Given the inanity that is our current patent system, it’s not surprising that innocent patent holders can look like trolls. Such might well be the case with SightSound Technologies, a subsidiary of General Electric, which has spent years in patent lawsuits with Apple, CDNow, Bertelsmann, Napster and others. As SightSound’s CEO Scott Sander argues in a letter to The Wall Street Journal editor, “true innovators [can be] so burdened by the cost of the very patents meant to protect them that they themselves must become an ‘assertion’ entity.” Or, in other words, a patent troll.
But when is a patent troll not a patent troll? And is it ever right to become a patent troll as an allegedly defensive maneuver?
Is Being First Enough?
According to Sander, SightSound owns a portfolio of 50 patents related to media downloads, and claims to have been the first to sell both music (1995) and movie (1999) downloads. Of course, a quick Google search reveals that others were offering subscriber-only music downloads before 1995, e.g., Compuserve, and the Internet Underground Music Archive was offering free downloads in 1993. Movies? They were available for free before 1999 and some organizations like the American Film Institute offered movies on their website.
But let’s not let historical accuracy get in the way of a good argument.
The reality is that under U.S. patent law, SightSound didn’t need to be the first to file for a patent, nor did it need to be the first to make its patent-pending product available to the public. While the U.S. has recently joined the rest of the planet in adopting a “first to file” rule for patents, formerly the only requirement was that you be able to demonstrate that you were the first to invent.
Courts have sided with SightSound against both CDNow, N2K, Roxio, Bertelsmann and Napster, but Sanders asserts “We now find ourselves defending our patent rights against Apple, which copied our business, our technology, and our innovative pricing model, all of which were presented by us directly to the future infringer in 1999.”
Compelling, yes? Well, maybe. If you look at SightSound’s website, you won’t find the obligatory customer case studies. In fact, the website is heavy on assertions that it was first to do this or that, with descriptions of its core technology, and little mention of actual products. On its news page, the company links to a series of court victories.
Yet this is where defining a “troll” becomes difficult.
Just What Is A Troll, Anyway?
Most characterize patent trolls as non-practicing entities (NPEs), that is, companies that don’t actually build anything beyond lawsuits and cease-and-desist letters. In Sander’s mind, the definition needs to be enlarged:
SightSound raised capital precisely because its patents protected its first-mover position. We used that capital to hire talented engineers attracted to the prospect of launching not just a company, but an entire industry. We were subsequently forced to defend our patents endlessly in court against larger, well-funded, heavily lawyered infringers. An infringer with a $100 billion war chest can make a mockery of the current patent system as much as trolls do.
To Sander, a patent troll might also include larger companies who can afford to steamroller smaller rivals, no matter the validity of their patents. The reality of our system is that few can afford to litigate their patent portfolios, and hence larger companies with deeper pockets invariably win any long-term patent suit (and given the pace of U.S. courts, they’re always long-term).
A Clear Test Of Trolldom
Sander proposes that we eliminate the ambiguity with a bright-line test: “Is the patent owner the first to invent, the first to file and the first to make the product or provide the service? If so, it cannot be a troll.”
What do you think? I personally like the test, but it’s hard to square it with SightSound’s history of litigation. Because that also makes a company a patent troll in my mind: if they’re more interested in litigating than building, to me they’re a troll.
Sander says it’s a troll purely out of necessity, but does that hold up with you?