New York Times Agrees With Us – Patently Ridiculous

We have been posting about the ridiculous state of the US Patent System for a number of years now (e.g. our posting selected for BlawgWorld 2006now downloadable for FREE here – covered this topic) and the recent Blackberry case has finally hit some of the mainstream mules in politics and media on the head.

See also CNET about the RIM patent reform campaign.

The NY Times – better late than never – has a March 22, 2006 editorial on US Patent reform aptly titled “Patently Ridiculous” in which they correctly write:

Something has gone very wrong with the United States patent system.

Americans think of the granting of patents as a benevolent process that lets inventors enjoy the fruits of their hard work and innovations. But times have changed. The definition of what is patentable has slowly evolved to include business practices and broad ideas….

[P]rofiteers, including lawyers and hedge funds, have turned the very purpose of patent rights — to encourage people to invent and produce — on its head, using them to tax, blackmail and even shut down productive companies unless they pay high enough ransoms. These so-called patent trolls have emerged as the villains in this intellectual property debate.” (Hat tip to André Rebentisch and Rebentisch Blog.)

RIM, the patent troll victim in the recent Blackberry case, in urging patent reform, writes:

As to the lingering question of why the patent system should allow such a bizarre set of circumstances to threaten millions of American customers in the first place, we share your concern. The good news is that this topic is currently receiving much more attention from policymakers and the Supreme Court and we hope the patent system will evolve to close the loopholes and become more balanced.

The Supreme Court case referred to above is the eBay case, described by ZDNet as follows:

Auction giant eBay and networking-systems developer MercExchange are scheduled to appear before the justices on March 29 to present arguments related to a long-running dispute. In 2003, a federal jury found eBay guilty of willfully infringing on two MercExchange patents related to its “Buy It Now” feature, which lets shoppers purchase items without participating in an auction, and ordered it to pay $25 million in damages. [Note that the clueless USPTO patent office has essentially granted a patent for “buying now” – that is an invention??????? worth millions??]

The high court won’t be dealing with the facts of the case. Instead, it will be addressing a broader question: Under what circumstances is it appropriate for a court to issue a permanent injunction–that is, a prohibition against using the patents in question–against an entity found guilty of patent infringement?

Let us say here that based on its performance the last two decades, our opinion of the U.S. Supreme Court is very low. The incumbent Justices are for the most part skilled hair-splitting legal technicians who often ignore the essential foundations of the legal system in order to reach spurious decisions based on legal technicalities for holdings guided primarily by political allegiances. In the last two decades, the court has been “result-oriented”, which means that ratio decidendi were guided by preconceived notions of what judgments should be made, rather than by an objective analysis of what the law and precedents actually demanded. Whether this will now change under the Roberts’ court remains to be seen.

We ourselves would put many patent trolls into jail for fraud. The current judiciary, on the other hand, is filling these same trolls’ bank accounts with bucketfulls of millions and is helping to enable the extortion of these moneys from legitimate businesses.

We are sceptical as to the future of patents in the USA because we doubt whether the judiciary, and in particular the US Supreme Court, has the requisite intellect and technical understanding to deal with this problem.

Furthermore, the current federal government, through the U.S. Department of Justice’s Office of Solicitor General (of course, supported by the clueless USPTO), is sticking its nose into where it does not belong at all, and in an amicus brief is siding with MercExchange, so that we think the Supreme Court will also dutifully do the same.

Small wonder that. The patent holder MercExchange has its patent from the company’s founder, a former CIA employee turned inventive auction genius, whose own ventures and companies went down the tubes commercially but who now is trolling those companies that are successful under the motto, “those who do, do – and those who can’t, sue for patent infringement”.

Is the Supreme Court likely to side with the patent troll in the eBay case? We think yes, because in upholding the right of injunction in patent cases, the Justices will be increasing the power of the judiciary, and that is an opportunity that judges, and especially Justices of the US Supreme Court, have seldom turned down.

The legal principle which may be applied will be a simple one along the lines of: “pay up or shut down”, and I am sure, as Justice Scalia will presumably find, is firmly anchored “originally” in the U.S. Constitution. The idea that looking down the barrel of a gun is a convincing argument is not new. Injunctions serve the same purpose.

But note that the ancient Hebrews tried that system several thousands of years ago in that they first had a strong executive (a series of powerful kings), during which society prospered, followed centuries later in days of weaker kings by the rule of judges. And what followed the rule of judges was total societal collapse.

When people such as myself think that the “rule of law” is being trampled under foot in the patent field, the loss of the consent of the governed is not far off. When the most obvious trolls and business failures are being rewarded for doing nothing and providing no societal benefit by stupid application of the patent law system, what incentive do law-abiding citizens have to actually WORK for their money? None.

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