Patent trolls in Australia?
Wayne Condon
Thu, 11 Sep 2014 4:30pm
Wayne Condon, Principal
Chris Sgourakis
Mon, 11 Aug 2014 10:15am
Chris Sgourakis, Principal
Kellie Stonier
Fri, 11 Apr 2014 9:45am
Kellie Stonier, Senior Associate
Andrew Goatcher
Tue, 1 Apr 2014 12:00pm
Andrew Goatcher, Principal
Eliza Mallon
Thu, 13 Feb 2014 3:45pm
Eliza Mallon, Associate Lawyer, Patent and Trademark Attorney
Kellie Stonier
Tue, 3 Dec 2013 9:55am
Kellie Stonier, Senior Associate
Eliza Mallon
Fri, 29 Nov 2013 9:00am
Eliza Mallon, Associate
Nicola Scheepers
Fri, 22 Nov 2013 9:00am
Nicola Scheepers, Principal
Nicola Scheepers
Thu, 24 Oct 2013 10:45am
Nicola Scheepers, Principal
Jürgen Bebber,
Thu, 10 Oct 2013 12:30pm
Jurgen Bebber, Principal
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Today BRR speaks with Wayne Condon; he’s the National Practice Group Leader, for the Law Group at Griffith Hack, based in Melbourne.  Welcome back to BRR Wayne.

Thanks David, it’s always good to talk to you.

Indeed.  Wayne the use of patents is typically thought of as being a protective mechanism for invention, but more and more we’re seeing them used as a weapon to extract significant licence fees.  It’s giving rise to a new industry of patent aggregators or patent trolls, is another term we’ve heard of.  How do these aggregators work Wayne?

David these sorts of entities have been around for some time now.  I guess the term patent trolls been around since the early 90s, but perhaps more commonly since the early 2000s.  Largely they centre in a pejorative way around non-practising entities, in other words companies that go out and deliberately acquire patent portfolios, and they usually are portfolios rather than single patents.  They don’t practise the inventions, the subject of those patents, but what they do do, is they go out and opportunistically seek to use that patent thicket against players in the market who are obviously engaged in the technology area in which the patents relate and they sue, or threaten to sue and in that way they try and extract value from their patent portfolios usually by way of a license fee.

I imagine to acquire a patent portfolio they would need to I guess buy the head company that owns these patents, I mean it all requires funding and then in order to litigate as well, again it all requires money how does these patent trolls fund themselves?

Yeah that’s true David.  But quite often, some of the portfolios that are being bought by these patent aggregators are actually pretty arcane, they’re sort of at the fringes of technology, they’re not necessarily that expensive to acquire, and for example companies that go into liquidation often have one or two patents in a portfolio that are bought by the companies at relatively cheap prices, and some of these companies are pretty canny about what they do.  They see an opportunity in a particular area of technology and they’ll go out seeking these patents, some of them are also acquired at auction now, and they gather them together and use them to threaten proceedings, but they may not of actually spent a lot of money in acquiring them.  It’s really creating maximum nuisance value from a set of patents that may have been acquired for, you know, only a few thousand dollars, and yet they can create mayhem in the market place.

Well in terms of mayhem you’ve just basically put your finger on it, what effect is it having on the sector, and in particular is this happening in Australia?

Look the mayhem it certainly has occurred in the United States, and one can suggest a number of reasons for that.  I mean it’s a generally litigious society, the patent system and the court system surrounding the enforcement of patents in the US really lends itself to the operation of these non-practising patent aggregators.  Our system in Australia I think is less conducive to patent aggregators having free rein.  We’ve got much tighter systems both in terms of the patents that are granted in Australia, we have I think less patents available for aggregators to purchase and then to try and enforce, and our legal system is much tighter than it is in the United States, and I think therefore we haven’t seen too much patent trolling activity in Australia, and I don’t believe we’re likely to see anything like the level of patent aggregation that has occurred in the United States.

So no need to I guess regulate or re-regulate the space here?

I mean we’ll continue to monitor that and no doubt the government will and interested stakeholders will continue to monitor whether there is a level of concern about this sort of activity that justifies some sort of specific legislative change, but I think the answer is at the moment no, the sort of systems we’ve got in place are strong Patents Act, the changes that will be occurring because the Patents Act in the course of the next six months and beyond, I think will all make it much more difficult for the patent aggregators to get a foothold in the Australian market.

Well certainly an interesting area to keep an eye on and thanks again for your time today Wayne.

It’s a pleasure, thanks David.

That was Wayne Condon, National Practice Group Leader for the Law Group at Griffith Hack, he’s based in Melbourne.  And listeners if you have any questions for Wayne please send a message using the panel on your screen or otherwise email through to brr@brr.com.au and we’ll forward your query.