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Google, BlackBerry, Red Hat, and Earthlink submit a paper (.pdf) to the FTC and DOJ calling for...

Google, BlackBerry, Red Hat, and Earthlink submit a paper (.pdf) to the FTC and DOJ calling for actions against perceived patent trolls, arguing such firms cost U.S. companies $80B in 2011 after factoring both direct and indirect costs. To back up their stance, the companies claim suits from "patent assertion entities" have risen 4x since '05, and now account for 62% of all IP suits. The paper arrives 6 weeks after Pres. Obama criticized patent trolls, and amidst expectations of Congressional action. Companies that could be affected: RMBS, IDCC, VHC, ACTG, WILN.
Comments (11)
  • Lets not forget Vringo, a company that has been the subject of many SA articles over the last year.
    5 Apr 2013, 02:15 PM Reply Like
  • Let's see how these companies would feel if there was no one to protect their patents. How do they feel about China again??
    5 Apr 2013, 02:16 PM Reply Like
  • Yes please FTC let us steal someone's Else's  patented property by the way IRS let us pay as close zero in taxes as we can ,and protect our patents from anyone that even thinks of infringing on us after all we are some of your biggest donors president Obama
    5 Apr 2013, 02:46 PM Reply Like
  • What? no mention of the "legit' patent 'trolls' like...QCOM, IBM, ARMHY, and many, many others
    5 Apr 2013, 02:47 PM Reply Like
  • No mention of the otherwise "legit" patent trolls like...
    QCOM? IBM? AAPL? Many, many others AAPL got 1B from suing samsung. That is a huge "troll expense in just one instance
    5 Apr 2013, 02:47 PM Reply Like
  • Without giving it too much thought I can come up with a couple of ideas pretty quickly:


    An entity holding a patent and not using the patent in any way save to sue for royalties should be barred from doing so. There should also be some kind of time limit on how long a patent can be held without some kind of effort to produce something real based upon it.


    Patenting ideas and never developing or following through on them is simply counterproductive.


    I also find the recent practice of rolling up IP in external entities to protect against cross-licensing and counter-suits troubling.


    In particular for the mobile phone makers it's bad because of how significant a cost the royalties alone have become. Google and Blackberry should give us the actual dollar amount patent royalties are adding to phone prices: I suspect the number will be appalling.
    5 Apr 2013, 02:52 PM Reply Like
  • The proposed distinction between entities that use their patents themselves and those that license the use of their patents to others is nonsense. Useful inventions are useful whoever uses them in a manufacturing process.


    This is nothjing more than a hail Mary to try to get the government to pick some winners by ginning up an "undeserving" rent collector - the "troll." One "troll" is IDCC - it has never built anything, but its various creations include some of the first mobile phones, switching and connection processes and protocols which are universally in use, and numerous inventions related to base stations, machine to machine processing, data compression and other things. Their hundreds of IN HOUSE SCIENTISTS AND ENGINEERS participate and sometimes lead industry design and engineering work groups and they have almost 20,000 patents, most issued because of work they did, in their labs.


    Every defendant in patent litigation is an entity which is accused of stealing property. The patent troll litigation explosion follows on discovery by major worldwide manufacturers, led by Nokia, that simply refusing to pay and defending litigation is a way to minimize costs. A "consortium" of manufacturers convinced the US DOJ to agree that they were not engaged in anti-trust price fixing when they created a cartel to engage in price fixing by driving down licensing costs and designing litigation roadblocks for scientists attempting to enforce their patents and receive compensation for their research.


    If they don't like the licensing, they can just buy the patents, or design their own. In IBM's case, they just bought hundreds of IDCC patents for about $400 million. There are plenty more avauilable.
    5 Apr 2013, 03:41 PM Reply Like
  • Vis a vis your point on IDCC: it's clearly not just an entity erected solely to prosecute IP legislation and your very remarks prove that. The distinction between blatant trolls staffed by armies of attorneys with no intent to be productive, and IDCC's business practices is quite clear.


    Further, I disagree on your point vis a vis Nokia: even a casual observer, such as myself, of the patent wars in the mobile space will have readily noted that many patents are frequently thrown out. In fact it is often the -threat- of expensive litigation rather than the validity of a patent which has encouraged companies in the past to license versus litigate.


    For Nokia in particular, operating in a low cost emerging market space, producing devices of $100-200 and paying royalties equivalent to 10-20% or more of the products hardware cost is clearly detrimental not just to the company's ability to do business with this product, but to the very consumers wanting to purchase these products. My point here being that patent royalty costs are becoming a very large percentage of a product's price, which hurts consumers, on the hand, and hinders innovation, on the other. Many of these very patents are held not by productive competitors looking to cross license large swaths of IP, as used to be the case, but by entities specifically erected and designed to extract royalties and nothing more.


    I don't disagree in the very real need for patent protection, but I view patent trolling in its current iteration as highly regressive for technology and innovation.
    6 Apr 2013, 10:31 AM Reply Like
  • Patents are meant to provide exclusivity rights for a limited time to the inventor. This provides time for the inventor to be able to establish a production capability, a customer base and a compensation model for reasonable licensing fees should that be deemed appropriate.
    R&D firms like Arm Holdings are not manufacturers, they develop and license their technology. I don't see anyone calling them a patent troll.
    When companies in a calculated, planned manner intentionally violate patents, it should be called what it is, an "organized crime".


    The violators look at it this way. If I allow the patent holder to have the exclusivity afforded by the patent, they will, until the patent exclusivity runs out, have 100% market share and I may have trouble penetrating that market. If I violate the patent and manage to capture a significant share of the market, I know I may have to forfeit much of my profit, in a settlement, but I will have established a foothold in the market. In fact, the violator will have forced the inventor to compete against his own idea, making market share acquisition more expensive. Margin erosion alone may account for more than the settlement.
    A little watch maker opens a store. His quality timepieces find a growing market. The local thugs see a profit and want a piece of the action, he resists. The thugs put hawkers on every corner selling knock offs. He complains to the authorities and they tell him they will investigate. Meanwhile they keep on stealing his potential customers and paint him as unneighbourly, a chronic complainer, greedy and unreasonable.


    Patent Thugs need to be dealt with by a system with teeth. You can bet that if it was a big drug company whose patent was violated, it would be treated with more respect. Notice how nobody calls them trolls. Why the double standard?
    Rights protection is everybody's issue. When erosion starts where does it end? Stand up for others rights or you stand to lose your own. Remember I trolled you so.
    5 Apr 2013, 06:42 PM Reply Like
  • if they don't want patents then open all their works and investments in getting where they are and give it all away and don't charge anyone anything. Patents are protection for free enterprise. Lest we forget all companies get up set when someone uses their ideas without permission. Apple/Franklin????
    6 Apr 2013, 10:57 AM Reply Like
  • Almost all this request and call for action against perceived patent troll is about when O'Bama started to give "orders" against them and defending his "contributors" ie AAPL,GOOG ,BBRY Etc ...
    as soon as he started that talk, all patent stocks got hit ..
    And who is saying: politic don't mix with .....
    Best to all
    8 Apr 2013, 02:00 AM Reply Like
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