Debunking the “Patent Troll” Myth: Who Is Really Lurking Under the IP Bridge?

AdamH.postBy Adam J. Handelsman, President & Founder, SpecOps Communications

Before we even broach the crux of this op-ed, a simple analogy will provide some enlightenment. In the world of tort law there is nuisance litigation and there is legitimate litigation. The same holds true in realm of intellectual property aka IP, and in every industry or sector there are always a few bad apples who tarnish the entire bunch. That said, the term in question, “Patent Troll,” was originally coined in 1993, but was made popular in 2001 by Intel’s Legal Counsel, Peter Detkin when he was responsible for enforcing the company’s IP portfolio. The irony is that Peter Detkin and his new company, Intellectual Ventures would now be considered a Patent Troll. The term itself is used to describe companies or persons that file patent enforcement lawsuits against one or more alleged infringers in what is deemed in an aggressive or opportunistic way. This is misleading because “Patent Trolls” are said to have no intention or ability to manufacture or market a patented invention. Furthermore, on today’s corporate playing field, the definition of the term “Patent Troll” changes dramatically depending on who’s using it, defining it, discussing it or asking about it. To properly move forward readers must be familiar with another term; the NPE or Non-Practicing-Entity which is an organization that partners with IP holders, both large and small companies, universities or inventors and helps them assert and license patents.  In layman’s terms, the NPE partners with an IP holder and helps them monetize the patent. 

To better understand the actual “Patent Troll” term, it is imperative to understand the fundamentals behind IP litigation. Basically, there are two distinct parties in all intellectual property battles; the creator and owner of the IP (the inventor), and those who steal IP for financial gain (the infringer). Let’s also remember, since the dawn of time there has always been someone bigger and stronger stepping in and seizing control of someone else’s innovation. That said, here are a few examples, and you can decide for yourself.

  • Thomas Edison, Philo Farnsworth and Marconi were all inventors. Is it fair to say that they should be compensated for their innovations and patents if the patents are found valid and infringed?
  • Should corporations like Apple, IBM, Samsung, Microsoft and Motorola —public or private— who invest years and millions of dollars into R&D be compensated for patents if they are being used by others?
  • Should universities and colleges be compensated for innovation stemming from their labs, minds and access to technologies because they do not manufacture anything?
  • Should NPE’s be paid if another company is found to infringe upon the valid patents of their partners?
  • Is it a far fetched request to require entities who have infringed IP and use it to benefit themselves be forced to pay a license fee for such access?
It is apparent that the unanimous answer to all of the above poised questions is a resounding, “YES!” This fact would then make it logically clear that the vast majority of “Troll”-based media coverage and the proponents that propagate this mentality adhere to the belief that no inventor, university or company that has ever created, partnered or acquired innovation should be compensated when it has been infringed upon. 

There are so many cases over the years that further support the fundamental principles of IP. Thomas Edison was a brilliant man, but he did not manufacture or sell anything? No, and if you believe the current Troll philosophy, neither he nor his estate should be rewarded for his innovations. To protect the AM Radio profits, RCA unleashed an army of lawyers, lobbyists and influencers to combat Edwin Howard Armstrong’s FM Radio. This battle eventually left Armstrong so distraught and penniless that he committed suicide in 1954. Is the inventor of a great new technology stifling innovation or is the large corporation at fault for hindering a new technology from disrupting its profits? And, we all remember that Philo T. Farnsworth created the television, but very few know that he fought the entire radio industry and its combined resources in an effort to prevent this invention from coming to market. Over and over the same the question remains… did any of these inventors stifle innovation? Because all of those aggressive entities rained down lawsuit after lawsuit affirm that they did.   

Inventors, universities and corporations have always been forced to defend intellectual property from aggressors with bigger bank accounts and legal resources. The little guy had a choice, do nothing and watch an invention be pilfered or try to fight back. Until recently, this was such an uphill legal battle that most who choose Armstrong’s path suffered a similar fate. 
 
The moral to the IP story is quite simple, no one is ever going to just write a check. If people did, there wouldn’t even be the need for the IRS. The same holds true for IP. Companies don’t want to admit infringing or even a kinder word like borrowing IP.  What most people still don’t understand is that IP should not be battled in the courts, it should be a form a corporate currency that’s a vital component of the boardroom; while being monetized in a fair and equitable manner. Unfortunately, the campaign of “Patent Troll” misinformation dominating the conversation is funded by the same companies that clearly do not want to pay their fair share for pilfered IP.  Bottom line, try and infringe on their portfolio and see what happens. I rest my case. 
 
###

About the Author: Adam Handelsman is a veteran strategic media relations executive and the founder of SpecOps Communications in NYC. Over the course of his 20 year career, he has represented a wide variety of public and private corporations ranging from Fortune 100’s to start-ups, and is well versed on the topic of intellectual property. In the spirit of full transparency, Adam represents Acacia Research (Nasdaq: ACTG), the nation’s largest IP licensing company.

image_print

2 Comments

  1. Michael Whitlow on June 8, 2013 at 7:38 am

    Adam: Here’s the rub, though. Some of the threats by IP lawyers are aimed at small businesses who are using IP they believe they legitimately purchased from well-known brands. The lawyers in question do not go for the large thief, but aim for the smaller, weaker links, often by industry and use categories, threatening litigation to many at a time. Rather than litigate, the small company owner is forced to settle. We can’t afford million-dollar litigation costs. And we can’t afford to then sue our vendor to reclaim our costs. Why not require the threat to be aimed at the “original” thief? Good post, and sound argument, but what can be done to keep my scenario from happening? It’s unfair to small businesses and individual users of IP who thought they had paid fully.



    • Adam Handelsman on June 8, 2013 at 8:18 am

      Michael – Since I do not know the details surrounding your question, it is hard to provide an answer. The only thing that I can see falling into a situation like your is a software user license. If you were to have made that purchase from a legitimate IT provider, then they must be held accountable for instal. If your IT guy loaded up a pirated version in your office… Well then you are in possession of an illegal version and that comes with consequences. If this is not the case, it doesn’t sound like IP enforcement, it sounds like extortion.