President Obama Tuesday introduced executive orders to combat the very patent trollery described in this week's This American Life, which detailed how so-called patent protectors buy up patents only to profit from lawsuits against inventors. Companies like Intellectual Ventures claim to help the little guy by paying them for ideas, which they don't know how to profit from on their own. But IV then sells the legal rights to shell companies, like Oasis Research, who use these acquisitions to sue inventors. IV has arranged the whole thing so it gets 90 percent of those profits.
To help combat this abusive practice, part of Obama's recommendations include a requirement that "patentees and applicants to disclose the 'Real Party-in-Interest.'" It took two years since the first This American Life program on patent trolling for its reporters to make the connection between Intellectual Ventures and Oasis Research, which seemingly operated together to sue the inventors IV claimed to protect. The new legislation, however, would make these company connections clear. "This tactic prevents those facing litigation from knowing the full extent of the patents that their adversaries hold when negotiating settlements, or even knowing connections between multiple trolls," explains the White House's recommendations.
This murky relationship between trolls — Intellectual Ventures and Oasis Research, in this case — is just one abuse of the U.S. patent system. Companies and individuals also file patents for broad claims to then use those to bully smaller companies into expensive lawsuits. "An idea being patented is supposed to be non-obvious to a person of ordinary skill in the art. What that means is that you shouldn't be able to get a patent for just a common sense good idea," explains This American Life's Laura Sydell. But that's not how it works in reality. "30 percent of U.S. patents are essentially for things that have already been invented," adds TAL's Alex Bloomberg. Pretty much every company, then, is violating some sort of patent, making it very easy for bigger (read: richer) companies to bully smaller companies with litigation.
Obama's recommendations attempt to improve "overall patent quality" of "patents with overly broad claims" — especially when it comes to software patents, which have seen the most abuse. "The PTO [Patent and Trademark Office] will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field." This should make it harder to patent vague software claims just to use said
Unfortunately even this promising legislation might not be enough to bring an end to the trollery. A law already exists to fight trolls — the America Invents Act, among other consumer protections — and they sit "largely unused," according to The New Yorker's Tim Wu. The laws remain unenforced, he argues, because fearful of coming out against innovation, legislators are overly cautious when pursuing anti-patent practices. "War on trolls could become a war on patent holders in general. Since the line between the two can be fuzzy, the argument is that war might deter some real invention," he writes. Obama's recommendations don't quite make that line any clearer — patent troll companies like Intellectual Ventures can still claim they are protecting inventors. But at least now it will be clear if that's really true.
This article is from the archive of our partner The Wire.
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