One of the first things the United States government did when America became a country was to establish a patent office. The founding fathers realized you could not run a capitalist economy if you did not have a functioning system of patents to protect innovators and to make innovation worthwhile and profitable.
But, as Laura Sydell and Alex Blumberg have detailed in a wonderful piece of long term, long form reporting, patent law has become so corrupt and dysfunctional, it is now a threat to the national security, the national economy and national sanity.
If we can believe Ms. Sydell and Mr. Blumberg, and listening to this report the Phantom found it hard not to believe them, the case is clear. These two reporters pursued a "company" called "Intellectual Ventures" and its co conspirator, Chris Crawford, and they unraveled a scheme which these predators devised to extort, and in some cases ruin, businesses, profiting fantastically and more or less legally, in the millions of dollars.
The report runs 15 minutes on the radio, but it can be boiled down: 1. Chris Crawford obtains a patent from the U.S. patent office fraudulently, by claiming he developed a technology which allows consumers to order things over the internet. (In fact, he did not develop this, but stole the idea, which was not actually new enough to warrant a patent.) 2. He then colludes with a "company" called Intellectual Ventures (IV) by "selling" his patent to IV for $12 million dollars and then appears as the star witness at the trials of companies IV sues for violating this fraudulent patent. Of the 20 companies IV sues, 17 do not have the money to fight the case in court, so they settle for a grand total of about $100 million. But three of the companies fight the suit in court and, in the process, they expose the fraud in Mr. Crawford's application for the patent in the first place. The jury, and the listening audience, can readily appreciate the fraudulent nature of Mr. Crawford's claims and IV loses the trial.
But it really doesn't matter to IV it lost the trial, because it has already profited by threatening suit in the other 17 cases and simply raking in the settlement money.
Although Mr. Crawford has obtained what is clearly a fraudulent patent, neither he nor IV are ever prosecuted. They can keep their money, free and clear, despite the harm they did, and the lies they told.
There are, of course, more guilty parties here than Mr. Crawford and IV. The patent office, of course, was guilty of issuing a patent which never should have been issued. The patent office simply performed in an incompetent manner, and 17 companies suffered mightily because the patent office failed to do its most basic function.
The legal system, which did not rescind the millions in settlements wrongfully claimed by IV failed to police its own ineptitude and allowed the courts and the process of out of court settlement to injure innocent companies, their workers and their workers' families.
Companies who settled had to lay off workers, some failed in the wake of the damages and some are still paying off the settlement.
Of course, anyone listening to this sad tale asks: Why have Mr. Crawford and IV not been brought to justice?
The Phantom can only imagine: 1. Going after the extortionists would be hard work and the government prosecutors have no appetite for that. 2. Patent law is inherently corrupted by the problem of ignorant juries who simply cannot follow the technicalities of the cases. 3. The entirety of our judicial system is based on this basic corruption: No matter how bogus your claim, no matter how ridiculous your case, if you have enough money, you can bleed your opponent dry if he does not have enough money to fight the case through the courts.
This basic principle applies not just to patent law cases, although these cases are often among the most egregious examples of extortionate use of the American judicial system--innocent victims of predatory lawsuits from doctors faced with bogus malpractice claims, to business owners to newspapers are often simply unable to fight the extortion because it would be financially ruinous to try.
This whole notion of allowing the rich to dominate the relatively poorer through legal phlebotomy has been so ingrained and so brazenly practiced nobody in this country stops to think--why do we tolerate it?
We cannot shrug off patent trolls as disgusting, but non life threatening leeches on the basis of believing rich people do not harm the basic fabric of American life by their attachments and exsanguinations. It must be because legal rape has been so deeply entrenched for so long, we fail to see the evil any more.
In Britain, the party which files a patently absurd lawsuit is often assessed court costs and penalties to make whole the innocent victim who has been attacked.
For reasons which escape The Phantom, that is not done in these United States.
False accusation, felonious legal assault simply goes unpunished here.
And we all suffer the consequences, one way or another.
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