A new study by the Heartland Institute assesses the impact of patent trolls on innovation, but it runs into a number of issues that are seldom addressed adequately. There is a general consensus that patent trolls are a manifestation of a problem with the current system; cases involving technologies like “scan to email” have become well-known examples. From the beginning, the Heartland Institute study, written by policy adviser Steven Titch, presumes that intellectual-property (IP) laws promote innovation—an assertion whose foundation is questionable at best. Nevertheless, the study suggests that patent “abuse” is a serious problem: “Patent abuse is harming the U.S. economy. It interferes with market competition, stymies entrepreneurs and innovators, and ultimately costs consumers in higher prices and decreased availability of products and features.” But even ostensibly non-abusive patents yield the exact same effects—hence one of the major difficulties of separating patent trolls from other patent protection.
According to Titch, the business model of patent trolls—“patent assertion”—involves “filing either frivolous or mostly baseless lawsuits.” This definition, however, essentially tosses the patent-troll problem into the realm of tort reform generally rather than IP specifically. To be sure, using the high cost of legal representation as a bludgeon to extort money from companies that might otherwise be motivated to contest a patent-infringement claim in court is a dubious practice, but again, such practices are problems with the legal system at large. In addition, the study says, “The solution [to the problem of patent trolls] must not unfairly classify certain patent holders, such as universities, as trolls simply because they hold patents without manufacturing goods.” But this is one of the main problems with patent-reform efforts, and it cannot be glossed over. Ultimately, one of the main principles that the Heartland Institute study illustrates is that dealing with patent trolls without systemic reform (likely meaning abolition) is difficult, if not impossible.
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