FTC to Examine Patent Assertion Entity Impact on Innovation

EDITORIAL NOTE: The black colored text below is taken from an FTC Press Release. I also provide my thoughts and comments in the format of comments from the peanut gallery, or perhaps as a patent law equivalent to Mystery Science Theater 3000.  In order to differentiate my thoughts/comments from the FTC statement, my comments are italicized, colored, indented and tagged with the IPWatchdog logo.

_____________________________

FTC Headquarters, Washington, DC.

The Federal Trade Commission voted to seek public comments on a proposal to gather information from approximately 25 companies that are in the business of buying and asserting patents, known as Patent Assertion Entities (“PAEs”). The FTC intends to use this information to examine how PAEs do business and develop a better understanding of how they impact innovation and competition.

After considering the public comments, the FTC will submit a request to the Office of Management and Budget (OMB) in compliance with Paperwork Reduction Act, seeking clearance of the FTC’s proposal to issue compulsory process orders seeking information from the PAEs.

MY TAKE: What if the public comments received suggest that there is no reason to for the FTC to move forward? Will the FTC still subpoena records from PAEs? There is something fundamentally wrong about the FTC saying that they will consider the public comments and then they will go ahead regardless and subpoena records. This conjures up images of the wild west. Crowd yells: “Hang him!” Sheriff responds: “First we will give him a fair trial and then we will hang him!”

PAEs are firms with a business model based primarily onpurchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency’s key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.

MY TAKE: I guess it wasn’t enough that the non-partisan Government Accountability Office report showing that there is not a non-practicing entity (NPE) problem isn’t enough when the White House and some members of Congress want to take action. I guess that is just how Washington works. If at first you don’t get the report you like try, try again! This time there will be no impartial GAO, but rather a branch of government on which authority from on high can be asserted. I wonder what they will conclude? For more on the GAO report see GAO Report Finds No NPE Litigation Crisis and GAO Report Unmasks Mythical Patent Troll Problem.

In December 2012, the FTC and the Antitrust Division of the United States Department of Justice (DOJ) jointly sponsored a workshop to explore the impact of PAE activity on innovation and competition. The FTC and DOJ also received public comments in conjunction with the workshop. While workshop panelists and commenters identified potential harms and efficiencies of PAE activity, they noted a lack of empirical data in this area, and recommended that FTC use its authority under Section 6(b) of the Federal Trade Commission Act. Responding to these requests, and recognizing its own role in competition policy and advocacy, the Commission proposes a Section 6(b) study that will provide a better understanding of PAE activity and its costs and benefits.

MY TAKE: Interestingly, one of the largest PAEs was not invited to participate in this FTC workshop. Acacia Technologies is not only one of the leading companies in this space, but they are also a publicly traded company that is required by laws and SEC rules to disclose volumes of information about their activities. Not inviting Acacia to attend is in my opinion akin to having a patent roundtable to discuss changing patent prosecution rules and not inviting IBM to attend. Perhaps there was nothing to Acacia not being invited, but if I were really trying to figure out how the industry works I would definitely have a seat at the table for them.

“Patents are key to innovation and competition, so it’s important for us to get a better understanding of how PAEs operate,” said FTC Chairwoman Edith Ramirez. “We want to use our 6(b) authority to expand the empirical picture on the costs and benefits of PAE activity. What we learn will support informed policy decisions.”

[Patent-Litigation]

The proposed study would add significantly to the existing literature and evidence on PAE behavior.  Earlier studies have focused primarily on publicly available litigation data and concluded that PAE litigation activity is on the rise. The Commission, however, has unique Congressional authority to collect nonpublic information, such as licensing agreements, patent acquisition information, and cost and revenue data, which will provide a more complete picture of PAE activity.

MY TAKE: The statement about previous studies concluding that PAE litigation activity is on the rise is terribly misleading. As anyone who understands the industry could have predicted, as a direct result of the America Invents Act (AIA) more patent infringement litigations are being filed. Perhaps Congress and Regulators in Washington, DC, didn’t understand that would be the implication of the AIA, but that would be only because they didn’t understand what they were doing. The AIA makes it quite difficult (if not impossible, depending on the district court) to bring a patent infringement action against numerous defendants in a single case. Thus, it was incredibly predictable that upon enactment of the AIA the number of patent litigations would rise. This was by design! It is also exactly what the aforementioned GAO report concluded.

