- Patents are legally binding rights to an invention
- Patents are important for business success, as seen on Shark Tank
- Patent trolls are companies that buy patents and threaten lawsuits
- Patent trolls have filed the majority of patent lawsuits in recent years
- Patent trolls target big and small businesses, even for using their own equipment
- The patent system has become prone to abuse, with vague and broad software patents being issued
- Patent trolls settle cases instead of going to trial, as it is cheaper for companies to pay them off
- Patent trolls often have vague company names and file lawsuits in sympathetic districts
- A bipartisan bill called the Innovation Act was introduced to address the issue, but it did not pass in the Senate due to influence from trial lawyers.

- The speaker is in favor of a bill and uses sound effects to express support.
- The bill is related to patent reform and is being discussed again.
- The speaker believes that something needs to be done to protect viable businesses in America.
- The speaker mentions that only one business does not rely on patents.
- The speaker concludes by emphasizing the need for patent reform.

For inventors, patents are an essential protection against theft. But when patent trolls abuse the system by stockpiling patents and threatening lawsuits, businesses are forced to shell out tons of money. 

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If you invent something in America and you get it approved by the Patent and Trademark Office, the rights to that idea then belong to you.

They're absolutely essential to business, as you would know if you've ever seen an episode of Shark Tank.

you telling me you've got something proprietary, a patent or a technology or a software no 1 can emulate?

I hope you do get your patent, and I wish you good luck.

Without having it, I feel that you're going to really have a struggle.

Don't have a patent, don't have a finished sample, don't have experience.

Unless you have a patent or some proprietary technology, you're gonna be in trouble.

Arriving on the set of Shark Tank without a patent is like turning up to America's Next Top Model without knowing how to smize or booty tooch.

You take that shit to catalog, you're not editorial.

-...the point is, if you don't have a patent, you don't have a prayer on Shark Tank, unless you've got a once-in-a-lifetime investment opportunity like this guy.

You go to my site, you describe a cat, I draw it, I mail it, it's as easy as that.

I'd invest if I were you, and I want to draw a cat for you.

-♪♪ He's not funded, presumably because he holds the patent on whatever the fuck he's doing with his shoulders.

The problem is, the patent system has increasingly been prone to abuse.

For instance, a few years ago, a man named Austin Meyer made a popular flight simulator app, and then 1 day, received a frightening letter.

It said that a company called Unilock was filing suit against me.

The company is suing Meyer for patent infringement.

According to the lawsuit, Unilock says it owns the idea of a computer program checking a central server for authorization.

It is the technology upon which all Android apps are based.

This company, Unilock, is essentially claiming it's entitled to a piece of every Android app.

That technically means they could show up at the headquarters of Tinder and demand a cut of everything Tinder has created.

Which I assume would be a pile of STDs, sad orgasms, and shards of human self-esteem.

This situation has become so common, there's even a name for companies that do this.

So-called patent trolls typically don't invent anything or sell anything.

They simply buy patents and make their money by threatening lawsuits.

Yeah, most of these companies don't produce anything, they just shake down anyone who does.

So, calling them trolls is a little misleading.

They control bridge access for goats and ask people fun riddles.

♪ -♪ Laugh track ♪ Patent trolls just threaten to sue the living shit out of people.

In fact, of the 4,700 patent lawsuits filed in 2012, 3,000 were from these so-called patent trolls.

The White House claims during the last 2 years, the number of lawsuits brought by patent trolls has nearly tripled.

Research shows this type of litigation has cost investors an estimated half a trillion dollars since 1990.

To lose other people that amount of money, Johnny Depp would have had to star in The Lone Ranger over a hundred times a year for 25 years.

And patent trolls target everyone, from big businesses like Apple and Samsung, to tiny ones.

In fact, you don't even need to make something to be targeted.

A business in Old Lyme couldn't believe it when someone threatened to sue them for using their own copy machine.

We provide employment services for people with, barriers to employment, mostly people with disabilities.

Folner, LLC, threatened to file unless Hurley forked over $1,000 for each employee who uses the scan-to-email function on this copier.

Volner says it's entitled to this licensing money because it owns the patents for that process.

When you are threatening to sue a company which helps people with disabilities find work for using their own photocopier.

You're not just on the roads to hell, you have your own parking spot right next to the f**king devil.

So, how exactly did we get ourselves into this mess?

Well, In part, it has to do with the types of patents that have been issued.

The patent office is supposed to certify inventions that are new, useful, and non-obvious.

Incidentally, all the adjectives that Tom Cruise would say he's seeking in an ideal mate.

But during periods of big technological change, they can get overwhelmed and certify patents that they shouldn't.

