And if we didn’t have enough to worry about from the domestic ones? Patent trolling gets foreign government sponsorship

I just ran across this article on Patent trolling which should scare the bejeezus out of South Dakota businesses, where we rank among the top states to do business.

While Islamic terrorists threaten people overseas, in some cases nations that our allies seek to threaten our domestic productivity:

“Patent trolling,” the practice of obtaining large buckets of intellectual property rights with the intention of using them to extract damages and settlement revenue rather than to protect innovation or produce anything, is not a new idea. Over the past 40 years, lawmakers have tried to strike a balance between defending research and advancements while dissuading offensive use of patents that negatively impact our economy.

Unfortunately, countries like France, Taiwan, China and others are now engaged in just that kind of abusive behavior. France established a $134 million investment fund called France Brevets that is dedicated to “patent promotion and monetization”; in Taiwan, the government-backed Industrial Technology Research Institute has secured nearly 20,000 patents and launched more than 225 startups. Earlier this year China also began its own patent trolling effort, claiming it was founded to “help Chinese high-tech companies to gain core IP rights.” However many are skeptical because China is not known for its enforcement against intellectual property and copyright violations.

These government-sponsored patent trolls (GSPTs) amass patents to effectively manipulate markets, and with government funding and regulatory clout behind them, they can do so on an unprecedented scale. They are able to discourage foreign competitors, thereby giving a distinct leg up to companies within their borders.

And…

For businesses statewide, these GSPTs pose a real threat to our economic development. According to a study conducted by Santa Clara (California) University, defending against a troll’s suit costs an average of $875,000 to $1 million in legal fees. Settlement outside the courtroom cost an average of $340,000. For small businesses and startups operating on thin margins, such hefty costs can drive them into bankruptcy, and having a foreign government as your legal adversary does not inspire confidence.

Read it all here.

It’s probably a little wonky of a subject, but putting an end to patent trolling is something that they need to take a look at fixing in Washington, especially with foreign governments getting into the business.

10 comments

  • But it is alright to allow foreign countries the ability to condemn and seize sovereign US property such as what TransCanada has done?

    • Exactly how much of a quarter of land would be condemned and used for the pipeline? I don’t know what the stats are and am curious.

  • This is just one more example of government intervention into the system of free market capitalism. Regardless of what form it takes, crony capitalism at all levels is a serious threat to the prosperity of our country. If you want to end the threat – end ALL crony capitalism.

    • i have no idea why you’re even on cronyism – – patent trolling is quasi-legal extortion in numerous cases where it occurs. EVEN in a healthy free market economy, the hand of government must exist, to exert law and order, and be the impartial referee in court disputes. nowadays, and under geithner, the government has become a competitive player in business and that is unfair. but in lieu of stopping the overlarge entry of government into business, the job of impartial referee must still be filled precisely for things like patent trolling. but hey it’s fun to do the broad-brush blast of “all” this and “all” that without nuance and examination, so go for it.

      • I believe you are wrong. I suggest that you first go to the following link and read just what crony capitalism is.

        http://en.wikipedia.org/wiki/Crony_capitalism

        You should have found the following description:

        “Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.”
        ———————————————-

        Then please reread what Pat had in his article and focus on the following section”
        ——————
        “These government-sponsored patent trolls (GSPTs) amass patents to effectively manipulate markets, and with government funding and regulatory clout behind them, they can do so on an unprecedented scale. They are able to discourage foreign competitors, thereby giving a distinct leg up to companies within their borders.”
        ————————

        Now connect the dots and I think you will see that you are wrong.

        • jammer, i concede part of your point. the problem with using a complex issue as a fulcrum for a simplistic political rant is that it doesn’t do justice to the complex issue and the many good people who end up being tarred by the rant while being unhelped by ignoring the nuances of the issue. case in point – friedman-style economics. a lot of people take an ayn-rand-puritanical type view of free market economics, and the supremacy of the economy-creator, when the best practicioners of such approaches, ala Friedman, recognize a host of conditional factors in applying free market principles that are based on the general problems created by your trading partners, whether they’re dictatorships or almost lawless in their market freedom. the watchword is ‘pragmatism,’ and i use that when examining the issues around patent-trolling by foreign governments. to present eradication of cronyism as a cure-all is nice, but it’s not something we can decide or do outside our borders.

          • Since you seem to be making a point of following my every comment and using your circular logic to criticize me, I was going to do a “copy and paste” from one of my previous replies to you describing how most people connect 2 dots with a straight line but you somehow always end up with a circle. However, I decided against that and I am going to address what I think is a more serious issue.

            It is becoming quite clear what you stand for and exactly what you are attempting to do. Decades ago, the traditional Democrats lost their party to a group of people who thought differently. These people also used circular logic and were a master of words. They even came up with a very good word from the English language which they hijacked to describe their ideology and that word was “progressive”.

            Today there is a group of people trying to do the same exact thing to the Republican Party. However, just like the term socialist became unacceptable in the 1920’s. the term “progressive” is losing its luster thanks to the idiot in the White House. Therefore your ideology needs a new description and you have decided to hijack the terminology of “pragmatic/pragmatism”.

            I urge the Republican Party to pushback against these so-called “pragmatists” because they are not who you think they are.

            • jammer, you could not be more dismissively incorrect. i join you philosophically on many issues, but i can’t stand the rigidity of the rhetoric you employ and the grandstanding that you do in your posts. it’s really no more complex than that. if william buckley were part of this exchange he’d tell you to shut the h*** up and offer to kick your butt in the parking lot later. i stand by wm buckley and milton friedman all day long. by whatever magic your gurus have employed, i would guess that you have been groomed over time to now hate half of the historical figures you used to admire. did they change or did you? i’m just guessing, don’t take this as alinskyism. i don’t know you, i’m guessing.

              • continuing – i do hope you have a really nice day today. our state is a beautiful place in the summer/fall transition time

  • “Because they are not who you think they are.”

    Funny coming from someone anonymous.