Silicon Valley’s Anti-Patent Propaganda: Success at What Cost?

By Gene Quinn
October 12, 2014

One of the real problems with the debate over patent litigation abuse is that it hasn’t focused on litigation abuse at all. Instead, the debate has focused on attempts to characterize patent owners with pejorative labels, such as calling anyone who has the audacity to seek to enforce their rights a “patent troll.” Unfortunately, the term “patent troll” has evolved to mean “anyone who sues me alleging patent infringement.” This has led the media, the public and Members of Congress to incorrectly believe that there is a “patent troll problem,” which has influenced decision-makers all the way from Capitol Hill to the United States Supreme Court, who increasingly seems to be deciding patent cases with one eye firmly on what is a completely non-existent problem.

You have probably heard the narrative start something like this: there is an explosion of patent litigation. The objective reality, however, is that there has not been an explosion of patent litigation. The Government Accountability Office, after an exhaustive review of patent litigation, concluded that there was no patent litigation crisis. The same GAO report also found that 80% of the patent lawsuits filed are brought by operating companies suing other operating companies. Thus, those who profess there to be rampant problems associated with patent trolls and non-practicing entities suing for patent infringement are simply telling a tale that the factual data doesn’t support.

More recently Lex Machina has come forward with some eye opening statistics as well. A recent report from Lex Machina concludes: “Plaintiffs filed 329 new federal patent cases in September 2014, a 40% decrease from the 549 cases filed in September 2013.” Indeed, if you dive deeper into the 2013 and 2014 statistics you see that through the first nine months of 2013 there were 4,548 patent infringement lawsuits filed, but during the first nine months of 2014 there were only 3,887 patent infringement lawsuits filed, which represents a 15% reduction in patent litigation in 2014 compared with 2013. Furthermore, in 7 of the 9 months during 2014 there have been fewer patent infringement lawsuits filed during 2014 than during 2013. The statistics and independent GAO report just do not support a narrative that proclaims there to be a run away problem with patent litigation run amok.

So how has such a factually baseless narrative been able to dominate the discussion? This propaganda was promoted by some of the elite Silicon Valley companies over the years, with Google leading the charge. But Google is a high-tech company. Why would they want to damage the patent system by spreading half-truths and reckless misrepresentations?


Despite what some have been led to believe, Google is a company that was founded on strong patent protection, having filed two patent applications prior to even obtaining the domain name Google.com. These patents related to Google’s proprietary page rank algorithm. The Google search algorithms, protected by patents, were how Google moved from fledgling start-up to eventually dominate the likes of Yahoo! and Microsoft. Simply stated, like virtually every other Silicon Valley start-up Google relied on the exclusive rights provided by patents and now that they are dominant they would prefer the patent system to evaporate so that the next round of dorm-room start-ups won’t be able to challenge Google in the same way that Google supplanted Yahoo! and Microsoft. The truth is Google is just one groundbreaking algorithm away from becoming old news.

Google is hardly monolithic. There are some within Google who really like patents, severely overpaying for a rather low quality Motorola patent portfolio, as well as being a top 10 patenting company in the United States. Still, Google has teams of lobbyists in Washington, DC, promoting the demise of the patent system. Unfortunately the half truths and misrepresentations about the patent system promoted by Google and others have gained mainstream acceptance.

To a large extent Apple, Microsoft and many other Silicon Valley innovators went along with the anti-patent rhetoric perfected by the Google machine because they were facing what they called a “patent troll problem.” This caused even innovation based leaders to throw in with Google and others in an attempt to vilify innovators and a patent system run amok. Such a myopic strategy risked the innovative future of these companies by putting their own patent portfolios in grave jeopardy in order to address the problems they were having with a relatively small number of truly bad actors who were clearly abusing the litigation process.

