FTC Report Gives NPEs a new name (PAE), Recommends That Courts and the PTO improve Patent Notice and Damages

This is a guest post by Professor Colleen Chien of Santa Clara University School of Law. The FTC relied heavily on Professor Chien’s empirical work for several aspects of its report.

While most of the focus right now is on Congress, the Federal Trade Commission (FTC) has recently weighed in on the patent system through its publication of The Evolving IP Marketplace. Though readers of the entire 302-page report may be limited in number, if the past is any indication of the future, they are likely to be well-placed. The report’s 2003 prequel, “To Promote Innovation” has been cited by the Supreme Court (in Ebay), the Solicitor General (in the US brief in KSR), and in Congress, and by lower courts, amicus briefs, and observers of the patent system. That report was a landmark, underscoring the need to strike a balance between competition and innovation, and drawing attention to the problem of “questionable patents.” A number of its recommendations, in some form, have been adopted (elevation of the wilfulness standard, changing the obviousness standard) or are under consideration (post-grant opposition, modifying the presumption of validity). As with the 2003 report, this report bases its findings on hours of public testimony, provided over nine days of hearings and a workshop, by many members of the patent community.

The impetus for the current report has been changes in the patent marketplace, through which inventions may be transferred prior to the invention’s commercialization, ex ante, or licensed after the technology has been put into practice, ex post. The report notes that of these, ex ante transfers are increasingly important as more and more innovation comes from small and younger firms. In 1981, 70% of US R&D came from large companies (25K+ employees), and only 4.4% from companies with less than 1,000 employees; in 2005, the proportions were 37.6% and 24.1%, respectively. (p.36-7). The report is less sanguine about ex post transactions, which it criticizes for distorting competition in high-tech industries and deterring certain kinds of innovation. In noting that such transactions are increasing, the report gives certain kinds of NPEs – those focused on buying and asserting patents, rather than developing and transferring them – a new name: patent assertion entity (or “PAE”). (Side note: I have used this term in my own work, and agree with others that the relationship between PAEs and practicing entities is complex: as I describe, like PAEs, practicing entities also buy and sell into the marketplace, sue in areas in which they don’t operate, and in some cases, may stealthily partner with PAEs in their activities).

To improve the efficiency of the patent system vis a vis both ex ante and ex post transactions, the report says, patent notice and patent remedies both need to be addressed. What’s notable is not only what the report recommends, but, as described below, who the report says should implement its recommendations.

Multi-Dimensional Patent Notice Problem. The report describes the problem of a lack of patent notice, particularly in high-tech industries, with reference to many aspects of the patent system. Companies can’t clear their rights at the product planning stage because they can’t sift through a multitude of patents. Even when particular patents are identified, their boundaries are unclear, and can also change a lot between publication and issue. You can’t necessarily tell who owns a patent because patentees don’t have to record their transfers. To cure these problems, the report recommends, for example, bolstering enforcement of 112 para. 1 and requiring recording of transactions as well as identification of the real parties in interest to a transaction.

Replicating the Market Reward. The FTC adds its voice to the chorus of those who believe that remedies law, in particular damages law, needs repair, but also articulates the principles and theory it believes should guide change. Patent remedies should reflect the economic value of inventions, and replicate the reward provided by the marketplace. The report provides a point by point analysis of the factors that district courts and the ITC consider in awarding remedies, setting forth “an economically-grounded approach” to remedies.

Post-Ebay Injunctions: In a side analysis, the report addresses the sense that, post-Ebay, it’s much more difficult for non-practicing entities to get permanent injunctions. The report indicates that that’s not necessarily true: through March 2010, district courts granted about half of the requests for injunction they received from non-practicing entities (seven of thirteen, or a rate of 54%, as compared to a general grant rate at 72-77%) (p.217). The successful requests tended to come from universities and research and development organizations (p.262-4), however, who arguably don’t fit the definition of “PAE.”

Recommendations – Differentiated Roles for the PTO, courts, Congress, and the Public: What the FTC recommends, and who it says should implement its recommendations are both worth noting. Congress’ list of to-do’s, for example (shoring up PTO funding and requiring recordation of assignments – neither of which are in the current bills), is notably short. The bulk of the work has instead been assigned to courts, which, as Dennis detailed before Congress have taken the laboring oar in reforming patent law. The FTC tasks district courts and the Federal Circuit with fixing damages law, carefully considering injunctions, and enforcing 35 USC 112 para. 1. Many suggestions are also aimed at the PTO, who the report says should work alone or together with the public to, for example, foster uniformity in software inventions, put examiner interviews on the record, and press applicants for improved disclosure. As the Federal Circuit’s Uniloc decision, and the PTO’s recently introduced supplementary 112 guidelines show, their work is well underway.

