In their interesting history of the rise and fall of Research In Motion, Losing the Signal, Jacquie McNish and Sean Silcoff describe how close a patent troll came to taking down what was at the time becoming the dominant player in the nascent market for smart phones. A patent was salvaged from a failed company and later used to sue RIM and came close to getting them locked out of the U.S. market. From pg 122:

The skeletal company was part of a growing breed of patent trolls whose primary business was to sue businesses allegedly infringing on their rights. Lawyers represented trolls on the contingency they would share a portion of any court awards. It was a booming business. U.S. lawsuits filed by patent trolls rose sharply to 428 in 2007 and 2,750 just five years later, by which point they accounted for nearly 60 percent of all U.S. patent lawsuits, double the level of five years earlier. 

Stout started the hunt for licensing fees by writing letters to dozens of communications companies suggesting they were infringing on its technology. One of the last letters was sent in January 2000 to RIM. NTP received no replies from most of the targets, including RIM.

If we accept the argument that intellectual property laws are intended to preserve profitability in the face of the infinite reproducibility of ideas, patent trolling comes to look like a fascinating systematic pathology. The very system designed to ensure the profitability of ideas leads, under conditions of accelerated competitive individualism, to the destruction of that system from within: what’s designed to facilitate innovation -> application in fact comes to pervasively disrupt it.

On pg 124 there’s a good summary of recent history:

Patent fights snowballed in the Information Age. Computing and communication advances arrived with such velocity that U.S. patent applications increased fourfold in the decade ending in 2010.8 Leading the way was the mobile phone business, accounting for nearly 25 percent of total U.S. patents granted in 2013, up from 5 percent in 2001.9 Many breakthroughs were based on software concepts, opening a new front in the patent wars involving a labyrinth of algorithms and code. These feuds became high-stakes battlegrounds when U.S. courts began handing out rich awards for patent infringements.

On page 128 they describe the long term damage to the company:

Few people knew of the emotional toll the case took on RIM’s chiefs. Lazaridis looked for solace in his faith, and Balsillie in his new guru. The humiliating legal spectacle had unnerved the company’s leaders and diverted their attention from emerging competitors. “We lost some of who we were through that,” says Patrick Spence. “That’s ultimately the cost to the company. It’s not the $ 612 million. It’s what that cost us in terms of taking focus away from where we needed to go.”

The necessity of resisting patent trolls incentivises tactics which may skew corporate priorities. From pg 145-146:

What Balsillie prized most of all was Motorola’s vast arsenal of intellectual property rights. There were an estimated seventeen thousand issued mobile patents, most of them for dated cellphone technology that was more valuable in the legal arena, where RIM and its competitors faced a constant onslaught of patent lawsuits. RIM’s dealmaker was obsessed with intellectual property after the emotionally scarring NTP war. He lobbied governments on both sides of the border and spoke to business groups to push for reforms that might prevent the legal brinksmanship that nearly flattened RIM. Washington and Ottawa were receptive, but progress was slow. In this vacuum, tech companies strengthened their legal rights by acquiring patent collections from struggling rivals. With Motorola’s patent chest, RIM would hold a much stronger hand against patent trolls and competitors alike.

From The Boy Who Could Change The World: The Writings of Aaron Swartz, loc 253-268:

The law about what is stealing is very clear. Stealing is taking something away from someone so they cannot use it. There’s no way that making a copy of something is stealing under that definition. If you make a copy of something, you’ll be prosecuted for copyright infringement or something similar—not larceny (the legal term for stealing). Stealing, like piracy and intellectual property, is another one of those terms cooked up to make us think of intellectual works the same way we think of physical items. But the two are very different.

You can’t just punish people because they took away a “potential sale.” Earthquakes take away potential sales, as do libraries and rental stores and negative reviews. Competitors also take away potential sales. One reason people might be buying less CDs is because they’re spending their money on DVDs. Or, as Philip Greenspun has argued, they’re spending their time on cell phones. I mean, talking to your girlfriend can often be more enjoyable than listening to music, but I don’t think we need to start suing girlfriends. So the question then becomes what’s a reasonable form of taking away sales, and what’s an unreasonable one. And that’s a tough question, but I think we need to evaluate it by looking at what’s best for society. Some people say that getting people to stop copying, whether through threats of lawsuits or technological restraints, is the only way to get people to keep coming up with interesting things.

