Since 2010, trolls have made 3 times as much money in court as real companies | Hacker News Reader

Since 2010, trolls have made 3 times as much money in court as real companies

gigaom.com

149 pointsprostoalex39 comments

The article equates non-practicing entities with trolls, which isn't really fair. Most universities, for example, are non-practicing entities, and so are vehicles like Mojave Aerospace Ventures, the NPE used by Paul Allen to structure his investment into Rutan's Spaceship One. More importantly, most of the other NPE's hold patents made by practicing companies.

There are clearly NPE's that deserve the moniker troll, but that has more to do with abuse of the process than non-practicing status. In a way, NPE's are a refinement of one of the key advantages of the patent system--separating R&D from product development. It's the foil to the natural tendency towards vertical integration and the otherwise inevitable dominance of companies that have the strongest manufacturing capability.

All of this is of course orthogonal to the validity of particular kinds of patents.

How often do entities like universities or a Paul Allen type company sue for patent royalties? (This isn't to discount your comment in any way. I'm just genuinely curious whether such entities derive substantial revenue from enforcing patent rights, and whether trolls account for >95% of the revenue from patents.)

Many companies like ARM, Qualcomm, etc, rely on at least the background threat of litigating for their revenue. For obvious reasons, it's the folks with claims at the margin that are most likely to litigate. That doesn't mean that the existence of recourse to litigation doesn't primarily benefit those who are most clearly in the right.

> How often do entities like universities or a Paul Allen type company sue for patent royalties? (This isn't to discount your comment in any way. I'm just genuinely curious whether such entities derive substantial revenue from enforcing patent rights, and whether trolls account for >95% of the revenue from patents.)

Part of the reason revenue is skewed toward patent trolls is the way they litigate. In most legitimate negotiations the inventor shows the patented invention to the prospective licensee who then decides whether the amount required to license the patent is worth it for including that feature in their product. If the patent holder is asking too much then the prospective licensee can walk away and pay nothing by just not adding that feature to their product. In this situation there is hardly ever any need for litigation since it would only occur if the company consciously chose to use the technology without licensing it.

By contrast, patent trolls almost always knock on the doors of companies that are already allegedly infringing their alleged patents. In that case the practicing entity has no option to walk away because they can be sued for past infringement even if they change their product immediately and will incur significant legal expenses even if they win in court. Furthermore, juries have the unfortunate tendency to vastly overestimate the market value of many patents, and now the defendant has to negotiate against a possible jury award rather than the actual market value of not being able to use the technology.

This all adds up to mean that the trolling behavior of filing a lawsuit against someone already allegedly infringing has a much larger revenue potential than the honest behavior of offering to license a new technology to a company that isn't already using it. It also means that the trolls make up a disproportionately large percentage of actual litigation.

A few universities have started partnering up with law firms that will monetize their IP on contingency (presumably) to raise money for the university. It's a recent trend. Carnegie Mellon won a $1.5B verdict recently (though I think the facts of that case are a little different than most). Boston University is claiming they invented the blue LED. Illinois is in a lot cases. Cal and Penn State have been in a few.

You are equating universities with trolls. It's easy to tell the difference. Universities have employees who are listed as inventors. Trolls don't. Universities license their patents on reasonable terms and seldom litigate or even threaten litigation. Universities are able to do this because their patents cover valuable technologies. Trolls Trolls buy up crap patents and wield them like a motorcycle chain wielded by a street thug on unsuspecting passers by to see who's got a wallet worth taking.

Yet, by your lights, none of the above is an abuse of process. Even the patents sold off by failed ventures are toxic. Relatively few things a zero-stage venture has implemented are worth patenting. Investors requiring ventures to file provisionals are proliferating crap patents. These patents become vanity vehicles, listing "inventors" who are polishing their resumes.

You say you can tell drug money from money carried by people who distrust banks. Yet here you are willfully blind.

Your comment is overshadowed by your emotion, which is a shame. It could've been much better. For example, if you have any source for "Universities license their patents on reasonable terms and seldom litigate or even threaten litigation," then that would be interesting. Or a direct, actionable suggestion about how the current system could change.

I'm worried that comments like yours will make people like rayiner less inclined to contribute to HN, especially with sentences like "You say you can tell drug money from money carried by people who distrust banks. Yet here you are willfully blind," which seems to be both an unrelated topic and a personal attack.

I've seen plenty of people call CSIRO a troll. And it's definitely a NPE and also not a university.

> You are equating universities with trolls.

Huh? Ve said,

> The article equates non-practicing entities with trolls, which isn't really fair. Most universities, for example, are non-practicing entities

which pretty clearly is intended to mean that universities are not trolls.