Colleen Chien, Assistant Professor at Santa Clara University Law School

69 thoughts on “FTC Report Gives NPEs a new name (PAE), Recommends That Courts and the PTO improve Patent Notice and Damages

  1. 69

    There is one aspect of the Troll/NPE/PAE debate that is usually overlooked. The FTC report divides patent “use” into tow categories: ex ante (transferred or licensed before commercialization) and ex post (transferred, licensed, or asserted after commercialization (by another)). In the debate, these categories are roughly matched to commercializing entities (ex ante) and NPEs (ex post). However, I suggest that whether a patent ends up in the ex ante or ex post category greatly depends on the pre-NPE patent marketplace.

    Consider an invention made by an independent inventor or small startup. It is almost always the case that as they are procuring their patent, they are trying to get the patent into the ex post category. that is, they are trying to commercialize the invention themselves or trying to transfer or license the patent to an entity better able to commercialize it. So what happens? There are many different outcomes (such as a dead-end for failed, non-commercializable inventions), but let’s focus on those inventions that are eventually commercialized. In some (many) cases, the commercializing entities do not give the small innovator the time of day. For example, the commercializing entity: (1) may not hear about the invention (an may find doing the FTO to much bother), (2) may not realize they will use the invention someday, (3) may just steal, tweak, or (try to) design around the idea, and/or (4) may judge that the small innovator does not have the resources to enforce the patent or assume that they can crush the small innovator in litigation. In these cases, the small innovator usually does not have the resources to enforce the patent once the commercializing entity starts selling the invention. So…the small innovator’s only real option is to go to some form of patent assertion entity to bankroll the expensive enforcement of their rights. I suggest that there is nothing contrary to public policy or the legitimate functioning of the patent system in this. The hired PAE cannot provide this service to legitimate small innovators unless there is an upside for them, and the small innovators cannot afford to have their legitimate rights vindicated unless the PAE is given this upside. In fact, it would be a big-fish-takes-all world for inventions if small innovator NPEs are not able to enforce their rights.

    This does not mean that there are not some NPEs who lie in wait with old patent rights to get maximum damages from innovations independently commercialized. However, I suggest that there are very few of these cases compared to most of the small innovator inventions that do not get picked up ex ante. The few spectacular cases of hold-ups by patent trolls make good reading (and can make these cases seem like a dire plague), but they do not represent the bulk of patents that are or need to be enforced ex post. Allowing these outlier cases to set patent policy is a mistake.

  2. 67

    Kinda begs the assumption that the so-called smear of “Troll” really is something that is illegal.

    I have yet to see any indication from anybody to substantiate any illegality. Taking a larger view and analogizing to Free Speech, this country fought for the ability to say unpopular things, and the mere fact that something is unpopular does not make it something that should be stamped out.

    The hunt for “Trolls” be a witch hunt, a bogeyman conjured up by the established powers to scare small (minded) children and to reinforce the concept that patents are bad, bad, bad.

  3. 66

    I find the PAE/NPE aspect quite interesting. Many have long noted that there is a need to differentiate between NPEs such as universities and those other entities who abuse the system through arguably-excessive patent litigation. Whatever one’s position on the “patent troll” issue, there are bad actors in any given group, and such abusive behavior should not unfairly serve to malign the entire group; therefore, distinguishing between those bad actors and other NPEs may be helpful in narrowing the focus and the terms of the debate over patent trolls.

  4. 65

    So we have a new name PAE for an inventor trying to get started in business by selling or asserting his patent for his brilliant conceptions. Then we have big business trying to stop him from getting going because they dont want the competition and they demand he work as there subserviant slave on there R+D team for peanuts.What part of cival rights violation conspiracies dont you understand.Can open source or invention conception outsourcing gain a foothold in this envirnment or do we need legislation to control these monitary abuses. certainly not in the proposed legislation on the table. We have no progress so far and were burning a huge black hole in what could be.

  5. 64

    Good question Sunshine. You gonna havta ask Mr. Kappos – these be his words. Like I done said (and please try to read what I actuallly dopne said), not by me.

    All I be doin here is gettin out my sharp stick.

