Patent Law

As a follow-up to my August 15, 2008 post titled, "Venali Wins Summary Judgment Motion Against Catch Curve Over Alleged AudioFax Patent Infringement," Jackie Hutter of the IP Asset Maximizer Blog writes:

I came across this TechDirt article: Exposing The Patent Troll Playbook... And How To (Almost) Beat It (h/t Ron Carson, VP of Marketing at Innovation Asset Group). This is an insider's account of what it is like to be the victim of a so-called "patent troll". Perhaps better than the article itself are the comments which make it clear how passionate people are about the topic of patent trolls. This is recommended reading, if just for the entertainment value of the comments.

Reading the TechDirt article made me recall my time as a junior litigator at a well-known Atlanta law firm. As a very green (and tired) young attorney, I sent many "licensing offer letters" for the AudioFax Company. In this role, I was an enabler of a very successful patent troll. And, as set out in this post, I have continued to enable patent trolls throughout my more than 13 years as a patent attorney and intellectual property business strategist.

There is no doubt that AudioFax meets the definition of "patent troll". For example, AudioFax never made or sold a product covered by its patents. Its revenue stream resulted only from the licensing fees obtained from its patents. The AudioFax patents have been licensed to over 30 companies including Cisco, AT & T and 3Com. Reportedly, AudioFax made millions from its licensing program, which is likely more than its founder would have made from actually selling fax products.

As used in the press, the term "patent troll" is clearly pejorative: they are lurking to attack the unsuspecting good guys who are trying to get across the bridge to do their business. In this context, the activities of patent trolls must necessarily be bad for business. The argument here is that a company that is actually making a technology or product should win out against a patent holder that does not seek to sell that same product or technology to the public. In this scenario, companies like AudioFax should be punished for having the foresight to protect their good ideas and enforcing their patent rights against companies that came up with those ideas at a later date and seek to commercialize those ideas.

But taking this contention to its logical extension, any person or entity that does not immediately plan to introduce a product or technology into the market should not be able to fully enforce its patent rights against someone who does seek to bring that idea to market. This group (which accurately reflects my client base over the years) would include universities, entrepreneurs with good ideas but limited means and any company that seeks to protect its R & D investment from its competitors through patents. Obviously, this is an absurd result.

Read the full post here.