Republican presumptive nominee Donald Trump is fond of impugning the character of companies that move overseas to China. However, recent news suggest that some companies may be about to leave whose backs the United States should be very happy to see. I speak of the industry referred to in kinder language as Non-Practicing Entities (NPEs), and in more accurate verbiage as patent trolls.
A recent report from Bloomberg BNA explains the Dickensian suffering which many patent trolls are experiencing here in the United States, the public having finally cottoned onto their parasitic practices. So, what’s a put-upon bloodsucker to do? Well, to quote Erich Spangenburg, a man referred to in the article itself as “one of the most notorious patent trolls in America,” the answer is “focusing on licensing and litigation in Europe and China rather than the U.S.”
Now, dear reader, you may well pause in shock. “Patent trolls are moving to China?” I hear you ask incredulously. “Isn’t that the very place they warn the United States will imitate if it decides to curb their abuses?” Actually, yes! Which is yet one more reason why, if you were under the impression that people who profit from frivolous lawsuits are honest, then you should hastily readjust your opinions. Despite what you may have heard, not only are patent trolls more than willing to do business with the boogieman they try to paint for gullible free marketers, but their far Left backers (such as trial lawyers and university presidents) would probably be more comfortable in a communist country like China anyway. After all, they produce nothing of value, and communist countries love producing just that.
But not as much as they love hurting the U.S., which is yet one more reason the trolls might find China a more amenable business environment: because rather like trolls themselves, China loves enriching itself at the expense of United States business while turning the very weapons of our own legal system against the capitalist system.
Exhibit A: In 2014, the Independent Institute reported that China had created a government-sponsored patent trolling firm known as Ruichuan IPR Funds, which it seeded with $50 billion to attack U.S. business using patent lawsuits. Prior to that, the blog Techdirt reported that China had begun subsidizing the legal costs for its companies to file patent lawsuits overseas, all as part of a strategy to weaken U.S. business.
The irony of all this is that China itself remains a massive intellectual property thief, as most policymakers on all sides of the intellectual property debate will readily admit. However, what its sponsorship of patent trolling in the U.S. shows is that it will also use any and all laws of U.S. and global governance to try to handicap its economic rivals while refusing to abide by those laws itself. So be it: Everyone knows China is a ruthlessly self-interested nation.
However, the fact that U.S.-based patent trolls see China as a land of opportunity for this blatantly amoral behavior speaks volumes about what patriotism is worth to the trolls when it stands between them and a meal ticket at the expense of American business. The one advantage of this coming mass diaspora of the patent parasites is that the defenders of our broken patent system will no longer be able to hide behind the fig leaf of protecting American business, or American property rights. And without that, perhaps the long-overdue reform that our patent system requires will finally come to pass.
And if it does, and the trolls have gone to China? Well, let’s see how the Chinese like it when Leftist trial lawyers decide to feed on their pocketbooks. And let’s see how trial lawyers like it when their opponent is the Chinese government, rather than the doddering Republican establishment. Odds are, one of them will end up losing that fight, and whichever one it is, America wins.