In recent years, patent trolling has emerged as a
significant concern in the field of intellectual property (IP). Patent
trolling, also known as patent assertion entities (PAEs) or non-practicing
entities (NPEs), refers to acquiring patents for the sole purpose of suing
other companies for infringement rather than using the patents to create or
sell products. This practice has raised questions about its economic impact,
effect on innovation, and the legality of such actions under existing patent
laws. The practice of patent trolling has evolved over time, with some entities
amassing large portfolios of patents and using them to target multiple
companies across various industries. These entities often do not manufacture or
sell any products themselves, leading critics to argue that they exploit the
patent system for financial gain rather than promoting innovation.
اضافة اعلان
In April 2018, Apple was on the losing end of a legal battle
concerning patent trolling and was ordered to pay VirnetX Holding Corp. a
settlement of more than $500 million for infringing on patents related to
secure communications. The US Patent and Trademark Office (USPTO) has been
criticized for creating a patent environment that fails to protect against
trolls, causing large settlements to clog the court system.
Patent trolling is just the tip of the IP theft iceberg. It
can include patent trolling, trademark infringement, software pirating, and
counterfeit production. And it is happening on a global scale. China accounts
for 87 percent of counterfeit goods seized coming into the US overall, the cost
to the US economy is estimated to be as high as $600 billion. The US has
stepped up its IP protections since the Commission on the Theft of American
Intellectual Property released its first annual report in 2013, but short-term
and long-term solutions still need to be taken.
“Using new technologies gives rise to IP risks, including patent, trademark, and copyright infringement concerns.”
Using new technologies gives rise to IP risks, including
patent, trademark, and copyright infringement concerns. The rights of an IP
creator or IP owner will vary between jurisdictions, so the IP issues raised by
new technologies must be appropriately vetted under applicable law —
particularly if the technology is intended to be deployed globally. An
important question will be who owns and licenses not only the IP in the new
technology but also the rights in any IP assets that are promulgated by the technology.
For example, if an influencer creates a video where their avatar is wearing a
fashion brand's logo in the metaverse and then creates a non-fungible token
(NFT) that they sell in an online marketplace, there are multiple levels and
types of IP rights at play — including potentially patents, trade secrets,
copyrights, and trademarks.
The economic impact of patent trolling
is debated among policymakers, economists, and legal scholars. Proponents of
patent trolling argue that it can incentivize innovation by allowing inventors
to monetize their patents without manufacturing products themselves. They also
argue that patent trolling can help enforce patent rights against larger
companies that might otherwise infringe on patents with impunity.
“Critics argue that patent trolling can abuse the legal system by asserting patents of questionable validity or using litigation tactics to extract settlements from defendants who cannot afford to defend themselves in court.”
However, critics of patent trolling argue that it can have a
chilling effect on innovation, particularly among small businesses and
startups. They say that the threat of patent litigation can deter companies
from developing new products or entering new markets out of fear of being sued
for patent infringement. This, in turn, can stifle competition and limit
consumer choice, ultimately harming consumers and the economy as a whole.
The legality of patent trolling is a complex and contentious
issue. On the one hand, patents are legal instruments that confer exclusive
rights to inventors for a limited period, and patent holders have the right to
enforce those rights against alleged infringers. However, critics argue that
patent trolling can abuse the legal system by asserting patents of questionable
validity or using litigation tactics to extract settlements from defendants who
cannot afford to defend themselves in court.
To address these concerns, some jurisdictions have enacted
laws or regulations to curb patent trolling. For example, the US has passed
legislation such as the America Invents Act and the Patent Trial and Appeal
Board (PTAB) to make it easier to challenge the validity of patents and to
deter frivolous patent litigation. Other countries, such as Australia and
Canada, have also taken steps to address patent trolling through legislative
reforms and court decisions.
“As the practice of patent trolling continues to evolve, policymakers, legal scholars, and industry stakeholders must continue to debate and assess its impact on innovation and the economy and explore potential reforms to address any abuses of the patent system.”
IP is the primary basis of wealth in the new economy, much
as bricks and mortar were the basis of wealth in the old. Today, the valuation
of intangible assets such as trademarks, copyrights, patents, trade secrets,
and know-how provide significant portions of the early-stage company goodwill
on a balance sheet. Indeed, the advent of patent auctions, acquisitions,
assignments, and IP holding companies are hot areas of intellectual asset
management. Yet many early-stage technology companies pay little or no attention
to the legal formalities necessary to obtain proper ownership of such property.
In conclusion, patent trolling is a complex issue with
significant economic and legal implications. While some argue that it can
incentivize innovation and protect the rights of inventors, others contend that
it can stifle competition and harm consumers. As the practice of patent
trolling continues to evolve, policymakers, legal scholars, and industry
stakeholders must continue to debate and assess its impact on innovation and
the economy and explore potential reforms to address any abuses of the patent
system.
Dr. Hamza Alakaleek is
a Corporate Lawyer and Tax Attorney with post-graduate degrees in International
Political Economy, International Business Law, and Law and Technology with a
focus on IoT, AI, DPA, and CSL.
Disclaimer:
Views expressed by writers in this section are their own and do not necessarily reflect Jordan News' point of view.
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