Boston University’s law school estimated that dealing with patent trolling
How do you identify these trolls? cost businesses in the US $29 billion. Plenty of ways, says Schoenbaum: Obama says the cash should have “Trolls don’t invent, make or develop been spent on generating products, anything. Between 70 and 90 per cent services and jobs. So the White House of their patents are software or is asking Congress to force the USPTO business-method patents, and in to narrow the scope of patents within virtually all cases the patent is invalid.” the next six months so that whole But San Francisco-based, “patent fields of endeavour cannot be trolled. buster” Gregory Aharonian, who Obama also wants to prevent patents invalidates patents by finding previous being asserted against the users of inventions using the same ideas, thinks technologies, like coffee shops, rather than manufacturers. The White House it will be tricky. “It is going to be hard for says trolls will have to come clean about their identity, and not hide their “Trolls don’t invent, make or develop anything – 70 to “abusive litigation and settlement 90 per cent of their patents extraction” behind a thicket of shell are invalid” companies. “This is a bold step forward by Obama to deal with the troll definition President Obama, and if these problem,” he says, mainly because legislative proposals are enacted some large technology firms behave the playing field will be levelled,” says like trolls when they assert overly Alan Schoenbaum, general counsel broad or obvious patents they never for web hosting firm Rackspace of exploit. “Anyone who asserts an San Antonio, Texas. What’s crucial, invalid patent, under any conditions, Schoenbaum says, is that Obama’s is a troll.” changes ensure trolls have something The only move that will crush the to lose when they fail in court. In troll phenomenon is vastly improved essence, the US legal system is patent quality, Aharonian says. “What unbalanced. In the UK, for instance, upsets people more is not the assertion the loser pays. “That keeps frivolous lawsuits down to a minimum,“ he says. tactics, but the crap being asserted.” Paul Marks n “But ‘loser pays’ is rare in the US.”
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24 | NewScientist | 15 June 2013
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James Leynse/Corbis
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–Easy money if you own lots–
The president vs the trolls Barack Obama has declared that it is time to get tough on “patent trolling” WHEN ordinary activities like using Wi-Fi in a coffee shop or updating smartphone apps provokes lawsuits you know something is seriously amiss with the legal system. That has been the state of play for some time in the US – but perhaps not for much longer. Last week, US president Barack Obama announced a series of measures that he hopes will finally end the scourge of “patent trolls”. Identifying these trolls may not be so easy, though. The term patent troll is slang for a firm that buys up obvious patents that the US Patent and Trademark Office (USPTO) should never have granted in
F
B K
the first place. The troll then “asserts” these patents by threatening to sue businesses that infringe them. Many will then settle out of court and pay an often business-crippling licence fee. For instance, one troll with an obvious patent related to wireless networking sent letters demanding damages to 8000 coffee shops, retailers and hotels because they were providing their customers with Wi-Fi. Another is demanding that app developers buy licences since it has patents for using apps to make purchases online. In 2011, Boston University’s law school estimated that dealing with patent trolling
How do you identify these trolls? cost businesses in the US $29 billion. Plenty of ways, says Schoenbaum: Obama says the cash should have “Trolls don’t invent, make or develop been spent on generating products, anything. Between 70 and 90 per cent services and jobs. So the White House of their patents are software or is asking Congress to force the USPTO business-method patents, and in to narrow the scope of patents within virtually all cases the patent is invalid.” the next six months so that whole But San Francisco-based, “patent fields of endeavour cannot be trolled. buster” Gregory Aharonian, who Obama also wants to prevent patents invalidates patents by finding previous being asserted against the users of inventions using the same ideas, thinks technologies, like coffee shops, rather than manufacturers. The White House it will be tricky. “It is going to be hard for says trolls will have to come clean about their identity, and not hide their “Trolls don’t invent, make or develop anything – 70 to “abusive litigation and settlement 90 per cent of their patents extraction” behind a thicket of shell are invalid” companies. “This is a bold step forward by Obama to deal with the troll definition President Obama, and if these problem,” he says, mainly because legislative proposals are enacted some large technology firms behave the playing field will be levelled,” says like trolls when they assert overly Alan Schoenbaum, general counsel broad or obvious patents they never for web hosting firm Rackspace of exploit. “Anyone who asserts an San Antonio, Texas. What’s crucial, invalid patent, under any conditions, Schoenbaum says, is that Obama’s is a troll.” changes ensure trolls have something The only move that will crush the to lose when they fail in court. In troll phenomenon is vastly improved essence, the US legal system is patent quality, Aharonian says. “What unbalanced. In the UK, for instance, upsets people more is not the assertion the loser pays. “That keeps frivolous lawsuits down to a minimum,“ he says. tactics, but the crap being asserted.” Paul Marks n “But ‘loser pays’ is rare in the US.”
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OBJECTIVE THINKING
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24 | NewScientist | 15 June 2013
_O
ffi
:
James Leynse/Corbis
tt ://
–Easy money if you own lots–