This happened in the 19th century with railroads, and then again more recently with the development of software.

In the last decade, the number of software patents has skyrocketed.

The issue here, say experts, is that while patents from machines tend to be fairly specific, software patents can be so broad and vague that they may give someone the ability to later claim ownership for inventions they never dreamed of at the time.

And that is the seed of our current problems.

Because if a troll can get a vaguely defined software patent, they can demand payment for anything that fits that description.

Basically, if they thought to patent computer thing that never works years ago, they'd currently be getting rich off of FaceTime.

Patent trolls have this process down to such a science, for a start, they have figured out a way to almost never go to trial.

1 study found that almost 90% of cases are settled for a very practical reason.

It's an extortion game, because it costs between 2 and 5000000 dollars to defend a patent suit.

So, the patent rule says, we'll settle for a hundred thousand.

Many decide to pay out settlements because it's cheaper than fighting the lawsuits.

So, they work out the maximum amount of money you'd be willing to pay, rather than go to court and negotiate for that.

They pick a number the same way airlines pick a cabin temperature.

Perfectly calibrated to make you miserable, but not so much that you'd actually do anything about it.

-♪ ♪ -♪ And the most frustrating thing is, sometimes it's hard to know who's behind all of this.

They often have vague company names like IPNAV, Empire IP, or Pragmatus.

And incidentally, Pragmatus sounds like the most boring mythological Greek hero of all time.

I am Pragmatus, and I shall not battle the Hydra, for it is much larger than me, so I shall go home via the farmer's market, for the bruised vegetables are cheaper at the end of the day.

-♪ ♪ Patent trolls have even managed to find the friendliest place to file their lawsuits.

Patent cases were filed in this Eastern Texas federal court district, Marshall, Texas.

A quarter of All patent cases are filed in Marshall, Texas.

And believe me, it is not because people there are inventing like a meth head in a Home Depot aisle.

Here's 4 feet of PVC piping I can use for a big straw?

-$HISSING AND LAUGHTER Patent trolls have figured out that for whatever reason, East Texas judges and juries are sympathetic to plaintiffs, and it has been so effective that big companies are having to go to absurd lengths to pander to the people of Marshall, Texas.

Tech companies know the value of a good PR campaign here in Marshall, where almost anyone could be on your next jury.

A city official tells us that Samsung, sued here multiple times, has spent almost a million dollars on community projects like this ice skating rink right in front of the courthouse.

Samsung was so frightened of patent lawsuits, they felt forced to build an outdoor ice rink in Texas.

Do you know how hard that is to maintain?

It's like building a bowling alley in space.

Now, the good news is, there is cross-party support in Washington for fixing this problem.

In fact, a bipartisan bill was introduced 2 years ago called the Innovation Act, with some decent ideas, such as encouraging judges to make patent trolls pay court costs if they lose, and forcing patent trolls to be more transparent about their identities.

And I'm not saying that bill was perfect, but it would have helped.

It's like when parents of teenagers lock the liquor cabinet.

Look, I know this isn't gonna stop you, Rhapsody, but it will make it just a little harder for you to fuck up the entire neighborhood.

Unfortunately, while the bill passed the House by an overwhelming majority, it never even made it to a vote in the Senate.

What do you make of this bill getting killed?

Well, I know this is news, but trial lawyers' influence in Washington is alive and well.

Yes, apparently, lobbyists for groups including trial lawyers managed to prevent the bill from moving forward.

And you cannot let trial lawyers decide whether there should be more baseless lawsuits.

That's the equivalent of trusting raccoons to make laws about garbage can placements.

No, they should be easy to reach and left slightly open.

All in favor, say, -"Kh-kh-kh-kh-kh!" -$H!

That's a good impression, as far as you know.

Luckily, there is actually a glimmer of hope here because that bill is making the rounds again.

And look, even if it doesn't pass, something has to.

We have to do something, or the only viable business left in America is going to be 1 that relies on no patents whatsoever.

And I can only think of 1 business that fits that description.

I'll draw you a cat, whatever the vibe, I draw the cat that you describe.

♪ -♪ I guess all I'm saying is, hit it.

-♪ ♪ -♪ BELL DINGS Let's reform our patents quick, or we will all be in the shit!


Speaker 0: ♪♪ Patents. They're basically legally binding dibs. And they're important. If you invent something in America and you get it approved by the Patent and Trademark Office, the rights to that idea then belong to you. They're absolutely essential to business, as you would know if you've ever seen an episode of Shark Tank.

Speaker 1: Why aren't

Speaker 2: you telling me you've got something proprietary, a patent or a technology or a software no 1 can emulate?

Speaker 3: I hope you do get your patent, and I wish you good luck. Without having it, I feel that you're going to really have a struggle.

