Joff Wild

Not only are there significant questions to be asked of James Bessen and Michael Meurer about the methodologies they used and the figures they came up with in their two major papers – The Private and Social Costs of Patent Trolls (using a database supplied by Patent Freedom) and The Direct Costs of NPE Disputes (based on the results of a survey undertaken by RPX) - but recently their basic integrity has also been called into doubt. This follows the publication of a piece by the Boston Globe in which they are revealed to be either incapable of undertaking even basic research or dishonest.

As the US patent reform debate looks set to kick-off again in Congress following the mid-term elections earlier this month, the reliability of the two Boston University academics as sources of record matters very much. They are frequently cited and/or referenced by senior legislators, as well as by advisers to President Obama; while they are also consistently quoted by organisations lobbying for change. On top of that, countless articles in the press over the years have rehashed their claims that the actions of “trolls” cost operating companies tens of billions of dollars each year. In short, they have significantly influenced the argument.  For them to have done so on the back of flawed research, a lack of intellectual consistency and potentially wilful misrepresentation is genuinely shocking.  

Bessen and Meurer have repeatedly equated the term “NPE” with the term “patent troll”. In their 5th November Boston Globe article they write: “Trolls are firms with no interest in innovation or technology transfer; they hold patents to assert them against innocent businesses to extract some of the profit from genuine innovators.A week later, on 12th November, in an article published by The Hill, Bessen claimed that “patent lawsuits filed by trolls cost operating companies over $29 billion in out-of-pocket costs; when things like employee distraction and lost business are included, that number jumps to $80 billion per year.”

Thus, Bessen is directly and knowingly tying the $29 billion and $80 billion figures from The Private and Social Costs of Patent Trolls and The Direct Costs of NPE Disputes to entities which he unequivocally stated just a week before “have no interest in innovation or technology transfer” and whose motivation for owning patents is “to assert them against innocent businesses to extract some of the profit from genuine innovators”. The question he must answer is how on earth he knows.

To elaborate, in order for Bessen to credibly make the claims that he does in his 12th November article, he would have to be able to explain the judgements that he and Meurer made when deciding that the entities they studied using the information provided by RPX and Patent Freedom have: (1) no interest in innovation and technology transfer; (2) own patents “to assert them against innocent businesses to extract some of the profit from genuine innovators”; and (3) what constitutes an innocent business and a genuine innovator. None of this is covered in either of the original papers. Bessen would then have to explain why he and Meurer have been so utterly inconsistent in the way that they define the term “troll”/”NPE” and why they see the terms as interchangeable, when for others they mean very different things.

In the Private and Social Costs of Patent Trolls NPEs/trolls were “firms that do not produce goods, rather they acquire patents in order to license them to others”; while in the Direct Costs of NPE Disputes they were “individuals and firms who own patents but do not directly use their patented technology to produce goods or services, instead they assert them against companies that do produce goods and services”. Whether you agree with these definitions or not, there was a level of objectivity in both. Now, that has been abandoned in favour of subjective, even moral, judgement, as NPEs/trolls have morphed into “firms with no interest in innovation or technology transfer” that “hold patents to assert them against innocent businesses to extract some of the profit from genuine innovators”. It is clear that the work done by Bessen and Meurer was focused on a certain type of entity. Now, though, Bessen has decided to attach the findings to a completely different kind. It’s hard to escape the conclusion that this renders everything that the pair have done completely meaningless.  

Having talked through the reasons for the fundamental shift in the definition, Bessen could then let us know how and why he and Meurer decided, in that Boston Globe piece, to label France Brevets, the Innovation Network Corporation of Japan (INCJ) and Taiwan’s Industrial Technology and Research Institute (ITRI) as “government-sponsored patent trolls” which “are frequently active in US courts”, when a basic internet search would have revealed that they are not. Was it just plain, bad research, or was it more about seeking to open up a new front in the reform debate by raising (false) alarms over foreign trolls?

Of course, it is possible that Bessen and Meurer can explain coherently and credibly why their decision to fundamentally change their definition of what a patent troll is has no impact on the research they did previously. They might also be able to refute the detailed critiques of their work made by Schwartz and Kesan and Katznelson, and perhaps open up their papers to full peer review. Who knows, there might even be a perfectly reasonable explanation for why they falsely labelled France Brevets, INCJ and ITRI trolls. If one or both of them does wish to set the record straight, IAM is very happy to act as a forum – we undertake to print anything they send to us in full, with no changes of any kind.

All that said, Bessen and Meurer do not force any politician, lobbyist or journalist to write and talk about their work. They put it out there – perhaps with some help from some interested parties – but it is up to others whether they wish to use it or not. Sometimes – as might be the case with business reporters or Congressional staffers – an initial level of credulity when presented with research from two academics from a reputable university is understandable. But as the doubts about their credibility mount, you do have to wonder whether something else is at play and that ignoring difficult evidence that runs against a popular narrative has become more expedient than taking it on board.

Then there are the IP owners and lobbying groups who should know better; that they might choose to cite the findings of Bessen and Meurer to justify their calls for reform is much more troubling. They know there are serious questions to be asked of the pair’s methodologies and figures; they know that they have a record of fundamentally changing their definitions; and they know that the two of them have seriously misrepresented the business models of highly respected foreign organisations. If those in the IP community who want patent reform wish for an honest debate about the subject, they have no business quoting or referencing James Bessen and Michael Meurer. Should they continue to do so, the only reasonable conclusion has to be that what is best for the US and global innovation economy is not the real issue – what matters is what best suits certain selfish corporate agendas. We will be watching.