Sure, there are bad patents, but the problem with bad patents is not nearly what you have heard it to be. During 2013 there were over 571,000 patent applications filed, with nearly 288,000 patents issued. See Patent Statistics Table. Even if the United States Patent and Trademark Office is correct 99.5% of the time that would mean that 1,440 patents during 2013 were issued that shouldn’t have been issued. It is unrealistic to expect perfection in any system, particularly when there are nearly 8,500 patent examiners, who are the front line decision-makers. With that number of individual decision-makers and the volume the USPTO handles in a given year there will be some mistakes. That doesn’t mean that the system should be or needs to be scrapped. But Google and others who abhor the patent system would have the public believe that the Patent Office issues low quality patents routinely. Everyone familiar with the industry who wants to be honest will tell you that the far bigger problem is that the USPTO doesn’t issue patents that should be issued. It is extremely difficult to get patents in some areas, particularly on software technologies. That is the reality and anyone who says otherwise is simply not being honest.

Still, many of the Silicon Valley elite have for many years complained about a patent litigation explosion that doesn’t exist and a Patent Office that seems to enjoy issuing low quality patents. Neither represents reality, but the truth has been drowned out in order to forward an anti-patent agenda. But why?

The Silicon Valley elite who have been bemoaning the patent system and patent trolls succeeded beyond their wildest dreams, convincing everyone of problems that don’t exist. So successful has this misinformation campaign been that now patents owned by everyone in the high-tech sector are at least worth less, if not completely worthless, given reforms that ushered in the Patent Trial and Appeal Board and a number of truly awful patent eligibility decisions by the Supreme Court. By taking a short-sighted view of the litigation problems they were facing they took direct aim on the patent system, their own patent portfolios and the essence of their competitive advantage. Institutional shareholders in any company that has lobbied for patent weakening policies and court rulings should be appalled and may well want to seek out attorneys specializing in shareholder lawsuits. With the patent laws as they are now many patent portfolios should be written down substantially, if not nearly completely written off altogether.


With the tide overwhelmingly flowing in an anti-patent direction, many of the most identifiable companies in Silicon Valley innovators have finally split with Google and are now coming out strong for patents and American innovation. A case in point is the Partnership for American Innovation (PAI). Recently the Partnership for American Innovation (PAI), which is comprised of Apple, DuPont, Ford, GE, IBM, Microsoft and Pfizer, submitted comments responsive to a request for public information published in the Federal Register back on July 29, 2014, titled Strategy for American Innovation. Some may recall that in February 2011, President Obama released a Strategy for American Innovation, which described the importance of innovation as a driver of U.S. economic growth and prosperity, and the critical role the government plays in supporting the innovation ecosystem. It is now time to update the national innovation strategy, and the PAI has come out to explain the critical role innovation plays in the U.S. economy. Time will tell whether this pro-innovation, pro-patent organization will be able to turn public sentiment, and more importantly influence Congress.

The trouble with so-called “patent reform” efforts, both on Capitol Hill and within an increasingly political Supreme Court, is that the changes made are crippling those that innovate and need patents. At the same time the changes do not offer relief to those that are being targeted by the bad actors because the changes in the law are not designed to fix the existing litigation abuse problems. Yet, through legislative attempts and Court decisions we are dismantling the patent system. In the meantime, no one seems to be asking the critical question: what about innovation?

Why will anyone invest the extraordinary sums of money to create the innovations we want without an expectation of exclusivity that will allow for a recoupment of the investment plus a reasonable return on investment? The Truly Staggering Cost of Inventing New Drugs unveils a Forbes study finding: “The average drug developed by a major pharmaceutical company costs at least $4 billion, and it can be as much as $11 billon.” The cold reality is that no company will spend between $4 billion and $11 billion without patents. And it is pure fiction to believe that software development doesn’t follow the same economic realities. When IBM produces one of their large scale projects there will have been many hundreds of people work on the software solution or at least several years. The same is true for a new Apple operating system, or the next version of Microsoft Windows. It is pure fantasy to believe that software programs are written over a long weekend by a single person who is merely a second year engineering student. Software that is compatible, secure and actually works is rare these days and takes real development effort, which costs real sums of money.

The quickest way to get less innovation is to destroy the patent system. This should be self evident to everyone, but sadly there are many intellectually challenged individuals who refuse to believe this objective truth. If patents inhibit innovation then why don’t countries without a patent system have run away innovation? If patents get in the way of innovation why do countries with the strongest patent rights have the most innovation? If patents get in the way of technological advancement then why haven’t we seen smartphones stagnate?

