Trolls, vampires or the savior knight

Is trading in patents separately from their application trolling or a legitimate business? A chapter from the new book by Adv. Naomi Asia "On Patents, Angels and Trolls"

By: Adv. Naomi Asia*

You can see the "Patent Troll" as a kind of elderly and rich oligarch who marries a very beautiful girl, a generation or two younger than him. Is he a vampire clinging to the darkness of a virgin? Or a knight rescuing a princess from a life of poverty and poverty? Is the troll, who acquires/buys/hoards new patents, a vampire who sucks the inventor's blood? One that in Hebrew can be called a "patent leech", or, as the praisers describe, is it a knight in shining armor who saves the inventor from the teeth of adversity and allows him to continue creating with confidence?

All of this belongs to the new worldview that separates the patent from the product, from the idea to the application... the patent stands on its own, like currency that passes to the merchant.
Sometimes the patent is described as "a toll road that allows the inventor to move quickly and efficiently, for a fee, to the desired destination".

The new era of patents
At the beginning of this new era of patents, amid the wave of lawsuits and lawsuits against infringement, along with the huge capital required for all these procedures, an American lawyer named Peter Detking coined the term "patent troll".

Detking was the director of the patent registration department at Intel when the company was attacked, at the beginning of the first decade of the twenty-first century, by a tsunami of patent infringement lawsuits.
The concept of patent trolling is seen as negative and derogatory and another lawyer named Raymond Nero from Chicago filed a lawsuit against Detking for stigmatizing exploiters on a whole group of companies and lawyers dealing in this field.
A troll, according to Detking's definition, is someone who makes a fortune from a patent by filing infringement lawsuits. He purchases a patent not for the purposes of production and application and 'lays in wait' for a company or better several companies that have improved the patent and its protection umbrella. So he attacks from the ambush and sues the company/companies for huge sums for the violation.
The dry statistics show that in the years 2004-2009 the number of lawsuits for patent infringement increased by 70% in the USA. Patent litigation is a 'business' in Marshall County in East Texas. The court there has specialized in the field and there are thousands of active cases.

In my opinion, in light of the developments in the field, I believe that the negative concept is misleading.
Many claim that whoever turns the patent into a type of future commodity, performs a legitimate and vital action.

Trolls or a new business area?
Nathan Myhrvold, who previously served as Microsoft's chief technologist, is the founder and president of I.V., "Intellectual Ventures" - a company specializing in the acquisition of patents.
In the Harvard Business Journal, Myrwald published an article called "Financing Eureka". There he submits a strong defense of the new industry which finances inventors.
Until now, the company has purchased Ai. V. About 30 thousand patents and it employs about 650 people. Leading business entities such as: Google, Microsoft, Sony, Intel itself, Nokia, Apple, eBay, and even large pension funds have invested huge sums in this company. Those investing entities are given access to I.V.'s vast patent database. to protect themselves from a possible lawsuit for patent infringement.

Myrwald opens his defense as follows: "My company is perceived in a wrong way. We were described as trolls. But everything that is said about us today, was already said in the 70's about a then new industry in the field of intellectual property, the software industry. Three decades since, the same industry that was described as unsafe, precarious and the like, has become one of the most profitable industries in human history. Just as 30 years ago the software was separated from the hardware and the software became an industry in itself, so today the business of inventions will work better if it is separated from production and develops with the help of the capital market."
He continues and claims: "Some people ask today what is the difference between a troll and Buffett? Both fish in murky water to fish for treasure. What is the difference between investing in unrealized patents and Buffet investments in real estate?" Meerwald eloquently refutes the accusations leveled at him and the new patent trade.

The purchasers of the serial patents, who have gained a bad name among the public, are received differently today due to a new concept of the patent 'product' - a concept that is gaining ground in the USA. The perceptual change came thanks to people like Mirwald and very profitable companies like AR. times. Ex. (RPX Corp) which was recently issued on the American stock exchange. The USA is the homeland of the trolls, they currently have no other territory and it is hard to argue with success...

The value of the patent is a value in itself
The patent is refined as a value in itself, separated from the implementation. Perhaps in this you will find the answer to many of the difficulties raised in this book: to difficulties in implementation, in establishing a team, in protecting a patent in the absence of means, in the slim chance of a single inventor to find a suitable implementer/entrepreneur/team/effective company and more. It is possible that those who were called trolls in the past encourage the inventor and the ability to invent by taking the burden of proof off their shoulders.

In recent years I have sold Israeli patents for amounts ranging from one hundred thousand dollars to three million dollars per patent. In 2008 the X company was sold. Islands. V. The Israeli company dealing in information storage for the global company IBM for about 300 million dollars. Ex. an island. V. It was founded in my office by graduates of the 14th cycle of the "Talfiot" program, and at the time of its sale, it had about 70 patent applications submitted over the five years since its founding.
The patent portfolio of the young company had considerable weight for weighing the value of the company.

The fierce opponent of trolls, Detking, has also, over time, moderated his views since the battle at Intel. He is now talking about patents as bridges or toll roads that lead not only to profitability, but also to multiple opportunities for companies, of any size, and even for individual inventors.

Another expert in the field, Bruce Berman, president of the business consulting body Brody-Berman in New York, a person who often works with inventors, is now going against myths that have grown for many years around patents. In his book: "Making innovation pay off" he refutes the first myth that a patent must be realized in an invention. Not true. A patent can exist without being realized and have a commercial value in itself. It can be leveraged and used like any future commodity or real estate.

Another myth says that it is not nice to sue for patent infringement.
Not true. The patent itself is a license to sue for its infringement. He talks about the patent and the product that exist in two separate tracks. A strong patent does not necessarily achieve a successful product. The success of the product depends no less on the market demands and its relative advantage.
Patent licensing, Berman says, is a negotiation with the state that grants the inventor twenty years of protection so that he can disclose his invention so that it can be implemented.

Creating a market and raising capital to realize the inventions

Myrwald May. V. Claims that today the world needs venture capital funds - inventions, just like the startups got their venture capital funds to develop.
"There is a deep misunderstanding about us, as if we are harmful trolls who try to take advantage of innocent companies, but the truth is that we create a market and private capital for the inventions." The patent is separate from the product, as the software was separated from the computer in the 70s.
In today's USA, the patent trade, which is separate from products, sustains an ever-increasing transaction flow. Microsoft, for example, registers about three thousand patents a year. It itself also sells licenses to other entities.
J. B. M. Registers about five thousand patents a year. The company's patent sales make up about a quarter of its annual income, a profit that is almost free of expenses.

Sometimes business companies sell a package of patents in a certain field - the value of the entire package together brings in more for the company than the sum of all its components individually.

This is a new world where the patent is exposed like a work of art in a museum: a person can be inspired to create something out of nothing, or try to acquire a patent that will allow him to realize his vision or acquire patents to continue his current activity...
Nortel put 6000 patents up for auction. The patent arsenal was purchased by a consortium of several companies, including Apple and Microsoft, for $4.5 billion. Google recently purchased Motorola Mobility's patent portfolio for $12.5 million. Motorola has a pool of patents among the largest in the world, while the young Google does not have a significant pool. Google faces a number of legal fronts, mainly on the background of the Android operating system. It seems that these amounts will be added to the existing products, and not necessarily to the construction of new products.

* Adv. Naomi Asia is the owner of the law firm Naomi Asia and notaries, patent attorneys and notaries. The aforementioned section is chapter 9 from her new book (2012) "On Patents, Angels and Trolls".

To purchase the book in an electronic version on the Mendeli website