Patent Trolls in Public

Guest post by James Bessen, Boston University School of Law and Berkman Center for Internet and Society, Harvard, and Michael J. Meurer, Boston University School of Law

As Congress considers the SHIELD Act, it is helpful to review some of the empirical evidence on the economics Patent Assertion Entities (PAEs). Following up on Colleen Chien’s recent post (Patent Trolls by the Numbers), this post looks briefly at data on the 10 publicly listed firms that were predominantly in the patent assertion business during the period from 2005 to 2010 (Acacia, Asure, Interdigital, Mosaid, Network-1, OPTi, Rambus, Tessera, Virnetx, and Wi-Lan). These companies accounted for about one sixth of all PAE lawsuits filed during this period. Although these companies might not represent the entire universe of PAEs, the greater amount of available financial information helps paint a rich picture of their business. We explored three questions:

1. How much licensing revenue do PAEs get per company sued?

We matched these patent trolls to the lawsuits filed listed in Patent Freedom’s database of patent trolls (see our paper The Private and Social Costs of Patent Trolls for details on this database and the matching). During the period from 2005 through 2010, licensing revenues totaled nearly $6 billion. The mean licensing revenue per defendant comes to $3.8 million in 2010 dollars. This figure includes licensing revenues from non-litigated patent assertions. But it understates the magnitude of licensing revenues per suit because it does not account for accruals — much of the revenue from lawsuits filed in 2010 was not collected in 2010 (and there were many more lawsuits in 2010 than in earlier years). Overall, this figure corresponds rather well with survey-based estimates in our paper The Direct Costs of NPE Disputes.

2. How does revenue vary with PAE business model?

We identified three different types of business models: “middlemen” who acquire or license patents from third party inventors (e.g., Acacia), “R&D-based” who conduct R&D and file their own patents (e.g., Rambus), and “salvage” where an operating company becomes a PAE using patents it developed for its own business (e.g., Asure / Forgent). The R&D-based PAEs file fewer lawsuits, but their licensing revenues are much greater. The R&D-based PAEs account for only 6% of the lawsuits, but 83% of the revenues, earning $54 million per defendant. The “middlemen” file 80% of the lawsuits, but earn only $0.7 million per defendant. These wide disparities correspond to other evidence about the high heterogeneity of PAEs and licensing outcomes.

3. How much of the licensing revenue flows to inventors?

Using the firm’s 10-K reports, we estimated the flows of funds to third party inventors as royalties and as patent acquisitions, as well as the flows to PAE’s own R&D departments including capitalized development costs when the PAE exited an operating business. Of the total licensing revenues earned, only 7% flowed to third party inventors. If we look at just the “middlemen” PAEs, 31% of the licensing revenues flow to third party inventors. If we include own R&D in the whole sample of PAEs, total flows to inventors of all types come to 26% of licensing revenues. These numbers suggest that on the whole, not much of the revenue received by publicly listed PAEs ends up supporting independent inventors. They also suggest that most of the licensing revenues are consumed as transaction cost, even for the “middlemen” PAEs.

 

James Bessen is a former software innovator and an economist studying innovation; Michael J. Meurer is an economist and law professor. Bessen and Meurer wrote Patent Failure, an economic analysis of the performance of the US patent system in 2008 (Princeton University Press).

203 thoughts on “Patent Trolls in Public

  1. LOL

    Um, sure, I guess if you attach some importance to the “reply to self” aspect…

    Not sure what that would be, but I am sure you can think of something odd and completely out of place.

    Now the title I would really like to have is the APPEAL EVERYTHING (TM) title.

  2. MM, as a result of antitrust settlements, IBM is required to license its patents. It will do so for specified royalty rates on individual patents, as a portfolio license with a defined field, and will accept a license back of your portfolio as consideration. With cross licenses, it demands a balancing payment.

    It approaches everyone that engages in manufacturing in any field it does business and has patents. One cannot avoid IBM. The costs it imposes on market entrants with small portfolios to cross license can be relatively high, crippling in nature. In this way, the IBM cross license is a market barrier.

    It approachs one in the same market space with the assumption that you need a license. It basis its royalty demands on various criteria, but mostly related to the size of their pile versus the size of your pile in the same field.

    If you balk, only then will they actually give you notices of infringements. At times, the patents asserted are inconsequential, at best.

    If you still balk, they will sue. But the way they pursue litigation is the problem. They spend like crazy, and do things like continually keep your key executives and technical folks involved in depositions and productions like you cannot believe. I was personally aware of litigation with a company we acquired who, because of the litigation, fell behind the market in producing new products and had to seek a savior. Expensive does not even come close.

    The above is not the way a patent holder who, like Apple, is trying to prevent competition using techonology pioneered by the patent holder. Apple sues to protect its product business.

    The above is not the way a patent licensing company operates. They look for infringement first.

    IBM operates on the assumption that it owns the sandbox and you need to pay a price to play in it. If you do not pay, they will sue and make you rue the day that you didn't. Their approach is very similar to the way any mafia organization demands protection money.

  3. I would hope that most who pay attention to these issues and respect Patently-O for its product over the years would be disppaointed to see the site post this “guest post.” Most know they are compensated for their “research.” Heck, they admitted it themselves. For example, in “THE PRIVATE AND SOCIAL COSTS OF PATENT TROLLS” published in 2011, Bessen and Muerer include the following note of appreciation: “Thanks to Colleen Chien, Dennis Crouch and Michael Risch for comments. Thanks to research assistance from Tim Layton, data from Patent Freedom and some support from the Coalition for Patent Fairness. A version of this working paper will be published in Regulation.” In addition to thanking this site’s moderator and others, they admit to “some support” from Cisco, Dell, Blackberry, Verizon, and other members of the CPF. What is “some support” and, if it was a financial payment, at what point does “some support” permit the readers of this site to question the authors’ independence? Thanks.
    link to bu.edu

  4. Ya stolen I filed 12 patents with 30 inventions worth 35 billion dollers and couldent find investors to hire patent preparers to complete the patents so they fell into default and there giving out patents on all my IP now. They need to make that 3 year due diligence provision into a assuming adaquate funding. Indegence should never be an excuse to comit fraud in order to enrichen the already rich its just another example of genuine heinious injustice in the system needing corection and compensation

  5. The danger of academic papers – such as the one here above – is that they are purporting to be scholarly works

    What is “non-scholarly” about the paper above?

    For example, say you were a new hill staffer and wanted to get up to speed on the patent debates. You google search ‘ mercexchange v ebay amicus briefs’ – it points to this blog as a source of that information. When you click to this blog – you only get the ebay amicus briefs (we need weak patent rights) – and ZERO amicus briefs for Mercexchange (we need strong patent rights).

    “BOO HOO HOOO HOOOHOOO!!!!!!! Dennis has a popular blog and it doesn’t express my viewpoint in the way that I want!!!!! STOP PICKING ON MERCEXCHANGE!!!!!!!”

