IP: Do Patent Trolls have a Place in Canadian Technology?

Been thinking on this quite a bit lately, especially as I get to “peek under” the hood at many new startups and their technology solutions to combat what they see as a “hole in the marketplace.” What I mean by that is that when a new startup begins to do their pitch to a room full of angels or VCs or mentors or even at a pitch contest, what they often have to do is to spell out their solution to the pain that they believe exists.

And as a part of that “spelling out” of their technology what they often do is to let the room full of listeners learn about their technology and how it works…and that’s a part of their presi…and when you hear a dozen or so of these weekly, you quickly can “suss” out what that means.

Not a problem one would think…but as those who are a part of the startup channel know, you can’t give up anywhere near your complete “secret sauce” component…without risking the ownership and hence the future of your startup. Wiki has lots on this as do so many other google searches and the official Gov’t site here too. It’s well worth the time to invest in learning more about this, everything from Stallman to Lessig to Thomas Jefferson here.

So okay, patents. They take real time and real money to acquire. They must be sought in each geographical area on their own, country by country. They provide little real protection under the “pending” guise…they must be a truly registered Patent to be successful for each startup.

So…what’s a Patent Troll? Ah, well, Wiki has it here (well worth the click, eh!) and as you’ll learn, this term is more about a business model than anything else – here’s how they put the definition –

“Patent troll is a pejorative term used for a person or company that enforces its patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic, often with no intention to manufacture or market the product. A related, less pejorative expression is non-practicing entity (NPE) which describes a patent owner who does not manufacture or use the patented invention…”

As you can see, what is meant by same is that this person or firm, actively goes after an “infringer” on their patents with the aim of only getting a settlement of money to increase it’s revenues via licencing. The world of startups and businesses is full of stories about successful patent trolls who went after firms to gain revenues with no real intent to ever use their patents to make a product; google for Acacia, or Wi-Lan or RIM vs NTP or Microsoft vs Eolas or Intellectual Ventures

In my mind, patent trolls, or patent holders who threaten companies with costly court battles unless they’re offered licensing fees, are a serious threat to legitimate businesses in that companies who do the costly grunt work of actually developing and marketing new technologies are being held ransom by tiny outfits whose only assets are vague patents. Former Deputy Prime Minister of Canada, John Manley thinks the same way I do here and then there’s the whole Nortel patent purchase by Microsoft and Apple for billions too to consider. Jeff Bezos of Amazon coined his position 12 years ago on this here and Rockstar a big Canadian troll is here as well as the big Canuck law firm Torys announced here back in Oct last year that yup, business processes can now be patented here in Canada too…and a great patent troll infographic is here too…sigh.

Patents are great. Patent trolls…not so much, so…as you can see, the real point that I’m trying to make is that a patent troll is not helping innovation…not in the least…but what do you think on this…is the patent troll model something you think is a viable Canuck business model?