The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Wednesday, 4 September 2013

How Universal is the Patent Troll?

Hand-over-heart, how many Kat readers gave much thought to trolls before the term "patent troll" entered the patent lexicon a decade or so ago? For this Kat, a troll was vaguely identified as some sort of Northern European nasty, reaching deep into Norse (or was it Celtic?) lore. Whatever its provenance, the troll was rooted within a defined cultural tradition—the troll was hardly a universal exemplar. In following the current IP press, one might however think that the patent troll has succeeded where its Norse predecessor failed, namely become a phenomenon that cuts across various IP settings. What could be more universal in today's patent world than the omnipresent troll, working its claimed mischief across the globe? Or so this Kat thought. In fact, the reality may be much more nuanced than that.

While in Singapore last week, this Kat had the opportunity to speak before a professional IP group. Part of this Kat's presentation focused on the June 2013 report issued by the White House, "Patent Assertion and US Innovation", here, or in common parlance, patent trolls. To calibrate my discussion to the audience, I asked how many had read the report. After all, a 100% response rate would require a different focus than a 50% response rate. This Kat was, however, not prepared for the response given by the audience—0%. It turns out that not one of them had read the White House report. "All right", this Kat thought. Maybe it was not realistic to expect for the local audience to delve into the actual text of the report. How many times have I read official IP reports from jurisdictions other than the US or WIPO?

And so I asked the audience a follow-up question-—how many of your companies or clients have ever received a letter that could be reasonably attributed to a patent troll, however defined? It is true that most patent trolling is taking place in the US, but this Kat, sitting in Tel-Aviv, has for nearly a decade encountered numerous letters of this type on behalf of his clients. Surely my anecdotal experience was not limited to Israeli companies. It turns out that I was wrong again. Based on the response of the audience, it appeared that none of them had ever received such a letter. Now that response really surprised me. I would thought that most hi-tech companies, wherever their headquarters, aspire to reach the US market and when we talk about online products, access to the US market is even more likely. Could it be that this audience was uniquely isolated from the US patent troll environment, or do these anecdotal results suggest that the transnational reach of patent troll activity may be less extensive than I would have thought?

Suzanne Harrison, the co-author of the iconic book Edison in the Boardroom (there is now a revised edition, here) and an especially wise and perceptive observer of the IP world, suggested to this Kat that these responses of the audience might simply reflect the fact that companies in Singapore tend to have a much greater Asian market orientation. This is a most interesting observation in explaining the anecdotal results given by the audience. Patent trolling is largely a creature of the US litigation ecosystem and the size of the US market, which provides a platform for greater potential infringement awards. Other than the US, patent trolling may simply not be prevalent. If one's company is not oriented to the US market, or its involvement in the US market is small, the likelihood that the company will be the target of a letter from a patent troll is slight. Under such circumstances, it makes perfect sense that a White House report on patent trolls is of little or no interest, and that the receipt of a patent troll letter is not a frequent occurrence.

More generally, the US-centric nature of patent trolling raises the possibility that excess attention is being paid to the phenomenon (no matter how you define "patent troll"). In speaking to an international audience, one can discuss topics such as patent novelty and inventive step, patent licensing strategies and even litigation measures, safe in the belief that there is robust kernel of commonality across jurisdictions. The same may not be the case for patent trolling. It may, or may not, be an acute matter for patent practice in the US, justifying (perhaps oversized) attention by the press, academia and politicians Whether it is a major international matter for patent practice is a separate and open question.


Norman said...

It appears that one PAE is active in Canada and has started about 35% of patent actions in the last year: see

MaxDrei said...

To answer the question whether there is patent trolling in Europe, who better to ask than Richard Vary of Nokia? In his public speaking, he uses the example of IPCom to test the efficacy of patent litigation structures in Europe. IPCom is the investment vehicle that acquired the Bosch telephony European patent portfolio and then asserted it against Nokia. Is IPCom a troll?

Bertrand Sautier said...

I do agree with Neil.
There is no such things as a systemic impact of troll activity or a trolling pandemonium weakening the entire patent system. It appears to be mostly a US civil procedure issue.

But who knows, I may be on trolling rage right now.

Suleman Ali said...

The US is a world leader in new business models. IP auctions, mission to Mars, films about vampires. It does everything first.

Anonymous said...

"Trolling" has been a part of Internet speak for well over 20 years. I suspect the term "patent troll" has come via this use, rather than directly from Norse mythology.

Andy J said...

While I have nothing useful to say about patents, I think it would be wrong to make too close a linkage between patent trolls and trolls of N European folklore. The intermediate step which was not mentioned in Neil's posting although I feel sure he is fully aware of it, is the internet troll, possibly a more cunning, malevolent and un-principled figure than the folklore character.

Anonymous said...

I had always assumed that the etmology of Patent Troll is one who goes on a trolling mission with his patent.

I strongly hold the believe that countering trolls should not require new legislation, merely implementation of existing legislation about novelty and obviousness by SKILLED examiners.

Could the fact that Patent trolls appear to be a mainly US problem be linked to the [perceived??] quality of US examiners?

Basically a troll can only exist by virtue of examination mistakes.

Peter Marks said...

Many companies generate IP that they then do not exploit directly. This can be out-licensed or sold/assigned to others to recoup costs and generate revenue. If governments prevent companies from asserting patents that are not being exploited, surely the value of such patents drops to zero. Competitors are effectively given a green light to infringe without cost or consequence. If you are defining a troll, where do you draw the line?

Anonymous said...

Peter, think about the concept of abuse.

Anonymous said...

Whom I wonder has whipped up all the hysteria about Patent Trolls (making sure that all legitimate NPEs are conveniently tarred with the same brush)?

Annonymous at 17:13:00. By abuse you mean abuse by those who infringe legitimate patent rights?

The very same companies that cry
Troll and are lobbying like hell to neuter NPEs. That’s what I call abuse.

Anonymous said...

MaxDrei, with Nokia disposing of its handset business to Microsoft but keeping its patents, does Nokia become a patent troll (or would paten ogre be a better description?).

Anonymous said...

-- two comments are in order.

First of all, 'troll' does not enter into the phenomenon with any etymology, except that the term "Jack-in-the-box" is called "troll-in-a-box" in the Scandinavian countries. It is the surprise action that is the similarity. So, in future, please refer to the phenomenon as "Patent Jacks" and leave the trolls be.

Secondly, the least investment you can make for the most disturbance is to be preferred. And here US patents are singular: after 10½ years you pay no more maintenance fees. This means that you may buy up rights years after the original owner has lost interest and will gladly receive any amount.

Lastly, litigation in the US is so costly that it is easier to pay protection money.

Kind regards,

George Brock-Nannestad

P.S. Wasn't it Glenn Miller who promoted the term "American PaTroll"?

Anonymous said...

As several recent patent blog series have shown (and as seemingly captiulated in the GAO report which supplants the White House propaganda piece), the 'hunt for "Trolls" is over.

What is it with this blog with the recent fixation on the subject?

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