  6. Ned: If a big company uses its size and wealth and sheer ability to litigate you into a black hole rather than the merits of its patents to obtain licensing revenue, then I think that is wrong.

    if you’ve ever been on the receiving end of IBM you understand what I am saying.

    I really do not believe that Malcolm fully understands how IBM operates. They are not like Apple at all.

    Ned, could you be a little more specific? You seem to be asserting (with inuendo) that IBM’s licensing arm has been going around for years threatening mass numbers of small businesses left and right with frivolous patent lawsuits involving patents that are unrelated to IBM’s products or business interests (other than the licensing/settlement fees). That’s what the PAE’s are doing.

    Can you provide some evidence of this? If not, can you provide at least some instances where IBM went around asserting a bunch of j-nk patents unrelated to their own products against a substantial portion of an industry or a large number of joined defendants, including small businesses? This is what the PAE’s are doing.

  7. “Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk.” Utter stuff and nonsense

    I didn’t ask for you to repeat what you originally said, EG. Give us an example of the “utter nonsense.”

    The title says it all

    Really? The title sounds exactly like what patent t–b-ggers like you tell us every time a law or decision is passed that finds a patent invalid or ineligible.

  8. There appears to be too much of a hurtle for filing a lawsuit which has hurt the small inventor

    It’s pretty easy and not very expensive to file a lawsuit, actually. I’ll file one for you today. Let me see your patent.

    we must lower the costs to file a lawsuit to help the small inventor.

    Again, I’ll file it for you and I won’t charge you. We can split the difference after we win. Just let me see the patent. It’s not worth doing if your patent st-nks. Of course, if you just want to troll, that’s another story. You should sell it some entity that does nothing but troll. I would suggest hurrying up, in that case.

  9. The lonely little anon is going to post something in reply to your post. And if you don’t post something in reply to his post with about 5-10 minutes, he’s going to post something in reply to himself.

    He really wants that title!!

  10. “NWPA said in reply to NWPA…”

    and

    “anon said in reply to anon…”

    You two are battling mightily for the title of “most replies to self.” Good luck to both of you.

  11. Ive been advocating the end of cash payment to noninventors if they cant produce invention regularly they are not inventors the only way bank drafts should offer lump sum payments is where IP startup from more of the inventors inventions is occuring and only to fund those projects cash is dangerious and ive don everything to eliminate it so far. I just had many setbacks in bought off legislators new provisions in reform they eliminated previous invention clusters to prove inventorship very disgusting.We could have had perfection in the new legislation but the degree of pagan regression is astounding the listen for 25 years or more if the normal holds true.

  12. “Really just a matter of whether or not I care enough to spend the time to write it.”

    Maybe you could spend less time blathering here and more time preparing your complaint to the Stanford faculty senate.

  13. as much consideration as they would give one of those e-mails from an exiled Nigerian prince.

    I don’t know about you, but those electronic letters addressed directly to me are intercepted and destroyed and I never see them.

    ps: APPEAL EVERYTHING(TM)

  14. We’ll see. Really just a matter of whether or not I care enough to spend the time to write it. It appears there isn’t going to be any pay out from you.

  15. Not really. You’re posturing and I’m calling you on your b–llsh-t. You and I both know that the faculty senate will give your complaint about as much consideration as they would give one of those e-mails from an exiled Nigerian prince. But if you want to consider this a call of your bluff, please do go ahead with your complaint(s) so we can all have a laugh.

  16. Inviting, if you've ever been on the receiving end of IBM you understand what I am saying.

    Regarding a lawyer with a patent, it is alleged that some offer licenses at a royalty rate substantially less than the cost of litigation. If there's a pattern of this, then I would agree that what the lawyers doing is using the high costs of litigation rather than the merits of the patent in order to enrich himself.

    All this argues is that we need to look at reducing the cost of patent litigation. Inter partes review is one such effort.

  17. “…and I am serious when I say that I may start filing complaints with the faculty senates of the universities.”

    No you’re not.

  18. I believe the thing with Rambus is their questionable involvement in certain Standard Setting Organizations and patents that just happen to read on the specs produced by said SSOs.

    Joe

  19. The $1500 level frauds come to me and get up in my face and some times threaten violence and rarely purpertrate it to obtain the conception under duress. The industrial goons pay the blood money with a prosecution understanding that creates the $1500 hitman in case the frauds are discovered like here for example then swarms start forming from the woodwork with no police protection evident with neglegent cops

  20. And, I would add this: I am really just socked and appalled that I even have to argue this. It would seem to me that any paper that is published in a law journal should have to uphold the highest standards of scholarship. I should feel safe reading the article that this is time well spent. Maybe an opinion but due respect given to the other side and no omissions or factual misrepresentations.

    I am really —socked and appalled—that this is even an issue with a journal like Stanford Law Review and I am serious when I say that I may start filing complaints with the faculty senates of the universities.

  21. And, I would point out in response to Dennis that the cost to me the reader is that I cannot trust a writing as being scholarly and so I don’t read it because I don’t want to take the enormous amount of time it takes to sort out fact from fiction from omission.

  22. I agree 100%!! And, I think that the law journals should police themselves. I wonder if the science professors are aware of this problem with their law school.

  23. The investors just want to horse trade them up to astronomical profits and leave the true conciever pennyless there should be a provision that 15%is retained for a future profit partnership by the end user after sales reach high levels where 10 million yearly profits are exceeded and a prorated share when less than that down to 0% in the companies infancy thats the way I do it. The group of top marketable inventions that I produce is worth it in business sucess odds and aditional inventions free in case of unsucess or low sucess makes a superior investment

  24. MM–

    Once again, you can whine all you want–the real problem is invalid or overly-broadly-construed claims.

    Every patentee has met their burden of disclosure, which is what the public gets in the quid pro quo. In return they are currently given the right to exclude–and whether, and how, they choose to exercise that right is up to them.

    You are troubled by the fact that the managers in the government aren’t doing a good job at extracting value in the quid pro quo because, especially in the so-called “software arts”, they aren’t adding to the body of human knowledge that already exists in society, in particular among infringers–that is, in granting patent rights, the PTO is getting nothing in return for society that society didn’t already have.

    Society, as personified by infringers, therefore gets all the burden (exposure to liability), but none of the benefit (disclosures are either old, obvious, almost infinitesimally narrow, or all the above).

    This is indeed an unfortunate imbalance, for which we have the PTO and the courts to thank.

    Which brings me to Ned–

    Patentees are, as you suggest, empowered–property rights + sufficient funds to effect those rights = power to exclude. I am, however, at a loss to understand how the lawful exercise of those rights could legitimately be characterized as an “abuse” of power.

    It is not the lawful use of the power that is the problem, it is the power itself. Take away or minimize the property rights in the above equation, and the power either disappears or is minimized.

