Patent Trolls & Impact on Innovation

We often see graphs representing exponential increases in technology; These are often tied to technical quantitative data (how smart we are as a society & a benchmark for our progression). One of the areas of concern that threatens this innovation is patent trolls – per EFF “A patent troll uses patents as legal weapons, instead of actually creating any new products or coming up with new ideas.” [1] Often times, we think of Patent trolls as companies just setup with a team of lawyers that prays on technological innovators.

IBM, once a global leader in IoT technology has recently been named as one of the world’s greatest patent trolls [2]. One of the greatest strife’s to innovation is fear of having the innovation taken away. IBM claimed almost 8,000 patents in 2016. To put it in comparison, Google barely broke 3,000 [3].  The belief in most IBM’s patents are they are just fluff. Claiming patents on anything that might be legally enforceable.

Recently, Apple was dealt a devastating blow to pay $500MM to a patent troll for infringement on their patents through Apple’s iMessage app. The Company, VirnetX, only operates as an IP Company, or loosely, a Company that enforces lawsuits on other companies based on any violation of outdated patents that should have long been deemed non-valid [4]. In 2016, Apple settled a $25MM lawsuit with a patent troll when evaluating the financial impact to their base business line. Maybe this is the best situation for larger companies, but smaller companies who cannot afford to settle could become bankrupt from these drawn out litigations.

Unlike technology, laws & regulations are long & arduous when it comes to adapting to changes. They require lobbying, funding, & a change in mindset of those in-charge to do the best thing for society. Many companies make the decision to settle the lawsuits, as opposed to dealing with long drawn-out litigation. This allows the patent trolls to win & have a dramatic impact on future innovation.

A recent Harvard study showed that the impact of these settlements is a decrease in R&D by 25% for large corporations [5]. To stop this threat to innovation, I believe companies will need to band together and avoid settling lawsuits. Go after the patent trolls & lobby to stop this threat to our future innovators. If there is no financial or other negative impact on the patent trolls towards filing lawsuits, nothing will stop them.





One comment on “Patent Trolls & Impact on Innovation”

  1. Hi Colby,
    You bring up many great points in you post here. What do you think allows these patent trolls to make off with tens of millions of dollars? Surely they must have some sort of evidence that their intellectual property has been infringed? Is it because of the sheer volume of patents (as you brought up with IBM)? Or might it be because of a lack of understanding about increasingly complex technologies in a judicial system where many are not tech savvy? Would love to hear your thoughts.


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