“While we were busy smashing our patent system, the Communist Chinese Party (CCP) strengthened theirs. As a result, a significant share of early-stage funding went to Chinese startups, and Shenzhen has now taken the Silicon Valley crown.”
Big Tech’s patent troll narrative is really just the great Big Tech smash and grab. Jean Ann Booth explains in the Waco Tribune what patent trolls are by taking Big Tech’s cartoonish characterization as her own: Patent trolls are rich investors who buy up patents from failed startups just so they can sue companies commercializing the invention in order to extort their money. Extortion – that’s what patent trolls do. And they are wrecking U.S. innovation to boot. They sure sound scary.
Patent trolls are indeed frightening. Flush with big bucks, Big Tech lobbyists pushed the patent troll narrative on Congress, the administration, and the courts, demanding that we gut U.S. patent law (the same U.S. patent law that drove over 200 years of American innovation) if we are to save American innovation. Government bureaucrats and politicians complied by smashing the U.S patent system. Now Big Tech can grab whatever technology they want.
What is a Patent Troll?
Patent trolls are certainly terrifying, but what exactly is a patent troll? Let’s start by defining its first name, “patent”. (We can skip the last name “troll” because other than being scary, it is meaningless.)
A patent is nothing but an exclusive right, the very essence of a personal property right. Like any personal property right, a patent can be collateralized to secure funding. In much the same way as the deed to your house becomes collateral to secure a mortgage, patents are collateral to attract investment in startups, especially those at a very early stage.
Collateral must be valued before anyone will invest in it. In the case of patents, investors calculate the future value of the market created by the invention, and then attribute some of that value to the patent. The patent’s value is then used to calculate how much they can invest.
If Big Tech steals patented technology, like they so often do, and then leverage their massive markets and endlessly deep pockets to saturate the market with their knockoff, they run the startup out of business.
When that happens, investors take control of the patents and are left with two options: They can sue the Big Tech company that stole the technology, or they can sell the patents to someone else who will.
In either case, the cause of litigation is that Big Tech stole the invention. The investors (who Big Tech calls Patent Trolls) are trying to get their investment back from the Big Tech thieves.
So Big Tech’s patent troll narrative is a Big Tech lie. It positions the argument backwards such that the cause of the litigation is the patent and not the theft. It does that trickery for the purpose of misinforming people with limited knowledge of patents, which include most politicians.
Fear the Patent Troll Lie
It should not surprise anyone that the patent troll lie is the well-nurtured brainchild of Big Tech. But patent trolls are not scary for the reasons Big Tech explains through Booth in the Waco Tribune.
Read any Big Tech annual report and you will see that startups with patented technologies are the biggest threat to Big Tech. The scariest part of the patent troll lie is that it attacks the very foundation of the secondary market for patent assets that drives investment into startups. If investors can’t get their investment returned, why invest in startups in the first place?
The patent troll lie has destroyed virtually every longstanding construct of patent law. Today, patents are invalidated at extreme rates in the Patent Trial and Appeal Board (PTAB) and under the unintelligible “abstract idea”. Injunctions have also been eliminated. With a startup’s ability to defend their patent rights smashed, Big Tech grabs whatever technology it wants, and they keep it.
What fools are we. Big Tech’s patent troll lie has always been a stealth vehicle to enable a massive smash and grab of America’s most valuable personal property rights for the intended purpose of eliminating the only real competition that threatens Big Tech – startups with disruptive technologies.
As scary as that is for startups and their investors, the real thing we should fear is that with no startups threatening the core technologies of Big Tech monopolies, Big Tech is untouchable and emboldened. So much so that they have the audacity to censor a sitting U.S. president and any other voices that defend him, as well as any disagreeable thought spoken on their captured markets.
Fear the Petri Dish Effect
Investors are a smart lot. They know that defending a U.S. patent is nearly impossible. So, they invest where patents can be defended in places like China. This has caused the entire swaths of disruptive technology to move to China.
The petri dish effect shows that once a new technology is seated in a region, people learn the know-how and know-not of the technology. They create new uses for it and startup new companies. Those companies get acquired or go public bringing in new capital. In just a few years, the region develops a critical mass of know-how, know-not, and capital to keep that technology localized for generations.
Since the great patent troll smash and grab, the Silicon Valley is but a shadow of its former self. Its venture capital is controlled largely by Big Tech monopolies, their executives, shareholders, and alumni. Not surprisingly, they don’t fund startups challenging the core technologies of Big Tech – it’s too risky and not in their interest either. Instead, most tech startups make phone apps and other devices that run exclusively on Big Tech’s captured markets.
Fear for U.S. National Security
While we were busy smashing our patent system, the Communist Chinese Party (CCP) strengthened theirs. As a result, a significant share of early-stage funding went to Chinese startups, and Shenzhen has now taken the Silicon Valley crown. Because of the petri dish effect, it will keep it for a generation before we can take it back.
But take it back, we must. The CCP seeks to expand their borders as they have in Hong Kong and threaten to in Taiwan, and it is challenging the world for control of shipping channels in the South China Sea and elsewhere. The CCP’s fusion of civilian and military means that they will leverage the gains in civilian technology, made possible by smashing the U.S. patent system, into their military technology and very soon, if not already, will be far ahead of us. The failure of the U.S. patent system is today a national security crisis, which can, and probably will, morph into a national security disaster.
I suspect that Washington politicians and bureaucrats will choose willful blindness for a while longer. Careers have been built on patent troll lies and acting on these lies magically creates mountains of campaign cash and lucrative promotions to lobbying firms.
We must apply substantial pressure on those politicians and bureaucrats who are willfully blind to the disaster created by the great patent troll smash and grab. And we must also support their peers who are trying to fix it. Only if the patent system is fixed can we have an open market for new ideas and free speech and take back the Silicon Valley crown from China.
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