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Patent trolls are a relatively new event Folks have gured out the patent loopholes and how to exploit them, and this case highlights how the Patent Of ce needs to be reformed to address the modern needs of the patent system We re testing the boundaries of a lot of the concepts of patent law, and we re on the cutting edge, although I m sure the client, RIM, would want somebody else on the cutting edge RIM lead attorney David Long A patent troll is a patent owner who never makes his property into products but rather lies in wait for unwary companies, scares them with the threat of costly court action, and tries to squeeze them for royalties or licensing fees Most of us know about trolls from Three Billy Goats Gruff, an old Norse fairy tale Three goat brothers want to cross a river to graze in the lush green meadow on the other side But a big hungry troll lurks under the bridge, with eyes as big as saucers and a nose as long as a poker The two younger brothers each escape by telling the troll that a bigger goat is coming along behind The last billy goat is the biggest brother, and he butts the troll into the river End of story
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In real life, Research In Motion was not a smart billy goat as it started to ramp up real revenue in the US marketplace in 2001 While basking in the lavish praise the BlackBerry was attracting, the company got careless and ran head-on into an ugly but highly effective patent troll who quickly tied up RIM in a ball of sticky patent claims, then put it through a ve-year legal wringer RIM was fortunate to escape from the nightmarish troll, but only by paying him a king s ransom The main reason RIM survived at all was that the BlackBerry was so good The device was so essential and so beloved by Washington insiders even by the lawyers who were suing RIM that the US Justice Department eventually went to bat for the company, forcing a settlement just in time to stop a complete shutdown of RIM s BlackBerry service
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Today s technology companies are built on owning and licensing patents and intellectual property (IP) Patenting is a large and growing business, with nearly 200,000 patents issued every year in the United States and 500,000 more in other countries, with 61 million patents in effect worldwide IBM earns at least $1 billion a year from a portfolio of almost 50,000 US and more than 30,000 European patents and is stockpiling more than 3,000 IP awards every year Xerox is another giant that has emerged as a major patent owner There is now a brisk marketplace in patents and claims, with trolls abounding Some even claim the trolls have a bene cial effect, creating a market for inventors and developers, monetizing patents that would otherwise not stand a chance, and forcing patent clarity Many tech rms like RIM are on a constant patent war footing They regularly have to unleash teams of legal experts to research lings, bolster patents, clarify claims, defend brands, box in enemies or interlopers, chase off trolls, or force other parties into
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mediation Since some patent disputes have more twists and turns than a John Grisham plot, if a company decides to go to court, it can lead one day and lose the next, depending on the whim of a judge or jury At worst, these disputes end up like gun ghts at the OK Corral, with the winner the last man standing At best, they lead to Mexican standoffs with other patent holders, so both sides can move forward, sometimes together, sometimes apart Companies that live by the patent can also die by the patent For a time, RIM had created a climate of uncertainty around itself with its various patent disputes, which did not help boost investor con dence Only RIM s aggressive defense of its patent rights left it ultimately in a far stronger position to survive, and avoid being gobbled up by a larger competitor
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Research In Motion had become known as a company that would ercely defend its patent turf and do right by customers, even if it meant short-term loss and pain But, unfortunately for RIM as it entered a high R&D phase, the United States Patents and Trademark Of ce (USPTO) was then groaning under a 600,000 patent backlog and reeling under sharp criticism and sarcastic rage from inventors, lawyers, and politicians Much of this patent pandemonium arose from the US Supreme Court s 1998 State Street Bank decision, where patents for business methods had become allowable in US patent law Tech companies like RIM now had to scramble to patent their processes and swallow higher costs to ensure that not just their inventions but also their methodologies could not be hijacked A torrent of method patent applications ooded into the USPTO Many were from trolls, but others showed a marked sense of humor and a desire to put one over on the patent of ce One early methodology award, US Patent 5,443,036, Method of
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