  6. 63

    He admits that every patent application his department fails to process is an American job that is not created

    What about the granted patent that forces another American to wind down his/her operation and lay off all his/her employees?

  7. 61

    Intersting tidbit (not by me):

    The U.S. Federal Trade Commission recently released a report called “The Evolving IP Marketplace,” which concluded that intellectual property, including patents, comprises 80 percent of corporate net worth in the U.S. today. This is not lost on David Kappos, who has consistently and forcefully lobbied for increased funding for his department. He candidly acknowledges the challenges of working through his department’s backlog with limited resources. He admits that every patent application his department fails to process is an American job that is not created and could ultimately cost the U.S. economy “billions of dollars annually in foregone innovation.”

    Should make the independent inventors crowd happy…

  8. 60

    Here is a similar story

    Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word “patent” or the abbreviation “pat.”, together with the number of the patent, or when, from the character of the article, this cannot be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

  9. 59

    Agree or disagree with the contents of the report, this post is a valuable service. Thanks to DDC and Prof. Chien. It’s an interesting report, bound to be influential in the coming years, and this post is the first I’d heard of it.

  10. 58

    ping will go on about “force” even though there is no compulsion in anything I am advocating. All I am saying is that there are public policy benefits when patent owners register their title, like more competition in the marketplace.

    One scenario is when generics manufacturers “clear the way” to market by engaging with patent owners. If they do not know who the owners are, how can they do this?

    Suppose the generic comes on the market and the patent owner seeks interlocutory injunctive relief. The court is minded to give that relief to a registered proprietor, but not if the owner was unreachable by the party clearing the way to market. Patent owner’s free choice, whether to record its ownership on the Patent Office Register. No compulsion about it.

  11. 57

    Nowhere. The fear was that MPF would not be permitted, when this was not true at all. The reason Sect. 112, p.2 was enacted was to calm the fears of the bar after Halliburton. They then too felt that MPF claims were history. But they were not. The Supremes had only condemned them to the extent they defined the “most crucial element.” It remained acceptable to use MPF for background elements or where the novelty lay in a combination of old elements. The Supremes considered just a claim a couple of years later.

    It took a very long time for the CCPA to consider the effect of Section 112, p.1. They began to consider them in the 90’s, only to forget its origin and rationale and got lost. For example, the Donaldson case. That case flipped the logic of Hallibuton on it head by authorizing broad functional claiming at the point of novelty because one could add corresponding structure to distinguish over the prior art. The Feds got lost here, as it was the very purpose of Halliburton to prevent such claims regardless of the rule of construction because such claims were by definition indefinite, and nominally covered all means for achieving the novel function.

    So we are presented with an FTC report that declares that a major problem with claims is their lack of definition. A major source of that problem is the use of functional claiming, even at the point of novelty.

    My suggestion is to overrule Donaldson in some fashion, such as by repealing Section 112, p. 6.

  12. 56

    The perfect example of lobbying politicans getting money for promoting thefts against inventors or there nessary pae patrolling partners who now wont be interested in the cases because of lack of monitary rewards. This shuts off the incentive to create stalling job creation. The only thing big business hasent tried is fairly partnershiping with inventors to avoid court nessities in the first place classic bartism.

  13. 55

    In a perfect patent system such as mine no inventor would have to enforcew its patent the patent office as a policeing entity should do this automatically.The dominance of big business with its submarine patents, legal system dominance ,intimidations,manufacturing trade secrets ect must be counteracted by legislation to break the monopoly.

  14. 54

    actually, IIRC, the ABA once voted simply to repeal Section 112, p. 6.

    What do I think about that? – Tell me Ned, how did that vote go?

    Explain.

  15. 53

    They need to establish two types of patents one conception one perfection. masterinventors cant do there correct job of inventing everything under the new kapos system everything is stolen. A conception patent would entitle the inventor to 15% minimum allowing negotations with established companies for perfection and production.A perfection patent would allow a developer and or manufacturer the final product rights including royalty or other payments.

  16. 52

    Ya fish in a perfect system immediate issue like mine worldwide immediate check for novelty by internet and patent databases means correct inventorship determination. Bandit countries who wish to steal ip causing the nessity for 18 months+ unpublished status applicationsmust be delt with by sanctions and fraud lawsuits account seisures or whorse. Of course we need kapos and lock outathere yesterday they is stealing inventions by application imperfection causing wholescale ip thefts destroying incentive to create and stalling the whole system and job growth.

  17. 49

    Triple Yodas: two in name and one in age (Sorry Ned-O, ya may be really old, wrinkled and green, but there aint no force or wisdom left in ya).

