My Own Pirate Radio

That’s “IP” as in intellectual property, not Internet Protocol.

There’s a growing trend towards squatting on intellectual property purely for the purposes of speculation and extortion. And it stinks.

IP squatting comes in different flavors (fragrances?). The recent RIM / NTP case is a great example of the patent troll variety. Paolo Del Nibletto at IT Business echoes my sentiments exactly when he says, “I don’t like NTP. They do not make any products. They do not deliver any valuable service. Sure they have the law on their side, in this particular case, but that is it.”

What’s particularly sad about the RIM case is that they actually tried to fight it, and lost, badly. Many patent troll cases never see the light of day, because companies prefer to settle quietly out of court.

Stinky flavor #2: Domain Trolls. I wrote here about the frustrations of trying to find a good domain name. It’s hard. You’ll surely have noticed the growing number of sites out there that are essentially ad-funded domain name parking lots, sometimes masquerading as search engines. While I don’t have data to back it, it seems to me that it’s happening at a growing rate, making it more expensive and time-consuming to secure a domain name. A blog post by John Cook of the Seattle PI sheds some light on this practice:

Houston entrepreneur Marc Ostrofsky … is back with a new Houston startup called Internet REIT that has purchased more than 400,000 domain names. The competitor to Seattle’s Marchex also recently scored funding from Perot Investments and Maveron, the Seattle venture capital firm co-founded by former investment banker Dan Levitan and Starbucks Chairman Howard Schultz.

400,000 names. That’s a lot. According to Dennis Forbes there are about 50 million .COM domain names registered. If Internet REIT’s names are all .COMs, that would mean it holds almost 1% of all registered .COM names. And that’s just one company. No wonder I’m left looking for table scraps.

As far as I’m concerned, the social impact of IP squatting is almost entirely negative. It lets a small number of people get rich(er) by imposing rents on those who have a legitimate need for the property, and frustrates would-be-productive enterprises from progress.

It sure would be interesting to see some stats on this: number of patent troll companies (see bottom of wikipedia article), number of patents held by such companies, dollar value of settlements with such companies, etc. And the same for domain trolls.

Here’s an idea: let anyone get a one-time lease on a domain name (or a patent), but terminate the lease after a reasonable time - 12 months, say - if they don’t actually DO something useful with it beyond attempting to sell the property or litigate.

I know, I know, not very free-market of me. You will not often hear me advocate regulatory policy. But if software has any area in need of a corrective change, IP squatting is it.