I’m particularly interested in the political consequences of enforcing this conflation of copying and stealing. The effective repression of copying would necessarily entail a growing and worrying authoritarianism, as Swartz goes on to write:

So if we choose this option of stricter and stricter enforcement, we’re heading down a very dark path where law enforcement gets more and more heavy-handed and authoritarian, and copying goes farther and farther underground.

One of Google’s most famous perks is the ‘20% rule’, in which staff are allowed a portion of time to work on their own projects. However as Eric Schmidt and his co-author explain in How Google Works, this isn’t a matter of time as such. From loc 3210:

This is the power of 20 percent time, 181 the Google program whereby engineers can spend 20 percent of their time working on whatever they choose. Twenty percent time has spawned a host of great products—Google Now, Google News, transit information on Google Maps, and many more—but it is generally misunderstood. It’s not about time, it’s about freedom. 182 The program doesn’t mean that the campus turns into summer camp every Friday, with all the engineers goofing off in (hopefully) creative ways. In fact, 20 percent time is more like 120 percent time, since it often occurs on nights and weekends. But it can also be stored up and used all at once—Jonathan had one product manager take a summer to work on a 20 percent project. Regardless of when you take your 20 percent time, assuming it doesn’t get in the way of doing your regular job, no one can stop you from doing it. Twenty percent time is a check and balance on imperial managers, a way to give people permission to work on stuff they aren’t supposed to work on. It helps bring to life the Steve Jobs maxim that “you have to be run by ideas, not hierarchy.” 183 And we have found that when you trust people with freedom, they generally do not waste it on extravagant pies in the sky. You don’t get software engineers writing operas—they write code.

This could be reframed as a strategy to maximally extract value from human capital: expecting staff to pursue projects, on their own initiative and in their own time, which are owned by the corporation.

An interesting empirical question: what’s it like to be someone at Google who doesn’t want to do this? Are such people filtered out during the hiring process? If not, are there sanctions for non-compliance? For just wanting to do your job as its presented to you?

Later in the book I found this paragraph, loc 3408:

While we believe in paying extraordinary people extraordinarily well for extraordinary success, we don’t pay people for successful 20 percent projects. Dan Ratner may have received very generous compensation for being part of the transformational Street View product team, but he didn’t get anything directly tied to his work on trikes. 197 We don’t provide any monetary incentive for 20 percent projects for the simple reason that we don’t need to: It may sound corny, but the reward comes from the work itself. Several studies have shown that extrinsic rewards don’t encourage creativity, and in fact hinder it, by turning an inherently rewarding endeavor into a money-earning chore

Over the summer the BBC website had an interesting feature looking at the ‘patent trolls’ who proactively buy patents with the sole intention of suing people for their infringement. The introduction of these ‘non-practicing entities’ into the patent system is something novel, with an influx of ‘entrepreneurs’ and ‘finance people’ having transformed the system into one in which the “majority of patent lawsuits today are filed by entities that don’t make any products”. Some ‘patent trolls’ develop their own patentable inventions in-house but most rely on buying second-hand technologies, which current owners were willing to sell for an influx of capital in exchange for potentially deployable ideas which nonetheless remain unactualised. Perhaps the financial crisis represents a supply-side cause of this willingness, given the apparent chronology of the growth of the ‘patent trolls’, though this is purely speculative on my part.

