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Chief Circuit Judge Michel Agrees with Me: NPE’s (aka "Patent Trolls") are Not Necessarily "Illegitimate"

On his great 271 Blog, Peter Zura posted excerpts of the Chief Circuit Judge Michel's keynote address at the FTC hearings on "The Evolving IP Marketplace" last December where Judge Michel addressed the state of patent law and patent reform. Anyone interested in patents, the USPTO and patent reform should take a look. I posted a comment on this post, and am reposting it here (with additions) along with Judge Michel's comments about NPE's as presented on the 271 blog. Specifically, I was intrigued by Chief Circuit Judge Michel's view that NPE's ("non-practicing entities" also known by the pejorative term "patent trolls") should not be viewed as somehow "illegitimate." He apparently believes that by allowing those who are on the receiving end of NPE lawsuits to control the argument by "naming and framing" (my phrase) the problem as "trolls" is not helpful. Here is the excerpt of this part of

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A Response to PWC’s "Starry-Eyed" View of the Value of Litigation as Effective Way to Monetize Patents

rose colored glassesI recently became aware of this patent litigation analysis prepared by PriceWaterhouseCoopers (“PWC”) (hat tip: Marcus Malek of the Intangitopia blog). The report appears to be rigorously prepared from data obtained from a large number of reported patent litigation cases dating from 1995. I read this report with interest and think that anyone who is interested in the ROI of patent enforcement should read it also. The data provide a wealth of information for anyone even thinking about bringing a patent case or who is involved in defending against claims of patent infringement. Although the data in the PWC provides informational value, I nonetheless have a big problem with the following assertion that is prominently presented on page 18 under the title “What This Means for Your Business”: "In light of the findings in this study, patent

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How Asking One Fundamental Business Question Can Reduce Expense and Improve Business Outcome of Patent Litigation

While a majority of companies consider the cost of obtaining patent protection an essential element of the product and technology development process, few of these same organizations favor the prospect of asserting their patent rights against potential infringers. Moreover, no company relishes the prospect of being a defendant in a patent lawsuit. That most do not readily welcome patent litigation is not surprising given that the average cost of large case (i.e., over $25 MM at stake) patent litigation through trial in 2007 was about $5MM per party in 2007. For disposition of smaller cases, the total amount per party was about $1MM in 2004 dollars. Why does it cost so much for a patent owner to assert her patent rights against an alleged infringer? Put simply, patent litigation at its core is an adversarial undertaking in which lawyers typically define the meaning of a successful outcome. In this context,

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Confessions of a Non-Recovering Patent Troll Enabler

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

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If You Can’t Beat ‘Em, Join ‘Em: Patent Strategy as a Business Model

In the May 12, 2008 New Yorker Magazine article, Malcolm Gladwell posits that there is no shortage of ideas. Rather, he indicates that what is needed is disciplined processes centering on invention and execution of those ideas through into the marketplace. Mr. Gladwell's article (which I believe is a must-read for those of us in the "innovation game"), goes about proving his hypothesis by reporting on the inventive processes of the principals of Intellectual Ventures. (Intellectual Ventures website is linked here: http://www.intellectualventures.com/).Intellectual Ventures is a new type of company. Its premise is that highly skilled scientists, engineers and other types of "big thinkers" can learn enough about a technical or human problem, such as a common medical condition, to invent possible solutions when in a "brainstorming session" with other high level thinkers of varying disciplines. Intellectual Ventures then files patent applications for the most promising of those solutions,