    By twice referring to “the merits of patents”, you seem to express concern about the same basic issue as does Mooney–patent quality.

  25. Some folks are getting paid directly to state a position (that’s what lawyers do)

    I completely disagree with the message that may be received from this comment.

    Equating lawyers (who have ethical duties, including, but not limited to, acknowledging controlling law) with bloggers who specialize in spin and misrepresentation is a clear error.

    I would LOVE nothing more than to be able to debate – on the merits – and without having to deconstruct the purposeful misrepresentations. I have long stated that the number one quality problem is quite in fact that debate is just not possible when the other side refuses to acknowledge vlaid points made, actual controlling law and positions that invalidate given agendas. The c_rrp-ignore-runaway-and-post-again-syndrome is the problem.

  26. Ya Robert this whole PAE thing started with muthvold observing my website but not wishing to consult even though I must make you money or I dont want payment. He instead took the normal route thats now shutting down the patent system becaues of the money these investors should owe me for my first invention conception profits that they dont want to pay. So they buy up a bunch of weak in most cases subinvention from my partent conceptions and dont return to the correct source for parent conception because I was burnt. Muthvold bought a bunch of trash originally but I hear he is doing better lately but I dont want to get into that poor odds group because I wasent involved originally to guide it away from poor investments.

  27. Ya robert I am the only inventor I know who has a system that offers a partial guarantee to patent purchasers reguarding overpayments but we cant accept underpayments which is all there willing to offer so so far its a no sale because there unfamiliar with the programs we offer and there improved odds of investment sucess see my website at http://www.inventingconsultantcreator.net

  28. Ask and you shall received, Malcolm. The “posture child” your point (1) is Bessen’s book (co-authored with Meurer) entitled,”Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk.” Utter stuff and nonsense, written by economics and academics having no understanding of the U.S. patent system and blindly accepted by the popular media (see Timothy B. Lee’s July 16, 2008 book review). The title says it all with respect to your point (2) (as well as Lee’s blindly accepting July 16, 2008 book review).

  29. They should put a provision in the new legislation that repeat wilful infringing should eliminate the company from the present ownership under a bandit clause and the owners be banded from further companys ownership

  30.  Malcolm, I think the problem  is abuse of power.    If a big company uses its size and wealth and sheer ability to litigate you into a black hole rather than the merits of its patents to obtain licensing revenue, then I think that is wrong.  If a small firm composed mainly of lawyers imposes settlement fees on people due to the sheer cost of litigation regardless of the merits of their patents, this too is an abuse of power.  Both large and small engage in this exercise, but the large entities pretend to be innocent when they are not.

     
     
     

  31. There’s nothing “right” about Big corp, unless you’re European and you only distinguish between fascism and communism. I prefer the American scale of totalitarianism versus freedom.

  32. Anybody who has interviewed a PR firm to address a policy issue knows that – internet communication – choirs – paid blog posters, etc – are part of the pitch to ‘shape the debate.’ The danger of academic papers – such as the one here above – is that they are purporting to be scholarly works – and therefore a credible/reliable source of fact and law – and policy implications. This is course is part of the PR plan – and these ‘scholarly works’ result in point cites like ‘patent stifle innovation’ in an amicus brief to scotus. And that is the danger.

    Indeed, the PR paid shaping of the policy debate, is both active and passive aggressive like the paid blog posting, the funding of scholarly studies and more subtile as well. For example, say you were a new hill staffer and wanted to get up to speed on the patent debates. You google search ‘ mercexchange v ebay amicus briefs’ – it points to this blog as a source of that information. When you click to this blog – you only get the ebay amicus briefs (we need weak patent rights) – and ZERO amicus briefs for Mercexchange (we need strong patent rights).

    Dennis, can you give answer to why that is the case?? Is that intentional or something google has done with its search results?

  33. Anybody who has interviewed a PR firm to address a policy issue knows that – internet communication – choirs – paid blog posters, etc – are part of the pitch to ‘shape the debate.’ The danger of academic papers – such as the one here above – is that they are purporting to be scholarly works – and therefore a credible/reliable source of fact and law – and policy implications. This is course is part of the PR plan – and these ‘scholarly works’ result in point cites like ‘patent stifle innovation’ in an amicus brief to scotus. And that is the danger.

    Indeed, the PR paid shaping of the policy debate, is both active and passive aggressive like the paid blog posting, the funding of scholarly studies and more subtile as well. For example, say you were a new hill staffer and wanted to get up to speed on the patent debates. You google search ‘ mercexchange v ebay amicus briefs’ – it points to this blog as a source of that information. When you click to this blog – you only get the ebay amicus briefs (we need weak patent rights) – and ZERO amicus briefs for Mercexchange (we need strong patent rights).

    Dennis, can you give answer to why that is the case?? Is that intentional or something google has done with its search results?

  34. Ya Robert its a huge consperacy going back 182 years and encompasing everything from A to Z. Since my great great grandfathers invention of fire and metal. No beginning in 1829-30 with the murders of the worlds only inventors George Roberts and his wife to steal the invention of the carriage and all his previous inventions. Then in 1869 Isiah Roberts and his wife were murdered by the edison carnegee tag team for his inventions. and in 1853 Delbert Roberts and if he had a wife were murdered for the estate and refusing to produce inventions. Then with me the grandson its been produce or your dead and the blockage of patent issue by the patent office for 59 years now encompasing some top 10000 invention conceptions or more. Thats why I asked congress for security provisions in new legislations but no dice

  35. PS: You sound all TEA party with this “equal rights” and “equal application of the law” stuff. That’s so passe. All the cool kids know that might makes right.

  36. More guys like you need to get into this battle, because you all are about to lose your ability to recover anything at all.

    Small inventors are a large part of my practice (and the most enjoyable part). You are definitely not alone.

    If you can’t force a company to the table under threat of suit, then why should they care? Today, there are no settlements because there’s no downside to a large corporate infringer to wait it out and see if the small inventor can get them into court. Most don’t/can’t because of the cost. It really takes a special kind of dunce to think that companies don’t know this and won’t use it.

  37. So, an individual inventor doesn’t have much leverage and we should strengthen the patent system to help the individual inventors.

    The other patents were all a result of R&D, so I guess that is a good indication we have a strong and healthy patent system.

    The percentages seemed pretty high to me compared with other types of returns: 31%? That is shabby? Are you kidding? Does the 31% include paid employees and the structure that was built to help the inventors invent? The overhead?

    So, I think we can take from this study that the patent system is healthy and adapting to help individual inventors. There appears to be too much of a hurtle for filing a lawsuit which has hurt the small inventor–the central core and essential people–that we need. Therefore, we must lower the costs to file a lawsuit to help the small inventor.

    Thank you for such enlightening insights into the problems with our patent system. Please proceed and put your efforts into lowering the costs of filing a lawsuit.

  38. BTW, why should property rights vary according to who owns them?

    Lady Justice welcomes you to the club.