Because the Commission believes a broader study will enhance the quality of the policy debate surrounding PAE activity, it proposes information requests directed to the following questions:

  • How do PAEs organize their corporate legal structure, including parent and subsidiary entities?
  • What types of patents do PAEs hold, and how do they organize their holdings?
  • How do PAEs acquire patents, and how do they compensate prior patent owners?
  • How do PAEs engage in assertion activity (i.e. demand, litigation, and licensing behavior)?
  • What does assertion activity cost PAEs?; and
  • What do PAEs earn through assertion activity?

To understand how PAE behavior compares with patent assertion activity by other patent owners in a particular industry or sector, the FTC also proposes sending information requests to approximately 15 other entities asserting patents in the wireless communications sector, including manufacturing firms and other non-practicing entities and organizations engaged in licensing.

The Commission vote to approve and publish the Federal Register Notice soliciting public comment on the proposal was 4-0. The Commission is authorized to issue Orders To File Special Reports by Section 6(b) of the FTC Act.  The proposal will be published in the Federal Register shortly.  Public comments on the proposal can be submitted electronically and will be accepted until 60 days after the Notice is published. Written comments should be sent to:  FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580.

MY TAKE: Things are going to get extremely interesting. With the FTC taking this step now I don’t know how Congress can move forward with patent reform legislation that purports to address the so-called patent troll problem. Perhaps they will move forward, but at a time when the Congress has so many issues to deal with is patent reform prior to yet another in-depth government report really where times should be spent? As of the writing of this article we do not have a budget for FY 2014, or even a continuing resolution and the debt ceiling debate looms in the backdrop. Perhaps Congress and the FTC should be spending time fixing other problems rather than tinkering with an issue the GAO says doesn’t need to be fixed.

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35 comments so far.

  • [Avatar for NWPA]
    NWPA
    October 2, 2013 01:56 pm

    I guess you can say that to say mistakes were made is subjective and I would have to agree with that.

    But, in my opinion, the mistakes were made and the reason they weren’t corrected is simply because of the cost and inconvenience.

    Also, Anon in terms of all your question in bifurcation. I think the answers are simple. Let the defendant by right decide to bifurcate for infringement before invalidity. That would be all I would add.

  • [Avatar for NWPA]
    NWPA
    October 2, 2013 01:48 pm

    Anon, the X reference was not disclosed to the PTO by the patentee and it was not considered by the examiner in allowing the patent. In my view, the PTO should have looked at the european search report themselves without the patentee disclosing it to them.

    Anon, there is no sour grapes on my part. I think there were clearly three mistakes made that cost the defendant millions of dollars. Also, I mean come on. Dist. Ct. Judges have a way of feeling superior to the PTO and ignoring them. And, as I said, I am very confident that the Dist. Ct. Judge would have been overturned by the Fed. Cir. for not narrowing the claim scope, which would have meant no infringement. It was outrageous for the patent to come out of the ex parte reexamination with the patentee only making statements to the PTO narrowing the claim scope. The language was something like X “cannot mean Y.” The Dist. Ct. Judge ignored our arguments that we wanted the element to be construed as “X cannot mean Y.” The PTO should force the patentee to actually narrow the claims so that the defendant doesn’t have to rely on a dist. ct. judge to narrow the claims. The reality is that the Dist. Ct. judges feel happy just ignoring the PTO.

  • [Avatar for American Cowboy]
    American Cowboy
    October 2, 2013 10:31 am

    Benny, you are mostly correct that patent applicants should have no rights to inventions which others invented before them. The prior inventions of inventors who abandoned, suppressed or concealed their inventions historically did not disqualify later patentees. That is probably also the case with AIA.

    But society in the form of the Federal Government has defined the mechanism for making the determination of whether the invention was invented before the patentee’s invention. In the first instance it is the Patent Office, and they are backed up by the courts. For an infringer to take it upon themselves to disregard their decisions is not really any different than a lynch mob hanging the defendant the jury found not guilty.

  • [Avatar for Benny Attar]
    Benny Attar
    October 2, 2013 10:03 am

    Anon,
    Infringers have no rights to infringe, of course. But patent applicants should have no rights to inventions which others invented before them, even if the PTO grants them those rights. Legally, you are perfectly correct in your assertions, but morally you are off the straight and narrow path. As I mentioned before, engineers see these things from a different perspective. I’m trying to give you a window into how others see it. Our R&D managers pay our attorneys’ invoices on time, but it is sometimes hard to convince them that it is money well spent.

