Google is reported this week to have filed a complaint with the European Commission for collusion by Nokia and Microsoft to use patent “trolls” to cause an increase in the cost of mobile phones by consumers.  See http://online.wsj.com/article/SB10001424052702304821304577438740232322350.html?KEYWORDS=google+trolls

I don’t like the word “trolls” when applied to IP.  My friend Peter Detkin, who if memory serves introduced the term in testimony before Congress some years ago, no doubt also somewhat rues his parentage of that pejorative label.  Peter went on to be one of the founders of Intellectual Ventures–a non-practicing  entity (“NPE”) that likely holds the largest portfolio of patents for licensing and invention purposes.

The problem is, “trolls” means such different things to different people.  In its only fair usage, “trolls” should refer to NPEs that gather IP having dubious provenance or legitimacy, and then aggressively demand extortionate royalties under threat of litigation against firms  unable or unwilling to shoulder the burden of challenging the patents’  validity.  So construed, the term ‘troll’ quite properly calls for holding one’s nose with an expression of disgust.  And, more importantly, for considering antitrust or other remedies to stop such abuse.

Some, however, including Commissioners in our beloved Federal Trade Commission, have at times used the taint of “troll” to refer broadly to any NPE–an expansion of the term that smacks of a generalized distrust of IP.  After all, there are many other IP holders who have no intention or ability themselves to practice the invention:  universities, garage-shop inventors, and even Fortune 50 companies like IBM, whose changing business strategies or fortunes have passed by entire blocks of their IP.   Consider, for example, recent IP asset sales by Lucent and Motorola Mobility.  Should we bar NPEs from buying those IP assets?  Should we require that Google commercialize them as a condition to approving their purchase?

So headlines with the word “trolls” bother me; they play into a generalize distrust of IP with loose labeling.  They make no distinction between the proper commercial purchase and sale of IP–and its assertion like any other property right–and the use of ‘nuisance suits’ based on questionable IP to burden innovation and competitive vitality.  There should be no shame, and certainly no antitrust complaint, arising out of Nokia and Microsoft selling IP assets to an NPE.  Nor is there anything inherently anticompetitive in forming a joint venture to commercialize or license IP assets, or in cross licensing IP, which is typically pro-competitive.  The proper question is:  “Did competitors collude in their use of IP assets with the purpose and effect of harming competition?”   The key words are “collusion” and “harm to competition,” not “troll.”   I’m just saying. . . .