
Since 2010, trolls have made 3 times as much money in court as real companies - prostoalex
https://gigaom.com/2014/10/08/patent-trolling-pays-since-2010-trolls-have-made-3-times-as-much-money-in-court-as-real-companies/
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rayiner
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.

~~~
Zigurd
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.

~~~
sillysaurus3
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.

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_delirium
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.

~~~
rayiner
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.

~~~
derf_
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](http://en.wikipedia.org/wiki/Asure_Software#JPEG)

------
TeMPOraL
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_.

~~~
cbd1984
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.

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Animats
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.

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niels_olson
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.

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josaka
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...](http://www.iam-
magazine.com/blog/Detail.aspx?g=dadf4dce-0f75-45dc-9339-dacb0f7bb465) [2] See
for stats on IPR: [http://www.insidecounsel.com/2014/03/19/patent-owners-
beware...](http://www.insidecounsel.com/2014/03/19/patent-owners-beware-your-
patent-has-a-15-percent)

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

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placebo
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.

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

Law enforcement _is_ violence.

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dsugarman
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.

~~~
PythonicAlpha
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).

~~~
jkeats
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.

~~~
PythonicAlpha
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).

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5414h
how can a troll make money ?