  39. I’ve never heard of a master inventor having his/her patents stolen. Often they are assigned to a company as a condition of employment (that has every right to sell or license them), or they are purchased from the inventor by a PAE, or a contingency deal is struck. And yes, sometimes the value of a patent is highly uncertain and people do get underpaid at times, but there are PAEs who have also overpaid relative to their ability to enforce and collect license fees.

  40. I’m an independent inventor and have engaged the services of a “middleman” troll. As the comment says, 100% of zero is zero. My take comes in right around 30%, which is way more than I would have received otherwise (I’m sure of this because I tried). And this is based on fair license fees of the patents only to corporations.

    BTW, why should property rights vary according to who owns them? If a PAE owns a patent, they bought it from someone, right? So whether they share license fees or pay up front, it’s now theirs. Why should they be penalized for owning a property vs. the prior owner, who (if an independent inventor) may have full rights to enforce without the stigma, but who typically doesn’t have the funds for legal fees.

    ONE MORE THING: IF YOU WANT TO KNOW WHERE THE MONEY GOES, 33-40% OF LICENSE INCOME GOES TO THE LAWYERS WHO REPRESENT THE PAE FIRMS SINCE THEY, TOO, WORK ON A CONTINGENCY BASIS. This isn’t a criticism of these lawyers (they deserve it in my view), just a comment on the cost of the legal system.

  41. Sorry, MM; there continues to be no “us.”

    You. Are. Alone.

    And; likely given your claim to be some type of practicing professional in the IP/patent field with more time to comment than time for any clients and/or for an employer; being paid for to post your foolishness.

  42. If you say “No doubt. ,” then why did you ask the question?

    What about when “the public” is informed?

    LOL – please move the goalposts back.

    Thanks.

  43. “all of this” is the attack on the patent system by both the Right (Big Corp) and the Left (Academia).

    Just like I said long ago.

    Just like Dr. Noonan posted.

    It appears that Dr. Noonan too, has English as a second language.

  44. you should understand that IBM does not patent just inventions that are in its products but quite a bit more

    I do understand that and I’ve acknowledged this in nearly ever comment to you on this topic.

    is quite common today for big businesses who do not otherwise have a licensing business to sell patents to the extent that they have patents on discontinued products or businesses. To me this is quite legitimate.

    No doubt about that either. That behavior also does not qualify one as a PAE. Let’s say I want to get into the business of selling X. Big Business stopped selling X because it wasn’t profitable. They have a patent. So sell it to me. That’s awesome.

    Less awesome if the only reason I want the patent is to sue somebody else. Get it?

    IBM does essentially what the others do, yet the others are PAEs

    IBM doesn’t fit the definition of a PAE because IBM does much, much more than a PAE. Are some of those things just as bad or worse than what a PAE does? Probably. Maybe do something about it besides complaining about a definition that is actually quite broad and covers a lot of territory worth studying and learning about.

    they are the Lord’s gift to humanity

    IBM? I certainly don’t think so. But you don’t have to look far to find people who believe that PAE’s are the greatest thing since sliced bread. To hear the patent t–baggers tell the story, without armies of lawyers hiding behind shell companies and wielding hundreds of patents it’s impossible for this country’s great “individual inventors” to earn a living sueing other people like they used to in the good old days.

    According to their mythology, PAE’s were not the product of greedy lawyers thinking about a way to exploit weaknesses in the patent system for maximum wealth. Shush now! That never happens! No, PAE’s were simply an organic collective response to the inability of these “little guys” to get the courts to do anything about the rampant theft of their awesome novel, non-obvious and enabled concepts by evil giant corporations who would slam the door on them and destroy their lives if their “true identities” were revealed. And anyone can see that right now is the most innovative time ever in the history of the country. That’s just a happy coincidence. But it does mean that pound-for-pound there’s more stealing of proprietary non-obvious computerized methods of providing information to people than ever before … People actually believe this story. At least, they behave as if they do.

  45. Uninformed decisions need not be made by a mob.

    No doubt. Uninformed decisions can be made by individuals, including judges, when those individuals minds are fossilized and/or the individuals simply do not want to listen to reason (e.g., because the individuals are primarily motivated by a religious belief or some other irrational abstraction).

    What about when “the public” is informed? Is there an “extremely good reason” for not allowing that opinion to become binding? Is there an uncrossable chasm between the public’s informed opinion and the informed opinion of, say, Congress, the President or the Supreme Court?

  46. LOL, while technically true, we both know that I have boxed Ned Heller into such an admission.

    Hey, it’s your blog, and if you want to close your eyes to the obvious, that is your prerogative.

    C’est la vie.

  47. Uninformed decisions need not be made by a mob.

    Seriously, Malcolm, where are you trying to go with these lame questions?

  48. No Ianae decreasing the settlement judgements doesent make for a more efficient economy because lack of the ability of the inventor to monitize their patents means no reinvestment money for new patents to continue human advancement. The patrollers arent going to take the suit without significant reward just like the inventors wont either. These thiefs called infringers had to be brought to court for any settlement. Good patents proving their worth is great but in most instances significant new parent conceptions are concieved by me so there paying the wrong entity raising the necessity of retrial to represent the intrests of the true conciever.These individules claiming invention wont be able to repeat there feat unless they find another one of my conceptions stolen or accidently devulged

  49. 101: a job posting here several weeks ago included supervising paid blog posters. It was some place in D.C. area for anti software patents.

    Essentially, from the job posting, it sounds like there are policy lists and talking points on all the issues that are debated here. So, there are definitely paid bloggers on here.

  50. But it makes sense now why certain commenters often spin the law and rarely if ever follow up on questions or respond to points raised that show their positions as incorrect and inaccurate.

    It’s even more insidious when such perpetrators try to employ a Crybaby’s Veto in the name of having a conversation they never intended to have in the first place.

  51. Ned,

    Your facts simply do not fit into Malcolm’s spin.

    This is nothing new, and you would recognize this if you did not have such blinders on to your own agendas (I still chuckle at your calling 6 Einstein merely because he agreed with your viewpoint).

  52. MM, you should understand that IBM does not patent just inventions that are in its products but quite a bit more, and assert patents not to protect its own products but the make money off its patents.

    Then we have so-called patent assertion entities that conduct R&D and forward license the technology to others for their benefit. They also sue people who do not take out licenses, and I think this is necessary to protect the R&D business. But this is not what IBM does at all. IBM cannot be considered a forward licensing company.

    Then we have so-called patent assertion entities that assert the patents of failed startups to protect the investments of their owners and investors. IBM views its licensing program as funding R&D. To this extent there licensing program is legitimate. But let's not kid ourselves that IBM is protecting its product business.

    For example, is quite common today for big businesses who do not otherwise have a licensing business to sell patents to the extent that they have patents on discontinued products or businesses. To me this is quite legitimate.

