WHEN ordinary activities like using Wi-Fi in a coffee shop or updating smartphone apps provokes lawsuits you know something is seriously amiss with the legal system. That has been the state of play for some time in the US 鈥� but perhaps not for much longer.
Last week, US president Barack Obama announced a series of measures that he hopes will finally end the scourge of 鈥減atent trolls鈥�. Identifying these trolls may not be so easy, though.
The term patent troll is slang for a firm that buys up obvious patents that the US Patent and Trademark Office (USPTO) should never have granted in the first place. The troll then 鈥渁sserts鈥� these patents by threatening to sue businesses that infringe them. Many will then settle out of court and pay an often business-crippling licence fee.
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For instance, one troll with an obvious patent related to wireless networking sent letters demanding damages to 8000 coffee shops, retailers and hotels because they were . Another is demanding that app developers buy licences since it has patents for using apps to make purchases online. In 2011, Boston University鈥檚 law school that dealing with patent trolling cost businesses in the US $29 billion.
Obama says the cash should have been spent on generating products, services and jobs. So the White House is to force the USPTO to narrow the scope of patents within the next six months so that whole fields of endeavour cannot be trolled. Obama also wants to prevent patents being asserted against the users of technologies, like coffee shops, rather than manufacturers. The White House says trolls will have to come clean about their identity, and not hide their 鈥渁busive litigation and settlement extraction鈥� behind a thicket of shell companies.
鈥淭his is a bold step forward by President Obama, and if these legislative proposals are enacted the playing field will be levelled,鈥� says Alan Schoenbaum, general counsel for web hosting firm Rackspace of San Antonio, Texas. What鈥檚 crucial, Schoenbaum says, is that Obama鈥檚 changes ensure trolls have something to lose when they fail in court. In essence, the US legal system is unbalanced. In the UK, for instance, the loser pays. 鈥淭hat keeps frivolous lawsuits down to a minimum,鈥� he says. 鈥淏ut 鈥榣oser pays鈥� is rare in the US.鈥�
How do you identify these trolls? Plenty of ways, says Schoenbaum: 鈥淭rolls don鈥檛 invent, make or develop anything. Between 70 and 90 per cent of their patents are software or business-method patents, and in virtually all cases the patent is invalid.鈥�
聯Trolls don鈥檛 invent, make or develop anything 鈥� 70 to 90 per cent of their patents are invalid聰
But San Francisco-based, 鈥減atent buster鈥� Gregory Aharonian, who invalidates patents by finding previous inventions using the same ideas, thinks it will be tricky. 鈥淚t is going to be hard for Obama to deal with the troll definition problem,鈥� he says, mainly because some large technology firms behave like trolls when they assert overly broad or obvious patents they never exploit. 鈥淎nyone who asserts an invalid patent, under any conditions, is a troll.鈥�
The only move that will crush the troll phenomenon is vastly improved patent quality, Aharonian says. 鈥淲hat upsets people more is not the assertion tactics, but the crap being asserted.鈥�
This article appeared in print under the headline 鈥淭he president vs the trolls鈥�
