Big trolls vs. small trolls: The real battle behind patent reform

Rogue software patent trolls are the scourge of the tech industry. But the larger, better-dressed trolls don't get a pass either

This week has been full of news related to software industry patents. Among the biggest stories, Rep. Bob Goodlatte's patent reform bill cleared a crucial vote, Microsoft and Acacia crossed swords again, and Apple convinced a court to squeeze more cash out of Samsung despite itself having been recipients of presidential grace on the same topic.

Now more than ever in the technology industry, patents are the focus of much energy and attention. Some of us no longer find pride in being patent holders. As a result, there's also been a lot of focus on all the patent reform bills circling Congress and hoping to be cleared for landing. Many of these initiatives target patent trolls, trying to nudge them to oblivion by making small adjustments to the existing rules. The demise of patent trolls would be good news for open source software, which despite better defenses than much of the software industry faces serious challenges from software patents.

Two types of trolls

It would be easy in the midst of all these change to take a simplistic view of patent trolls. These amoral gamers of the patent system are clearly more of a menace to innovative business in the 21st century than their predecessors in other technology bubbles were. But you may be surprised to learn that there's more than one breed. Obviously, there are companies with no products, called "patent assertion entities" (PAEs -- or "patent aggression entities," if you prefer). But there's another dimension, too, one that wants the patent reform sculpted much more carefully.

As the Washington Post notes, Rep. Goodlatte's bill was trimmed as a result of intense corporate lobbying pressure. The changes mean that the bill's expedited process for the Patent Office to get rid of low-quality software patents has been neutered. This change to the "covered business method" program was an important weapon against trolls. Trouble is, the change also affected large corporate players using their extensive patent portfolios to extract money for innovators.

The dirty secret IBM, Microsoft, and other self-proclaimed advocates of patent reform don't want you to know is that they are trolls, too. They have large and highly profitable business units using exactly the same tactics as the patent trolls they hate. The reason they hate the trolls is not because of what they do -- after all, IBM and Microsoft were the pioneers of treating patent portfolios as profit centers rather than cost centers. No, the reason they hate the trolls is because the trolls attack them with the weapons they themselves perfected.

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