The Amazing Spider-Man Patent Lawsuit
This week, the Supreme Court struck a blow against patent abuse. Amusingly, the patent in question was for a species of toy that allows children to roleplay as a "spider-person" — this ambiguous phrasing presumably having been selected to avoid copyright claims — by shooting pressurized foam string, or "web," from wrist-mounted canisters.
In short, it was a patent on toys that enable one to act like Spider-Man. It expired this year after 20 years of being on the books, meaning that anyone could use this design without securing the permission of the patent's holder, Stephen Kimble.
However, Kimble didn't go down without a fight. Long ago, he'd struck a royalty deal with Marvel Entertainment allowing the Spider-Man publisher to make toys with the technology — and the deal did not specify an expiration date. Kimble sued, arguing that, by its own language, the deal should continue even without the patent.
This argument clearly contradicted the Supreme Court's 1964 decision in Brulotte v. Thys Co., which held that licensing agreements are not enforceable once the underlying patents expire. Kimble's case made it all the way to the Supreme Court, which declined to overturn Brulotte. Justice Elena Kagan's majority opinion was peppered with Spider-Man references.
It is fortunate that the Court refused to remove one of the few obstacles it has put in the way of interminable patent litigation. However, not every victim of patent abuse will be so lucky. And there are many.
This Monday alone, nearly 70 cases were filed by known patent trolls in U.S. courts. Twenty-two more followed this Tuesday. Their targets are a Who’s Who of famous technology companies, including computer manufacturers such as Acer, ASUS, Dell, and HP. Blackberry, Microsoft, and Nokia also appear in the filings. The plaintiffs, meanwhile, are almost uniformly non-entities who do not seem to produce much other than their lawsuits.
This alone does not prove that there is anything malevolent happening; after all, big companies are just as capable of infringing as anyone else. But many individual cases are ridiculous. For instance, one case against Dell involves a patent with the following almost unfathomably vague abstract:
An operator controlled interactive communication device having a display for receiving or displaying messages internally generated and received from external sources. A communication transmission interface which is selectively connected to a telephone handset connector, a computer connector and a modem to allow multiple modes of communication between an operator at a customer site and a vendor site. The communication device is reprogrammable from a remote location or through the computer connector.
Someone patent the technology for translating this into English, stat, because there is clearly a market need for it.
Needless to say, the above language (which is echoed in the patent's more technical, legally enforceable claims) could apply to countless devices. And if Cypaleo, LLC, the plaintiff in this case, had manufactured such devices or was trying to prevent someone from stealing technology the company actually wanted to produce, that would be one thing, but there is no evidence that Cypaleo has done anything beyond filing lawsuits. In fact, this Monday alone, it produced seven, all against companies with the resources to pay the sorts of extortionate settlement costs that patent trolls attempt to extort.
Let’s be clear: Cypaleo and companies like it are not innovators. They aren’t even speculators. They’re parasites who latch on to larger companies and abuse the intellectual-property system to suck cash from them.
Worse, their trolling does real damage to actual innovators who can’t afford a five-star legal team. True, Microsoft might be able to afford to buy off a litigious tick, but what happens when the guy tinkering in his garage manages to build something for which a troll claims to already "own" the patent despite never having any illusions that it could be built?
This is the state of our legal system. And while we should applaud Justice Kagan’s decision in the Spider-Man case, this is not a state of affairs that the Supreme Court can or should bear the responsibility of fixing. Rather, it’s time Congress took up the reins, passed patent reform, and stopped letting the patent trolls fire their rent-seeking missiles at businesses and innovators.
Mytheos Holt is an associate policy analyst with the R Street Institute.