Intellectual Property, Patents, Technology

President Obama Admits That Patent Trolls Just Try To ‘Extort’ Money; Reform Needed

Ed. note: This post appears courtesy of our friends at Techdirt. We’ll be sharing law-related posts from Techdirt from time to time in these pages.

As we noted yesterday, President Obama is holding a “Fireside Hangout” via Google Plus today. In a bit of a surprise turn, he took a question about patents and patent reforms, with a specific question about software patents. And, his response was surprising. He admitted that there was a problem, and that there were some companies who were clearly not doing anything other than trying to “extort” money from others. Furthermore, while he pointed to the patent reform bill that passed in 2011, he also admitted that it really only went “halfway” towards reforming the patent system as far as it needed to go. If you click on the video, this takes place around 43:30 in the video….

He also used the question to address a few broader issues, including innovation, privacy, the internet and the rapid change of technology.

Question: High tech startups are an important engine of the American economy. When I go around and talk to other enterpreneurs, what I hear is that they’re afraid that if they become successful, they’re going to be targeted by patent trolls… What are you planning to do to limit the abuse of software patents?…

Obama: A couple years ago we began a process of patent reform. We actually passed some legislation that made progress on some of these issues. But it hasn’t captured all the problems.

The folks that you’re talking about are a classic example. They don’t actually produce anything themselves. They’re just trying to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them. Sometimes these things are challenging. Because we also want to make sure that patents are long enough, and that people’s intellectual property is protected. We’ve got to balance that with making sure that they’re not so long that innovation is reduced.

But I do think that our efforts at patent reform only went about halfway to where we need to go. What we need to do is pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws.

This is true, by the way, across the board, when it comes to high tech issues. The technology is changing so fast, we want to protect privacy, we want to protect people’s civil liberties. We want to make sure the internet stays open. I’m an ardent believer that what’s powerful about the internet is its openness and the capacity for people to get out there and introduce a new idea with low barriers to entry. We also want to make sure that people’s intellectual property is protected. Whether it’s how we’re dealing with copyright, how we’re dealing with patents, how we’re dealing with piracy issues. What we’ve tried to do is be an honest broker between the various stakeholders and to continue to refine it — hopefully keeping up with the technology — which doesn’t mean that there won’t be some problems that we still haven’t identified and that we have to keep working on.

Some will reasonably be less impressed by the hedging at the end, but this is the first statement we’ve really seen that the administration believes that patent trolling is a problem (even to the point of referring to it as extortion). It’s also the first we’ve heard from the administration that they only consider the last patent reform bill (the AIA) a “halfway” solution. To date, the administration had acted as if passing that was fixing everything.

President Obama Admits That Patent Trolls Just Try To ‘Extort’ Money; Reform Needed [TechDirt]

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