Speaker 4: Don't have a patent, don't have a finished sample, don't have experience.

Speaker 2: Unless you have a patent or some proprietary technology, you're gonna be in trouble. I'm out.

Speaker 5: I'm out. I'm out. -♪ ♪ -♪ BOOM!

Speaker 0: Exactly. Arriving on the set of Shark Tank without a patent is like turning up to America's Next Top Model without knowing how to smize or booty tooch. You take that shit to catalog, you're not editorial. You're not editorial. I don't know what that means, but...

-...the point is, if you don't have a patent, you don't have a prayer on Shark Tank, unless you've got a once-in-a-lifetime investment opportunity like this guy. -♪♪

Speaker 6: You go to my site, you describe a cat, I draw it, I mail it, it's as easy as that. I'd invest if I were you, and I want to draw a cat for you.

Speaker 0: -♪♪ He's not funded, presumably because he holds the patent on whatever the fuck he's doing with his shoulders. The problem is, the patent system has increasingly been prone to abuse. For instance, a few years ago, a man named Austin Meyer made a popular flight simulator app, and then 1 day, received a frightening letter.

Speaker 7: It said that a company called Unilock was filing suit against me.

Speaker 4: The company is suing Meyer for patent infringement. According to the lawsuit, Unilock says it owns the idea of a computer program checking a central server for authorization.

Speaker 7: It is the technology upon which all Android apps are based.

Speaker 4: All Android apps.

Speaker 7: That I know of. Everyone I know of.

Speaker 0: It's true. This company, Unilock, is essentially claiming it's entitled to a piece of every Android app. That technically means they could show up at the headquarters of Tinder and demand a cut of everything Tinder has created. Which I assume would be a pile of STDs, sad orgasms, and shards of human self-esteem. That's...

That's the business model. But... This... This situation has become so common, there's even a name for companies that do this.

Speaker 8: So-called patent trolls typically don't invent anything or sell anything. They simply buy patents and make their money by threatening lawsuits.

Speaker 0: Yeah, most of these companies don't produce anything, they just shake down anyone who does. So, calling them trolls is a little misleading. At least trolls actually do something. They control bridge access for goats and ask people fun riddles. -♪

Speaker 5: Laugh track

Speaker 0: ♪ -♪ Laugh track ♪ Patent trolls just threaten to sue the living shit out of people. And believe me, those lawsuits add up.

Speaker 4: In fact, of the 4,700 patent lawsuits filed in 2012, 3,000 were from these so-called patent trolls.

Speaker 8: The White House claims during the last 2 years, the number of lawsuits brought by patent trolls has nearly tripled.

Speaker 4: Research shows this type of litigation has cost investors an estimated half a trillion dollars since 1990.

Speaker 0: Half a trillion. Let me put that in context. To lose other people that amount of money, Johnny Depp would have had to star in The Lone Ranger over a hundred times a year for 25 years. That's a horrifying amount. Horrifying!

And patent trolls target everyone, from big businesses like Apple and Samsung, to tiny ones. In fact, you don't even need to make something to be targeted. You just need to use something.

Speaker 9: A business in Old Lyme couldn't believe it when someone threatened to sue them for using their own copy machine.

Speaker 3: We provide employment services for people with, barriers to employment, mostly people with disabilities.

Speaker 8: Folner, LLC, threatened to file unless Hurley forked over $1,000 for each employee who uses the scan-to-email function on this copier. Volner says it's entitled to this licensing money because it owns the patents for that process.

Speaker 0: Wow. When you are threatening to sue a company which helps people with disabilities find work for using their own photocopier. You're not just on the roads to hell, you have your own parking spot right next to the f**king devil. So, how exactly did we get ourselves into this mess? Well, In part, it has to do with the types of patents that have been issued.

The patent office is supposed to certify inventions that are new, useful, and non-obvious. Incidentally, all the adjectives that Tom Cruise would say he's seeking in an ideal mate. But... But during periods of big technological change, they can get overwhelmed and certify patents that they shouldn't. This happened in the 19th century with railroads, and then again more recently with the development of software.

Speaker 2: In the last decade, the number of software patents has skyrocketed. The issue here, say experts, is that while patents from machines tend to be fairly specific, software patents can be so broad and vague that they may give someone the ability to later claim ownership for inventions they never dreamed of at the time.

Speaker 0: And that is the seed of our current problems. Because if a troll can get a vaguely defined software patent, they can demand payment for anything that fits that description. Basically, if they thought to patent computer thing that never works years ago, they'd currently be getting rich off of FaceTime. Very, very rich. Patent trolls have this process down to such a science, for a start, they have figured out a way to almost never go to trial.

