Millions of e-mail addicts cheered the news earlier this month that a long-running patent lawsuit would not, after all, shut down the popular BlackBerry wireless e-mail service. But amid their jubilation, something noteworthy may have been lost: Research in Motion, which makes the BlackBerry, paid an astonishing $612.5 million to settle claims that it infringed on patents which were on their way to being declared invalid.
That’s just one symptom of a patent system gone insane. Unless fixed, it’ll continue costing technology companies hundreds of millions of dollars to settle questionable claims. It’s money that could be better spent delivering innovation, economic value and consumer benefits.
Patent laws were created to give innovators a chance to turn their ideas into money-making enterprises. But in the past two decades, an understaffed and overworked U.S. Patent and Trademark Office has granted far too many patents. Many are for ideas that are overly broad, vague and often far too obvious to deserve protection. And once granted, patents are extremely hard to invalidate.
That has sparked a cottage industry of firms whose only business is filing patent petitions and enforcing those patents. Armed with newly acquired and frequently questionable patents, they go after firms — often technology companies — whose real innovations, they claim, “infringe” on their patents.
The patent “trolls,” as tech firms like to call them, have gotten a huge assist from the courts, which in most cases automatically grant injunctions to stop patent infringers. That gives patent holders a sort of “nuclear option”: They can threaten to shut down an entire product line or business service if even a tiny part of it is found to infringe their patent.
What’s more, patents that are challenged and are found to be invalid by the patent office remain enforceable until the patent holder exhausts all appeals — a process that can take years.