Problem Child: The Third-Grade Approach to Patent Owners

By Gene Quinn
March 27, 2015

Alone in the darkWhen you really look at the facts and underlying dynamics of patents and patent litigation, there really isn’t much of a problem at all. There is litigation mischief in some cases, but that goes both ways.

Overall what you see in the hard, factual data is not at all surprising. There really is no patent troll problem at all, and despite what many charge, the quality of the patents asserted by non-practicing entities is quite high, at least if you remove from consideration patents asserted by independent inventors. In fact, non-independent inventor non-practicing entities (NPEs) have an outcome profile that is significantly better than that of operating companies. See Myth #1 in Probing 10 Patent Troll Myths – A Fractured Fairytale Part 2.

But is there a problem? Yes. There are certainly a few bad actors out there that leverage judicial inefficiencies and abuse the litigation process, but is that a patent or patent system problem? No. We could abolish patents tomorrow and those that abuse the litigation system to extort money will move on to the next scheme to monetize the lethargic, protracted and tedious litigation process.

The litigation abuse that is witnessed in the patent arena probably does rise to the level of patent misuse, or at the very least vexatious litigation brought with careless disregard to the truth. But we have laws on the books to handle that kind of litigation misconduct, which is exactly what it is — litigation misconduct. To try and sweep an entire class of patent owners together in a pile in order to address the few, easily identifiable miscreants is just plain stupid. And we all know, or should know, it to be stupid.

We all knew that it was wrong when we were in third grade and the teacher punished everyone because one or two kids didn’t follow the rules. So why isn’t it equally self evident that it is just plain nuts to take an entire industry out behind the woodshed because of a handful of delinquents? What was so obvious to us back in third grade seems to be lost on at least some.

Punishing everyone for the actions of an easily identifiable few is an abuse of power. The difference is when Sister Mary did it we lost a few minutes of play or had to sit quietly and watch seconds tick off the clock. Today the overlords who want to stamp out abuse risk destroying the engine of the American economy. If you haven’t noticed manufacturing jobs have gone. All we have left, by and large, is innovation. Are we going to kill that too? We’ve shipped manufacturing to Asia and thanks to decade of poor patent law and policy decisions we are on the cusp of shipping intellectual property and innovation to Europe. It is time to wake up and realize that exaggerated discipline that castigates the overwhelming number of good actors is ill advised and unwise.

[Patent-Litigation]

Perhaps those who want to punish all patent owners, weaken all patent rights and fundamentally alter the patent system as we know it didn’t learn the same lessons in grade school because they were the “problem child” (to quote AC/DC) that led to us all losing recess. Or maybe they were that clueless third-grade teacher who just didn’t have the sense or patience to figure out who the problem children really were. Let’s just punish everyone darn it!

Today we do have the ability to clearly identify the bad actors. District Courts have plenty of authority to stomp out those that abuse the system. This has always been true, but now in the wake of the Supreme Court giving trial Judges greater discretion to award attorneys fees there is little doubt that there are plenty of tools at the disposal of Judges who don’t want to allow their courtrooms to become center stage for a litigation shakedown.

The truth is that there is no problem with the patent system. The patents in the software space that are too broad issued more than 12 or 14 years ago. The Patent Office long ago clamped down on bad software patents, so the justifiable ire for these bad patents is a relic of what transpired at the Patent Office well over a decade ago. Thus, to claim that the Patent Office today is the problem because they issue bad patents is ridiculous. It shows a lack of understanding of the issues and ignores the reality that today the Patent Office has clamped down so tight in certain Art Units that they routinely reject patent claims that really should issue. The problem today with the Patent Office is likely more that they issue too few patents in the software space.

Litigation abuse is a problem, but that does not mean that there is a problem with the patent system or patents. Certain nefarious bad actors use a patent as part of a shakedown to force defendants to settle for pennies on the dollar or pay hundreds of thousands of dollars (at a minimum) to mount a defense. But is that a problem with the patent system? No, absolutely not! The problem is with using the sloth of the judicial system to force settlements.

You might say that if you were sued with a bogus lawsuit you would defend, but it only costs a few hundred dollars to institute a federal lawsuit, so the bad actors can ask for $10,000 or $20,000 and still make a great return. If you don’t pay and seek legal representation, you will almost certainly be required to provide a retainer deposit that is at least $50,000, likely much more. So what do you do? Many choose to settle, including the corporate elites that have the money to fight. But all settling does is paint a target on their back so others now know that they are easy prey. And the cycle repeats.