    Clearly, most of the above can be justified under the patent laws and are pro-R&D and therefore are pro-advancement of the useful arts. But IBM does essentially what the others do, yet the others are PAEs and they are the Lord's gift to humanity, according to their own propaganda.

  53. Your permission is not needed

    LOL – yes, you do not need my permission to w_@nk.

    but likewise, I don’t need your permission to hand your head back to you when you attempt to pass off your w_@nking as actual law.

    Your head, sir.

  54. If you just want to w_@nk, then by all menas, have your “court of public opinion.”

    Your permission is not needed. That was my point. Let it sink in, anon. I know it’s hard for you. Your referee whistle is so shiny and your mommy polishes it for you every day so it must mean something. And it does, to you anyway.

    Last I checked, such does not have binding decisions for some extremely good reasons.

    Please identify two such “extremely good reasons” that the “court of public opinion” isn’t binding. I don’t doubt that you know of one. I would like to see you articulate two of them, just to confirm my suspicions about you. Go ahead. Just let us know two of the reasons that, in your view, are “extremely good.” Thanks.

  55. Once the inventor gets started with selling patents then he wont need to consider selling rights for the chart rates he can fund projects himself and partnership with others or not if they want all the money and to leave him nothing then he can work them for the cheapest wages possible and throw them away like spent trash as they did to him previously.

  56. IBM then can neatly avoid the PAE label because it owns a separate business that sells products, that business operating under a license from its licensing business?

    It’s not “avoiding the label”, Ned. You have it backwards. The purpose of the term is to focus discussion on a particular kind of patent troll. Any definition is going to include some entities and exclude others. By having a clear definition, a lot of time is saved responding to the usual screechers.

    How the frack is that different from a company that licenses patents where the licensee makes products?

    If the company that licenses the patent doesn’t make any of its own products, it’s completely different.

    Think about this way, Ned: I’m sure that you will acknowledge a difference between a rich —hole who never had to do an honest day’s work in his life and who spends all his time complaining about “lazy American thieves”, versus a rich —hole who worked his butt off to build a business and who requires his employees to assign their inventions to the company. They’re both rich —holes. But they aren’t going to be treated the same way by the public and they shouldn’t be.

    IBM wants its cake and eats it too. They are the biggist hypocrits in patent law to the extent they are behind the Shield Act while exempting themselves from its application.

    I don’t necessarily disagree with you. But IBM does not fit the definition of a PAE and it’s difficult to argue that they should be treated identically to a PAE under the law.

  57. “Some folks are getting paid directly to state a position (that’s what lawyers do) and others reach their conclusions in different way.”

    Wow, so I guess it’s true after all. NWPA, and anon have been right all along. There are paid bloggers here in Patently O.

    I personally did not want to believe it.

    But it makes sense now why certain commenters often spin the law and rarely if ever follow up on questions or respond to points raised that show their positions as incorrect and inaccurate.

    None the less I still think it is important to follow up and challenge any assertions that are contrary to case law, particularly the Supreme Court, and the statute.

    Otherwise the blog would be over run with a one sided paid point of view, and in effect be one big infomercial for a particular lobby’s interest.

  58. no doubt there are some leftovers with 102/103 issues. Most of those are clearing out now though. All of the bad ones (ones with serious 102/103 issues) that I’ve seen lately have been on the verge of expiration.

  59. Wrong again. Loser pays ends contingent litigation for all but the LARGEST claims. You can’t have a 3mil downside unless you’re 100% winning (impossible), so your upsides have to be 50mil+. Congrats, you’ve completely ended independent inventors and smaller contingent claims.

  60. MM, IBM then can neatly avoid the PAE label because it owns a separate business that sells products, that business operating under a license from its licensing business? How the frack is that different from a company that licenses patents where the licensee makes products?

    There is something fundamentally wrong here with out definitions. We are elevating labels over reality.

    Make no mistake, IBM wants its cake and eats it too. They are the biggist hypocrits in patent law to the extent they are behind the Shield Act while exempting themselves from its application.

  61. Only if you ask to have your head handed back to you.

    I have already explained this to you.

    And yes, I do respond on point.

    Thanks.

  62. And for the record I’ll note that the above authors, as well as Chen and Lemley and others, are far less intransigent and much more “willing to understand” than the patent t–bagger base who are most threatened by them.

    LOL – prove it.

  63. but it doesn’t apply to public discussion of the merits

    LOL – If you want to talk law, talk law.
    But if you just want to w_@nk, then by all menas, have your “court of public opinion.” Last I checked, such does not have binding decisions for some extremely good reasons.

    If you have another term for such patents

    LOL – well, there you go agin, misunderstanding the difference between FACT and SPIN.

  64. NWPA: Scholarship investigates both sides of an issue and tries to understand.

    There’s more than two sides to many issues and it’s not practical (or possible) to address every angle with the detail preferred by proponents of that particular angle.

    And for the record I’ll note that the above authors, as well as Chen and Lemley and others, are far less intransigent and much more “willing to understand” than the patent t–bagger base who are most threatened by them.

    As just one example off the top of my head, there was a discussion here about the patent allowance rate not too long ago and getting the usual suspects to admit that a 100% allowance rate might be indicative of a failure in the present system was like pulling fingernails out. Why should that be?

  65. Again, not to excuse IBM’s behavior, but just to explain why IBM is not a PAE. Maybe you should coin your own term and do your own research and come up with your own conclusions and proposals. Or not.

    translation: come up with your own “facts”

    Message: Malcolm STILL does not get the difference between facts and spin.

  66. Prove it.

    LOL, you better have a case cite from the Supreme Court, or it’s not “official” for Malcolm.

  67. You have earned the instant degradation heaped upon you Malcolm.

    Are you saying that no matter what I write, as long as I disagree with you, you are going to personally insult me?

    That would be the truth, of course. But is that what you’re saying?

    I also respond on point

    No, you don’t, Humpty.

  68. IBM’s licensing department, a business unit within IBM, does assert patents and obtains revenues as a business. That is their business. Their sole business.

    What can I say? Words have meanings. IBM’s licensing department is not a separate company from IBM. It’s part of IBM. IBM is not a PAE.

    Again, not to excuse IBM’s behavior, but just to explain why IBM is not a PAE. Maybe you should coin your own term and do your own research and come up with your own conclusions and proposals. Or not.

  69. anon: Let’s ignore the law we don’t like that carries a certain presumption…

    News flash: that bit of legal fiction applies in a courtroom but it doesn’t apply to public discussion of the merits of a particular patent. Patents are granted all the time that should not have been granted. They are typically referred to as “invalid patents.” If you have another term for such patents, you should use that term in your own comments. Of course, that assumes you can recognize such a patent without a judge holding your hand and explaining it to you.