1 study found that almost 90% of cases are settled for a very practical reason.

Speaker 1: It's an extortion game, because it costs between 2 and 5000000 dollars to defend a patent suit. So, the patent rule says, we'll settle for a hundred thousand.

Speaker 4: Many decide to pay out settlements because it's cheaper than fighting the lawsuits.

Speaker 0: So, they work out the maximum amount of money you'd be willing to pay, rather than go to court and negotiate for that. They pick a number the same way airlines pick a cabin temperature. Perfectly calibrated to make you miserable, but not so much that you'd actually do anything about it. -♪ ♪ -♪ And the most frustrating thing is, sometimes it's hard to know who's behind all of this. They often have vague company names like IPNAV, Empire IP, or Pragmatus.

And incidentally, Pragmatus sounds like the most boring mythological Greek hero of all time. I am Pragmatus, and I shall not battle the Hydra, for it is much larger than me, so I shall go home via the farmer's market, for the bruised vegetables are cheaper at the end of the day. Pragmatist bids you farewell. -♪ ♪ -♪ ♪ Patent trolls. -♪ ♪ Patent trolls have even managed to find the friendliest place to file their lawsuits.

Speaker 8: Almost a quarter of last year's U.S. Patent cases were filed in this Eastern Texas federal court district, Marshall, Texas. Population, 24,000.

Speaker 0: A quarter of All patent cases are filed in Marshall, Texas. And believe me, it is not because people there are inventing like a meth head in a Home Depot aisle. Oh, I combined a wheel with a nail. It's a nail wheel. New invention, patent.

Here's 4 feet of PVC piping I can use for a big straw? Patents! Holy shit, I'm a genius! Give me more meth! -$HISSING AND LAUGHTER Patent trolls have figured out that for whatever reason, East Texas judges and juries are sympathetic to plaintiffs, and it has been so effective that big companies are having to go to absurd lengths to pander to the people of Marshall, Texas.

Speaker 8: Tech companies know the value of a good PR campaign here in Marshall, where almost anyone could be on your next jury. A city official tells us that Samsung, sued here multiple times, has spent almost a million dollars on community projects like this ice skating rink right in front of the courthouse. -$100,000. -$100,000.

Speaker 0: Samsung was so frightened of patent lawsuits, they felt forced to build an outdoor ice rink in Texas. Do you know how hard that is to maintain? It's like building a bowling alley in space. This situation is insane. Now, the good news is, there is cross-party support in Washington for fixing this problem.

In fact, a bipartisan bill was introduced 2 years ago called the Innovation Act, with some decent ideas, such as encouraging judges to make patent trolls pay court costs if they lose, and forcing patent trolls to be more transparent about their identities. And I'm not saying that bill was perfect, but it would have helped. It's like when parents of teenagers lock the liquor cabinet. Look, I know this isn't gonna stop you, Rhapsody, but it will make it just a little harder for you to fuck up the entire neighborhood. Unfortunately, while the bill passed the House by an overwhelming majority, it never even made it to a vote in the Senate.

I wonder, why would that be?

Speaker 4: What do you make of this bill getting killed? Well, I know this is news, but trial lawyers' influence in Washington is alive and well.

Speaker 0: Yes, apparently, lobbyists for groups including trial lawyers managed to prevent the bill from moving forward. And you cannot let trial lawyers decide whether there should be more baseless lawsuits. That's the equivalent of trusting raccoons to make laws about garbage can placements. No, they should be easy to reach and left slightly open. All in favor, say, -"Kh-kh-kh-kh-kh!" -$H!

-"Kh-kh-kh-kh-kh!" -$H!

Speaker 5: -$H! -$H! -$H! $H! -$H!

$H! $H! $H! $H! $H!

$H! $H! $H! $H! $H!

$H! $H! $H! $H! $H!

$H! $H! $H! $H! $H!

$H! $H! $H! $H! $H!

$H! $H! $H! $H!

Speaker 0: $

Speaker 5: C-C, CCCCC. --C, C. --C, C, C.

Speaker 0: That's a good impression, as far as you know. Luckily, there is actually a glimmer of hope here because that bill is making the rounds again. And look, even if it doesn't pass, something has to. We have to do something, or the only viable business left in America is going to be 1 that relies on no patents whatsoever. And I can only think of 1 business that fits that description.

Speaker 6: I'll draw you a cat, whatever the vibe, I draw the cat that you describe.

Speaker 0: ♪ -♪ I guess all I'm saying is, hit it. -♪ ♪ -♪ BELL DINGS Let's reform our patents quick, or we will all be in the shit!

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Patents: Last Week Tonight with John Oliver (HBO)