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Obamanomics: Turning a Blind Eye to Debt?

Having a master's degree in business, I can say with complete confidence that "Why the Obama Plan Is Working" (In Depth, Apr. 19, 2010) is utter rubbish. Crediting the market's temporary uptick to Obama's policies is asinine. All businesspeople know the market is all about short-term profit. It is unclear where the market and economy will be at the end of the year. What is not unclear is the increasing debt this Administration has placed on future generations. This Administration is on par to double the debt of all previous Administrations. Mike Dorning can cheerlead for Obama all he wants, but he takes away not just his credibility but that of BusinessWeek when he does.

Michael Buck, Carrollton, Tex.

A Recount on Patent Monitoring

"CEO Guide to Patent Trolls" (BusinessWeek.com, Feb. 1, 2010) contained numerous references made to data produced by PatentFreedom. PatentFreedom conscientiously researches data it provides to its subscribers and the broader public related to the activities of so-called Non-Practicing Entities (NPEs).

As the articles acknowledge in certain sections, the term "patent troll" is almost always problematic. While many use it without malicious intent as shorthand for an entity that primarily enforces patents, the term is certainly loaded and some consider it pejorative. Plus, it can lead to confusion. We prefer the more neutral Non-Practicing Entity (NPE).

We define NPEs as entities that derive a substantial portion of their revenue from licensing or enforcing patents and for which we have been unable to obtain verifiable evidence that the entity sells products or services that would make it vulnerable to patent counter-assertion. We intend to provide potential licensees of patents held or enforced by such entities with knowledge that may help in their discussions with them.

In one article in the report, BusinessWeek writes that Acacia Research (ACTG) has filed more than twice as many litigations as Rates Technology (RTI), "which ranks second in the number of patent cases filed, according to PatentFreedom." That statement is incomplete. RTI maintains it is not an NPE because it produces substantial revenue from the sale of products and services beyond the enforcement of its patents. While PatentFreedom has been unable to independently confirm RTI's statement, additional analysis indicates clear and important differences between RTI and NPEs such as Acacia.

First, RTI is the original owner of the two patents it is enforcing and the two it has enforced in the past (which have expired). Moreover, RTI President Gerald J. Weinberger is one of the inventors on each of these patents. This is clearly distinguishable from many NPEs that primarily—or exclusively—base their enforcement activities on patents either purchased from others or from which they have obtained enforcement rights.

Further, unlike many NPEs that file litigation against many operating company defendants simultaneously, RTI enters into discussions with companies to try and persuade them to pay a one-time fee in exchange for a covenant not to sue. If these discussions are not fruitful, RTI has turned to the courts to pursue the matter, but most frequently one company at a time. Therefore, while RTI has sued approximately 60 companies since 2000, in terms of the number of defendants sued, it ranks 17th among entities PatentFreedom tracks, not second.

Since 2007, RTI has sued approximately 15 companies, some of which they state were filed to obtain jurisdiction in New York should settlement discussions fail to conclude in a timely manner (and which were dismissed a few months after filing). In that same period, Acacia has brought patent lawsuits against more than 500 companies.

Daniel P. McCurdy, CEO, PatentFreedom, Newtown, Pa.


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