Supreme Court Makes it Easier to be a Patent Troll
The Supreme Court set software industry precedent on Monday with the unanimous reversal of a 2006 ruling in the patent infringement suit between Akamai Technologies Inc. and Limelight Networks Inc. Akamai had originally testified that Limelight encouraged its customers to violate an Akamai patent by copying technology to improve website traffic efficiency. The initial ruling was made under the doctrine of “induced” infringement, which tests liability by determining if the violator “knowingly induces others” to fully commit the crime, rather than first party infringement.
With five dissenting votes the decision was one of much dispute because it did not fit the parameters of classic patent infringement. In December 2013, the Solicitor General advocated a review of this ruling based on the concept of “divided” infringement. This notion challenged the traditional definition of patent infringement, which typically includes a purposeful violation committed by a single entity. In the case of Akamai v. Limelight, multiple independent users took some steps toward infringement, thus muddling the controversy and ultimately leading to this week’s reversal. Many top tier companies, such as Facebook, Google, and Oracle supported the reversal, asserting that they would have faced mountains of claims and skyrocketing litigation costs across the board had Akamai won the suit.
The complexity of this case’s nuances bring up greater concerns about the growing disparity between the context of the Patent Act’s conception more than two centuries ago, and today’s technological advances. Copying someone else’s invention is now as simple as downloading a file with the click of a button. Had Limelight been defeated, we would have seen a staggering increase in the already heavy burden of patent infringement suits on the technology community.
The nature of the patent industry has developed in the twenty first century from tangible products to cloud-based software. According to the Wall Street Journal, as of 2012 technology patents accounted for more than half of all the patents granted that year. This trend in software research and development has essentially turned patents into the type of invaluable investments that brick-and-mortar manufacturing used to be.
Due to this change it seems that trolling is no longer exclusive to social media. We’ve seen the rise of non-practicing entities (NPEs), more commonly known as “patent trolls”. These players work to build and enforce litigation for other people’s patents in the effort to collect licensing fees. The reversal of the Akamai v. Limelight case lifted helped to restrict the possible business of this secondary patent industry that typically hindered innovation by tying up inventors in legal trials.
It seems to me that while top companies, like Apple and Google, continue to push the limits of technology, they are simultaneously presented with a paradoxical challenge. As the only safeguard against having their ideas stolen by or credited to others, patents continue to serve as the blood of the technology industry.
On the other hand, patent trolls and entrepreneurs that use patent licensing business models to prematurely buy, sell, and trade patents have effectively altered the industry. In a way, patents are no longer fostering innovation but are rather sold to the highest bidder who may not actually create the best product, despite their sole rights to it. Unfortunately, these third-party entities of patent trolls and NPEs are driven by money, and when money is paired against the dreams of inventors, money typically wins. This is especially true with startups that don’t have the gross capital and market share of companies like Apple. In the end, true innovators, and the consumer audience they hope to serve, are the ones that tend to be on the losing end.
Erika Bethmann (@EBethmann) is a New Jersey native and a Washingtonian in the making. She is passionate about travel and international policy, and is expanding her knowledge of the world at George Washington University’s Elliot School of International Affairs. Contact Erika at staff@LawStreetMedia.com.
Featured image courtesy of [Alexandre Dulaunoy via Flickr]