Microsoft Joins the Fight against Patent Suits
In the past few years, it seems that every day there is in a new patent suit filed. Although Microsoft Corp. and other major software and technology companies (such as Oracle Corp., Google Inc., and Facebook Inc.) believe that preventing patent infringement is vital, they are concerned that the “rampant” litigation could actually hurt, not help, technology businesses when it comes to the legal protections for innovative software.
Microsoft executives, along with executives from IBM and Oracle, took their concerns to the Hill last Thursday. Microsoft, joined by Oracle, made sure to express its desire to curtail litigation, but not to limit the ability to patent software, since patents protect competitive edge and innovation. Brad Smith, general counsel for Microsoft, stated, in regards to the patent system, “We need to fix what’s broken but be careful so we don’t break what’s working. It’s all about striking the right balance.”
Microsoft’s’ concern over the increase in patent litigation is not unfounded. Of the 5,600 patent infringement lawsuits filed in the United States in 2012, 60% were filed by patent-assertion entities, commonly known as “patent trolls.” Patent trolls are individuals and companies that earn most of their money from patent licensing and litigation, rather than actual innovation. They do this by buying patent portfolios with the only purpose to extort fees from the companies that actually make the patented products. If there is one thing that all the technology giants can agree on, it is their dislike of patent trolls and their lawsuits.
In addition to their dislike of patent trolls, Microsoft has joined with Google and Oracle in support of changing policy to address the rampant litigation that is occurring today. Microsoft supports reforming the U.S. patent system in numerous ways, including, having the losing party pay the winner’s legal fees (forcing companies to internalize the strength of their case prior to litigation, thus deterring frivolous litigation), greater transparency at the patent office, more clearly identifying the true owner of a patent, and requiring more specific information to be provided by patent applicants regarding their inventions. Microsoft has even announced that it will post “information that enables anyone to determine which patents [Microsoft] own[s],” by April 1 of this year to foster transparency and reduce litigation. Furthermore, Microsoft, Oracle, and IBM have stated that courts and the patent office are making some progress since implementing the Leahy-Smith America Invents Act in 2011, but more needs to be done, especially in curtailing ligation.
It will be interesting to see if Microsoft and the other technology/software giants live up to their promises of transparency regarding their own patents in their efforts to reduce litigation by patent trolls and increase innovation.