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==About==
<onlyinclude>[[Patent Reform|Patent reform]] has recently emerged as an important issue in the [[Small Business |small business]] space.The current patent system in the United States is facing a fair amount criticism on multiple fronts. Skeptics have argued that the current system is broken as it allows the presence of entities called 'patent trolls'. Trolls manipulate small businesses and extort money through patent litigation. Metrics regarding the prevalence of patent trolls are unclear. Several important pieces of legislation have been proposed to combat these reported patent trolls, as well as a "Prize System for Invention", which rewards innovative companies with monetary prizes instead of patents.</onlyinclude>
==Problems with Current Patent System==
==Patent Pools==
Patent pools are agreements between "two or more patent owners to license one or more of their patents to one another or to third parties." [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] Generally, patent pools cover mature and complex technologies that require complementary patents to develop compatible products and services. [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] Patent pools are useful when new products are based on multiple existing patents or on one invention with patents on many of its components. [http://www.theglobalipcenter.com/sites/default/files/reports/documents/Prizes__Patent_Pools.pdf (Global IP CenterGIPC)]
===Benefits===
===Risks===
Patent pools have many flaws, which may explain why they have been used so infrequently. [http://www.theglobalipcenter.com/sites/default/files/reports/documents/Prizes__Patent_Pools.pdf (GIPC)]
'''Elimination of Competition''' Opponents criticize patent pools for the potential of anti-competitive behavior and collusion. According to the World Intellectual Property Organization, "a patent pool may be regarded as a cartel." [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)] Patent pools potentially create a way for companies to share competitively sensitive information, such as pricing, marketing strategies, or R&D information among its members." [http://www.wipo.int/export/sites/www/ip-competition/en/studies/patent_pools_report.pdf (WIPO)]
'''Licensing Practices''' If a patent pool restricts its members from licensing its patents independently, it lowers the incentive to produce alternatives and inflates the costs of goods or technology for consumers. The Department of Justice and Federal Trade Commission state that restrictions on licensing may create "a barrier to entry if existing relationships make it harder for 'new firms to come in and overcome the patent thicket'." [http://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf (DOJ)]
