Friday, April 10, 2015

A New Do-It-Yourself Patent Reform - Bounties

So one of the biggest problems in patent law is that vague, unclear patents with malleable boundaries and dubious quality used to extort "license" arrangements that cost less than fighting the extortion in court. There is one court that even violates the rights of defendants to increase the costs of litigation (and the weight of a lawsuit threat). So, most companies pay, and the extortionists evade judicial review and the invalidation of their patent.

But the rise of crowdfunding offers a new solution. See, there is a concept in patent law where a potential infringer can compel a patent holder to prove, in court, that the potential act violates the patent. This allows every defense, including that the patent is invalid, to be presented without risk to the potential infringer. There's also inter partes review, where third parties can kill a patent based on pre-existing art. So, here is my proposal:

Select a particular patent, say, Personal Audio's patent on podcasting. Launch a crowdfunding page for the patent, and award the total amount raised to whatever organization successfully invalidates the patent. Patent litigation is expensive, so it isn't really feasible for one person to fund the bounty themselves, but with a massive group of people, it becomes much easier.

The incentive system here spins the current program around. With a large enough bounty, patent trolls would be fending off repeated attempts to "bag" their patents. And, without the patent troll being able to present itself as a little guy fighting some Faceless, Enormous MegaCorp, it becomes harder for them to spin a jury. Even without legally invalidating their patent, it may be enough to convince them to dispose of the patent themselves.

One thing that is both an advantage and disadvantage of a crowdfunded system is that it would only impact well-known unpopular patents, like Personal Audio's claimed patent on putting audio files on the Internet in chronological order. This is an advantage because it reduces the ability of the bounty system to target valid patents, or patents actually in use by large corporations, and a disadvantage because there are, for certain, harmful patents that are not well-known.

But this system, if successfully implemented (and not illegal) would help add pressure both on patent trolls to quit and on the government to reform the patent structure to eliminate them.

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