One of the more picturesque characters occupying the contemporary business ethics landscape is the "patent troll."
The term, attributed to former Intel Corp. lawyer Peter Detkin, refers to firms who own patents they never intend to develop. Instead, they snoop around for potential infringers and demand licensing fees.
The term "patent trolls" is used because these firms (or their lawyers) can suddenly pop up like ugly monsters from the misty thickets of technology licensing and demand money.
The problem is not in the fact that the inventor doesn't market the product himself. Patents are mainly intended to encourage innovation, or as the US Constitution puts it, "to promote the progress of science and useful arts."
This intention is satisfied even if the inventor isn't personally involved in manufacturing and selling his invention. Innovation is encouraged when an inventor can get paid for his invention, whether this payment is through profits from marketing the invention itself or from licensing or selling the patent.
But a true "troll" who is trying to capture unwitting infringers only stifles innovation.
The troll business plan is based on the assumption that other firms will independently make the same invention, not knowing that the "troll" was there first. Thus it doesn't help others who are venturing out into the dense forest of unknown technology, but rather harms them by suddenly leaping out of the shadows and demanding ransom.
Some big firms are seeking various kinds of legal reforms to protect against the "troll" phenomenon. I'm skeptical about these reforms, for two reasons.
The first is that existing law already incorporates many protections against "true" trolls. If a firm does nothing to promote its patent, it may be limiting the protection it can claim in a suit. The court may decide that they were negligent in defending their rights or even waived them. And it's not really easy to make a patent application that will escape a diligent patent search, which competing innovating companies are bound to carry out.
The second reason is that the myth of the wicked little "troll" lying in wait for the heroic large-scale innovator and slapping a big firm with a multi-million dollar nuisance suit has a flip side, the "patent ogre."
This is my term for the bullying gigantic firm which treads on the patents of small investors and threatens them with huge legal bills if they dare to try and enforce their patents. In some cases, the "troll" is really a kind of Robin Hood defending the weak against those who abuse their power. In many cases, large firms either know of the "troll" patents or could easily find them.
A true "troll," who takes out a patent for the sole purpose of stifling innovation by intimidating others who own nothing to the "troll's" invention, is certainly acting in bad faith. Large firms are justified in using all their legal resources to demonstrate that they will not be blackmailed by these tactics.
But the same hardball tactics that can be used legitimately to discourage the bad-faith actions of "trolls" can be used to discourage the good-faith actions of genuine inventors who find themselves intimidated in trying to defend their rights against technology giants with huge legal staffs and deep pockets. I find it hard to believe that the law right now is stacked in favor of the little guy, and so I don't see any compelling reason to alter the legal balance of power.
Ultimately, the patent system will fulfill its intended function if all the players act in good faith, using the legal system as a tool to defend their investments in innovation and not as a weapon to extort undeserved benefit from the innovations of others.
The writer is research director at the Business Ethics Center of Jerusalem (www.besr.org), an independent institute in The Jerusalem College of Technology. He also is a rabbi.
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