  70. Ide like to find a pae are they in the phone book under what? Probable the theftor goons are just paying off senators to get the prosee legal representatives of indegent inventors process stoped before it snowballs into inventor prosperity and incentive to create for themselves not the slave goons tryign to stop economic recovery

  71. Dennis,

    Thanks, I figured that. And I don’t mind if others disagree with my views, that’s their perogative, but there’s no need for “name calling.”

  72. But, MM, IBM's licensing department, a business unit within IBM, does assert patents and obtains revenues as a business. That is their business. Their sole business.

    Whether the same corporation has other business units that make products is irrelevant, truly.

    If a PAE is defined as licensing patents as a business, then IBM licensing department squarely meets that definition.

  73. Ive got a market place for patents for civalized cliants who are willing to pay for intellectual properties my guaranteed marketable conception special ordering concept is the wave of the future. But so far nothing but the normal murdering thugs that sell my patents to attorneys or file themselves most of these end up being asserted by npes but at least they get paid something but not me.

  74. Yesw the bond and I the indegent masterinventor doesent have the ability to pay it along with all citizens wishing to exercise there cival rights to their intellectual property. The effect of the bond is to deny citizens there rights and force the brightest and best inventors into corperate slavery for peanuts why cant that be seen

  75. even when some of those patents are certainly invalid?

    Let’s ignore the law we don’t like that carries a certain presumption…

  76. I am civil in kind.

    You have earned the instant degradation heaped upon you Malcolm.

    I also respond on point (something you should try to do – but without torching your dogmas – what is that controlling law on the exceptions to the printed matter doctrine again?).

    Please return to your [shrug] and stand by mode.

    Thanks.

  77. as it is presently being incompetently applied

    LOL

    Excuse me while I ignore your baseless accusations.

  78. It is quite possible inventors …don’t have resources to do the litigation by themselves.

    This keeps coming up and it’s really a terrible justification for encouraging trolls. There’s all kinds of contingency lawyers out there who are happy to take a patent case if it’s a good case. Therein lies a huge difference between the type of “inventor” (or business) who “benefits” from PAE/trolls and those who deserve and obtain profits from their own R&D.

    I could easily understand why an inventor would like to continue his/her work while having a third party do the licensing, litigation, etc.

    Take a look at a typical PAE “invention.” All the “work” is done by the attorneys who drafted the application and prosecuted the claims. It doesn’t take any “work” to “invent” computer-implemented j-nk. All of the “work” is done by programmers and precisely none of that work is relevant to patentability under the law as it is presently being incompetently applied.

  79. Thats the problem I am having with selling my conceptions the potential customers dont want to pay anything even though of my high percentage of multibillion $ conceptions they want to turn down getting 66% of the profits over 10,000,000 and they dont want the 33% of profits that I get they want the 0% profits of not consigning the inventions with strings attached and walk away from their nearly certain fortunes. Of course the old and new patent system is not helping one bit and they unfortunately apear to be a mob of thieves that pay for nothing but thats where lack of inventor security comes in that I asked for.

  80. given that IBM is the greatest PAE on the planet, any “study” that does not begin with them is a farce.

    I’m no fan of IBM’s j-nk patent habit, Ned, but IBM is absolutely not a PAE as defined by Chen: businesses that assert patents as their primary business model.

    Note: PAE’s are not businesses that are primarily involved in commercializing or transferring IP that they’ve developed.

    It’s an important distinction, for a number of reasons. Again, this is not to excuse IBM’s behavior. But there are significant differences between IBM and your typical Patent Assertion Entity.

  81. At the point of business folks negotiating the right price comes my idea make charts and graphs to represent the right price under all circumstances how ever we cant bind the patentees right to start his own company and we need to restrict the money market monopolys efforts to steal everything from the inventor destroying incentive to create through that method

  82. IBP Is the current furor over the assertion of claims of which the subject-matter is not concurrently implemented by the asserting entity mostly restricted to the “software arts”, or am I completely wrong in that assumption?

    I believe this is the correct (re computer-implemented arts) but I couldn’t quickly pull up the data. Chen’s recent article noted that many defendents in troll suits were not “high tech” but that doesn’t mean that the claims being asserted were directed to novel non-computer compositions of matter or manufacturing processes (as opposed to automated or semi-automated information processing methods).

  83. IBP Under SHIELD, however the situation is exactly reversed, or regressive–the only property transferred without compensation is from those without the ability to pay the bond.

    What? What “property” is “transferred without compensation”? What “bond”? Who “doesn’t have the ability to pay” it?

  84. Dennis: they also suggest that the transaction costs are still really high because so much is being spent on lawyers fighting the cases instead of just having business folks negotiate the right price. In my view, what we should be working toward are ways to reduce that transaction cost so that we have a better marketplace for patent rights.

    I don’t know that anyone disagrees with the comment in the bold. Where’s the “conclusion” of Profs. Bessen, Meurer, & Chien that “oversteps the data”?

    they show the really cool result that folks are turning a profit on their patents

    Is it “cool” even when some of those patents are certainly invalid?

  85. You might improve things by actually engaging in conversations and replying (on point) to those who respond to your posts.

    LOL!!!!!!!! Just follow anon’s lead, LB. He’s the poster-baby for “civilized discourse”.

  86. “That lecture was presented to us scores of times. Odd now that anon becomes silent when his s-ckpuppetry has been curtailed.”

    Complete B$ Malcolm.

    Which part is “complete B$”? The part about you lecturing us on how content is all that matters (thereby “justifying” your s-ckpuppetry) and we shouldn’t worry about who is providing the content?

    Or the part about that rule only applying when your s-ckpupettry made it difficult to see that you hypocritically applied your rules about “content” selectively, only when it suited you?

  87. Thank you! These comments would have more readers, and more useful IPL legal information, if they were not so often abused by gestalt therapy ad hominum attacks.

  88. MM–

    I would modify one paragraph to read instead:

    “Even if it were so injured, I would submit that the responsible problem in the patent system would be either the holding that software claims are eligible subject-matter, or excess breadth determined for software claims, OR THE INCORRECT DETERMINATION THAT INVALID CLAIMS ARE VALID.”

    As per your history of commenting, there are IMO massive 102/103 issues relating to software patents, not just 101/112 issues.

  89. incapable of coming up

    Nice non-sequitur.

    I think you need to refresh (or understand for the first time) what patents are for.

  90. I should modify one thing, because it was inaccurate:

    “the only property transferred without compensation is from those without the ability to pay the bond.”

    Property could also be transferred from those unwilling to pay, but who would in fact have the ability to pay.

  91. The problem anon is when the indegent masterinventor has his patent applications stolen and allowed to be distributed to third party thefters buy the uspto then the whole patent system shuts down due to lack of funding from the first patents

  92. if “software patents” were outlawed, they could just steal good ideas

    Right, because companies employing thousands of people are incapable of coming up with “good ideas” like ….

