This Is Where the Patent Trolls LiveS

This American Life had an amazing story this past weekend about patent trolls. It was pegged to Intellectual Ventures, and various others who litigate rather than innovate. But the real patent trolls are being traded on the NYSE.

As This American Life reports, from 2004 to 2009 patent infringement lawsuits rose 70 percent while licensing fee requests went up by 650 percent. The system is broken. And it's got to be fixed before it kills everyone in the business of making something new.

To make that happen, we need to get the big players in the patent system on board. Sadly, right now they're part of the problem.

Software patents are often flim-flam, won almost by lottery, that benefit no one other than lawyers and shakedown artists. Take Lodsys, for example, the company hammering iOS developers over patent number 7,222,078. Here's its abstract:

"In an exemplary system, information is received at a central location from different units of a commodity. The information is generated from two-way local interactions between users of the different units of the commodity and a user interface in the different units of the commodity. The interactions elicit from respective users their perceptions of the commodity."

It's utterly ridiculous. There is nothing non-obvious or novel about the patent it is seeking to enforce. Anyone who finds it innovative is naive, intellectually dishonest, or, sadly, a patent examiner at the USPTO.

Like many software patents, it's essentially several hundred words of typo-riddled gibberish, much of which might as well be lorem ipsum text. And yet, it passed. So now this patent, which mostly talks about market research, is being used to shakedown iOS developers for in-app purchases.

The epicenter of this slow death of American invention is Marshall, Texas. Marshall is the town Technology Review called "a haven for patent pirates." Many offices there are, effectively, mail drops established for the purpose of filing lawsuits. The Lodsys office is nary a block from the U.S. District Court for the Eastern District of Texas.

The courthouse itself looks bucolic in this Google streetview map, with rays of sunlight arcing over its roofs. Until you realize that the light is coming from the West, and what you are looking at is the sunset of American innovation.

A Nexis search of 104 E. Houston Street, the building where Lodsys and Oasis Research, LLC (a company profiled in the This American Life report) are headquartered, reveals suite upon suite of patent trolls and weasels. Companies like Software Rights Archive LLC, whose Google footprint is basically a history of lawsuits.

These are the tapeworms crawling through the nutrient-rich belly of American innovation, full of bile and shit, slowly starving us to death.

104 E. Houston also houses a hive of lawyers, the kind who can file a multi-thousand word lawsuit but can't even bothered to take the dummy text off their websites. Others, who aren't actually headquartered there, brag of their Marshall office—because it is "blessed with outstanding judges who employ a "fast track" docket system for resolving disputes quickly and efficiently."

Yes. A true blessing for us all.

But the thing is, the problem isn't Lodsys or Innovation Solutions or even the litigation-prone attorneys. They're just taking advantage of a broken system. The problem is driven by the ones who perpetuate it. It's Apple. It's Microsoft. It's Sony. It's Samsung. It's HTC. It's Google.

Instead of spending obscene fortunes stockpiling patents or suing the shit out of each other at every available opportunity, these large companies that depend on innovation could actually do something constructive for society.

If the biggest players in technology and the American economy tell Washington to write a bill, it gets written. The Patent Reform Act, that passed the House in June—which awards patents to the first applicant, not the first inventor—is basically the exact opposite of what patent reform should look like. It needs to be harder to get a patent issued. The patent re-examination process needs to be more vigorous. And it needs to be easier for small players to participate. If the Apple-Microsoft-Rim-Sony consortium spent a fraction of the $4.5 billion it plunked down for the Nortel patent portfolio on lobbying, we'd have very different patent laws. And we need them desperately.

It wasn't always like this. Even as recently as 20 years ago we had a better patent system. We need to totally overhaul it now, so that patents once again foster innovation, rather than prevent it.

As Marco Ament noted, perhaps it's a good thing that Google didn't win the Nortel patent portfolio, because not owning a trove of patents could motivate the company to challenge the system. Until that happens, until large corporations fight to fix the status quo instead of lawyering up and buying every patent on the market, they're the problem, and they're the ones we should be focusing our outrage on.

Raging against Lodsys and Oasis Research and Software Rights Archive and even Innovation Solutions feels good, but is ultimately useless. They're lampreys. Yeah, we should be rid of them. But the only way to do that is to get rid of all the sharks.