The example always used is that patents inhibit innovation and the proof pointed to is the smartphone industry. Really? Talk about breathtakingly dishonest. Smartphones as we know them have existed only since late 2007. Every generation is faster, thinner, providing more battery life, with stronger screens and better cameras. There are a million apps that can be loaded to your smartphone and every new edition is so much better you have to have it compared with your now 1 year outdated model. The truth is that the smarphone industry proves beyond a shadow of a doubt that patents don’t inhibit innovation. Everyone bemoans the vast number of patent lawsuits over smartphones, which is still only about 20% of the number of patent lawsuits filed during the original telephone patent wars, but at the same time that there is this alleged patent thicket phones get better, stronger, faster and provide far more functionality. How could anyone who is at all intellectually honest believe the smartphone industry proves patents inhibit innovation. That is laughably untrue.

Of course, the anti-patent critics will look at the mountains of evidence that objectively disprove their bogus claims and the best they can do is cry about “correlation not being causation.” Allow me to translate for you: “I am going to ignore all the objective, factual and historical evidence you have and then pretend that you have no evidence. I will then proudly conclude that since you have no evidence my position, based on faulty logic, inaccuracies and misrepresentations, clearly shows I am correct and you are wrong.”

When the best a anti-patent critic can do is say “correlation is not causation” we have won the argument. They will soon excuse themselves from the debate, calling you some derogatory name on the way out. They won’t remain in the discussion because at best they are first-level thinkers who can only parrot the propaganda that they have heard second-hand. In the fact of objective reality and hard factual evidence they cannot come back with anything because they have nothing based in fact to support their arguments. Like an emperor without any clothes they prefer to remain blissfully ignorant.

Anti-patent critics are wrong, pure and simple. They are intellectually dishonest. They have been lied to by those with an agenda to destroy the patent system. Patent acquisition or licensing is not per se evil. What is evil are the actions of those that take advantage of judicial inefficiencies, employing extortion-like tactics and fear. Sadly, very little of the discussion has been about the real problem, instead the debate erroneously claims that the patent system is to blame. Bad actors are to blame and the media, public and Congress have been sold a bill of goods by those who want to destroy the patent system in the United States.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 23 Comments comments.

  1. Donald Grump October 12, 2014 12:05 pm

    stop using the term “intellectually dishonest”…. just say it like you mean it: liars… why sugarcoat it?

  2. Gene Quinn October 12, 2014 3:46 pm

    Donald Grump-

    I use the term “intellectually dishonest” instead of liars for a subtle reason. Having started my career as a litigator, and having been an attorney for closing in on 20 years, I’ve seen plenty of situations where there was not malice involved with the telling of a tale that was not true. People can and do convince themselves of things that are not true.

    The term liar carries with it a little too much baggage in most cases; in my mind carrying a malicious element. Perhaps there is malice here, perhaps there is a convenient ignorance. But whatever it is, even with the issues being nuanced with layers of complexity, what the anti-patent critics say is indeed intellectually dishonest. If they would merely inform themselves of the objective facts they would realize they are wrong. So perhaps it is most accurate to call the anti-patent forces closed mind and/or intentionally ignorant. I will, however, stick with intellectually dishonest because I do think many have convinced themselves of things that aren’t true. With critical and fair evaluation they would see the light. I’m not going to hold my breath though.

    -Gene

  3. SJE October 12, 2014 5:35 pm

    Patents are typically far more important for small and medium sized companies than for large companies. A large, established company has brand recognition, market size, established networks of business partners, and the money and lawyers. A small company may only have its patents. As a result, it is perhaps less surprising that large companies are now less keen on patents. Look at Tesla motors: only after establishing its dominance in high end electric cars, and is the basis for several other brands’ forays into the area, is it keen to offer licenses to expand the network of demand.

    None of this is novel to IP. The lord of the castle owned his land through the power of the sword, and peasants were just tenants on the land. It was a huge reform when individual peasants could own their own land, and buy and sell land.