Did you mean "you're distinguishing between them, but I don't"?

(I can't work out where you're expressing your honest opinion, where you're describing what you think is rayiner's opinion, and where you're being sarcastic.)

The singular "they" is as old as Chaucer and used by Shakespeare, Conrad, Austen, and EB White. The made-up word "ve" is, for what it's worth, an attempt to pick a usage fight that you won't win. :)

Join us in camp "gender-neutral singular 'they'". You have nothing to lose but your &c &c &c.

Singular they is one thing, specific-person they is another. I haven't actually checked, but I suspect that most-if-not-all of those historical instances are referring to a person in abstract, rather than a known person of unknown gender.

Regardless, I'm not necessarily expecting to win this usage fight, but for the amount of effort it costs me, I don't mind throwing in anyway.

"I haven't actually checked" means you're wasting everybody's time right now.

No. Not so. You've already lost this fight. See the positive side: now you can use "they" instead of "ve" and not fight your autocorrect like I just had to.

Don't take my word for it. This is a whole section of the estimable Language Log blog:

http://languagelog.ldc.upenn.edu/nll/?cat=27

So, skimming http://en.wikipedia.org/wiki/Singular_they#Older_usage_by_re... and http://www.crossmyt.com/hc/linghebr/austhlis.html reveals nothing that feels like a counterexample to me. Nor does the first page of that LL link (specifically talking about historical usage of singular they). But it does contain http://languagelog.ldc.upenn.edu/nll/?p=2600 :

> My claim has always been that you just can't get singular they with a proper name of a person as antecedent.

Which is precisely the situation where I'd be even more inclined than normal to use 've' over 'they'.

But on a meta-level... my prediction was actually somewhat irrelevant: "most-if-not-all of those historical instances are referring to a person in abstract, rather than a known person of unknown gender" would be true not because of historical author's choices of pronouns, but because of the things they were trying to say. It just isn't especially common to refer to a specific person when you don't know their gender. If historical authors did find themselves in that situation, I wouldn't be surprised to find them using singular 'they'.

And it's irrelevant beyond that, because even if historical authors turned out to do this all the time, it's not likely to change my own usage. I like gender-neutral pronouns, I think they fill a gap that 'they' doesn't, and I'm willing to take the hit (in occasional downvotes and in clarity to people not used to them) to use them.

(I've now spent way too much time on this relative to the amount I actually care...)

What you just said made no sense. You're saying that "precisely the situation where you'd be even more inclined than normal to use 've'" is the situation where you know the gender of the antecedent.

To the list of reasons not to torment your spellchecker, add that.

I lump usernames in with proper names. I guess if you don't lump them together, it's not precisely the situation. But I still feel like I can use that article as validation for not wanting to use 'they' in certain situations.

e.g. (if I didn't know your gender, like I don't know most genders on HN), I'd much prefer "tptacek said that ve likes bcrypt" over "tptacek said that they like bcrypt".

The example of VirnetX is interesting because it is "troll" in the eyes of many, but the patents it is suing on are from SAIC, with whom they are partnering with.

That is just the problem with the name "patent troll" ... it is misused by many companies to direct the focus of the people away from the inherent problems of the patent system to the narrower view of "patent-trolls". That leads to the notion, that you just have to remove the those to have a perfect system. A notion, that is simply false.

In the view of the big corporations, a patent system without those "trolls" would be fine, of course.

But wait, which are the entities, that are trolls? Not only universities, but also small inventors, that have good ideas and depend on the possibility that big corporations buy their inventions and thus they could be realized, since many inventions are just beyond of the financial capabilities of single inventors or smaller companies. There are many cases where patented ideas are simply stolen, because the corporation don't want to buy the idea from the inventor. When they sue subsequently, they are now insulted to be "patent trolls".

Even with the patent trolls problem (that exists) solved in a fair manor, it would not solve the problem of low (up to no-) quality patents.

So? Microsoft is a real company - but that doesn't mean it doesn't act like a patent troll too.

My point is that just because you're a university or a "real" company, doesn't mean you aren't going to use bogus patents to extort money from others.

I can believe that, but it doesn't by itself show the full effect of the patent system. The threat of a legal case is important in a lot of places where no actual legal case develops. For example, Stanford's CCRMA computer-music research lab has been funded over the past few decades largely by patent royalties, from licensing patents to synth-makers like Yamaha. IMO that's an example of the patent system functioning largely as intended: R&D group develops something, licenses it to a commercialization group, which develops a product and pays a small percentage as royalties to the R&D group. No court actual court case happened anywhere here, because everyone played by the rules. Yet the possibility of one was necessary, or else there'd be no reason for Yamaha to pay anything at all.

