There’s an interesting and bothersome new threat to technological innovation out there that could hamper the development of new technologies such as low energy nuclear reaction (LENR) or cold fusion. The threat is patent trolls, a patent troll is a company or individual that buys up patents then sues or threatens to sue anybody that appears to violate the patent.
Around 61% of the patent lawsuits filed in the United States from January 1 to December 1, 2012, were filed by patent-assertion entities – a polite term for patent trolls-a study by Collen Chien a Santa Clara University law professor found. That compares to 45% of patent lawsuits in 2011.
This can put a real damper on innovation because the average cost of defending a company against a patent-troll lawsuit in the USA is $420,000. The cost can rise as high as $7 million for a big company. Not surprisingly patent lawyers love patent trolls because they help them make a lot more money. Scientific American blogger Neuro Bonkers estimates that the cost of defending all the software patents in the US would exceed the profits of the US software industry.
Patent trolls could be a major threat to LENR or at least American LENR efforts because they love to target startup companies. Professor Chien found that 35% of start ups that raised between $50 and $100 million had been sued by a patent troll. Even companies that raised as little as $20 million had been sued by trolls.
Start up companies are the ones most likely to take a risk on new technologies like LENR. They also have limited amounts of money so handing out a large portion of their income over to lawyers can cripple their business.
If you’re wondering how the patent troll scam works here’s a brief description. A lawyer goes and looks through patent office records and finds an old patent that might affect something a company is doing. Say an LENR patent filed twenty years ago by somebody who is now dead. The patent troll then buys that old patent. He then has his lawyers sue any LENR company that might infringe on the patent.
The LENR company then has to hire lawyers to fight the suit or pay off the troll. In some ways it is a legal form of the protection racket. It could be a real threat to LENR because there are old LENR patents out there. The troll doesn’t care whether the patent is valid or not, he simply wants to make a fast buck.
The term patent troll comes from the mythical trolls that hid under bridges and made people pay to cross. Like those monsters he tries to make people pay to cross.
There are some ways to get around the patent troll scam that LENR companies can take. One is to adopt the kind of open sourced strategy that Francesco Celani is following through the Martin Fleischman Memorial Project. The project simply distributes Celani’s designs and devices free to those who want to experiment with them. Since there are no patents, patent trolls cannot make money.
Although it might be possible for a company to use such tactics against it in the way that Apple has tried to shut down Google’s open sourced efforts. Something like the Fleischman Project and the smaller companies such as Hunt Utility Group that it works with could be real vulnerable to patent troll tactics.
Another end run around patent trolls is to file for a patent in a foreign country with a different legal system. That at least ensures protection in one market, Brillouin has done this by getting a Chinese patent for its LENR boiler technology. Andrea Rossi has a patent in Italy but not in the US.
The problem with this strategy is that patent trolls could simply follow them to foreign countries and start using the same tactics there. They could also make it costly to import the new devices back into the US.
It’s obvious that the US patent system is in serious need of reform. Despite recent changes it is harder and more expensive than ever for an ordinary person to establish an effective patent. It’s also either than ever for patent trolls to abuse the system and shakedown inventors.
One more thought here, patent trolls are nothing new. Henry Ford had to contend with them when he first tried to market cars. Trolls sued him claiming they owned the patent on the automobile and he had to pay them for the right to make cars. Ford had to spend a fortune suing them but he ultimately prevailed because he had a superior technology that worked.
If somebody develops a working LENR device that can be commercially manufactured. That individual or company will make so much money that they will have the resources to fight or buy off any patent troll much as Ford did. Still these pests could delay the adoption or commercialization of the most important new technology of our age. Money that should be spent on research and development will be paid to lawyers and extortionists that it is just plain wrong.