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March 31, 2006
Patent Trolls or Patent Pushers?
Ebay and MercExchange got their day at SCOTUS this week and much coverage seems to be along the lines of Jessica Holzer's jibe in Forbes at companies like Merc as being "patent trolls." The gist of this argument - advanced by large tech companies - is that lower court judges ought to have lots of latitude in dealing with situations where patents are found to be infringed. In particular, automatic injunctions are a scary proposition for these big tech companies.
This theory holds (as was originally judged in the Merc vs Ebay case) that if the patent holder isn't actually using the patent, or being harmed by its use, then the proper remedy is some kind of compensation while the infringer continues on about his business. Deep pockets companies like this - they can pay. However, it weakens the positions of patent holders who can no longer use a threatened shutdown to extract the best possible terms. So far so good.
However, the 800 lb gorilla in the room is not really the tech industry, which is riddled with crappy patents. The gorilla, which is pretty damned proud of its patent quality, is bio-pharma. These companies, particularly the drug companies and biotech research houses, see patents as their absolute protection. They base entire company strategies on the principles of exclusive license to market and produce. Permitting an infringer to pay to make copies of a new drug or genetic product would potentially be devastating.
In my book this is still more evidence that computer software and processes need a new and different form of intellectual property protection. Neither copyright nor patent seems right and working (in the sense of 'producing results we want').
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