Google’s Recent $900 Bid for Nortel’s Patents May be Inspired by Patent Trolls

By Joseph Mandour on July 1, 2011

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San Diego – Companies and individuals who have become known as “patent trolls” exploit the civil justice system by purchasing patents for the sole purpose of filing potentially lucrative patent infringement cases against companies alleged to be infringing on the patent at issue.

These trolls are no trifling matter as indicated by the recent announcement of Google’s opening bid of $900 million for the acquisition of the late Nortel’s 6,000 tech patents. According to the President of the American Tort Reform Association, Tiger Joyce, Google’s bid for these patents is part of an effort to shield itself from the increasingly strong troll offensive. With companies like Google pumping millions of dollars into protective efforts against patent trolls instead of funding their own growth and innovative pursuits, it is clear that these trolls are disrupting, and potentially preventing, the productivity that we depend on to help resuscitate the economy.

While virtuous companies and individuals should be ensured protection from infringement, it is vital that we identify and preclude brazen trolls from squandering the intended purposes of patent protection as well as prevent the resulting impediment they put on the economic recovery. Despite a provision in Section 18 of the proposed patent reform bill allowing the USPTO to re-examine business method patents disputed in court (the most frequently litigated type of patent) and potentially reduce the amount of “entrolled” cases, the threat of patent trolls would still persist. With billions of dollars litigated in patent cases annually, vigilance against the trolls themselves is a must.

Vice President of Hewlett-Packard Intellectual Property Licensing, Joe Beyers, suggests that the first step is to differentiate trolls from legitimate businesses by creating a standard definition of patent trolls. It would also be prudent of the courts to establish requisites for filing an infringement suit other than simply owning a patent and claiming infringement. For example, filing an infringement suit could require that the company or individual actually offer the products or services described in the patent, i.e. actually “practice” the patent. In taking these steps, lawmakers and industry heads could restructure patent law and business practices in such a way that patent trolls will no longer be able to unnecessarily burden legitimate businesses and the courts.

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Posted in: Patent Registration