US government targets patent trolls

US patent trolls are huddling under their bridges in fear after the Federal Trade Commission announced it is launching an investigation into their antics.

According to the New York Times, the agency’s boss, Edith Ramirez, wants an open season on trolls.

She is particularly concerned in the breed of troll that engages in “a variety of aggressive litigation tactics,” including hiding behind shell companies when it sues.

Ramirez did not name names, but the Times thought her description sounded rather like Intellectual Ventures.

Co-founded by Nathan Myhrvold, the former chief technology officer at Microsoft, Intellectual Ventures has bought 70,000 patents and related assets in the last 13 years.

This year Intellectual Ventures filed 14 lawsuits and is expanding its battles against banks, which Intellectual Ventures says infringed on patents that cover data encryption techniques, firewall protection systems or digital imaging.

Robin Feldman, a professor at the University of California Hastings College of the Law told the Times that while the trolls were flat out, there were new products coming out of this extraordinary level of activity.

He said that all they are doing is taxing current products and companies and most of the money changing hands is not flowing back to original inventors.

Now the White House is wondering if patent trolls violate antitrust law or fair competition regulations.

President Barak Obama ordered the Patent and Trademark Office and other agencies to heighten disclosure of who owns a patent and to take steps to eliminate unwarranted patent lawsuits.

Another thing which is worrying the FTC is privateering. This is when a company sells a patent to a troll company, which then uses it to sue the original owner’s competitors.

Ramirez said that this allows companies to exploit the lack of transparency in patent ownership to win a tactical advantage that could not be gained with a direct attack.