Blawgletter doesn't often give high marks to newspaper editors on the quality of the facts they offer in support of their opinions. The lead editorial in today's issue of The Dallas Morning News — on "patent trolls" — should thus not have come as a surprise.
Yet it stuns.
Start with the title. "Patent trolls get rich by killing jobs and robbing consumers" makes you wonder if the act of job-killing really earns a profit. How does that work, exactly? Does the dead job itself fork over the money? Or does the person whose job became one with the infinite do it?
We can see how "robbing consumers" could pay, but we don't get the mechanism. The theft must take an indirect route, we guess.
And it does. "Ultimately," the editorial says, "the billions spent on patent purchases are passed on to consumers in the form of higher prices."
The News cites Google's $12.5 billion buy of Motorola Mobility for its portfolio of "17,000 active and pending patents that Google needs to protect its products from death-by-a-thousand-patent lawsuits." Also Nortel's sale of its patents to Apple and Microsoft for $4.5 billion.
So, let's get this straight. We need patent reform because Google, Apple, and Microsoft didn't actually need the patents to gain a competitive advantage — they bought them mainly to fend off patent trolls? Really?
The tech community doesn't appear to share that view. They seem to believe Google will use the Motorola patents to protect its products not against marauding by patent trolls but against real head-to-head competition by the likes of — you guessed it — Apple and Microsoft. And we think we know why Apple and Microsoft acquired the Nortel stuff. They, too, want to bolster their market power.
What else? Ah. The editorial starts by making fun of a patent that tells you how to "refreshen a bread product by heating the bread product". Pretty goofy, right? Almost keeps you from wincing when the News ends by saying "you're . . . toast" if you don't get ready to fight the patent trolls.
Except the editorial leaves off the next part of the sentence — "to a temperature between 2500.degree. F. and 4500.degree. F". Steel melts at about 2,500 degrees Fahrenheit. Don't try to "refreshen" your biscuits in a steel furnace at home!
But what really gets us shows up in the editors' tale of how a patent troll "shell company" in Marshall, Texas, "killed" the "entrepreneurial dream" of a Dallas-area "entrepreneur". (The News notes it borrowed the story from a July 22 broadcast of This American Life.) "Everything collapsed" for the co-founder of FotoTime, an online photo-sharing service, when he got a menacing letter from the troll.
Very sad, yes? And yet the killing of the entrepreneurial dream might surprise FotoTime, which seems to have survived the blow pretty well.
Nor do we find in the editorial much beyond bluster on what to do to solve the problems the editors suppose. The obvious solution — banning ownership of a patent by firms that don't "practice" the invention — strikes us nutty. Also a bit weird for a newspaper that puts a high value on property rights.
Making patent suits less costly to defend seems a far better idea. Let's do that.
One way to head in that direction would take a page from firms that handle plaintiffs' cases — a fee contingent on the outcome. The defense firm charges no fee unless the client gets out of the case for less than $X. The firm then receives a percentage of the savings. That better aligns the firm's interests with the client's and protects the client against the threat of ruinous cost.
See "How to Negotiate a Reverse Contingent Fee".
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