The Obama administration has issued legislative recommendations in a growing debate in the world of high tech intellectual property. At the heart of the debate are “patent assertion entities” (PAE’s), more commonly known as "patent trolls." These companies do not develop or manufacture products, but rather engage in buying and asserting patents against companies that often have developed the patented technologies long before on their own.
Critics of patent trolls point to the fact that patents can be filed in very broad language, which has allowed some patent trolls to claim ownership of such ubiquitous technologies as wireless e-mail and podcasting. They also point to the recent upswing in patent lawsuits, which, according to one Boston University report, cost defendants $29 billion in legal fees in 2011, a 400 percent increase from 2005.
The White House has come down pretty strongly against patent trolls, saying that the companies exist to “essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.” But not everyone is so unanimously on board. Proponents of PAE’s argue that they promote liquidity in patent markets, which can enhance investment in start-ups and promote innovation, and that they serve to protect smaller businesses from larger ones that may steal their ideas without consequence.
James Bessen, Lecturer at Boston University School of Law, Fellow at Berkman Center on Internet and Society at Harvard, he studies economics of innovation and patents.
Michael Risch, Associate Professor of Law at Villanova University