  18. 48

    And seriously Ned, you do say what ya mean – but it still dont make sense. You keep spoutin on about 112 Para 6 but ya dont have a clue.

    The only mischief has been to you as most everyone else just dont got the same befuddlement.

  19. 47

    Maxie,

    Ya cant force a plaintiff into arbitration , so it still dont matta “who.”

    If and when that adverse party does come forward, then the “who” will be known.

    Seriously, you are being quite daft about this.

  20. 45

    Seriously, ping, you never say what you actually mean , so's hard to understand what you mean at times.

    The problem I said about section 112, paragraph 6, is the mischief this clause has caused because it was enacted.

    Sent from Hellcat

  21. 44

    Clarity, not achieved.

    Commercializing, means making money from, includes licensing, I say.

    Hmmmm. Much work needed, yes, to smear ones opponents, yet not oneself, there is.

  22. 43

    Who said anything about “getting rid of” litigation? Not me. I’m a fan of litigation, but as a last resort, when nothing else will serve.

    Society (which has to pay for the court system) should be encouraging parties to resolve their civil disputes short of trial. But if those parties don’t even know who their adverse party is, what chance is there of that happening?

  23. 42

    How is “patent-asserting entity” any more accurate that “non-practicing entity” to describe an entity that does not commercialize the invention disclosed in a patent yet has every intention to or does in fact assert a patent? Entities that both commercialize and assert their patents are certainly not patent “trolls.” A better, yet not perfect means of classification should be a 2×2 grid with “commercializing?” on one axis and “asserting?” on the other, and a yes and no on each axis. Of course I mean to include in commercializing or asserting the act itself or a bona fide intention to do so. The trolls are more accurately then “non-commercializing, patent-asserting entities”.

  24. 40

    and I suspect…in effect says that it is quite proper to claim a result, all ways of achieving…

    Seriously Ned – Neither I nor 112 paragraph 6 means this.

    You are showing a complete lack of understanding on a rather simple concept. It be royal chuckles that you then go one step further in your lunacy and accuse me of being clueless.

    At times you should actually think.

  25. 39

    I don’t know a lot about what the FTC has the power to do, but it seems odd to me that the FTC has drafted this paper. Isn’t this a policy making role that belongs to congress? Why did the FTC decide to draft this paper?

  26. 38

    ping, and I suspect your simple rejoinder is that the Supreme Court is wrong and was wrong in cases like O’Reilly v. Morse and Halliburton. Your rejoinder in effect says that it is quite proper to claim a result, all ways of achieving the novel function regardless of means or method.

    That is what you just said in your comment. At times I think ping that you are clueless.

  27. 37

    Paul, this problem of litigation cost is not confined exclusively to patents. It is equally true of torts. We even nominated for VP one of worse of the tort vermin a few years back.

    We should tackle the real problem head on — litigation costs, rather than denying access to the courts for one class of right holders, patent owners.

    I once sat in plane and had a long discussion with a fellow passenger, a district court judge. He identified as one source of the problem: big firms. They represent the defendants.

    These firms advise their clients to litigate, not settle. They then litigate as expensively as possible for a long as possible. Shortly before trial they generally advise their clients to settle — for an amount they could have settled for had they not litigated in the first place. They do this so that they can make tons of money off litigation, but avoid losing a case.

    Old timers tell of a time when patent litigation was conducted by patent lawyers. Such was a time where issues were swiftly joined and resolved. The games the big firms played did not exist.

    This leads one to this view: try liability in special courts. Require the lawyers be licensed patent attorneys. Require judges to be former patent attorneys. Only after liability is found, allow the general attorney in if necessary.

    I can assure you that any such system would be “efficient.”

  28. 36

    argue that patent litigation is the most efficent way

    Strawman much there Paulie?

    No one be arguin about “efficiency” – the point be that litigation is a system set up to get Justice.

    Ya really gonna say otherwise?

    real companies making real consumer products

    If those be really infringing that they “really” needs to be obeyin the “real” laws.

    Or are ya sayin that all infringers – for real prodcuts – oughta not have to pay attention to the law? Are ya advocating anarchy there Paulie?

  29. 35

    I suspect that the greatest source of confusion in” in Ned’s head is means claiming and what the law actually is.

    Cmon, man – just come out and say that you be befuddled.

    Everyone else plainly sees it already.

  30. 34

    Let me try, and Paul, this is for you too.