  • [Avatar for Anon]
    Anon
    October 2, 2013 09:35 am

    And Benny,

    You are misapplying ‘ease of the industry’ as that way is the way of ‘infringer’s rights.’ Remember that the patent right is a negative right and does not include actual making. This fundamental fact is too often ignored.

  • [Avatar for Anon]
    Anon
    October 2, 2013 09:34 am

    I would also remind everyone that the likelihood of court action to begin with is far under .2% of active patents.

    Benny, you might try adjusting the math used to balance the pro’s and con’s of the patent system with that fact.

    Much like the FTC (and certain Congressmen) kicking up the ‘Troll’ dust given the fine series here by S. Moore and the GAO report debunking the ‘Troll’ hysteria, there is far too much rhetoric here.

    Just imagine if the energy and moneys spent on this effort (and on the AIA effort) were instead plowed into the Office to re-engineer and re-energize the actual examination system that is at the roof of all of these squabbles…

  • [Avatar for Anon]
    Anon
    October 2, 2013 09:27 am

    NWPA,

    Why do you feel that the disclaimer was inadequate? I’m curious when you say the Office did not consider the art in the first place (I highly doubt it). Are you saying that the patentee did not reveal an X reference of a related foreign application to the USPTO on an IDS? Did the examiner initial the reference or did he not? Or are you saying that you disagree with how the reference was considered? I do not find it odd that the (accused) infringer is never at fault – at least in their eyes.

    And again, your adjudicated problem was a court problem and not a patent problem per se. Without the fine details, I can only presume that you are offering an opinion of the re-exam process (my first inclination is that you have a tinge of sour grapes).

    Try to take an objective view of the situation, and look at it from both sides – modify the facts and imagine that a judge ignored the record and you as patent holder ends up punished. Fair? The fact pattern does not impugn the patent system as much as it does the judge.

    I am not a fan of bifurcation (yet). How do you resolve the chicken and egg issue? Which part of bifurcation is delayed? Is that decision based strictly on costs? How is overall justice served? Can you cleave the infringement deliberations from the validity deliberations? Are there jury and other court costs that end up being more expensive?

  • [Avatar for American Cowboy]
    American Cowboy
    October 2, 2013 09:22 am

    PTO screwed up twice.
    Federal District Court judge screwed up once.
    Defendant was right all along, in his own self righteous judgment.

    Dude, look up the word “paranoia.’

  • [Avatar for Benny Attar]
    Benny Attar
    October 2, 2013 09:20 am

    NWPA,
    What you are telling us is that an oversight on the part of the USPTO could end up costing the manufacturing industry $3M (or destroy my company). That is a frightening thought. No, I don’t need reminding that a) good work by the USPTO can generate an equivalent revenue for the patent holder and b) that those $3M are included in the GDP.
    The point is that the difficulty in correcting these mistakes is a burden on the industry.

  • [Avatar for NWPA]
    NWPA
    October 2, 2013 08:47 am

    Anon, you have the facts basically right. More than one person can be in error. In this case, the PTO was wrong in issuing the patent without considering the X reference to begin with. The PTO was probably wrong in affirming the patent based on disclaimers. The PTO is too quick to accept disclaimers rather than amendments to the claim language. And, the Dist. Ct. Judge was wrong in ignoring clear disclaimers of claim scope. I have ever confidence she would have been overturned on appeal. The defendant rolled because the cost of fixing all these mistakes was at least $3 million dollars and years more of time where the executives are having to focus on a patent litigation rather than build the business.

    As an aside, I think that the defendant should be able bifurcate the trial into a first part of infringement and then invalidity. So, much of the expense is invalidity up front before the defendant even knows if they are infringers.

  • [Avatar for Anon]
    Anon
    October 1, 2013 05:49 pm

    American Cowboy,

    I am not sure of the facts involved (it was NWPA’s case). My impression (and correct me if I am wrong, NWPA), is that the PTO had the reference in front of it and did not hold the patent invalid based onthe reference because the patent holder made estaoppal remarks that let the patent survive (albeit in a changed form).

    However, the court (and hence my view that this is strictly a judge problem) decided to ignore the effects of the reference and led the parties to believe that the claims were not affected by the art (and thus prompted one party to capitulate and reach an (unwanted?) settlement.

    I agree tht the defendeant may have been in error, even if the judge was also in error, but from the description, the judge simply threw out any impact from the re-exam, which I find to be a bit problematic.