  4. Elvir Causevic October 12, 2014 8:34 pm

    You make a series of excellent points. The conversation about “innovation” has been hijacked by groups who jave never innovated, built real products to market, and had 3rd parties willingly pay for those new products based on merit and value alone (meaning without bundling and using various forms of coercion). The role patents in innovation is grossly misrepresented. Not one company I know would publish a serious peer reviewed article or participate in a standard making body without having patent protection first. We will see a dramatic reduction in serious innovation. We will manage to stay happy and coast on innovation inertia, keeping ourselves busy with cute apps that order pizza in a clever new way, but that inertia will slow to zero – as no one serious will now publish their key stuff – they will just keep ot a trade secret.

    So much more to say about the topic, fingers cramping on an iphone.

  5. Paul Morinville October 13, 2014 1:24 am

    “But Google and others who abhor the patent system ” they don’t “abhor” it… they fear it.

  6. Benny October 13, 2014 9:37 am

    “…. It is unrealistic to expect perfection in any system, particularly when there are nearly 8,500 patent examiners, who are the front line decision-makers”

    OK, so maybe the USPTO should invest a little in an effective error correction system. How much would it cost anyone of us to invalidate one of those 1440 or so patents per annum that were granted in error?

    I’m with Donald G on the use of the term “intellectually dishonest”. Among my peers honesty – or dishonesty – doesn’t come in flavours. I would not be offended if you were to tell me that I am talking scribble instead of calling me “intellectually dishonest”.

    As for the drop in patent litigation cases – is it possible that all the “troll” publicity has frightened off the real abusers?

  7. Anon October 13, 2014 10:13 am

    Benny,

    Your own actions contradict your words here.

    Routinely I point out your errors based on your predilection of “engineering without law.” You routinely get upset even as I do not use such incendiary words as calling you a liar. You show offense even at the more polite level of discourse. Should I call you an outright liar instead, I can only imagine how much more offense you would take with my (correct, albeit polite) rejoinders.

  8. Benny October 13, 2014 10:22 am

    Anon,
    I am normally far too cynical to be offended by an attorney who lives on a different continent. I might be offended if you were to call me a liar, because that would be false, but not if you accuse me of talking nonsense – after all, this the bit where we express personal – often subjective – opinions, and you might be right where I am wrong.

  9. Gene Quinn October 13, 2014 10:49 am

    Anon-

    I don’t think Benny is even worth the time any more. He is wrong far more often than he is right, so I guess that just makes him a liar.

    -Gene

  10. Anon October 13, 2014 12:44 pm

    Gene,

    There is a lesson to be learned from Benny’s error here: you are correct in using the term intellectually dishonest, as that term covers far better the tactics used in the ongoing philosophical patent battles.

    Benny,

    Your cynicism – inaptly applied – is a part of your problem. As I have noted, your hubris is your downfall. You value your own opinion above the reasoning provided to you. Your closed mindedness is a weakness, not a strength.

  11. Inventor0875 October 13, 2014 4:48 pm

    Perhaps we need to more clearly distinguish between:

    Patent troll (bad).

    and

    Patent toll or another term (good). [For example: A payment/reward for use of a successful invention that was created out of prior speculative expenditures for research and development.]

  12. Alexa Jackson October 14, 2014 1:22 am

    You got a point. Patent plays a big role for individual inventors and for the economy. It gives inventors the right for their own ideas and innovation. If the is no patent acquisition, for sure many people would take advantage of other inventors ideas.

    For anti-patent critics, whether they like it or not, patent helps boost the economy. It ensures that businesses and individuals are encourage to create new ideas and innovation.

  13. Pro Se October 14, 2014 5:01 am

    This is the same culture who tricked all of the music labels to “ditch DRM” to make digital music sales grow. They even wrote a thesis on how MP3 piracy somehow enhances CD sales. Silicon Valley is a culture of idea theft and good-ol-boy VC influenced have and have nots.

    Not everyone is playing their game and the patent system will survive and exist even when it can no longer help Silicon Valley from protecting themselves from China (Alibaba) because they have shot themselves in the foot on parents.

  14. Tristan Parker October 14, 2014 8:03 am

    I am in total agreement with SJE about patents being more important for small and medium-sized companies than for large companies. However, every company whether small, midsized or large should not take patents for granted. Even large companies can have their ideas taken up and implemented by small companies. The only difference is that large companies aren’t labeled “patent trolls” when they go to collect.

