The Growing Problem Of U.S. Patent Trolls, And What Should Happen Next

CEO and Co-Founder of Bitmovin, a company providing cloud-based OTT video software solutions for leading media companies worldwide.

In the very near future, President Biden will nominate a new director for the U.S. Patent and Trademark Office (USPTO). Although we don’t yet know who the incoming PTO director will be, there's a lot of work ahead for the new administration. In our view, the last administration did more harm than good by passing poor policies that made it easier to obtain and assert low-quality patents, all while raising the bar to challenge them. The new administration will need to set to work addressing the problem of patent trolls and reshaping the patent system to support economic growth through startups, small businesses, and innovation.

The patent system ensures that innovators see return on their investment, and that provides the incentive necessary for them to expand the scope of human understanding and share that knowledge with the world. However, the patent system, like all other human institutions, is vulnerable to abuse. This abuse is most notable in the form of low-quality patents that are asserted against innovative companies by entities that often don’t even make any products. The worst of these patent trolls pick up low-quality patents and take advantage of asymmetries in the economics of litigation to make quick cash. Bitmovin has been on the receiving end of several of these dubious suits, which are a very real threat to innovators and other startups. Some studies have estimated that 30% to 40% of issued patents are invalid or low quality.

Leave a Comment