The purpose of a patent is to provide an income to those who produce public goods like knowledge. ~The argument being that without the invention of this form of property then public goods like knowledge will be underproduced.
Someone who insists upon being paid for a patent is not, therefore, a patent troll. They are, instead, someone using the patent system as it is meant to be used. Producing an income stream from having procued that public good, the knowledgte, that is being charged for.
At which point the EFF’s whining here rather falls down.
Imagine this: a limited liability company (LLC) is formed, for the sole purpose of acquiring patents, including what are likely to be low-quality patents of suspect validity. Patents in hand, the LLC starts approaching high-tech companies and demanding licensing fees. If they don’t get paid, the company will use contingency-fee lawyers and a litigation finance firm to make sure the licensing campaign doesn’t have much in the way of up-front costs. This helps give them leverage to extract settlements from companies that don’t want to pay to defend the matter in court, even if a court might ultimately invalidate the patent if it reached the issue.
That sounds an awful lot like a patent troll.
The reason this sounds like a patent troll is because this is the way that EFF defines a patrent troll. Someone who gathers up patents in order to enforce them is, in the eyes of the EFF, a patent troll. But this is not in fact true, as I’ve said before:
My apologies but this just isn’t correct. Patent trolls exist, yes, patent trolls are largely non-practising entities, yes, but it does not therefore follow that all NPEs are patent trolls. Let me take a hypothetical example. We have a university (we might call it “Harvard” for example) where professors and students create a new drug with interesting properties. They patent it. This is actually the sort of thing that happens quite a lot actually, small research organisations (whether universities or not) find something of interest. They’ve absolutely no intention whatsoever of trying to take that drug to market though. Not when it costs $1 billion to get a new drug through the FDA they’re not going to. So, they licence that drug to a pharmaceutical company that agrees to do all of the testing.
Harvard, or the little corporation Harvard sets up, are clearly an NPE here. But they’re in no manner a patent troll if they do end up suing someone for breaching their patent. And that’s where I spot the error in this paper. They’re simply not distinguishing, as they should be, between NPEs and patent trolls.
Sadly, the EFF continues to make this mistake. Even a kombinat – as here – of patents from different universities that really is an NPE still isn’t a patent troll. It’s a patent licencing organisation.