We don’t need sweeping new laws or speeches from the Rose Garden.  What we need to do is identify bad actors and punish them directly, specifically, and without negative consequences for those who do not abuse the system. Without a targeted approach we run the risk of making the cure worse than the disease, which happens all too frequently thanks to the law of unintended consequences.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. 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 7 Comments comments.

  1. angry dude March 27, 2015 10:30 am

    Gene,

    What’s your problem with independent inventor’s patents ?
    Did you do the study ?
    I say independent inventors’ patents on average should be of better quality than the majority of corporate patents on various insignificant improvements to their products (most of them are)
    Mine is of the highest quality (as I was told years ago by Ocean Tomo experts and other people) and I have same Ms and Phd degrees from same top US universities where those Silicon Valley “corporate inventors” studied
    I just don’t work for Google or another big tech corp and never will
    I am a toxic asset now – thanks to US Patent system

  2. Gene Quinn March 27, 2015 10:38 am

    angry dude-

    If you follow the link provided you would see that I did not do the study.

    I can hypothesize though. In my experience independent inventors frequently obtain extremely weak patents. As a group they are extremely cost sensitive and frequently go for the low bid, paying near bargain basement prices. They will sometimes convince themselves that they can get the same quality patent applications written for $1,200 as they could for $12,000, which is ridiculous. Many other independent inventors represent themselves and while they get claims they will always get far more narrow claims than could otherwise be obtained. Still other independent inventors brag about the fact that the attorney or agent they hired got the patent on the first action. They say that as if it is a good thing, which of course it is not. The reason you get a patent on the first office action is because you asked for claims so narrow that the examiner could say yes, which means you left claim scope on the table.

    There are a variety of reasons why patents owned by independent inventors as a group likely aren’t as strong as patents obtained by others. That, of course, doesn’t mean that all patents owned by independent inventors are low quality. In some cases, for example when you work for a sophisticated independent inventor or entrepreneur, the patent quality is higher because they understand the law and business, but most importantly they understand that getting a worthwhile property right takes time and costs money.

    -Gene

  3. angry dude March 27, 2015 11:07 am

    Gene,

    Patents are about describing new and unobvious inventions first, and claims – only second.
    The fact that someone gets narrow claims does not make his patent “bad” or “bogus” – it just makes it less enforceable. Plus claims can be added later if needed.
    I spent more than 20K on US patent (that included paying 4K to my patent attorney for personal interview in Wash DC – he had 2 more interviews that day)
    The patent issued after 1st office action (2d action was allowance notice) AND personal face-to-face interview with examiner
    During that personal interview I successfully fought all independent claim rejections in the 1st office action AND added 12 more claims (to bring the total number to 62 claims, 9 of them independent, the printed patent itself is like 35 pages single spaced)
    You call it a weak patent ?
    Claim-wise I got exactly what I deserved
    Property-wise I got nothing
    If you start saying that this is because I didn’t understand business side and didn’t have a strategy I will call bs on you
    How can you have any strategy if patent laws can be reversed 180 degrees in just a few years ?

  4. Anon March 27, 2015 11:47 am

    Patents are about describing new and unobvious inventions first, and claims – only second.

    Absolutely wrong.

    Why is it so seemingly difficult to understand that patent law seeks – that must seek – a balance?

    How many times do I see the canard that the patent system must favor “the public” over the inventor, or other similar non-balanced positions?

    That being said, I do recognize that perhaps that is not the intended message of angry dude, who clearly carries with him a deep sense of hurt and betrayal that colors all of his posts.

  5. angry dude March 27, 2015 12:08 pm

    Anon,

    Of course it is a wrong statement as far as patent law goes

    But I’ve seen actually pretty good patents from Silicon Valley companies with ridiculously narrow independent claims: e.g. “a filterbank of 500 bandpass filters” as part of independent claim

    – looks like they got tired of figting examiner on some stupid obviouness rejection over combination of 2 or 3 references
    and narrowed the scope to get the allowance. Those patents are still listed on their corporate balance sheets and they are pretty good technically, just not worth much as far as enforcement goes

  6. Martin Snyder March 30, 2015 2:31 pm

    Check your comments in “the patent system hangs in the balance” and square them up with today’s musing. IBM is a bad actor here on a 17 year old junk patent in the first degree. Yes, they should be punished.

  7. Gene Quinn March 31, 2015 8:43 am

    Martin-

    You do realize I did not write “the patent system hangs in the balance,” correct?

    You are entitled to believe IBM is a bad actor. I do not share your opinion and nothing I wrote in this article contradicts what I have written or said previously.

    -Gene