Sunday, December 12, 2010

Intellectual Property Rights vs Innovation Part 1

There is a rush of patent lawsuits between mobile phone companies.  Most of them are involved in lawsuits and counter suits in court.  Why?

Two Views on the Purpose of Patents
The traditional view is that Intellectual Property Rights are a long established tradition and that they are the bedrock of our economic progress.  These Intellectual Property Rights do not just include patents of course, but also, copyrights.  The opposing view can vary within certain shades, from extreme to more moderate.  The libertarian view is the more extreme view that wants intellectual property rights to be removed.  They want a shared community and view these ideas as shared by the world community at large.  The less extreme view wishes a reform to take place in the patent laws to allow less obstacles to innovations using these patents.  It also wishes that the anyone taking up a patent lawsuit pay all legal costs if it loses the suit.

The Rise of  Non Practicing Entities (NPE)
click to enlarge; via: scienceprogress
A Non Practicing Entity is a legal parlance for a company that owns patents but has no intention of producing a product using those patents (hence the term non-practicing).  In many cases, these companies purchase patents for the purpose of suing companies that might infringe on the patents.  These entities are viewed by many as pariahs that produce no benefit to society but only serve themselves.  

As of January 2009, there existed 219 of these entities.  These companies are called "patent trolls."  This term was popularized by Peter Detkin, a former assistant counsel to Intel. by an Intel executive Since 2003 the number of patent lawsuits brought to court by Non Practicing Entities has risen dramatically.  Here is a video produced against these NPEs and in favor of a revision of our current patent laws:

The Wall Street Journal takes a view that these lawsuits are about more than just patent violations:

Here is a spoof on remixing and copyrights from an appearance Lawrence Lessig made on the Colbert Report:

Here is a defense of these patent lawsuits by a legal firm that specializes in these types of cases.

These Non Practicing Entities buy patents to produce lawsuits.  This is clearly stated by this law firm.  In fact, they state explicitly that the only purpose of a patent is to use as a tool for a lawsuit.  Are these companies pariahs on the rest of the corporate world?  Do they discourage innovation by raising the costs of legal defense which on average costs $1 million dollars?  To answer these questions, we will need to investigate things further.

See These Pages:

Stay tuned for our next installment in this series.

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