I find this interesting because the ‘patent trolls’ seem to rely on digital technology, in so far as that they use ‘virtual offices’ to minimise legal constraints and presumably rely upon internet research to assemble their ‘patent war chest’ and to identify their targets. Their methods rely upon digital innovation and abundant data but so too do the basis of their claims. What intrigues me is how an obscure potential technology for which they have acquired a patent can be linked to actually existing technologies which are claimed to infringe upon that patent. Their activities represent a weird inversion of the innovation process: linking ideas with their practical deployment in technological artefacts. How open-ended could this potentially be and what are its implications for innovation itself? Furthermore, what are the long-term effects of this likely to be for the viability of systems for registering and enforcing intellectual property? If we accept Margaret Archer’s (2012: 36) argument that the growth of the patent system “served to ‘freeze’ uncertainty and, in guaranteeing profitability ceteris paribus, thus freed up internal resources to make the next innovative development which, if successful, would then be protected in the same manner” then the long term viability of this growth, which underwrote the calculability upon which corporations have tended to depend, becomes something of enormous sociological significance. The enterprise of ‘patent trolling’ is “totally legal, and very lucrative, and absolutely shady”. Perhaps unsurprisingly then, it seems likely to take centre stage as a political issue in coming years:

Innovation is the foundation of America, and since 1790, entrepreneurs have been able to claim patents on their inventions so that copycats can’t profit off their work. But some companies have found a controversial use of the American patent system, derisively referred to as “patent trolling.” The practice refers to when a company buys broad patents for technology that it doesn’t make—or partners with inventors who don’t actively use their patents—and brings legal claims against other companies that use the technology. The price of stealing someone’s work in the United Statesff rrkis mind-blowingly expensive—in the millions of dollars—and even if the accused company wins, rkit still faces high legal costs. Often, a company violating a patent will pony up a few thousand dollars for licensing fees rather than face off in court.

“There are hundreds of thousands of crappy, vague, overly broad patents out there, and all you have to do is scoop up one of these patents and threaten to sue. No one is going to defend themselves, because it makes no financial sense,” says Julie Samuels, a senior staff attorney for the Electronic Frontier Foundation (EFF), which is running a database of patent troll claims. “It’s totally legal, and very lucrative, and absolutely shady.”

Bryan Farney, an attorney for a MPHJ, a company that has accused multiple businesses of using its patented office-scanner technology without permission, takes issue with the characterization of companies that sue others over patents they don’t use. “Obviously, patent trolling is a pejorative term…” he tells Mother Jones. “A more accurate term is Non-Practicing Entity.”

Earlier this month, Senator Claire McCaskill (D-Mo.) called these kinds of companies “scam artists” and “bottom feeders” who “work in the shadows.” Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Senator Mike Lee (R-Utah) introduced a bill this month that specifically takes aim at them by making it harder and more expensive to make these claims and allowing targeted companies to get their legal fees back. The bill has support from the White House. This week, a group of inventors—including Facebook and Twitter’s co-founders—sent a letter to the House and Senate Judiciary Committees arguing that “broad, vague patents covering software-type inventions—some of which we ourselves are listed as inventors on—are a malfunctioning component of America’s inventive machinery.”

But companies that oppose the legislation say that it shouldn’t matter whether or not they use their own patented technology because big tech companies are taking advantage of their inventions. “Almost all inventions seem obvious after they have been invented,'” wrote Katharine Wolanyk, president of Soverain Software, in a November 18 letter to the House Committee on the Judiciary. (Wolanyk’s company owns patents that governs online shopping cart technology and lost one of its claims in the US Court of Appeals for the Federal Circuit. Soverain is now trying to bring the case to the Supreme Court.) “The current system forces patent owners to defend, over and over again, the validity of their patents.”

If anyone can suggest useful places to begin reading further about this I’d be very grateful. There’s something extremely interesting happening here and I’d like to understand it in much greater depth than I do at present. I’m particularly interested in the potential scope of the activity: is it possible that the range of ‘broad patents’ which can be linked to particular products is basically infinite? Will it be possible to legislatively counteract this tendency? Or is it perhaps more likely that we’ll see an ever growing influx of financial and human capital into ‘patent trolling’ and, if so, what are the long-term consequences? Would it even be possible to have an intellectual property system which prevents ‘patent trolling’? 

One further thought is that The Mark Cuban Chair to Eliminate Stupid Patents must surely be the best name ever chosen for an endowment. It’s also an instance of systemic consequences leading to the grouping of new agents seeking to transform their shared context. I wonder if it is a sign of more to come. The difficulty seems to be whether the interests vested in the patent system itself preclude the reforms that would render ‘patent trolling’ untenable.