Is the Supreme Court Finally Ready to Take on Patent Trolls?

As the saying goes, there’s no such thing as a free lunch.

But for years, patent trolls – companies that exist solely to attempt to collect license fees on patents they hold, despite not offering any services related to those patents themselves – have made a killing by moving from district to district, filing lawsuits against unsuspecting businesses.

In other words, these companies don’t sell anything. They simply try to get patents issued for things lots of people do, then work backwards and try to and turn a profit through lawsuits. Litigation is expensive, so oftentimes these companies might just choose to settle out of court to avoid the process altogether.

Thanks to a recent Supreme Court ruling – and the subsequent rulings by lower courts – it appears as though patent trolls might very well be a breed that’s facing extinction.

In the case of Alice v. CLS Bank, the Supreme Court struck down a software patent, using what some pundits considered to be rather abstract reasoning. But what’s been interesting to see is just how that reasoning has been interpreted by lower courts; the case has even caused some law firms to claim that intellectual property laws may well become the defining law issue of our time.

The “Do It On a Computer” Patent Era

Most famously, patent trolls would take some job or activity that’s been in existence for quite some time and apply for a patent of that idea – adding, of course, that the activity is now done on a computer.

As an example, a patent troll might describe the process of holding money in escrow until a transaction has gone through – but say that task can only be done via a computer and the Internet. The truth is, such transactions have been taking place for as long as history has been recorded.

On top of that, these kinds of patents won’t really go into detail over how the technology works. And they are also held by companies that don’t perform any services or offer any products related to them.

In other words, these patent trolls don’t add any value to society. Instead, they just extract money from companies that are actually innovating and don’t have the time – or money – to deal with litigation.

But there’s some good news. Following Alice, courts have recently revoked 11 software patents, sending a signal that the days of the patent troll may in fact be coming to an end.

Nobody Likes Someone Who Cheats the System

In the tech world, innovation occurs rapidly. There are tons of hardworking entrepreneurs and innovators that have had to devote their time, energy, and money toward fighting these patent trolls, who at the end of the day are little more than parasites.

Patent trolls have found a way to game the system, and they’ve made a pretty good living along the way.

But is it an honest living? Probably not.

After years of dealing with these trolls, it appears as though sunny skies lay ahead. It’s refreshing to see the courts do something that undoubtedly makes sense, and it’s also refreshing to see them striking down patents that probably shouldn’t have been granted in the first place.

Let’s hope the courts continue to dismantle these frivolous patents, sending a message that patent trolling is not a viable business model. The resulting outpouring of innovation could very well be unlike anything we’ve seen. Time will tell.

Image Credit: Flickr (via Creative Commons)

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