Tag Archives: patent trolls

Future Issue: PATENT TYING.

Thinking about the possible future issues with regard to larger companies entering the “patent pooling” / patent enforcing business model, I believe a future issue might be the concept of “tying,” (a concept I learned about during my time in China) where a company is approached to take a license for patents relating to one or more of their products, and as a condition to accepting a license [in lieu of a threat to be sued for patent infringement], that company is forced to take licenses on patents that are only remotely relevant (or not relevant at all) to the subject matter in which their products cover. In other words, it seems to me that this could lead to an abuse of the patent system where companies would be forced to take licenses to practice patents they have no intention of practicing just to get the license that is forced upon them regarding the patent they are actually being accused of infringing. It obviously goes the other way too, namely, that companies seeking licenses for patents which they wish to practice might be forced to take licenses which they really don’t need just to get the license they are seeking. With companies having so much muscle these days, I see this as becoming a real threat that can cause some damage within the patent law system.

For example, see the articles, IEEE joins move to patent pools by Rick Merritt @ EE Times, and IEEE to get into the patent pool business? by Lawrence Ebert, to which I posted the comment below:

The prospect of another company (or organization) entering the “patent pooling” business is not unexpected. The patent pooling business model in my opinion is quite effective, profitable, and certainly poses more of a threat to infringing companies who would otherwise be hesitant to take a license where they were clearly infringing certain patents.

One topic I foresee as a future issue which I would enjoy reading in one of your future blogs is the idea of “tying” in regard to companies being coerced to take licenses to patents they don’t need and wouldn’t want. I would say that is a possible and realistic outcome of these big companies with litigation and licensing muscle entering the patent world.


If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Ethics and morality, too little enforcement and too much regulation.

I was thinking about Zusha Elinson’s “New Business Targeting Patent Trolls Signs IBM and Cisco” article in which he discusses how RPX Corp appears to have the business model of aggregating patent assets (likely relevant to their members) “off the street” so that patent trolls cannot get to the assets first and enforce them against their members. Additionally, the article discusses how the company is buying NOT to enforce their patents against their members.

The issue here is two-fold: 1) whether RPX can control itself regarding costs to its own members and not become a mafia-type of organization extorting funds from corporations who have the choice of “join or be sued,” and 2) what RPX will do to companies who choose NOT to join their organization.

As per the question of whether RPX can control itself internally, I see from looking at Wall Street that companies do not and can not control themselves when there is opportunity to get away with an abuse. It reminds me of the old “moral versus legal” discussion I used to have in law school about whether one should be permitted to do something immoral and wrong even though it is not illegal, and whether all immoral activities should be illegal (obviously the answer is no — when there too much control, wrongdoers surface and look to find loopholes in the system, and the question becomes only whether something is legal versus whether it is moral.) With the over-regulation and under-enforcement by the federal regulators, my opinion is that there are few controls and risks for companies who violate laws and it is simply too costly to enforce the laws against those companies breaking them. Thus, people do what they can to make a profit and their conscience has no part in the equation. My opinion about this issue is that government must cut down on the regulations and must stop over-regulating, but MUST significantly increase their enforcement of rules that are on the books.

Similarly with regard to RPX’s activities towards companies that choose not to be part of their posse, the danger is that a for-profit organization has a profit motive, and often the ability to grow profits will overtake ethical considerations such as fairness and morality, as discussed above. A company infringing a patent soon-to-be-owned by RPX obviously should either 1) take a license, or 2) get sued for patent infringement. However, my question is more about questionable bullying practices which are likely to occur as soon as a for-profit organization has muscle.

I have read on the web about some questionable litigation tactics where abuses of the legal system force a company take licenses when they are not necessarily infringing the patents being asserted against them. The reason here is that the cost of litigation ends up being HIGHER than settling and taking a license to the assets even though the company is not infringing them. This is a serious abuse and is something that should be addressed in the form of legislation and/or regulation.


If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Maybe the issue is allowing patents to be TRANSFERRABLE PROPERTY.

A paste of a comment from another TechDirt article on “New Patent Buying Firm Swears It’ll Never Litigate Over Its Patents

Comment – Nov 25th, 2008 @ 1:27pm
I agree. The goal of the whole patent process is to INNOVATE and to protect the INVENTOR against others reverse engineering and copying his/her ideas. Perhaps the problem is allowing patents to be transferrable.

Obviously I don’t have a solution, but the patent law system is obviously broken at the point where inventors no longer can enforce their patents and are forced to sell to larger companies (often called trolls) who have the muscle to enforce. Maybe in addition to giving inventors more protections to enforce their patents, preventing the purchase and sale of patents in itself is also a solution. I know a solution like that would upset a lot of people, but at least it would protect the integrity of the patent system.