Rather than cave into one troll’s ludicrous monetary demand for what is essentially the basis of the Internet, the Times’ lawyers have headed for the courtroom, says the Associated Press. So what’s at issue? Hyperlinks in text messages.
As unbelievable as it sounds, a Chicago-based firm called Helferich Patent Licensing LLC owns that patent, which its founder Richard Helefrich filed for in 1997. So far nearly 100 companies have settled with HPL for the $750,000 (£473,000) licensing fee, meaning a patent that you’d think would be ludicrous has earned its owner at least $75 million (£47 million), if not more.
Now, I’ll concede here that Helferich did indeed file with the U.S. Patent and Trademark Office on how hyperlinks would work in texts while texting itself was in its infancy, so kudos to him for being a smart entrepreneur. What exactly is the real invention here, though? The Times’ lawyers seem to agree, and are paying for the United States Patent and Trademark Office (USPTO) to review HPL’s patents. One has already been overturned. This is little solace to all those companies who paid up and are now S.O.L, as they say.
Such a move isn’t unusual at all. Paying up quickly is typically the wisest option for companies dealing with relatively minor patent spats, as the cost of fighting it in court may be far more than the license itself. Patent defence consultancy PatentFreedom found that the average patent defence costs a company anywhere between $1 to $5 million (£630,000 to £3.2 million). Thus a court battle isn’t always the best idea financially, despite how frustrating it is to watch those victims feed the trolls.
What’s sad is that this is not the first time somebody’s tried to make money off the back of the good ol’ hyperlink. You may remember British Telecom’s attempt at patenting hyperlinks back in the early 2000s. After “discovering” the patent during a review of its holdings, the company then attempted to force ISPs to obtain a license to link, which would have almost certainly resulted in higher monthly fees for internet users – and probably the death of the web. The courts found that ISPs, Prodigy in particular, didn’t infringe on BT’s patent and threw the case out.
Helferich is by no means the first troll to try to cash in on the basics of the web as we know it. But his and the actions of those trolls before him are a clear sign why the whole system needs to be reformed.
Federal appeals court judge Richard Posner, best known to techies for his work in the Apple vs. Motorola patent case, argued just that in an opinion piece for The Atlantic last month.
He wrote: “A patent blocks competition within the patent’s scope and so if a firm has enough patents it may be able to monopolise its market. This prospect gives rise to two wasteful phenomena: Defensive patenting and patent trolls.”
Posner explained that with so much litigation surrounding patents right now, companies are patenting things not because they fear being copied by others, but rather they fear getting sued. “The cost of patenting and the cost of resolving disputes that may arise when competitors have patents are a social waste,” he argued.
So how can the system be fixed? That’s a great question. Posner recommends that the American government better staff the USPTO so that reviews of patent applications are much more thorough. This would prevent a boatload of bogus patents from ever seeing the light of day, and would also reduce the amount of litigation.
However, when it comes to patent trolls, maybe it’s time to no longer allow a company to hold and sue on a patent for technologies it does not produce a physical product for. That would end nearly every patent lawsuit, and the ones we’d be left with would be legitimate cases of infringement.
Published under license from Ziff Davis, Inc., New York, All rights reserved.
Copyright © 2012-2013 Ziff Davis, Inc