  • [Avatar for American Cowboy]
    American Cowboy
    October 1, 2013 05:33 pm

    Anon and NWPA, are you saying both the PTO and the district court had all of the prior art in front of them and still held the claims patentable? If so, maybe it is the defendant who is wrong.

  • [Avatar for Anon]
    Anon
    October 1, 2013 04:57 pm

    NWPA,

    I too laugh at the similarities (they are definitely there – and in more than name).

    However, on your case, I am not sure how a judge refusing to consider a reference covered in re-exam (with the effects of estoppal) qualifies as a ‘fault’ of the Office or of examination. To me, such a judicial action would impact ANY patent, and thus I would remove the issue away from the patent itself and place the issue on how the judge is running his case.

  • [Avatar for NWPA]
    NWPA
    October 1, 2013 04:37 pm

    Anon,

    At 20, seems like a very similar fact pattern to me. Was it the Dist. Ct. Judge’s fault or the PTO’s fault for doing such a poor job examining the patent application that they didn’t even consider the X reference in a European search in the first place. The Dist. Ct. Judge may have thought that sure the claim construction is wrong, but we will sort out this X reference at trial. Not sure.

    Thanks for the advice, but don’t worry about me. I am a big boy and can handle myself.

    Anon, you are a lot like anon. Not sure I believe you two are separate people.

  • [Avatar for American Cowboy]
    American Cowboy
    October 1, 2013 01:50 pm

    Benny says: “You also ignore the fact that my competitors’ reason for requesting the patent is specificially in order to block my entry into the market so he can sell more products, not to clean up on licensing fees.”

    I gather that since he is your competitor for your product, he makes and/or sells competing products. That makes him not a NPE or PAE or troll or whatever the pejorative of the month is. This whole topic was supposed to be about those guys.

    As to the dialog by the others, if the patent survived re-exam, citing the best prior art, you should quit your whining and take a license, if that is commercially reasonable, or avoid making the allegedly infringing device, if not. You can make exactly what that allegedly killer prior art discloses, for example.

  • [Avatar for Anon]
    Anon
    October 1, 2013 01:28 pm

    NWPA at 18,

    It appears that your problem is a district court judge problem as opposed to any type of patent problem per se. It appears that you did atempt to use the re-exam system in light of the X reference, and obtained the ‘proper’ disclaimer that should have caried the day in court. I would also note as well that it does not appear that the judge-problem you have is related to any type of ‘owner of the property’ issue (Benny’s other point in pursuit).

    So overall, I would say that your fact pattern does not line up with what Benny is trying to peddle.

    NWPA at 19,

    As for Gene ‘being after you,’ I think that happens only when people start misrepresenting things.

    If you are clear that what you are saying is an opinion (for example, if you don’t like Lemley because you feel that he exercises a negative influence on certain types of patent eligible subject matter) that is one thing. If you come here and post that the law indicates something that it does not, (or that facts indicate something that they do not), that is quite another. Of course, if you express an opinion and have nothing to back that opinion up, well, the comments here can come across fairly stridently (peruse some of the software threads for some pretty good give and take).

  • [Avatar for NWPA]
    NWPA
    October 1, 2013 11:50 am

    I don’t think there is anything wrong with a shadow board. Just surprising given the seemingly open nature of patentlyo. I would think that there would have been mention of it in some way by the people that participate in both members only and general public. I also find it a bit unnerving that Lemley (whom I have been censored from criticizing many times is big contributor to the members only.

    But, oh well, enough of talk regarding another board. Gene will be after me soon.

  • [Avatar for NWPA]
    NWPA
    October 1, 2013 11:47 am

    Anon,

    The EP claims were not allowed as not having an inventive step. The US claims were allowed and the X reference cited in Europe was not cited. The patent did go through ex parte re-examination and came out largely unscathed except for some very clear disclaimers by the patentee. The court ignored these disclaimers in claim construction.

    So, we had the US patent issue without consideration of the X reference. When the X reference was presented to the PTO the patentee got out of it with very strong disclaimers that were ignored by the dist. ct. judge. The defendant settled after the claim construction so we won’t know if the jury would have found the patent invalid in light of the X reference. My guess is yes.

  • [Avatar for Anon]
    Anon
    October 1, 2013 11:09 am

    NWPA,

    I do not find the idea of a shadow board all that unbelievable. Further, I do not have any issues with such (we still have a freedom of association in this country).

