Just saying the term in certain circles evokes a collective cringe.
"Patent trolls," or non-practicing entities who hold onto patents solely for the purpose of suing anyone who dares to create something that even slightly violates them, take advantage of what many agree is a broken patent system. They not only stifle innovation; they sit back and profit off the roadblocks to innovation that they created.
And they’re successful. In 2011, patent trolls cost the U.S. economy an estimated $29 billion, according to Boston University researchers. If that number sounds alarming, consider that a previous study also conducted by BU academics estimated the total cost of patent troll litigation and fees since 1990 at $500 billion.
It’s one of the most frustrating parts of the modern-day business world, made even more depressing because it's long seemed like it wasn't going to change.The typical legal activists, such as the Electronic Frontier Foundation, have spoken out for years, calling for change to the patent system. For whatever reason, these efforts have largely fallen short.
But some new hope has emerged as the result of a particularly bold new patent troll lawsuit.
Personal Audio, a company that has not sold a product in 15 years, filed for Patent 8,112,504 B2 in February 2012. Then, in January 2013, the company filed suit against the creators of popular podcasts the Adam Carolla Show and Stuff You Should Know, claiming that the creation of podcasts violates Personal Audio’s patent. On this premise, Personal Audio could theoretically force anyone runnning a podcast to pay them for the right to do so. It’s a shakedown, plain and simple.
The podcasters do have the option to fight, but, as this Boing Boing article explains very well, most podcasters lack the money to cover even the legal fees, let alone the payments they’ll likely be required make as a result of the ruling:
The podcasters that get these letters have 3 options.
1. Ignore the letters and hope for the best.
2. Contact the troll and agree to pay a license fee for the patent (even though the podcasters don't use the technology covered by the patent).
3. Fight the troll in court.
Well actually there is a 4th option -- shut down the podcast and delete all files and hope they go away. But even if podcasters do that the patent trolls could still try to extort money retroactively. But at least podcasters would not be out more money. Sadly many may choose this option.
Regarding option 3: If someone does fight the troll and wins - all that means is the winner does not have to pay the license fee to the patent troll. However the "winner" is still out all the lawyers [sic] fees they spent to fight a bogus patent.
But Personal Audio, whose 15-year patent troll career includes an $8 million win against Apple in 2011, seems to have set off a chain of events that could arm businesses for the fight against patent trolls.
The main advantage of the patent troll is the legal process itself. When faced with a lawsuit claiming patent infringement, the accused entity tends to settle with the patent holder just to make the problem go away. Sure, they could go to court, but nothing guarantees they’ll win, and even if they do, they will spend potentially years and millions of dollars just to clear their names. In the meantime, their competitors will have edged them out, and the fight will have actually been a detriment, regardless of the ruling.
But the situation is showing signs of change. A combination of federal support, legislation, and media hype may help level the playing field and create a more productive legal discourse in the patent system.
Just this week, Congress re-introduced the Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act of 2013 [PDF], a bi-partisan effort that aims to force patent trolls to reimburse the defendant for all legal fees pertaining to the case they brought against them. The bill even specifies that the ruling will not apply to an original inventor of a product who seeks reimbursement from a patent violator. That means companies that grab patents for technology that was long ago invented (i.e. patenting the podcasting process in 2012, which has existed in its modern form since at least 2004, and has its roots in the 1980s) will have to pay the legal fees for the companies they accuse of infringement. It makes for a slightly fairer fight.
Helping matters are the politics – or lackthereof – around the bill. Stopping patent trolls is a pretty clear-cut economic move - businesses want to make products and create jobs, and patent trolls stand in the way. Therefore, it's a pretty safe cause for a politician to take on. Not only was the bill introduced by both Republicans and Democrats - Congressmen Peter DeFazio (D-OR) and Jason Chaffetz (R-UT) - but the problem was addressed by President Barack Obama in his recent Google+ Hangout.
Of course, the bill still has a long way to go before it’s made law, and could very well get shelved in the process. But the EFF, whose efforts have been ramped up in light of the introduction of the bill, aren’t the only ones championing the cause. The podcasting community has started spreading awareness, informing its listenership of not only the threat against their favorite shows, but also the unfairness of the general patent system. Public radio host Jesse Thorn has been ranting about the issue before his 27,000+ Twitter followers quite consistently lately. And he's been retweeted by Marc Maron, host of the massively popular WTF Podcast who boasts more than 200,000 followers himself, and stands to lose a lot in the Personal Audio case.
Then consider that podcasting has evolved into a widely used medium for promotion for actors, musicians, writers, and the like. Maron’s show boasts a quite impressive list of celebrities, many of whom would lose another channel to promote their work if podcasting were to lose the legal battle. And that’s where the support will come from. All it takes is one mention from Louis CK or The Black Keys to get people to make an effort. Just wait until it gets to Buzzfeed.
They did it with SOPA, and if this movement sees even half the recognition of SOPA it could achieve its goal. Not only that, but this movement entails asking Congress to act on a bill that has already been introduced - a much easier task than demanding members of Congress shut down a bill that benefits those who fund their campaigns.
Admittedly, that all may overly optimistic. But if enough people bug Congress to take action on a politically neutral and economically beneficial issue, Congress generally listens. It was just last month that Obama signed a law that aimed to help track down Joseph Kony, the leader of Africa’s Lord’s Resistance Army, even after the group supporting the cause was criticized for suspicious distribution of funds and its co-founder was detained by police for drunkenly masturbating in public.
It's a long way to go, but it's finally a good sign for the patent system. In the past, the rhetoric around patent trolls has included big-name companies like Apple or RIM, which can afford to pay patent trolls enough to make the problem go away. But Personal Audio's fight against podcasters aims to take money from people who can't afford to pay them and stay on the air. And these people happen to have droves of passionate fans and new legislation that neutralizes their most powerful weapon.
Finally, a patent troll's greed has gotten the better of them, and it could spur some effective action on the economy as a whole.
Information on how to help the EFF change the patent system is available here.