Alas, there are significant problems that holding companies have brought to the forefront. There is no denying that current means of patent enforcement are strongly skewed in the favor of the patent holder. The current cost of litigation almost prohibits smaller companies from challenging a patent plaintiff, and almost guarantee that larger companies will settle in lieu of engaging in a proactive defense. To its credit, the government has been attempting to address these problems by introducing significant patent reform, but there are some troubling aspects in the proposed legislation (e.g., first-to-file, redefining prior art), and it remains unclear which parts will survive when the legislation works its way through Congress.

Also, the issue of patent quality and prior art need to be addressed more seriously. While there always have been (and always will be) "bad patents," the USPTO has to take a more proactive role in searching and applying prior art, especially art that is found in non-patent literature. While there is a conventional wisdom to view every patent being asserted by a holding company as a "bad" patent, this is not typically the case in reality. Nevertheless, there are a few cases where lapses by USPTO personnel have ended up costing others millions of dollars in defending themselves against poorly examined patents. This simply has to stop.

Peter also does a great job discussing the Rates Technology vs. Google case.

Some of the comments in this particular post are interesting:

At 12:08 AM, Ankush Garg said…

It just shows how the whole patent regime is replete with flaws. RTI is exploiting ‘doctrine of equivalents’like anything. I feel that there should be a provision in patent laws that a company not developing a technology will be stripped of patents pertaining to that technology.