    …using a computer to received and process information about how many jars of peanut butter are on the shelf at the grocery store, wherein the grocery store is on a corner block of a busy street with more than 200 parking spaces and wherein the grocery store employs at least one female executive, wherein the female executive was born in a state that does not end with an “n”.

    We need “independent inventors” to come up with dreamy awesomeness like that. Inventors like me. Every day I’m inventing stuff like this and posting here. And it’s all patentable. More patent-worthy, in fact, than a lot of the stuff that is actually granted and asserted (if we’re all playing by the same “rules” that the PTO and the court’s are presently using).

  93. That lecture was presented to us scores of times. Odd now that anon becomes silent when his s-ckpuppetry has been curtailed.

    Complete B$ Malcolm. I have not changed at all as to what I consider poor blogging, and content is still king. Your attempted miscontruing of my position is flatly rejected.

    You, on the other hand, cannot tell the difference between fact and spin. When this is pointed out to you, all you can do is [shrug] and stand by.

  94. The liberal arts professors are the leftists decrying all of this

    What is “all of this”?

    the patents that their university holds funds their cushy lives. Tad bit hypocritical

    Right. In order for a professor to comment negatively on an aspect of our patent system without being labeled a “hypocrite”, the professor must be employed by a university with no patents. Yes, that makes a lot sense.

    Seriously, every day you patent t–baggers sound more and more like the gun nuts who troll CNN comments after a school shooting.

  95. Nobody is talking about decreasing the risks and downsides.

    Actually, IANAE, they are inseparable.

    That being said, your second paragraph does have some nice tidbits. It’s a shame that the SHIELD Act (the generator of this series of threads) is so extremely one-sided and fails to meet your suggestions.

  96. NWPA – Its very simple. Tell us why their argument is wrong and don’t make unfounded accusations regarding fraud and bribery.

    I also know that we all have our angle. Some folks are getting paid directly to state a position (that’s what lawyers do) and others reach their conclusions in different way. We can still debate it.

  97. And, IANAE, the point is that this is supposed to be scholarship. Scholarship investigates both sides of an issue and tries to understand.

  98. you can’t assert your own R&D against their products as a countermeasure

    That’s not a bug – that’s a feature.

  99. EG: I’ve seen/read other stuff written by Bessen, and it is utter rhetorical nonsense, simply evidencing a complete anti-patent bent.

    LOL! I remember when anon was running around here with his dozens of s-ckp-ppets. When some of us complained (were you among them, EG? I doubt it) the response we got from anon was that the “identity” of the commenter shouldn’t matter, just the content itself which should be judged on its own matters. That lecture was presented to us scores of times. Odd now that anon becomes silent when his s-ckpuppetry has been curtailed.

    In any event, EG, now that you’ve provided us with a lovely personal anecdote, maybe you can (1) provide us with an example of this “utter rhetorical nonsense” and (2) tell us whether the facts presented by Mr. Bessen/Meurer also have an “anti-patent bent.”

  100. Not that the reputation of my online persona is terribly important

    Candidate for understatement of the year.

    You might improve things by actually engaging in conversations and replying (on point) to those who respond to your posts.

    Just a thought.

  101. I don’t have time to investigate it IANAE. I know that from what I’ve seen it is true. I know that Microsoft set up their R&D labs primarily because of patents. I konw that I have seen corporations I work with set up systems of making it easier to disclose inventions, etc.

    On the front lines as both a real product developer and patent attorney, I have seen a call to arms…

  102. Let me ask you this: what do you think of the current Cypriot situation? Even in Cyprus, the confiscated property would go into the public coffers and be re-distributed more generally than is contemplated in SHIELD, where it is simply transferred to another private party–and a party who may very well not be favored by the balance of equities. Also, if Cyprus goes ahead, the so-called “tax”, or confiscation, would still be “progressive”, and would be predicated on the ability to pay.

    Under SHIELD, however the situation is exactly reversed, or regressive–the only property transferred without compensation is from those without the ability to pay the bond.

    Think about the value of the underlying property–I’m not talking in a monetary sense, I’m talking about the value to the owner, which is what determines, among other things, efficiency, waste, highest and best use, etc..

    Well, what about it?

  103. Decreasing the risks and downsides means that no businessman would ever negotiate.

    Nobody is talking about decreasing the risks and downsides. We’re talking about decreasing transaction costs, which pretty much always makes for a more efficient economy.

    Give both sides a speedy and efficient way to secure a decision on the merits, assess the losing infringers treble damages for willful infringement from the day they were put on notice, make all losers liable for costs, and the good patents will prove their worth.

  104. And, just like the paid bloggers on this board, there is never an answer as to where their financial interests lie.

    They can answer. They could assert that they have no financial interest and they hold themselves to the highest standards of academic scholarship in writing their paper and would address any concerns. But, why is it that we not heard that from a paper writer?

  105. Dennis–

    Post broken into parts…

    So-called “transaction costs” are to some extent related to the type of transaction, and the type of property, involved.

    Situations that are sophisticated may intrinsically incur higher transaction costs. Any “transaction” in which the scope or viability of intellectual property is contested is a sophisticated situation.

    “The law” of intellectual property is in a shambles, and that uncertainty is a major source of transaction costs.

    That aside, when you consider things like the proposed SHIELD legislation, you MUST consider the underlying value of the property itself, apart from the associated costs of transacting transfers thereof.

    Although your concern over transaction costs is laudable, by ignoring the value of the underlying property itself, you are missing the bigger picture.

  106. Why haven’t we seen a paper on the increased spending on innovation to counter the NPE’s?

    Because you just made it up, and it takes more time than that to write a paper.

    What exactly is your theory on how increased R&D spending would effectively “counter the NPE’s”? I thought the whole issue was that NPEs are the Worst Thing Evar because you can’t assert your own R&D against their products as a countermeasure.

  107. As discussed by NWPA, the “injury” is that existing entities like Microsoft and IBM have to innovate to stay on top of the market. Whereas if “software patents” were outlawed, they could just steal good ideas and use their superior size to overwhelm the upstarts. That’s the “injury” these companies are spending big money to redress.

  108. And the suggested solutions are exactly opposite of the actual problem. Decreasing the risks and downsides means that no businessman would ever negotiate. That’s what we saw after eBay. They have no incentive. So removing the ability of inventors to pursue their legal rights (via PAE’s trolls whatever), just FURTHER reduces the ability for an inventor to force a business representative to the table before going the PAE/troll/whatever route.

  109. Tripple post! It looks like two posts went into the black hole of nothingness my machine must be rigged or Dennis isent happy with my coments

  110. I don’t know that it is name calling to say that these papers are not presenting balanced views of the patent system. I don’t know that it is name calling either to say that these papers are no better than blog posts in the controls put on them. And, I don’t know that it is name calling to say that the “professors” are making money by taking these views.

    I also think that analyzing and arguing with these papers is like arguing with paid bloggers. There is no winning. There interest is not to get to the bottom of an issue, but to push a side of an issue.

