It seems that every day we learn of a patent-holding company suing deep-pocketed companies over alleged infringements. I link to two recent examples, here and here. The second link reports that Immersion believes that Apple used its haptic feedback technology in the latest iPhones. Many, if not most, infringement suits are brought by companies who have purchased patents but do not use them. In the vernacular, the firms are “patent trolls.”
Such suits are at least a nuisance to the likes of Apple. On occasion, they result in rather large payouts, should they be decided by sympathetic, if not also ignorant, judges and juries. A favored venue is the U.S. District Court for East Texas, which has, more often than not, sided with the trolls and against defendants.
There is no question that patent trolls harm the economy, as detailed in the linked Wikipedia article. Among other negative impacts, many defendant firms reduce research and development investments to pay for legal costs.
One partial remedy would insist that those holding patents use the pertinent technology or lose the patent. Europe requires losers of infringement cases to pay the legal costs of the winner, deterring unfounded or frivolous lawsuits. Another proposal, as covered in the Wikipedia article, is to require more specificity and clarity in the original patent application. Software, in particular, is “inherently conceptual,” and thus more susceptible to allegations of infringement.
I, for one, fail to see the societal benefit of trolling. It’s certainly unproductive. Then, again, so are most of the jobs on Wall Street.