Plot Afoot to Use ‘Patent Troll’ Boogyman To Undermine Patents

[ 0 ] July 4, 2014 |

Patent laws are essential to much of the business world. They help protect inventors’ innovations from being knocked-off and harming the innovator. But “patent trolls” are being used as the “boogeyman” in order to sabotage patent rights for all inventors, says Gary Lauder, managing partner of venture capital firm Lauder Partners and the co-creator of the Socrates Society at the Aspen Institute.

WATCH as Gary Layder de-mystifies patent trolls and explains how these “non-practicing entities” are being vilified to get Congress to undermine patent rights for all: 

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“Patent trolls” is a pejorative term for companies that usually buy unused patents to assert to extract money from companies whom they think are violating the patents. Often, the patents would not survive a court proceeding, but they usually seek an amount much less than a trial would cost. There are other kinds who buy high-quality patents, often from the remains of companies that were forced out of business by the imitator.

Lauder stresses that it’s hard to eliminate the “bad” trolls without also eliminating some of the good actors we need in our system.

“The whole concept has taken on a life of its own,” says Lauder. “There are now people out there with pitchforks and torches trying to solve the ‘problem’ when it really requires a surgical excision.”

The courts are the best at solving these types of problems, Lauder says, since they typically solve those problems in a thoughtful, detailed way. Congress, on the other hand, does not. Instead, Lauder continues, it wreaks tremendous havoc with broad, one-sided ambiguous laws that re-prove the law of unintended consequences.

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Lauder believes that the troll problem causes “creative destruction,” which is when an invention creates a new industry that destroys the inferior one that came before it. “Cars eliminated the whole industry of buggy whips and horses,” Lauder explains. The incumbent big companies don’t like the “destruction” part, he adds, so they want to undermine patents for everybody to reduce their exposure.

Many big companies more often find themselves on the defendant side than the plaintiff side, so they would prefer to see patent power be eroded. Congress would not change the laws just for them, Lauder says, so “they’re using the patent-troll-boogeyman-harming-the-small-innovators-and-shopkeepers” meme as the way to get the public incensed and calling for reform.

But getting Congress to ‘solve the problem’, Lauder says, “will make things a lot worse” for innovation.

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Category: Aspen Ideas Festival 2014

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About Gary Lauder: Gary Lauder is the Managing Partner of Lauder Partners LLC, a Silicon Valley-based venture capital firm investing primarily in information technologies. He has been a venture capitalist since 1985, investing in over 75 private companies. [...]
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