Patent roulette

If anything good has come out of the settlement between BlackBerry maker RIM and patent holding company NTP (under which RIM will pay NTP $612.5 million), it's that the settlement is spurring a closer look at US patent law. It couldn't come at a more opportune time. Cognex, which has already done yeoman's work fending off a patent troll (Ref. 1), is once again going to battle—in this case, against Acacia Research and Veritec, who claim to hold a patent on a system for reading 2-D symbology. Cognex is seeking a declaration that the patent is invalid, unenforceable, and not infringed by either Cognex or its customers.

"Cognex firmly believes in the right of inventors and patent holders to seek licensing fees for legitimate, patented technology," said Dr. Robert J. Shillman, Cognex chairman and CEO, in a March 20 press release announcing Cognex's action. He continued, "But we strongly object when questionable patents are used to extort payments from companies that do not have the expertise to challenge the patents, or who, for business reasons, decide to submit to licensing demands rather than to undertake costly legal challenges."

I applaud Dr. Shillman for pursuing the fight and not caving, as RIM did. But companies like Cognex shouldn't have to be in the fight at all. What's needed is the reform of a US patent office that rubber-stamps the flimsiest patent filings and of courts and juries unable to comprehend the technical merits of patent claims. Illustrating the absurdity of the situation, Jurassic Park author Michael Crichton (Ref. 2) facetiously asserts patent rights to 257 facts about dinosaurs that you may not use in your own novel unless you pay him royalties.

There is hope. The US Supreme Court is hearing cases relating to medical tests and online auctions and may rule in a way that injects some common sense into the patent system. And many observers believe the RIM and NTP case will spur a backlash that leads to patent-law reform.

Bruce Sewell, general counsel for Intel, summed up the current situation succinctly in recent commentary on the RIM and NTP case (Ref. 3): "For NTP it was like winning the lottery, but for the rest of us, and for business in particular, it stinks."

It certainly does. Let's leave the gambling to casinos and state lottery commissions. American businesses, international businesses operating here, and legitimate patent holders all deserve better.