Richard Lloyd

In the debate around US patent reform – both while it was being considered in Congress and after it was taken off the agenda by Senator Leahy – several members of the patent community have voiced the opinion that the market is best placed to handle the issues that legislators tried to address. Through a mixture of self regulation and new business models, the argument goes, the patent community can deal with the issues much more effectively than Congress ever could.  

Of course, this is not a view shared by the patent owners and advocacy groups who want legislation to remedy what they believe are damaging aspects of the patent system, such as frivolous demand letters. But the point is worth considering again in light of a paper published last month by the Juelsgaard Intellectual Property & Innovation Clinic at Stanford Law School, entitled ‘Hacking the patent system – a guide to alternative patent licensing for innovators’.

In the paper, Stanford students Marta Belcher and John Casey outline the various options available to start-ups to protect themselves from litigation. The authors provide a brief overview of the three main defensive patent aggregators – Unified Patents, AST and RPX – and the various patent pledges from the likes of the Defensive Patent License, the Open Invention Network, Twitter and Google, which offer some level of defence from legal action.

One reading of the paper - which was supported by the Electronic Frontier Foundation, the Open Invention Network and Engine - is that it actually adds some weight to the market forces argument. This is not the paper’s purpose but, while some of the language used to describe the state of the patent system is a little hyperbolic, it does highlight the growing number of options available to new businesses concerned by the threat of lawsuits.

In many ways there are parallels to be drawn with some of the steps that a few NPEs have taken recently to commit to a series of best practices and encourage greater self-regulation. Conversant, Finjan and, most recently, Dominion Harbor Group have all announced best practice principles that they now promise to adhere to.

Some may see this view as particularly naïve and, ultimately, some of the most extreme examples of patent troll-like behaviour may have to be dealt with by legislation. But, if recent experience in Washington DC has taught us anything, it’s that if you leave it up to Congress then you might be waiting quite a time, while what the politicians come up with could well be sub-optimal to say the least – with the potential to do significant harm to any number of innocent parties, most of them SMEs. The quickest solution is for those affected to take the initiative and promote solutions from within. And that goes for both sides of the debate.