    You know, Dennis, it is no small matter the influence of money on academia. And, frankly, really? I mean really, Dennis, do you think that these one-side papers are not financial driven? Why haven’t we seen a paper on the increased spending on innovation to counter the NPE’s?

    And, Dennis, do you think it is unfair to ask an author that presents their work as scholarship to ask them what financial interest they have in their opinions? Where are they getting their outside money?

    Please, I mean really, the constant rolling in of papers like with no balance of how the patent system has reacted to the NPEs is again like reading paid bloggers.

  111. Yup were just one legal representative away from genuine economic recovery and the continuation of human advancement

  112. That’s certainly understandable. Not that the reputation of my online persona is terribly important, but the redacted record is a bit misleading. For the record, the comment of mine that was pulled did not call anybody names. It did call out (and quote) some of that name-calling.

  113. My thoughts on the work of Profs. Bessen, Meurer, & Chien is that these three actually work incredibly hard to get accurate data on how the world is working. But, their conclusions are overstep the data.

    As Anon write above, they show the really cool result that folks are turning a profit on their patents. But, they also suggest that the transaction costs are still really high because so much is being spent on lawyers fighting the cases instead of just having business folks negotiate the right price. In my view, what we should be working toward are ways to reduce that transaction cost so that we have a better marketplace for patent rights.

  114. Observations:

    1) use of the pejorative term “troll”, in the particular manner in which it was used, reveals this article to be commercial speech. It is nothing more than an ad.

    2) most of the entities studied have portfolios that are dominated by the “software arts”. It strikes me that the increase in complaints about this phenomenon has mirrored the increase in software patenting. Compared to many, if not most, of the actual physical arts, the barriers to entry in software development are low–incredibly low. INCREDIBLY LOW. In my practice, the only NPE’s I come across in actual physical arts are universities–who, however, have licensing offices that purport to actively pursue licensing opportunites.

    So it is essentially a component of a single industry that is doing the complaining. If…IF…patenting as it now exists is actually and demonstrably injurious to the development of the industry as a whole, then there very well may be something undesirable, or even wrong, about the current patent system as it applies to that industry sector.

    I have never seen compelling evidence that the industry as a whole is actually and demonstrably injured as a result of the patent system.

    Even if it were so injured, I would submit that the responsible problem in the patent system would be either the holding that software claims are eligible subject-matter, or excess breadth determined for software claims.

    Is the current furor over the assertion of claims of which the subject-matter is not concurrently implemented by the asserting entity mostly restricted to the “software arts”, or am I completely wrong in that assumption?

  115. Remember these corperate suporters only care about obtaining patents as cheaply as possible and live for today not about a continuing the supply of new intellectual properties to increase there bottom line and jobs government revenues and exports and human advancement through the retention of the incentive to create

  116. I can answer the question why dont the inventors go directly to plaintiff attorneys alright. Because there is none that will take the case on contingency and the patentees have no money and many have no money even to get the patent issued so they lapse into abandonment even if you ask for a unactive due to indegency status. Ive got a portfolio worth 35 billion if you can find me one legal representative

  117. That would be from the apolitical engineering professors. The liberal arts professors are the leftists decrying all of this, all the while, the patents that their university holds funds their cushy lives. Tad bit hypocritical?

  118. ” total flows to inventors of all types come to 26% of licensing revenues. These numbers suggest that on the whole, not much of the revenue received by publicly listed PAEs ends up supporting independent inventors. They also suggest that most of the licensing revenues are consumed as transaction cost, even for the “middlemen” PAEs. ”

    26% is not much?

    Did you happen to compare that amount to the amount the inventors got when they approached infringing corporations on their own?

  119. These numbers suggest that on the whole, not much of the revenue received by publicly listed PAEs ends up supporting independent inventors. They also suggest that most of the licensing revenues are consumed as transaction cost, even for the “middlemen” PAEs.

    This is an unremarkable finding. Look at furniture, to bluefin tuna, to plastic toys, to just about anything that involves middlemen in the sales process and you’ll see that the middlemen consume a large portion of the final price of the product.

  120. The universities are going to dissolve soon just as print media is dissolving.

    LOL – not if the AIA can help it.

    Notwithstanding the more leftist professor corp, look at how much revenue was generated by the State of California university system from its IP.

  121. The polite term is called “captured”

    See Ovshinksy, Who Killed the Electric Car and other films about cpature, especially Inside Job.

    Pull your head out Leopold.

  122. Seriously? You’re endorsing this?

    LOL – El toro Leopold.

    Given that you “endorse” much of the c_rrp from Malcolm, you have no room to talk.

    Sure, NWPA is a bit over the top with his “sky is falling” posting style, but the veracity is still there concerning the topic under discussion: this “journalism” is just propaganda in an ideological battle. Nothing more.

  123. but is allegedly infringing the patent?

    Yes. Patent infringement is strict liability.

    drafted to cover one technology but is now being applied…

    Yes. A patent is good for what it covers, and is not limited to what “was intended.”

    prosecutor did a terrible job of drafting claims…< ?i>”

    Then you don’t have enforcemtn, do you – sorry this question does not make sense.

    They get the patent for free

    Really? For free? Oh wait, it’s not for free as there is contingent payments attached.

  124. It is quite possible inventors are not interested or don’t have resources to do the litigation by themselves. I could easily understand why an inventor would like to continue his/her work while having a third party do the licensing, litigation, etc.

  125. Sorry Dennis, but given that Bessen co-authored this post immediately creates a credibility issue for me as to any conclusions it draws. I’ve seen/read other stuff written by Bessen, and it is utter rhetorical nonsense, simply evidencing a complete anti-patent bent.

    NWPA: I’m with you as to your comments above.

  126. Is a company ripping off an inventor when it has never heard of the inventor or his/her patent, but is allegedly infringing the patent? How about where the patent was drafted to cover one technology but is now being applied to a different technology? How about where the patent prosecutor did a terrible job of drafting claims, so infringement is unlikely or the claims are likely covered by prior art?

    In some cases, such middlemen could be doing small inventors a service. I’ve seen a few of those, but must PAE suits fall into other categories.

    Also, what does the PAE actually do? They get the patent for free but offer the inventors 50%, 33%, etc. of revenues. The PAE finds a law firm then to litigate for 1/3 or 40%. What am I missing? Does the PAE finance some costs, eg expert fees too? If not, why don’t inventors go directly to plaintiff attorneys? There’s at least a few that have.

  127. Dennis: Why don’t they let the provisions such as inter partes review, post grant review work their course. Aren’t they instituted for the same purpose?

  128. 7% of 3mil (pretty much the minimum to go to trial or file suit) is $210k.

    100% of zero is $0.

    Looks like PAE’s provide an invaluable service to independent inventors and small companies that are being ripped off.

  129. You mean that people are turning a profit on the transactions involving property…?

    “astounding”

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