    Amend Section 112, p. 6 to apply to all functionally expressed claim elements and terms, then add the actual holding of Halliburton:

    “provided that a claim cannot be functional at the point of novelty.”

    The net, background elements can be functionally expressed as authorized by Halliburton, but not the point of novelty. Further, the rule of construction of Section 112, 6, is a general rule applicable to all functional expressions. Make it so in the statute so as to eliminate confusion.

    I suspect that the greatest source of confusion in modern claiming has at its source the chaotic fallout from the enactment of Section 112, p. 6.

  31. 33

    I GUESS WE NEED A HISTORY PROFESSOR FOR THIS ONE….
    LETS CALL IT THE SEA WAR. AND THE GUY WHO TRIED BUT COULDN’T LOLOLOLOLOL. BUT DID CREATA A TSUNAMI.

  32. 32

    Those who argue that patent litigation is the most efficent way to solve patent issues should try paying for it sometime. Or at least read what even some judges now have to say about how trolls can make use of the patent litigation system advantages for patent-purchasors to shake down real companies making real consumer products by settling for less than the multi-million legal cost to prove the patent invalid or non-infringed, so that neither validity or infringement ever even gets tested.

  33. 31

    I had supposed that any rational society would put in place measures to keep litigation to a minimum, consistent with doing justice.

    Again with the anti-litigation crrp. Litigation is a measure put in place by rational society to do justice.

    Getting rid of litigation for the sake of getting rid of litigation is anathema to doing justice. You prefer that either people take Justice into their own hands or that rights be freely violated?

    Adjust your perspective – you be outa wack.

  34. 30

    In patent law, what is the cases in Europe is usually the case everywhere else in the world, except in the USA. Americans are the only ones I know, who see no need to record at the relevant Patent Office their acquisition of ownership of that patent.

    You must be hanging out with the wrong Americans, Max. All of the U.S. patent owners I know are very diligent about recording their assignments. While Professor Chien is correct that a purchaser is not required to record a transfer, a purchaser would be very foolish not to do so, given 35 U.S.C. s. 261.

    I haven’t read Professor Chien’s report, but I find it difficult to believe that the inability to find a patent’s true owner is a very significant problem.

  35. 29

    Maxi,

    all good up to:
    And so, I had thought, I need to know who purports to own them.

    Which ya assume ya need ta know – you dont. My question back to you was why do you need to know who owns the patent? You have assumed that for some reason ya need to know “who” – as if that affects the “what” of the patent – What difference does it make? Ya got a big jump in logic there that ya have not esplained. If you dont own it, then somebody does.

  36. 27

    Not just the attorney, Ned. If you give courts and juries tools to muddy the water they will use them, in the interests of justice. How does one strike the right balance, between giving more legal certainty to those opining, and more justice to those litigating? Does one nurture the doctrine of equivalence, or abolish it? Does one embrace the doctrine of file wraper estoppal, or abolish it? I know what the specialist patent judges in England think, and they were opiners/advocates (barristers) in patent cases for 20 years before they became judges but that’s of no interest to the USA, right?

  37. 26

    There is one thing I wholeheartedly agree with is that the scope of claimed subject matter often is unclear. One really has to study the patent and prosecution history to get a feel, and even then it is hard. Honestly, this is not right.

    We have discussed this before. Practitioners like to be fuzzy in claim drafting in an attempt to capture the principle, to lay the claim boundaries at the outer edge of enablement, to automatically ensnare all possible equivalents.

    It there was an area truly needing reform, this is it. I have ideas on how to fix this, and have discussed them here. But ultimately, the solution to the problem lies in the patent office, in the courts and in legislation. Patent attorneys cannot be tamed.

  38. 25

    Up above, ping quotes me, and writes:

    “Is there some good public policy reason in denying the American public the knowledge of who owns the patents that can be enforced against them?”

    and replies:

    “Yeah – it’s called mind your own business.

    Seriously, if ya transgress a patent you will be told who is coming after you – if the case or controversy arises – at teh appropriate time. What possible “good public policy reason” is there for knowing otherwise? So you can decide whether or not to transgress based on teh holder (and the holder’s status)?”

    And I then think:

    I assume there is a public interest in vigorous investment in technical innovation.

    If I am “minding my own business” I am assiduously innovating.

    And if I am hard-working, and painstaking, and caring for my investors, I am diligently doing FTO.

    And if I am doing that, I am doing FTO.

    And if that, then I may need to assess the validity of the patents I have in view.

