My son brought this item to my attention from this week's Fortune magazine. In the article by Roger Parloff titled, "Pay Up -- Or You're Done For" he takes a look at the power of the injunction in the hands of NTP in the NTP v. RIM Backberry case.
NTP has this remarkable power because it is nearing victory in its four-year-old patent litigation with Research in Motion, the maker of the BlackBerry. As FORTUNE went to press, RIM faced the real likelihood of a court-ordered BlackBerry blackout (government devices would be exempted) unless it agrees to pay essentially whatever sum NTP names, which some analysts think will approach ten figures.
NTP was founded in 1991 by the late inventor Thomas Campana and his patent attorney, Donald Stout, of Arlington, Va. It has no employees and makes no products. Its main assets, Campana’s patents, have spent most of the past decade in Stout’s file drawer. But in 2002 a federal jury found that RIM had infringed five NTP patents that relate to integrating e-mail systems with wireless networks. An appellate court largely agreed in August 2005, and in late October the U.S. Supreme Court declined to issue a stay while it ponders whether to hear the case.
Should plaintiffs in NTP’s position be entitled not merely to a reasonable royalty but also to an injunction shutting down the infringer? ...the Court of Appeals for the Federal Circuit, which handles all patent appeals, has consistently held that almost any victorious patent plaintiff meets this standard, since a patent grants “exclusivity” over the invention, not just the right to a royalty.
The Business Software Alliance, led by companies like Apple, Intel, and IBM, has argued before Congress that there is often no “irreparable harm” when the plaintiff isn’t making any product, since a reasonable royalty will give that plaintiff everything to which it is entitled. “The patent troll”—the derogatory term for such plaintiffs—“has zero interest in killing the goose laying golden eggs,” says Matt Powers, a patent litigator at Weil Gotshal & Manges who represents Intel and Microsoft. Though the troll wants to negotiate a license, he adds, his potential power to shut down the defendant’s product line gives him an unfair advantage. The situation is exacerbated, he notes, when the product—a Pentium processor, for example—contains thousands of inventions.
Defining a “patent troll” can be difficult, but courts are up to the task. As the late Justice Potter Stewart once said in another context, “I know it when I see it.”
Read the rest of the article here. Read the latest perspective from RIM on status of the case here.
This issue always comes back to the validity of the claims and the quality of the prior art research performed by the inventor and the examiner. If a patent is valid, I don't really care who is listed as the assignee. In some cases, the "garage" inventor would be shut out of the process entirely if it were not for these brokers or licensing companies.
The Patent Prospector posts some great info on trolls, infringement and the need for great prior art searching. For an interesting discussion of patent reform, trolls and all things patent, take a look at the posting "Patent Ignorance Pending" with the 30+ comments.
http://www.patenthawk.com/blog/archives/2005/12/patent_ignoranc.html#more
Posted by: Norm | December 13, 2005 at 10:56 AM