    As to the fact scenario over which you identify with Benny, I am curious as to what the allowed US claims sound in. I am sure that you are aware that US patent law and EP patent law do differ somewhat on eligible subject matter, so a patent granted in one legal domain but not in the other is not necessarily all that surprising.

    I am also curiious as to whether the expensive court fight also based on something that could not be pursued in a re-exam setting. Was the choice based on a notion of not wanting to ‘gold-plate’ the patent and to make sure that the control of the fight was not left to the Office? If so, that would be a tactical decision and crying about cost would not be entirely fair.

  • [Avatar for NWPA]
    NWPA
    October 1, 2013 10:54 am

    Hard to believe that patentlyo would censor anon and not MM. But, then I still can’t believe there is a shadow board that appears to be dominated by Lemly.

    Ah, well. Benny, I had a client with exactly your fact scenario. And, the patent was issued by the PTO and not the EPO. It also cost the client a fortune to fight it in court and they had to settle.

  • [Avatar for Anon]
    Anon
    October 1, 2013 10:16 am

    Benny,

    You retread grounds that do not support your postion and show how easy the matter is. If you have such novelty-defeating art, then submit it to the Office with a re-examination request (and no more expense to you – much les than the 3n$ you seem intent on paying). Now, if you merely think that such art does as you claim (and the other side claims otherwise), why should your view hold sway?

    And you have not addressed the difference between holders of the particular patent and the dismantling of patent thickets (still a good thing). That your competitors may hold patents – not to use but merely to block – is a valid use of patents. Or do you think that there should be a ‘use’ requirement in US patent law? If so, how would you address improvement patents where the underlying patent right is owned by another?

    Sorry Benny, but your posts simply sound in rhetoric and are unconvincing to me.

    NWPA,

    You might look at some of the cryptic remarks left by lower case anon on the ethics side of the fence at Patently-O (threads by Hricik).

  • [Avatar for Benny Attar]
    Benny Attar
    October 1, 2013 09:39 am

    American Cowboy,
    I am referring to patents for which prior art exists proving that the invention is not novel. Why should I pay someone a license for something he did not invent and has no right to own? In the case of truly novel inventions we would pay a license if required.
    You also ignore the fact that my competitors’ reason for requesting the patent is specificially in order to block my entry into the market so he can sell more products, not to clean up on licensing fees.

  • [Avatar for American Cowboy]
    American Cowboy
    October 1, 2013 09:29 am

    Benny says “I, as a manufacturer, then have to spend 3n$ to have the patent decreed invalid, if it is blocking my market entry”

    How about going to the patent owner at the outset and requesting a license, in a businesslike, not lawyerlike way?

  • [Avatar for NWPA]
    NWPA
    October 1, 2013 09:11 am

    Okay, maybe Anon is not the patentlyo anon, but anon reads this blog as he has referenced it many times at patentlyo. But anon is gone from patentlyo and he was the most prolific poster on patentlyo.

    Patentlyo also apparently has a members only board that includes many posts by Mark Lemley.

  • [Avatar for Benny Attar]
    Benny Attar
    October 1, 2013 07:35 am

    Anon,
    American Cowboy does, in fact, raise an important point. You are correct that this is not an issue with patents, but wth the cost to manufacturers of the errors and omissions of the patent system. You, as a legal representative, can earn n$ by filing a patent application for a client. I, as a manufacturer, then have to spend 3n$ to have the patent decreed invalid, if it is blocking my market entry. An extra hours’ work on the part of the patent examiner (worth 0.05n$) would have resulted in the patent not being granted in the first place. (I am still referring specifically to those patents which do NOT represent true innovation). You may well ask, do I not wield the same weapon against my competitors? Indeed, this is a valid question deserving of an answer. But answer came there none.

  • [Avatar for Anon]
    Anon
    October 1, 2013 07:11 am

    Benny,

    I suggest you take a moment and reflect on your post at 9.

    First, note American Cowboy’s post at 6, which points to the fact that you are not really dealing with a patent issue at heart.

    Second, again reflect on what I have posted regarding the role of breaking up patent thickets. I am not sure that you realize yet that you are making my case for me. I have no doubt that the so-called ‘troll’ is making the status-quo build-a-thicket approach uncomfortable as the typical ‘Armageddon’ Mutual Assured Destruction of suit-countersuit-cross-license game falls apart when the threat of countersuit is removed, but I view that as a good thing.

    NWPA,

    A common error, but my moniker is with a capital “A.”

