Impact of Patent Trolls on Innovation

This article talks about how patent trolls can stifle innovation in entire economic sectors.  It uses the healthcare space to demonstrate how one patent troll severely delayed innovation in the digitization of medical records.  Patent trolls gain their leverage by buying vague patents from other small entities, where the patents encompass large portions of an economic space.  The trolls then sue companies infringing on these patents and that effectively brings R&D in those areas to a standstill at the company.  The reason for the standstill is that even if the troll’s case has no real merit, if the company somehow loses the case it is liable for “willful infringement” and triple the damages because it continued to participate in work that infringed on the patent at issue during the case.  While it’s clear to see the damages this has done to large companies, the patent trolls hold that what they do is protect the rights of small level inventors from being bullied out of the market by larger companies who infringe on their patents.  Which side do you take, and do you feel that our patent system is designed too much in the patent litigant’s favor?

3 thoughts on “Impact of Patent Trolls on Innovation

  1. I go back and forth about patents. On the one hand, they are very valuable for someone who has few resources and is starting out. For example, my father-in-law benefited from having a patent and was able to grow his company from him in his garage to employing over 25 individuals. On the other hand, with truly new/disruptively innovative products, the market is untested and most businesses won’t interfere in that space until the innovator already has sizeable market share (as we just discussed last class). So perhaps where I see patent law as most positive (benefits without drawbacks) is also where it seems least necessary.

    Where I think patent law gets more problematic is in the incremental/sustaining innovations. For example, it appears to me that patent law has caused the multiplicity of phone chargers on the market today. I’m not sure that anyone buys the phone because of the charger associated with it, but each charger has a patent saying why it is better in some respect. This prevents uniformity and compatibility, harming the consumer. The same drawback is true across the tech space where compatibility may be most desirable.

    However, even though people do not buy the main product because of the sustaining innovations, it seems like the sustaining innovations are necessary to continued growth/survival of a market (how many iphones would be sold if the next iPhone offered no upgrades?). It appears to me that these sustaining innovations are where trolls most easily reside, but also where the only way to turn a profit from an invention is to patent it (and often license it out).

    Having not taken patent law, all of the above represents my initial impressions. I would be glad to hear the thoughts of others, especially those who have taken patent law.

  2. I have a very novice understanding of patents and patent trolls. After reading your post, I found this article:, which provided me with some easy-to-understand information regarding what exactly a patent troll is. What I found disappointing about the article, though, was its relative lack of a discussion on how entrepreneurs can protect themselves from patent trolls. The article did offer this piece of advice, “The most important thing that inventors can do to protect themselves from both legitimate patent infringement and from patent trolls is to have an experienced intellectual property attorney on retainer.” That’s the best an entrepreneur can do? Have a lawyer at the ready? This seems like a very unsatisfying solution. Unfortunately, as I mentioned at the outset, I do not have the proper knowledge on this subject to offer my own solutions, but I am hopeful that there must be something an entrepreneur can do to protect themselves before having to turn to lawyers.

  3. I think the patent troll phenomenon is a real problem that shows there are major flaws in our current patent system. The patent laws are supposed to protect an individual’s right to their invention, but the patent trolls are twisting that purpose. I agree with Ricky that it is probably the most problematic in the incremental innovation space. As the article shows, I think healthcare is a good example of why some reforms are needed. Healthcare is an industry that is supposed to do good for everyone and where information sharing would most benefit. I’m realistic to know that people are always going to try to profit when they can, but I think a balance can be struck. To answer the question, I think the patent laws are too lenient toward the patent litigants right now. There should be some level of information sharing so that we, as a society, can progress, rather than just have the aim of individual profit.

    I found this article (link found below) that applies to this idea as well. It says copyright and patent laws are stifling innovation and economic growth. It made an interesting point that innovation would probably be at the same level even if there was zero protections in this area. It implies that innovators are not only motivated for their potential ownership rights and profit. There will probably always be a sect of people that are driven to innovate for its own sake so that things can be improved and problems can be solved. I think this shows that there is some space then to allow for some reform. There must be a sweet spot between too much protection and not enough .