Troll hunters: Is the US patent system 'broken'?

Fierce debate about technology patent laws was reignited at the start of 2015 as storage firms united to hit back at so-called patent trolls

The 200-year-old US patent system is broken. It is failing the inventors it set out to serve and is in desperate need of an overhaul. That is according to a number of technology vendors - including Pure Storage and Avere Systems - which have joined forces with fellow firms and industry bodies under the banner of patent reform to push for change. And what is at the heart of the patent reformers' issues with the current set-up? Trolls.

"Patent troll" is the informal name given to a non-practising entity (NPE) - a company which derives most of its revenue from patent-licensing activities. And to say they are unpopular would be an understatement.

"A troll is basically a venture capital fund which is set up purely to hold patents and not trade in products," said IP lawyer Dai Davies. "The problem with them is that the only thing they are interested in is money. They are not interested in technology. The likes of Samsung and Nokia are constantly having knockabouts and litigation between themselves but it is not difficult for them to settle it because... they do cross-licensing deals and that is how they get around it.

The problem with NPEs is that they are not interested in technology exchanges, just money. It is becoming a huge problem, especially in the US with the no-win, no-fee set-up."

He added that deals to satisfy trolls more often than not cost upwards of $250,000 (£164,810) to settle, putting huge pressure on smaller firms with limited funds.

Unlike their fairytale namesakes, trolls of the patent variety are not a rarity. According to research carried out by reform group Unified Patents (UP), in the US alone last year, 5,000 patent litigations were filed - 61 per cent of which were NPE related. High-tech firms accounted for the vast majority - 63 per cent - of the total patent lawsuits filed as well as a whopping 86.2 per cent of the claims related to trolls.

Storage vendor Avere Systems' co-founder and chief technology officer Mike Kazar said the way the current patent system works means that patent trolls can grab a monopoly on huge slices of the market for relatively little effort.

"For example, [in a patent application], an inventor might describe how to build a nuclear-powered car by describing how to build a fission reactor and then how to connect the steam turbine of the reactor to a car's transmission," he explained.

"The invention would work, but of course, it's completely useless - it would weigh 20 tons, and also irradiate the driver. No one, of course, would ever build one.
"But once you've described this single invention [in a patent file] you could write up a much broader claim covering any automobile with a power source utilising nuclear reactions. If you filed first, your claim would be accepted, even though the invention you described is worse than useless.

"Now imagine you invent a device that weighs five pounds and produces power via some novel nuclear process that produces heat, but no radiation. With this gadget, you can actually build a useful nuclear-powered car, like the DeLorean in Back To The Future. Unfortunately, your invention infringes upon the first patent, since your invention is "an automobile with a power source utilising nuclear reactions". This means that the first inventor can sue to prevent you building your DeLorean, even though you did the inventive work of building a small, safe reactor."

According to fledging flash firm Pure Storage's chief executive Scott Dietzen, this demonstrates that the system is rotten to the core. The firm kicked off 2015 by publishing a blog on the patent system, branding it "broken and ineffective".
"It's an innovation tax," he told CRN. "The NPEs are basically taking dollars in many cases where there is no material justification to do so and it is just such a nuisance.

"They are trying to extract money from innovators and at the end of the day it is a zero-sum game because the innovation that could be happening may not get funded because these dollars go to NPEs. That is not in anyone in the industry's interest; it is only in the interest of NPEs."

Fighting back

The first US patent was granted in 1790 to inventor Samuel Hopkins for a process of making potash, an ingredient used in fertiliser. In 2013 alone, 610,000 patents were applied for in total in the US, with 51 per cent of them gaining approval. The number of applications has rocketed in the past 15 years - in 1999, just 290,000 patent bids were submitted, fewer than half 2013's figure.

The soaring interest in getting inventions patented has fuelled the fire, Pure Storage added.

"If you fast-forward, seven million [patents will be granted] in the next 20 years," said Joe FitzGerald, the company's vice president of legal. "We are facing this wall of IP. We've [suggested] the idea of ‘use it or lose it' - if you have a patent, there is a reason you were given it. You've been given a monopoly and that is a very powerful grant given by the government, so that has to come with responsibility."

Pure also calls on the US government to slash the amount of time patents are valid from 20 years to just five, in order to reflect the rapid pace of change in the digital era.

But such fundamental changes to the patent system are not felt necessary by those across the industry. In an anonymous web comment left on a ChannelWeb story about Pure's new-year patent-reform blog post, one user said retaining a robust system in its current form was essential.

"Do you know how to make a Stradivarius violin? Neither does anyone else," they said. "Why? There was no protection for creations in his day so he,
like everyone else, protected them by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of or weaken patent rights? Think again.

"For 200 years the patent system has not only fuelled the American economy, but the world's. If we weaken the patent system, we force inventors like Stradivarius underground and in turn weaken our economy and job creation. For a robust and stable economy America depends on a strong patent system."

The weird and wonderful world of the US patent system

■ The cheese freeze: In 1948, inventors Lawrence Little and Gerald North were granted a patent for a method of freezing cottage cheese in order to "overcome the objectionably chalky, mealy and crumbly texture".

■ A sight for sore eyes: Inventor John Rose wanted to put an end to people misplacing their glasses with his bizarre 2003 invention. His idea involved attaching frameless glasses to studs pierced through the top of the user's nose and outer-eye area to prevent them getting lost.

■ Feline active: In 1995, Kevin Amiss and Martin Abbot got their patent granted for a method of exercising cats. The idea involved directing a laser beam at the floor or wall "in a fascinating way" to encourage a cat to chase it and therefore get some exercise.

■ Feeling flush: Also in 1995, Gregory Smith and Edward Rhead patented their toilet flush handle cover idea which was designed to prevent
men leaving the toilet seat up by covering the flush until the seat was lowered. The idea was designed to "provide considerate positioning of the seat of the toilet... for subsequent female users".

■ Snack attack: Leonid Kofman came up with the perfect solution for hungry businesspeople in 2003 with his patented edible business card invention. The card was made from edible materials and printed with edible inks.