  • [Avatar for Benny Attar]
    Benny Attar
    October 1, 2013 02:23 am

    Anon,
    It’s not the legal difficulty of dealing with bad patents that is our problem. It is the cost. Our companys R&D budget should be devoted to just that, we can’t spend it all fighting patent cases in court. A competitor will not assert a bad patent because they have as much to lose as we have, but for a PAE it is just a method of generating revenue. We haven’t been hit by one of these yet, but we are defenceless against them. The examole I gave, by the way, is an actual case concerning a product we are about to place on the market.

  • [Avatar for NWPA]
    NWPA
    September 30, 2013 07:29 pm

    Also, note that the letter was signed by Xerox and IBM.

  • [Avatar for NWPA]
    NWPA
    September 30, 2013 07:28 pm

    Hey anon, why are you gone from patently-o?

  • [Avatar for American Cowboy]
    American Cowboy
    September 30, 2013 03:17 pm

    Benny, the problem is not with bad patents. The problem is the EXHORBITANT cost of litigation. That problem manifests itself in many fields of the law, not just patents.

  • [Avatar for Cash-Tight Startup]
    Cash-Tight Startup
    September 30, 2013 02:19 pm

    Good summary, but I could not find a listing of the 25 entities that will be subjected to this witch hunt….umm…I mean “inquiry”. Nor could I find a listing of the 15 wireless firms. Have they been identified?

    Given the FTC’s past history of being embarrassingly captured by the memory cartel’s political influence (re: FTC’s failed Rambus persecution), I can assume a few disgruntled wireless big boys are sponsoring….umm….I mean “lobbying for” this witch hunt….umm…I mean “inquiry”.

  • [Avatar for Anon]
    Anon
    September 30, 2013 01:01 pm

    Benny,

    Sorry, but I do not find your posts convincing – at all. You appear to oveblow the situation (and thus join a chorus of such noise).

    Sory, I have personally stood in those shoes on BOTH sides – the technical/business side and the legal side. Your example is presented in tones that do not sound convincing. I am sure that many companies may face ‘threats’ with weak patents. But the example you give – a patent not allowed in the US but an existing foreign patent in place would be very, very, very, easy to handle and thus would not be a true threat – no matter who held the patent (competitor or NPE).

    There is just far too much “Troll” rhetoric out there.

  • [Avatar for Benny Attar]
    Benny Attar
    September 30, 2013 10:22 am

    Anon,
    You assume wrong. I consider a patent bad when it is granted despite the fact that prior art exists which proves that it is not novel, but which the examiiner didn’t have the time to look for, or if the invention is obvious to the mythical PHOSITA (which the patent examiner is not).
    Let me give you a real world example: A competitor of ours was granted a patent in a European country, but was denied the patent in the US because the examiner found prior art, which his counterpart in Europe did not. Legally, I can now be sued for infringing what no less an authority than a US patent examiner has deemed a bad patent. My competitor won’t sue me because he is on shaky ground, and in any case he earns his money by selling products, not by sueing people. A PAE, on the other hand, could threaten me with an expensive lawsuit, and request, nay demand, an out of court settlement – because that is his business model. In the case of genuinely novel patents – no contest. I don’t deny that true innovators deserve their rewards.

  • [Avatar for Anon]
    Anon
    September 30, 2013 10:07 am

    Gene,

    In addition to the ‘neutral’ GAO report (which was not fully neutral, as it utilized data realed to two known les-than-patent-friendly sources, Lemley’s Lex Machina and RPX proprietary sources), I would add the wonderful series on “Trolls” that you had Steve J. Moore guest host.

    Benny,

    You need to check your assumptions, as you appear to have fully drunk of the kool-aid that patents must be bad if they are being asserted. The idea that a property only becomes ‘bad’ when it changes hands is quite ludicrous. The logic of this actually goes to building patent thickets and neglects the benefits of the so-called ‘trolls’ when it comes to busting patent thickets.

  • [Avatar for Benny Attar]
    Benny Attar
    September 30, 2013 07:20 am

    I think we wre missing the mark here. Patent infringement litigation is not the problem with the PAEs. The problem is out-of-court settlements where the alleged infringer has to choose between proving his innocence in court (either because he is not infringing or because he can prove the patent to be invalid) or paying the settlement fee (which is always calculated to be the cheaper option). A company like the one I work for cannot afford a patent infringement case for a mistakenly granted patent, and we are wide open to this form of abuse. Fortunately, our competitors can’t afford to sue us either (they run a high risk of having their claims invalidated), but if their patents get in the hands of a PAE…