So for a full picture of the effect of the patent system, I think you need to look at total licensing royalties, including both court-ordered and contractually agreed ones.

The value of the civil legal system is entirely about the influence of the possibility of litigation on primary behavior. Obviously any actual litigation is a loss--but the possibility of recourse to litigation can allow transactions to happen in low-trust environments, and thus be a net win.

Similarly, value of NPE's is that they allow recovery of investment into R&D that doesn't lead directly to a product, thus reducing the barrier to investing in R&D.

So that would include the nearly $100 million collected by Forgent in settlements over bogus JPEG patents [1]? Or all of the other NPEs who target the small startup, the app writer, or anyone else they can think of who can't afford a long, protracted legal battle?

Yeah, this article is just part of a complex picture, but it's telling.

[1] http://en.wikipedia.org/wiki/Asure_Software#JPEG

The more I watch the development of patent trolling cases or net neutrality issues, the more I come to conclusion that the real problem is that we don't have any good legal and economical representation of the term "asshole". Most of discussions around those topics tend to be about whether or not a given proxy is good enough to capture the majority of despicable behaviour. The core issue is - and I'm probably stating the obvious, but it bears repeating every now and then - that we don't have a legal framework for capturing intent.

Laws take intent into account all the time. It's the difference between acting and assault, for example: Do you intend to put on a show or do you intend to make someone afraid for their safety?

The problem you're hitting on is that being an asshole isn't illegal, because we can't write laws that vague. Well, we could, but they'd be applied inconsistently enough that courts would practically fall over themselves to strike them down. And they should: One person's idea of asshole behavior is another person's idea of normal variation, which is fun when the difference comes down to culture, which always gets recast in terms of race, as in Europe's anti-Roma racism.

SCOTUS handed down two rulings this year that pretty much exactly that. http://www.mwe.com/Unanimous-Supreme-Court-Exceptional-Paten...

Intentionally threatening clearly bullshit infringement claims is going to be clamped down on.

If you look at the EFF's list of patent troll litigation, it turns out that only three small law firms send out most than a few demand letters, and one firm is the big threat generator.

Also, if the patent holder wins in court, they weren't a troll. They really did have strong patent rights.

I'm beginning to think the patent system is a mechanism for lawyers to extract money from people. The odds of another lawyer turning off that spigot seems low.

These stats do not reflect the effect of recent changes in the law. Money being awarded now is from lawsuits launched at least one or two years ago. New case filings are down 40% year-over-year[1], and anecdotally, we're hearing that many troll-friendly firms are severely curtailing their new filings due to new procedures at the US Patent Office to attack patents in parallel early in a litigation [2].

[1] See for drop in filings, http://www.iam-magazine.com/blog/Detail.aspx?g=dadf4dce-0f75... [2] See for stats on IPR: http://www.insidecounsel.com/2014/03/19/patent-owners-beware...

Not surprising, since trolls exist solely to make money through the legal system; companies, usually, make money another way.

I'll bet criminal organisations that use extortion on businesses also make more money than the average businesses being targeted. The fact that trolls use the law instead of violence doesn't make it that much better. Legal but morally offensive practices are certainly not exclusive to patent trolls though. They just get more attention due to the publicity of the action.

> The fact that trolls use the law instead of violence…

Law enforcement is violence.

curious to see more detailed data, this seems to include research companies that, in fields like pharma, are real companies and their major product is patents.

Not only pharma: What about ARM? As much as I know, they even don't have a chip factory. They just deal with their chip-designs (I am not sure, if it falls under copyright or the patent system -- but it is just a chip design, some ideas and such they are selling).

The ARM holding company makes designs and maintains the ARM instruction set and licenses them to manufacturers or designers under a processor license, (for a specific processor without modification), a POP license, (a processor optimized for you if you can't do it yourself), or rarely, an architecture license. Architecture licenses allow you to do whatever you want as long as it implements the ARM ISA. Apple holds an ARM architecture license for the Cortex A15 used to develop the Swift core in the A7 and A8.

See http://www.anandtech.com/show/7112/the-arm-diaries-part-1-ho... for more information.

I think there's a couple of distinctions to be made between trolls and more legitimate IP owners:

- trolls usually aren't the original IP creator,

- trolls' patents often cover trivial material, or ideas which are included in prior art.

I'm gessing that ARM patents are not trivial.

Yes, you are right. But the distinction that should divide trolls from non-trolls (at least, as much, as the big corporations wanted) was mainly, if a company produces something related to the patent. And that is in my opinion the worst classification you can find (it is handy of course for the big corporations).

But does the link make that distinction? I didn't think it did.

how can a troll make money ?

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