"Patent trolls" - are they "good" or "bad"? As with many things, the view and lines are blurring, and the answer often depends on one's position in the world. The WSJ includes a new article on how some big patent holders are embracing patent litigation (troll behavior) in one form or another. Techniques include creating "licensing co." to own intellectual property rights and file lawsuits.
Now, Corporate Counsel is publicizing a study said to justify the conclusion that patent trolls generated "loss" of $ 80 billion. On the other hand, the study was tartly attacked in the July 9, 2012 Chicago Daily Law Bulletin in an article by Jerry Crimmins. The story includes the following excerpts:
"But two Chicago lawyers, Paul K. Vickrey and Robert P. Greenspoon, said this new study is financed by big business and is heavily biased
"The Direct Costs from NPE Disputes" is the title of the study by professors James E. Bessen and Michael J. Meurer of Boston University School of Law.
Greenspoon and Vickrey said "patent trolls" is a purely pejorative term. They also said the study states it is "supported by funds from the Coalition for Patent Fairness."
Greenspoon, of Flachsbart & Greenspoon LLC, called this a group of "primarily large tech companies whose stated aim is … to weaken the patent system" and "make it more difficult to pursue infringement claims against the members."
(The coalition's website says its members include "Adobe, Apple, Cisco, Dell, Google, Intel, Intuit, Micron, Oracle, RIM, SAP and Symant.")
Vickrey and Greenspoon said the study admits much of its data comes from a company called RPX, whose stated goal is to buy up patents for its paying members and to resist NPE litigation.
"This study is ridiculously biased," said Vickrey, of Niro, Haller & Niro.
One of his own clients, Greenspoon said, is a publicly traded NPE whose business model is to license patents for inventors.
"They do give a share of their recoveries back to the original patent holder," he said.
For such an NPE to protect patents, "litigation has to be a tool in the tool box, or else you have no credibility as a licensing agency," Greenspoon said.
Greenspoon also said NPEs are vital in the overall American market for patents held by technology startup companies. Those patents hold value to investors because investors know NPEs will buy the patents if the startup business fails, Greenspoon said.
Vickrey said "many of our inventor clients either don't have the resources or don't have the business model to commercialize their own inventions" through licensing. Small inventors turn to NPEs for this, he said
Many NPEs, Vickrey said, "are structured in such a way as to directly compensate the inventors named in the patent."
When NPEs defend patents through litigation, Vickrey said, on the opposing side are sometimes manufacturers that are "serial (patent) infringers who don't innovate but just build a business model of copying" someone else's invention without paying for the rights."