Posted by Sequel on March 24, 2014
Topic: Patents
Tags: Intellectual Ventures, Patent Trolls, Regulations
Patent Trolls Like Intellectual Ventures Must Be More Closely Regulated, But How?

Patent trolls are the bane of the existence of American industry. These companies and individuals shop around for patents and patent portfolios to acquire for the sole purpose of using litigation and the threat of litigation to monetize their underlying ideas. They have no interest in the utility, social value or commercial viability of the underlying intellectual property.

Essentially, a patent troll gambles that even if a patent it owns has few if any real applications and therefore is of dubious commercial value, it will be able to squeeze settlements out of those it accuses of infringement.

One of the largest and most egregious examples of this behavior is Intellectual Ventures, a Bellevue, WA based firm that boasts a portfolio of some 70,000 patents it has acquired during its 14 years in business. It has realized $3 billion in patent licensing fees, but has passed on to the inventors behind the patents just $500 million.

Last year, IV began filing its own lawsuits. Previous to that, they set up a dummy corporation, assigned the patent(s) to the new company and then sued on behalf of the shell. This was a mere legal fiction, of course; the benefits of the suit ultimately went to IV and its shareholders.

This behavior jeopardizes the value and public perception of intellectual property protection. This, in turn, is clearly damaging to American industry both at home and abroad. It is difficult to see any social good being performed by companies like IV but regulating them is a challenge. To find a way to do so without unnecessarily handicapping inventors who can’t afford to monetize their inventions directly will be tricky waters indeed.

But unless Congress can find a way to deal with this scourge, patent protection will fall into greater and greater misuse and disrepute. It behooves the lawmakers to at least begin looking into this issue with greater depth and purpose.

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