The old question which came first, (one of life’s most perplexing riddles) is often asked about “efficient infringement” (E I) and “patent trolls ” the conjoined twins invented by ICT bigs to degrade our patent system. Inspired by Samuel Butler’s famous species preservation observation that, ” Hens are the egg’s way of making another egg”, we think it important to explain that chronologically EI was first in line. Thematically originating with the mythic tale of “Billy Goat Gruff”, the term “patent troll” was invented at Intel by Peter Detkin (who ironically now helps Nathan Myhrvold run Intellectual Ventures.) “Patent Trolls” have long and ably served; as a device to distract the IP community from EI, as a symbolic cookie easily snarfed by academic street walkers and a lazy press, as a goad for SCOTUS patent property dilution and as “shiny object” by which to engineer enactment “bait-and-switch” AIA in an apathetic Congress. Even though EI literally created them, Patent Trolls have consistently preceded E I in whatever passes for” top of mind” awareness on Capitol Hill. Having recently been labeled “unhelpful” by the FTC, the term reappeared in a recent anti-patent op-ed in “The Hill”. So, although the troll meme has grown tired, it still is being kept alive. Its more obscure E I twin lives-on as well. Indeed, E I is now more prevalent as ICT biggies get bigger, patents become less reliable and costlier, and early stage innovation retreats to secondary market’s cheaper “bird-in-the-hand” monetization. Until courts see it for what it is, EI will continue creating market demand for assertion specialists among up-stream patent holders. Demand legislation could finish off obvious abuse by bad actors. The more pressing issue is how can EI be stopped?
Efficient infringement makes economic sense. Big tech must compete in fast-moving cut-throat markets with its patented component packed devices. It will be employed by all if it is used by one. But it is not just creating assertion specialists it is snuffing early stage innovation. It is most contemptible when a huge well-resourced firm with well-established access to an original inventor’s addressable target market, uses the patented technology of an under-resourced inventor to become even more deeply established in that market. It simultaneously deprives the inventor of first-mover status, not to mention a significant number of potential customers within that defined market. It also eliminates an original inventor¹s capacity to obtain financing needed to compete with or even to assert its patent against a larger, better-resourced infringer. No wonder EI has such staying power. And no wonder, as Rep. Issa recently proclaimed, its anti-patent purveyors still are watching and waiting for an opportunity to further shoot the early innovation wounded by enacting more statutory shields against the costly comeuppance of court-awarded willful damages. EI has not yet led to that but inevitably it will. Practicing the EI business model is nothing less than organized plunder. SCOTUS has opened the door to the exercise of judicial discretion. We look forward to watching the first district court walk through that door.