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Patent Problems


Timothy Lee, over at Cato, writes about patent trolls, “firms whose sole reason for existence is to acquire patents and then use the threat of litigation to extract licensing revenues.” While patent trolls are “a real concern,” he writes, they “are a symptom of deeper problems with the patent system.”

If we had a well-designed patent system in which only high-quality patents were issued, it would be much harder for patent trolls to engage in . . . abusive behaviors. . . . The reason patent trolling is so profitable is that over the last quarter century the courts have expanded patenting into new areas like software and business methods, and dramatically lowered the bar for receiving a patent. As a result, patents that would have been rejected 30 years ago (like this ridiculous patent on removing white space from database entries, which IBM received earlier this month) are now routinely approved by the Patent Office. As a result, patent trolls are able to buy up low-quality patents by the truckload. Even though the vast majority of the patents won’t survive legal challenges, defendants can’t take the chance that one of them might survive and force the firm into a 8- or 9-figure settlement. Patent trolls make good poster children for the patent system’s dysfunctions, but focusing too much on them ignores the fact that abusing the patent system is a game played by large companies as well.


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