Analysis: UK aims to break curse of the patent trolls

By Stuart Sumner
01 Aug 2012 View Comments
patent troll road sign

The situation is sufficiently bad that the UN has called a meeting of smartphone manufacturers and industry bodies to address the “innovation-stifling use of intellectual property”.

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However, Maughan is unconvinced by this attempt at policing the trend.

“I don’t think the UN will do very much at all,” says Maughan, adding that he believes that the EU is more likely to make a difference.

“The EU are more ‘anti-patent’ as they’re about free competition, and patents are about preventing that freedom.”

However, Aidan Robson, patent and trademark attorney at law firm Reddie & Grose, believes that the current system is working as intended.

“If you’re the owner of the patent you’ve got the right to stop people doing whatever it covers,” says Robson. “Patents have always been commercial tools, there to protect the owner’s investment.”

Maughan fears that the inability of the system to distinguish between firms trying to protect their innovations, and those simply chasing a fast buck, will give rise to more NPEs.

“The original theory behind patents was that you’ve put effort into developing an invention so you should have the rewards. The philosophical question is if all you’ve done is spent millions hoovering up IP, are you worthy of the same protection? The patent system doesn’t distinguish between the two camps, and we could end up with more patent trolls.”

The trolls are not unbeatable, however. Three years ago an NPE called IPAT filed a patent infringement against 35 antivirus companies. Of these, 34 agreed to pay up to $5m annually, while Russian security firm Kaspersky Lab refused all settlement proposals and licensing deals.

Kaspersky eventually won the case by proving itself to be more stubborn than the troll, but spent $2.5m in legal fees in the process.

Meanwhile, the UK government is looking to encourage businesses to develop and patent their innovations in this country through a beneficial tax scheme called “Patent Box”, which will reduce the rate of corporate tax payable on profits arising from patents to 10 per cent from April 2013.

Patent trolls hoping to gain from the tax break by setting up shop in the UK will be dissappointed, however, as the legislation is designed to only benefit businesses that have made a significant contribution to the development of the patented technology.

“Companies seeking to claim the protection of a patent box must fulfill a ‘development condition’; they must have been involved in the creation of the qualifying IP right,” explained Maughan.

However, if Patent Box succeeds in boosting the number of high-tech patent holders in this country, the likelihood of trolls chancing their arm in the UK courts is bound to increase.


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