It will only take a minute to read this short post where I discuss my experience with patent trolls (which I define as non-operating companies that use patents they have acquired to threaten and extract compensation from entrepreneurs who are building companies). Please also take a minute to tell the White House what you think about patent trolls and patent reform. That link is at the end of this post. Thanks!
My colleagues and I recently hosted a dinner with about 25 CEOs in the tech industry. Our featured speaker was my Congressman Joe Kennedy III (MA 4th District), so we spent much of our time talking about how the Federal Government can help entrepreneurs and others in the innovation economy.
We discussed all of the predictable topics: immigration reform, education, etc.
We also had several CEOs speak up on the issue of patent reform, specifically how to stop patent trolls from destroying value in young companies. Everyone at the dinner agrees that patents are essential to building a strong innovation economy - in fact most of our tech & life science clients license patented technology from universities or corporations to start their companies and then continue to develop technology and file their own patents once their companies are up and running.
The patent system is valuable, but it is being abused by patent trolls who leverage it by acquiring patents and then using them to shut down innovation by extracting compensation out of startups who are working on technology for purposes other than the patent that the trolls holds.
I work with hundreds of companies, and while I’ve seen many cases where a patent troll has pursued one of my clients, I have never seen a case where the patent in question has been relevant (after all, our clients hire very expensive IP attorneys to make sure they have freedom to operate before they even go to market). I have not seen even one of these cases decided in court, but the process is so frustrating and so threatening to the value of the entrepreneurial company (the operating company that is employing people and building value in the economy!) that some kind of out of court settlement is often reached to make the patent troll “go away”.
Our intellectual property system in the USA is the best in the world at protecting innovators and fostering innovation, but it was not designed for trolls to be able to hijack it and use it for their own anti-innovation, value-destroying purposes. The good news is that the Federal Government is starting to see that changes are needed and is asking for your feedback. Please take a minute and provide that feedback to the White House here.