Tuesday, July 16, 2013

For Whom The Bell Trolls

Public concern over "patent trolls" or "patent pirates" - more bloodlessly termed "non-practicing entities" ("NPEs") or "patent assertion entities" ("PAEs") - has reached a fevered pitch.  Companies whose business is to acquire patent rights from others, and then to sue (or threaten to sue) companies that produce goods or services, are now firmly in the sights of the United States federal government.  On July 16, 2013, the New York Times published an article entitled "Inventive, at Least in Court," by writer Edward Wyatt, that chronicles the new legal scrutiny into patent trolls.  As the article points out,
[t]he explosion in lawsuits [many apparently filed by patent trolls] has prompted not only the F.T.C. but other parts of the government — notably the White House — to question whether the activity of patent trolls violates antitrust law or fair competition regulations.
Courts may be the first to determine whether or not the activities of patent trolls - especially those with the most massive patent portfolios - violate the law.  Whatever courts may decide under current law, it may not be long before new laws are passed to curb patent trolling.  Our understanding of the costs and benefits of the patent system remains rudimentary.  Until we better grasp the social utility of patents, knowing how best to regulate NPEs will be mere surmise.