It’s Time for Patent Licensors to Police Themselves

The release of Conversant’s principles for ethical behavior in the patent licensing industry is a sign of just how far the industry has come in recent years.

For years, patent licensing firms have studiously avoided any discussion of “patent trolls” and the harm they cause to small businesses. Most licensing firms refused to even use the term “patent troll” in their communications, fearing that it would only give ammunition to those who wished to weaken patent rights, especially for non-practicing entities.

So, with heads stuck firmly in the sand, most licensing companies hoped that the whole patent troll issue would eventually blow over.

It didn’t. It only got worse, because the patent troll problem got worse. With some trolls now sending out demand letters to hundreds of small businesses across multiple industries, businesses are screaming for action, and Congress is poised to provide it.

But will Congress target only the abusive patent litigants in the industry, or the whole industry itself — including the majority of responsible patent licensing companies?

That remains to be seen. But one thing is clear: only by doing our part to curtail abusive practices in our own industry do we have a chance of ensuring that legislative action focuses only on the few who abuse the patent system rather than the majority who participate in it responsibly to the benefit of our entire economy.

We are not the first industry to face this challenge.

The electronics industry has a code of conduct for worker safety and environmental protection. The insurance industry has a code of conduct to prevent fraud and consumer abuse. Even the marketing industry has a Statement of Ethics that seeks to prevent misrepresentation and unfair or deceptive practices.

Where abuses exist, it’s up to responsible industry leaders to condemn such behaviors and help to end them. Because if industry doesn’t act, government eventually will. You can bet on it.

Conversant has started the ball rolling with its 10-point statement on patent licensing principles. Now it’s time to hear what other responsible players in the industry think.