Patent trolling is far from a divisive issue in the United States. Pretty much everyone but the trolls can agree that patent trolling is damaging to the economy, and generally kind of a dick move. Patent trolling, if you're not familiar with the practice, is quite simple in concept: buy patents, extort licensing fees from alleged infringers, and sue if they refuse to comply. President Obama proposed some "major" changes to US law that will supposedly reduce the effectiveness of such companies. Before we look at those, though, let's look briefly at what makes a troll tick.

(And no, Apple is not a 'patent troll.' This has basically nothing to do with Apple. If you're looking for a reason to make a bad Apple joke about innovation for the fiftieth time, please go elsewhere.)

Patent trolling has proven a highly successful business model for companies like Intellectual Ventures. While it sounds pretty simple on paper, patent trolling requires armies of lawyers, computer scientists, and various experts to effectively accomplish its goals. Identifying a patent's scope, its relative validity, its value, and its relevant legal history is hard enough when one patent is involved. Companies like IV own thousands of patents. Then, you have to determine who infringes (allegedly) that patent, another task that is far from easy. Finally, you have to work out a licensing fee that the infringer is likely to agree to in lieu of a lawsuit, because patent trolls actually hate lawsuits - they cost a lot of money and could expose them for what they are. IV is also the poster boy for a rather common practice of creating various shell companies to avoid directly identifying themselves in some lawsuits, basically in order to avoid bad PR or readily identify themselves as "trolls."

Trolling itself isn't strictly legal in the United States, either. Justice Kennedy of the US Supreme Court briefly commented on the issue of trolls, and how troll-like behavior may be construed against a plaintiff seeking injunctive relief (product bans). While this is not binding precedent, the Court's view - even as a mere concurrence - on the matter is without a doubt highly influential in lower federal courts. That, however, was 7 years ago, and patent trolls seem as healthy as ever.

President Obama's suggested changes to prevent trolling are as follows. First, more strict requirements in regard to current patent ownership information for registrants at the USPTO. Whenever a patent suit is filed, the current owner must update the involved patents' ownership information. This will effectively reduce some of the identity issues in patent troll suits.

The second change Obama proposed was that the loser of a patent lawsuit deemed "abusive" by the presiding judge must pay the defending party's legal fees. This, in theory, reduces the attractiveness of going to court even more for the trolls.

Finally, Obama issued an executive directive to better train USPTO examiners to identify frivolous or overbroad software patents, though that has a feel of generic pandering about it more than a serious promise.

Congress is already drafting bills that incorporate these proposals (note that Obama does need congress to pass laws to make this happen, apart from the executive order above), and a third change is apparently gaining steam as well, one that would make evidence discovery more expensive for plaintiffs in patent suits if they wish to go beyond "core documentary evidence" at the pre-trial stage. The new rule would require the plaintiff to front the cost of additional discovery. Evidence discovery can be an intense burden for small defendants to meet in a lawsuit, and can quickly ramp up the cost of legal defense.

This all sounds great, right? Well, not so fast. All of these changes are geared at making lawsuits more expensive - potentially - for patent trolls to engage in. This is great news for Google, Apple, Microsoft, etc., companies that are under siege from a handful of infringement allegations by trolls at any given time. The big boys' real concern with trolls is making lawsuits much riskier. A single victory in court by a troll would be disastrous, as jury-awarded damages could be sky-high compared to the original licensing demand. By making lawsuits more costly for the trolls if they lose, lawsuits are less likely to happen in the first place. In theory, of course.

But when we're talking about the Intellectual Ventures of the world - a company likely worth tens of billions - the potential cost of evidence discovery and legal fees are unlikely to do much in deterring lawsuits the troll finds worthwhile risks to take. When the potential payoff is, over the years, billions of dollars, a couple million put up as collateral isn't exactly the end of the world. Not to mention, one victory in court against a major defendant means all other accused infringers are pretty much guaranteed to fall in line and take a license. And most patent troll allegations are actually settled long before court, and happen behind closed doors.

These new laws, if implemented, will also do nothing to protect small businesses and individuals from the threat of patent trolls. And that threat is entirely real. No small developer or modest Kickstarter project is going to have an ice cube's chance in hell against a determined troll, because the chance of ever getting to the point of a lawsuit in such a case is not statistically significant. You either abandon or change the product, or you take the license. Almost everybody takes the license.

The real problem comes down to the way we currently manage the intellectual property rights of patents. The hinge upon which trolls rely is that patent ownership does not require you ever actually use a patent for anything once you've bought it - it's yours free and clear until it expires. Requiring a patent assignee to actually utilize a patent sounds like an attractive option, but is totally impractical - legitimate technology companies file patents for inventions that are never actually used quite regularly. Plans change, and it's entirely possible an invention may not be feasible as part of a product until a decade after it is first described. You can't fully account for those kinds of situations, and it's unfair to paint in broad strokes of "if you don't use it, you lose it."

So, what should we do? The answer is probably more complex than we'd all like to admit. Laws that outline and describe abusive patent behavior and restrict it may be necessary. Or, a more intricate set of rules that make purchasers of patents less able to sue on those patents for a time after purchasing them.

My idea, and I'm just spitballing here, would be to issue a 5-year general moratorium on patent infringement suits for any patent that has been transferred away from the initial assignee (from the date of the new assignment), unless the new assignee can show the court that it is either currently producing or developing a product which falls under the scope of that patent. This would protect patents transferred as part of major business mergers or buyouts where the company is still making or developing protected products, but make trolling much more difficult. If the new assignee believed there was an infringer out there, one of the USPTO's quasi-judiciary bodies could be given a right to exempt a patent from the moratorium in cases where infringement was obvious and causing the plaintiff clear economic harm. But that's just my idea.

Reuters