  15. Anon2 October 14, 2014 9:54 am

    Gene:

    As always a good read.

    Your tags for this article are brilliant…funny, true, and sad all at once.

    Grump @ 1

    “intellectual dishonesty” captures everything on the spectrum from considered choice to represent the untrue as the true (conscious lying), to conscious evasion of the truth in favor of a wish (lying to oneself and others with the hope that believing in the untrue will make it true) all the way to an inadvertent form of evasion or pure emotionalism where when one is confronted with an “uncomfortable” truth one simply refuses to think at all: a total abdication of the intellect.

  16. American Cowboy October 14, 2014 10:31 am

    Peter Thiel wrote about Google being a monopoly in this article:
    http://online.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536

    He says that some monopoly is a good thing, and he seems to espouse the benefits of innovation-inspired “monopolies.” A point he does not seem to reach is the importance of patents in allowing those innovators to actually cash in on their innovations using patents before Google and its ilk walk in to steal it.

    Another example of Google’s audacity is its Google Books program, where they took the position that they could digitize copyrighted books and make them available to its profit, without paying the copyright owner.

    Won’t it be fun when the Russians or Chinese hack the Google algorithm and post it on Wikileaks.

  17. Anon October 14, 2014 11:45 am

    Well said, Anon2.

  18. Dale B. Halling October 15, 2014 11:39 am

    Gene, when people say the patent system inhibits invention ask them to run through this thought experiments. Start looking around the room and eliminate every product that was the subject of a patent or made by a patented process. All electronics are gone, the electrical system to the building is gone, the clothing made with synthetics are gone, anything mechanically woven or that used a sewing machine is gone, the steel used in the construction of the building is gone, the wood in the building was cut and planed with patented machines, so that is gone. Basically, our modern world would not exist if you eliminate all products that were subject to a patent or made with a patented process.

  19. Gene Quinn October 15, 2014 3:14 pm

    Rudy-

    I know that is the narrative that some are pushing, but it actually can’t be true. If you look at the data it is clear that there has been a downward trend in patent litigation all year long, with steep drops in January 2014 and February 2014. Alice wasn’t decided until June 2014, so as much as people may want to point to Alice it is impossible for Alice to account for the drop prior to the decision.

    Likewise, Alice played no part in the analysis by the GAO that found there to be no patent litigation explosion contrary to popular belief.

    -Gene

  20. SJE October 16, 2014 2:23 pm

    The difference between a patent troll and a pluckly little company with a good idea is often analogous to the differences between a terrorist and a freedom fighter. Sure, there are real trolls, but often it appears just to be a matter of labeling.

  21. Gene Quinn October 17, 2014 12:04 pm

    SJE-

    Did you really just say that small innovative companies are patent trolls?

    And just for the record, terrorists that kill women and children for no reason are not freedom fighters. They are monsters.

    -Gene

  22. Paul Kemp October 17, 2014 3:33 pm

    Gene
    I enjoyed the article and sympathise with the great majority of the views expressed based on factual data rather than subjective opinion. Speaking from the European side of the pond, the “problem” of trolls is almost non-existent. Trolls seem to be defined as organisations which do not innovate and use bought in IP, especially patents, to extort funds from practising undertakings. The perceived practice of trolls is to offer a licence for a sum which if paid immediately will settle the threat. The sum is set so that it is cheaper for an alleged infringer to settle than to contest the case. Failure to settle in a troll set time frame too short to investigate the veracity of the allegation means the settlement terms are increased. As a result the allegations made by trolls are perhaps rarely brought to court. Most if not all settlements will be associated with non-disclosure agreements. If this perception is correct it seems to me that the litigation stats you have presented may not be clearly indicative of the level of the troll problem to US businesses. I have had the impression that at least some US litigators and presumably trolls prefer to take on big players such as Google first, after all Google has money to extort. This can then be used to whip lesser players into line. I have no particular axe to grind in defence of Google and do not see this as reason to attack the patent system as a whole.
    From here (the UK) it seems there is not a sufficient threat of loss from costs (in the event of a defended case) and groundless threats in the US system to counter balance the potential rewards to a troll.

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