Tech Companies Ramp Up Fight Against Patent Trolls

By Cameron Scott 

patents, IP, social media, social networks, mobile apps, facebook, google, Google, BlackBerry, Earthlink and Red Hat today petitioned the Federal Trade Commission to crack down on companies whose chief business is enforcing patents. The move came one day after cloud host Rackspace announced that it was suing one such patent assertion entity, IP Nav, for violating a previous agreement that both companies would provide notice before suing over a group of contested patents.

Google’s comments follow a workshop the FTC and Department of Justice held on patent assertion entities, often referred to as patent trolls, in December. The comment period closes today. Rackspace will also file comments, the company said.

The tech industry has been embroiled in numerous battles over patented software processes. Google and Oracle and Apple and Samsung have waged epic court battles over intellectual property. But numerous smaller cases are also ongoing.

Last year, a Boston University study found that the number of lawsuits filed by patent assertion entities had quadrupled since 2005, and that the fight over patents cost U.S. companies nearly $30 billion in 2011.

“Patent trolls like IP Nav are a serious threat to business and to innovation. Patent trolls brazenly use questionable tactics to force settlements from legitimate businesses that are merely using computers and software as they are intended. These defendants, including most of America’s most innovative companies, are not copying patents or stealing from the patent holders. They often have no knowledge of these patents until they are served with a lawsuit. This is unjust,” wrote Alan Schoenbaum, Rackspace’s general counsel.

Google’s comments chiefly target “patent privateering,” in which the patent holder sells rights to a PAE.

“Trolls use the patents they receive to sue with impunity—since they don’t make anything, they can’t be countersued. The transferring company hides behind the troll to shield itself from litigation, and sometimes even arranges to get a cut of the money extracted by troll lawsuits and licenses,” Matthew Bye, Google’s senior competition counsel, wrote on one of the company’s blogs.

The Electronic Frontier Foundation, which supports freedom of expression on the Internet, has laid out a 7-part plan to reform the patent system and sideline patent trolls.