Patent trolls in Europe: a burning issue right now?

Forgive the use of "patent troll" in this post -- it is not meant here as a term of abuse or as a term of art, but rather as a loose term to cover the sort of patent owner who has earned the attention of critics and legislators in the United States for seeking to enforce patents that the owner does not itself use, in circumstances that attract their moral opprobrium and outrage.

Speaking at the Extraordinary General Assembly of MAPPING yesterday (on which see this and subsequent posts on the IPKat), it was my task to introduce a discussion of the role of intellectual property in Europe, within the context of internet governance, privacy, online security and surveillance. I mentioned various issues in my 45 minute talk, mainly but not exclusively relating to copyright and trade marks, but also patents in the context of Amazon's controversial one-click online shopping patent.

During the subsequent discussion I was taken to task for not mentioning the threat of patent trolls. My feeling was at the time, and still is, that while the phenomenon has manifested itself to a large extent in the United States, where the homogeneity of the domestic market and the existence of a single patent to cover it, as well as the infrastructure of federal patent litigation, make troll-based business models which are both attractive and lucrative, the current legal, cultural and economic infrastructure is more fragmented and makes it less easy for such business models to succeed. I also believe that, to the extent that trolling depends on the making of unwarranted demands of licence payments on pain of bringing an infringement action, remedies already exist at national level which address this sort of behaviour.

It is easy for someone who is a regular commentator, public speaker and alleged thought-leader to lead himself to believe that what he says is right and that everyone agrees with him, so this blogger thought he'd ask readers of this blog what they think. Does the patchwork of pan-European and national law in Europe, together with its still-divided nature, make the continent a less-than-fertile territory for patent trolling, or is this view outdated or just completely untenable? Do let him know!

White House Announces Array Of Programs To Fight Trolls, Improve Patent Quality

In his State of the Union address last month, President Obama promised further action to improve the U.S. patent system, stating (to significant applause) that the government should "pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation."  While more than a dozen patent-related bills percolate in the Congress, Obama has taken some steps to advance his goals through executive actions.

On February 20, the White House announced a series of programs to combat the patent troll problem and to improved the quality of patents generally. Three new programs were announced: (1) new procedures to allow examiner to take advantage of "crowd-sourced" prior art by making it easier for members of the public to bring prior art to the attention of the office; (2) better training for examiners in areas of rapidly-advancing technology; and (3) expanding the USPTO's patent pro bono initiative to cover low-income inventors in all 50 states.

The Whites House also reported on its progress on initiatives announced earlier.

• The USPTO has proposed a new rules requiring patentees to report the "attributable owners" of patents, making it harder for trolls to operate anonymously through shell companies. Those rules are in the public comment stage.
• A better training program for USPTO examiners, focusing on improving claims; 
• A new "toolkit" on the USPTO website proving small businesses with advice on what to do if sued by a patent troll. You can access a beta version of that toolkit HERE.
• Better outreach to stakeholders and expanding the Edison Scholars program to enlist more academics and researchers to study the NPE problem. 
• New procedures relating to enforcing exclusion orders from the ITC.

You can download a detailed Factsheet about these efforts from the White House website HERE. Although these steps seem incremental, and largely symbolic, they do suggest an effort to keep some momentum behind legislative patent reform efforts.

Is there a market route to anti-troll protection?

Infoworld carries a post on how membership-based patent aggregator RPX is positioning itself as an effective weapon against "nefarious non-practicing entities", by which it means patent trolls. Characterised as a "defensive patent aggregator" RPX's primary goal is said to be the protection of companies from litigation against a product or service that is already in the market. Ideally, the patents will also cover products and services offered by multiple companies. The idea is that:

"Once RPX gains ownership of a patent, it takes the patent off the market, thereby reducing an existing product's susceptibility to patent trolls. RPX also allows member companies to license the patents RPX owns. As part of the contractual agreement between RPX and members, a provision states that RPX will not assert or litigate patents it acquires".

Focused almost exclusively in the IT field, including software, e-commerce, mobile communications, networking, and consumer electronics devices, RPX seeks initially to buy $100 million in patents each year, raising the cash through membership fees (US$35,000 to US$5 million, depending on the size of the company).

Bilski: an end to patent trolls?

In "US court blocks Amazon-style patent trolls", The Register reports on Re Bilski and Warsaw, a controversial decision (full text here) in which the United States Court of Appeals for the Federal Circuit upheld an earlier decision by the US Patent Office to reject a patent application for a method of hedging risks in commodities trading. The 9-3 decision rejects the court's own earlier State Street Bank ruling of what can be patented. Instead, it favours earlier Supreme Court guideline that maintains a stricter, two-pronged standard. IP auctioneers Ocean Tomo have sought to assuage fears that business method patents are no longer valid in the US, but The Register's view is one that is widely held in commercial rather than technical legal circles.