Patent Trolls
A Hindrance to the Economy and to Computer Science
By Shawn Karber
PHIL 343 Final Paper
05/02/2015
Patent trolls, often referred to as Patent Holding Companies (PHC) in the media, are a defamation to the ideals that the United States patent office were meant to promote, that is protection for the innovators and inventors of America. Wikipedia defines patent trolls as “a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question…”.1 ("Patent troll.") Not only do they undermine the ability of small companies or individuals to experience success and profitability through invention, they also hamper the progress of society, especially in fields of technology. PHCs are a devastating problem in the United States, not only in terms of their impact on global markets and progression, but also in terms of how many PHCs there are and how big they can become.
To understand the breadth of the problem, it is important to understand how prevalent patent trolls have become. According to an article in the Washington Post, patent trolls now account for 67 percent of all new patent lawsuits. Just five years ago, the article says the number of PHC-filed suits was 28 percent less.2 ("Patent Trolls Now Account for 67 Percent of All New Patent Lawsuits.") With an average increase of 5.6 percent a year, it is evident that patent trolls are
On July 15, 1994, the United States sued Microsoft for unlawfully maintaining its monopoly in the market for PC operating system software. The lawsuit alleged that Microsoft engaged in anti-competitive marketing practices directed at PC manufacturers that distributed Microsoft operating system software preinstalled on its PCs. Microsoft began to levy fines against original equipment manufacturing (OEM) companies who distributed or promoted operating systems other than Microsoft. On August 21, 1995, Microsoft "consented" to a "Final Judgement" against them.
Thousands of companies who patent products in turn sell their products for a price then continue to circulate revenue. The primary company retains ownership and anyone who
Patent Infringement Litigation. Nonpracticing companies are firms that do not create inventions, rather buy patents in order to sell licenses to other organizations interested in utilizing or commercializing the invention. Nonproducing companies like Bellevue, Washington-based Intellectual Ventures, argue that licensing of patent rights supports innovation, as they are able to broker access to companies and individuals that have the capacity to do something with the intellectual property (e.g. develop or apply the technology in the marketplace). Nonproducing companies aggressively defend their patents by filing patent infringement lawsuits in federal court against companies or groups of companies that that they believe have infringed on their patents. The focus on litigation is in fact a core component of these firms
gotten to the patent before them allowing for them to create a monopoly. The Capitalists if the
The United States Patent and Trademark Office granted the exclusive right to the Knoll brothers to profit from their invention – Photoshop, which Adobe acquired through a licensing deal. While rewarding a person for his invention is good to promote innovation, rule utilitarians would disagree in grating the patent to them because it implicates a social cost that far outweighs the benefits of that one software and the people involved in making it. The inelastic nature of the patent gives tremendous amounts of leverage to Photoshop as it is the undisputed market leader of photo editing programs because it has features that its competitors aren’t allowed to offer due to the patent.
The U.S. government charged that Microsoft had violated antitrust law. Microsoft disagreed. Do you agree with the U.S. government, or with Microsoft? In answering this question, you may wish to address two issues. Was Microsoft a monopoly? Did it use its monopoly to compete unfairly against other companies?
As previously mentioned, application fees can reach up to $8000 and maintenance and examination fees can reach up to $650 per year. Since patents may need to be amended and the maintenance fees can accumulate leading to a costly application process. With high costs, after the approval of the patent, many companies charge higher prices for their products in order to recover their costs. This is especially prevalent in pharmaceutical companies who also charge high prices due to the costs of research and development. Pfizer patented a drug called Lipitor and after the expiry of the patent, the cost of Lipitor was “80% off the original cost” (Reference 11). When the drug is first introduced, the drug is the only product that that particular market for a certain medical condition. Therefore, with a monopoly, companies are able to charge higher prices to recuperate their costs from research and development as well as patent costs. However with the patents only protecting innovations for 20 years, patent cliffs occur where the patent expiration of drugs causes many other pharmaceutical companies to produce generic versions of the same drug. This can lead to revenue losses for the original pharmaceutical company as they had to invest significantly into their research and development while other
The case against Microsoft was brought buy the U.S. Department of Justice, as well as several state Attorneys General. Microsoft is accused of using and maintaining monopoly power to gain an unfair advantage in the market. The case has been under observation for a long time, but the Justice department is having trouble coming up with substantial evidence against Microsoft. Specifically, the Department must prove:That Microsoft has monopoly power and is using it to gain unfair leverage in the market.And that Microsoft has maintained this monopoly power through "exclusionary" or "predatory" acts(Rule).Some say that Microsoft is only taking advantage of its position in the market and using innovative marketing strategies
What is a patent bet? You might have heard people referring Patent Bets in horse racing and football betting. Are you wondering what this is? A Patent bet is also known as Full Coverage Multiple Bet since it offers a complete coverage of all possible combinations of bets from three selections. The patent consists of the three market selections bundled up together into one package with a potential of getting a very big returns once you land the three winning selections. Note that some Full Cover Bets exclude singles. Patent Bet resulted from an upgrade of Trixie Bet (A full cover bet) which consists of three selections but leaves out the single selections.
Private companies often use IPRs to their advantage, placing a patent on a product that they either created or want to claim as their own. Monsanto was one of the ten international biotech corporations that initiated trade agreements, such as the World Trade Organization’s Trade-Related IPRs, in order to expand their corporate profits on a global scale. (Shiva, Vandana. Stolen Harvest: The Hijacking of the Global Food Supply. Cambridge, MA: South End, 2000. Print. pp. 9-10) Under this trade agreement,
There is a intense rivalry among the big players of this industry. There have been some legal processes involving cases such as false advertising claims and patent infringement.
Competition in economics is rivalry in supplying or acquiring an economic service or good. Sellers compete with other sellers, and buyers with other buyers. In its perfect form, there is competition among many small buyers and sellers, none of whom is too large to affect the market as a whole; in practice, competition is often reduced by a great variety of limitations, including monopolies. The monopoly, a limit on competition, is an example of market failure. Competition among merchants in foreign trade was common in ancient times, and it has been a characteristic of mercantile and industrial expansion since the Middle Ages. By the 19th century, classical economic theorists had come to regard
Patent Act brands anyone who “actively induces infringement of a patent” as an infringer, 35 U.S.C. 271(b) and imposes liability on individuals labeled “contributory” infringers 271(c).
Innovators are so scared that they have gone to far extents just to please dominant NPE cities, such as Marshall, Texas. Samsung has built a ice rink in Marshall, Texas to please the city so the court goes to their favor since there is a strong NPE influence. Samsung has to maintain the ice rink in a dry hot landscape just to please a court system for every time they are sued repeatedly for every little issue in their electronic products. People may wonder, why are NPEs so successful in these cities? NPE cases are taken by many judges because NPEs can help influence the court system to have the judges re-elected so many judges use the opportunity to take patent cases and go in favor of the NPE or plaintiff, person suing/prosecuting (usually NPE). High rank federal judges even make laws in favor of patent trolls and place patent cases to be held in high influential NPE cities and this occurs,