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Validity findings... | 158 comments | Create New Account
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Validity findings...
Authored by: mrisch on Sunday, July 15 2012 @ 07:59 PM EDT
Responses in line below:

I have a question. I'm only up to page 18, so perhaps
that isn't fair, but why would you call Intellectual
Ventures a non-litigating NPE, in that you link in
a footnote to the "When Patents Attack" article which
stated that IP uses set-up subs to sue all the time?

**I didn't say non-litigating. I said non-litigious. A
couple or three suits (at the time) as compared to a
gigantic portfolio puts them on the less litigious side.
They are obviously more litigious now, but still less
litigious than other NPEs

Also, why would it in any way benefit society if
productive companies send their patents to NPEs for
enforcement, since that tips the scale away from
cross-licensing deals that are much less disruptive
to the market?

**First, cross-licensing deals are not necessarily less
disruptive. They can and are used to lock out startups and
smaller competitors that can't get into the cross-licensing
game. Second, I'm not arguing directly that it benefits
society for productive companies to send patents to NPEs.
Patent litigation in itself does not benefit society; it
would be far more efficient if everyone got patents and
didn't enforce them. However, if we are going to have
patents, and if patents are alienable, then I am saying we
should look at the activity that generated the patent. A
patent asserted by an NPE that comes from a productive
company is likely to be better for society than a patent
asserted by an NPE that comes from a company that never
actually tried to make anything.

And why would an individual like Lemuelson ever
be a benefit to society?
**I never said that - he was the worst.

And in what way is society benefited by any NPE that files
293 different patent litigations?
**You have to look at the whole system (which is not great,
mind you). ex post (litigation) rules will affect ex ante
(invention and investment) behavior. Now, many people
disagree because they think that patents can't or don't
affect those things. That's fine, but I'm not looking at
that. I'm only looking at whether NPEs are different than
productive companies.
Can you think of any productive company that does this?
**Yes. Monsanto has filed 150 cases on one patent alone. The
293 for the NPE came from a set of many patents. I'm making
my matched set now, and we are shocked - starting with the
same number of initial patents, we are likely going to have
more cases than our NPE data set.

So what is the societal benefit in that picture?
**That's up for huge debate, one that I am not (and cannot)

And if the benefit of patents is that it attracts
investors, if the investors are attracted precisely
because they figure they can sue with the patents,
how is that helpful to society?
**Because you need investors to get stuff built. The
liquidity option (which I actually find to be weak, by the
way - you haven't gotten there if you are only on page 18 -
I bust the myths both ways) is a potential return on
investment, and investment makes stuff happen.

I'm no doubt missing quite a bit of your thinking.
But I'm watching the MOSAID hustle that Microsoft and
Nokia are using, and I can't see any benefit to any
society that wants good products on the market for
such players to try to force the market to use
*their* substandard products instead of Android,
using patents as the weapon of choice.
**Every Android manufacturer pays Microsoft a license fee
for patents. Microsoft spent gobs of money on research and
development. Android may be better and win out, but
companies were experimenting with stuff in Android long
before it was a twinkle in Google's eye. The race theory of
patent says that this early experimentation is a good thing,
and we collectively learned from it (even if the patents
have no value, there are plenty of associated articles
written by MS and Nokia folks), and we award patents as a
result. I know that theory doesn't fly so well here.

Nor do I see any benefit to society to reward such
**Fair enough. Though note that that's not really the focus
of my paper. Indeed, your discussion of the tactics of
Microsoft and Nokia make my point quite well - what you
think of NPEs should depend on what you think of the patent
system generally, because productive companies and NPEs are
doing the same thing and getting patents from the same

[ Reply to This | Parent | # ]

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