Cornyn smokes patent trolls out from their bridge
Most children who’ve heard the tale of the Three Billy Goats Gruff know that if an ugly, parasitic troll comes out to get you, the best thing to do is to bide your time until your bigger, stronger sibling can knock him off the bridge with a well-placed set of horns.
Unfortunately, there’s one kind of troll that can’t be speared on the horns of more powerful competition, and that’s the patent troll. That sort of troll has a lobbyist, you see, who’ll make sure that bridges come equipped with goat-proof safety railings.
Fortunately, Senate Minority Whip John Cornyn, R-Texas, seems to be putting in an audition to act not only as the third Billy Goat Gruff, but to rip up the metaphorical bridge under which patent trolls hide. Cornyn recently vowed to resurrect anti-patent troll legislation (which failed to clear the Senate this year, despite bipartisan support) in the next Congress, in the increasingly likely-looking event that Republicans gain control of the Senate this November:
“I don’t think we’re ever going to end [the business of patent litigation], but what we can do is close some of the gaps…loopholes that allow for frivolous patent suits,” Cornyn told VentureBeat in an interview after a patent reform panel at Austin Startup Week. He added that this doesn’t apply to all patent holders, saying: “I firmly believe people have a right to litigate, and should, on patents that add value [when infringement occurs.]”
In an amusing twist, despite Cornyn’s legislation relying on Republican control, it arguably unites conservatives with some of the more liberal members of the Democratic Party. When the bill was still under consideration in the current Senate, Cornyn worked with none other than liberal firebrand Sen. Charles Schumer, D-N.Y., to draft compromise legislation.
So why didn’t this left-right alliance shatter its opposition? Why, the only reason most sensible legislation in Washington fails – because interest groups happen to have the phone number of powerful people, in this case Senate Majority Leader Harry Reid, D-Nev. As Politico reported, the compromise effort “frayed as universities and other major patent holders argued the measure would have negative consequences for the patent system,” adding that:
Reid…played a decisive, behind-the-scenes role in the legislation’s fate, according to sources on and off the Hill. Reid told [Senate Judiciary Committee Patrick] Leahy he could not put the bill on the floor given the opposition from trial lawyers, pharmaceutical companies and biotechnology giants, the sources said. Reid’s office did not comment for this story.
Those looking for a self-parodying instance of tone deafness in the establishment Democratic Party need look no further than this story. Apparently, the mere mention of tort reform is enough to sink a bill in the minds of politicians like Reid. Let’s not even mention the irony that Reid allowed Big Pharma to kill the bill, despite belonging to a party that allegedly wants to end abuses in the health care system.
And let’s be clear: There is no issue of principle over intellectual property at the heart of this fight. Patent trolling is the sort of practice that gives intellectual property a bad name, and savvy defenders of IP realize this. Both Microsoft (a generally hawkish actor in the IP space) and Google (a generally dovish one) agreed on the need to reform the patent system so that the sort of abuse trolls specialize in would become more difficult, if not impossible. In fact, both companies were signatories on a letter to precisely this effect. For an example of how patent trolling works through abuse of the tort system, this example from the same panel where Cornyn made his remarks illustrates the problem very well:
“We have a free app in the app store and [someone] sued us for millions of dollars because they said their patent covered ‘rotating a cellphone app,’” said Rackspace VP of intellectual property Van Lindberg, who participated in the panel with Sen. Cornyn. “Well, we called them up and said this is completely bogus and we’re going to fight it. And before we could even get the words out of our mouths, they followed up to say ‘… and we’ll go away for $70,000.’”
In other words, patent trolling is more akin to the iconic image of a Mafia hit man who ends his sentence with “pity if anything were to happen to you” than to any sort of earnest defense of IP. And despite its moral turpitude, it’s a lucrative business. Since 2010, patent trolls have made three times as much money in court as real companies (i.e., companies that actually use the patents they own), earning median damages of $8.5 million through the court system, compared with $2.5 million for their real competitors.
Killing this kind of practice should be common sense. Unfortunately, because trial lawyers have a lucrative cash cow in patent trolling, the ruthless logic of donor relations means that it can probably only be stopped by Republicans, despite bipartisan opposition to the practice.
Either way, here’s hoping that John Cornyn gets to run these particular trolls out from under their bridge, before any other innovators try to go “trip, trap, trip, trap” over it and get tripped and trapped by these unrepentant abusers of the patent system.
