"Patent trolling has emerged as a big and growing business line for what the Manhattan Institute has dubbed Trial Lawyers, Inc., the subset of the plaintiffs’ bar that behaves like the biggest of big businesses," writes Manhattan's Center for Legal Policy.
The paper is less an academic study than a work of advocacy. It tells the now-familiar story of how patent trolls make no useful products themselves but use the courts to extract cash from legitimate businesses. The document is stuffed with insets denouncing people Manhattan regards as patent-trolling villains, complete with unflattering caricatures.
Chicago litigator Raymond Niro is described as the "Original King of the Patent Trolls." A company called MPHJ is accused of operating a "scanner shakedown." And the study describes how federal courts in the Eastern District of Texas adopted patent-friendly rules that have made it the "rocket docket" for patent lawsuits.
The study directs particular ire at patents on software. "Litigation over software patents has became a drag, not a boon, to technological innovation," the study notes in its opening paragraph. The study argues that "software patents are hard to define, enabling aggressive plaintiffs’ lawyers exploiting the maze of U.S. legal rules to extract wealth from the nation’s most innovative companies." In contrast, pharmaceutical patents are "limited to easy-to-define, specific chemical compounds," producing a much lower rate of litigation.
Some scholars have been drawing a contrast between good pharmaceutical patents and bad software patents for years. But until recently, the distinction tended to get lost in mainstream debates. When Congress overhauled the patent system with the 2011 America Invents Act, it focused on esoteric procedural changes like switching from "first to invent" rule for granting inventions to a "first to file" rule. Reining in software patents wasn't even on the agenda.
Now there's a growing awareness that the patent crisis is really a software patent crisis. Trolls are suing people over scanner, Wi-Fi, and mobile app patents, not for chemical or mechanical patents. While the Manhattan Institute stops short of advocating the elimination of software patents, it urges Congress to "clarify the definition of 'processes' underlying such patents," which would at least nix the most egregious ones.
Ultimately, the details of the paper are less important than who is publishing it. The Manhattan Institute is a prominent think tank with deep ties to conservative elites and the business community. The study's publication is another sign that the political right is paying attention to the patent system's growing dysfunction. And given that the Obama administration has endorsed a slate of patent reforms similar to those the Manhattan Institute favors, there's a real chance of change actually happening.