    And so, I had thought, I need to know who purports to own them.

    I am left wondering if ping thinks that submarine patents are a good thing too, in his “If you are sued for infringement, then (and only then) will you find out who owns the patent ” world.

    I had supposed that any rational society would put in place measures to keep litigation to a minimum, consistent with doing justice.

    Recordal of title is not compulsory in ROW. Each patent owner can please itself, whether it records its title on the Patent Office Register.

  39. 22

    Ex professor – so what?

    Let them try ta enfore a patent that is no longer effective – ya’ll see what happens.

  40. 21

    Answer to the patent law quizz question above you just flunked:
    Because a terminal dislaimer is no longer effective if the related patents are no longer commonly owned.

  41. 20

    It would seem useful in the case of patents with terminal disclaimers attached to them.

    Why?

  42. 19

    ping What possible “good public policy reason” is there for knowing otherwise?

    It would seem useful in the case of patents with terminal disclaimers attached to them.

  43. 18

    Is there some good public policy reason in denying the American public the knowledge of who owns the patents that can be enforced against them?

    Yeah – it’s called mind your own business.

    Seriously, if ya transgress a patent you will be told who is coming after you – if the case or controversy arises – at teh appropriate time. What possible “good public policy reason” is there for knowing otherwise? So you can decide whether or not to transgress based on teh holder (and the holder’s status)?

  44. 17

    I read above:

    “You can’t necessarily tell who owns a patent because patentees don’t have to record their transfers.”

    and wonder whether readers think this is a good thing.

    You see, in Europe, a range of legal carrots and sticks ensure that patent owners take the trouble to register that fact on the corresponding public Register at the relevant Patent Office.

    In patent law, what is the cases in Europe is usually the case everywhere else in the world, except in the USA. Americans are the only ones I know, who see no need to record at the relevant Patent Office their acquisition of ownership of that patent.

    Is there some good public policy reason in denying the American public the knowledge of who owns the patents that can be enforced against them? Is it the same reason why, in the UK, you can’t find out who owns the land beneath your feet.

  45. 15

    Professor Chein–Nice work. Thanks for the summary– it’s very helpful to have your introduction to this 300+ page report.

  46. 14

    Amen to that, ping. The Antitrust Division at DOJ isn’t much better. I remember (and cringe over) the days of the “Nine No Nos” in patent licensing.

  47. 11

    Whenever the FTC speaks about patents and patent laws, I shudder. And usually agree with the position 180 degrees opposite theirs.

  48. 9

    I find it hilarious that the “large entity threshold” was arbitrarily set at 1000.

    Why? Because it’s a nice, round number?

    Because somebody has a base-10 fetish?

    It must have been Paul Michel who choose the number.

  49. 8

    Patent Assertion Entity:

    Any entity that actually has to go to the trouble of enforcing its patent.

    yeah – that adds a bunch O clarity.

  50. 7

    And so, damages are to be according according to the economic value of the invention. What does this mean in practice? Can the infringer ignore patent rights as MS did in the i4i case and assume that if they are every accused of infringement they can, after a long and expensive trial, simply pay the same rate as anyone else who took out a license early?

    If find this reasoning a bit bizarre. It fosters patent infringement and severely undermines the US patent system.

  51. 6

    One reform on marking that would make sense, simple sense. If any patent owner is asserting a patent, he should be deemed a troll -er, PAE, regardless off size or arrogance, unless he is selling a product in the US marked by his US patent number.

    We identify the problem of PAEs. But I can assure you that for generations there have been bigger problems caused by major firms having thousands of patents and a huge litigation war chests. These folks demand extortionate royalties of all small fry competition or else. They act like the mob. Give us protection money or else. And they normally get it because the small fry have no choice.

    This “professor” Chien obviously has been drinking the cool aid to some degree.

  52. 5

    Ah, so, with the growing importance of small entities to R&D and job growth, it is very important that the major firms with large investments at risk do something, quickly, to entrench and to suppress competition.

    And, lo and behold, we have a new patent reform bill, universally hailed by the big companies, and universally opposed by the small.

    Wonder why?

  53. 3

    patent notice would be improved if the PTO acted more quickly to issue patents (especially if the Board acted quicker).

  54. 2

    In 1981, 70% of US R&D came from large companies (25K+ employees), and only 4.4% from companies with less than 1,000 employees; in 2005, the proportions were 37.6% and 24.1%, respectively. (p.36-7).

    Uh … how was “R&D” defined?

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