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Wanted: Prior Art to Invalidate Lodsys Patents


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: July 8, 2011 @ 4:41 pm
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Article One Partners is at it again, this time with four patents in the cross-hairs owned by the company suing Apple App Developers for patent infringement — Lodsys.  Article One Partners has made a name for itself as the premiere crowd sourcing, prior art locating company in the world. Now they have three different studies (see below) aimed squarely at the four Lodsys patents.  In addition to being used against Apple App Developers, these four patents were also used earlier this week to sue the New York Times and others, and earlier still against Best Buy, Adidas, CVS and others. Indeed, it seems that Lodsys is becoming quite a nuisance for defendants, which places them at or near the top of the patent troll most wanted.

In an interesting twist, the Lodsys patents were at one time owned by Intellectual Ventures (IV), a massive patent holding company that owns the rights to more than 30,000 patents.  For the greater part of the IV history it did not engage in suing those it believed to be infringing, rather seeking to obtain as much licensing revenue without a direct patent infringement lawsuit.  It had long been speculated that IV was outsourcing its patent infringement litigation to those who would acquire certain patents from IV and then sue for patent infringement, but there was never any direct proof.  See Intellectual Ventures’ Patents Starting To Show Up In Lawsuits and Intellectual Ventures Takes Indirect Route to Court.

Given the Lodsys is now asserting patents acquired from IV in a variety of patent infringement litigations the old speculation about the possibility of IV outsourcing its patent infringement litigation has been rekindled.  According to Lodsys, inventor Dan Abelow sold his patent portfolio to IV, after which time IV licensed the patents to a number of companies.  Ultimately, IV sold all the rights (minus the already licensed) to the Abelow portfolio to a private rights ownership group, which then setup independent companies to focus on licensing the patent rights.

According to Lodsys, neither Dan Abelow nor IV has any investment, control, or knowledge of the specific licensing activities of Lodsys, which would presumably cover the patent infringement litigations.  See Lodsys Q&A.  Florian Mueller of FOSS Patents says he has seen no evidence suggesting that IV is in any way behind these patent infringement litigations in any way, see Credibility of Lodsys Assertions.  This would make sense given that the initial lawsuit was brought against numerous small players, namely Apple App Developers.  Those small players would seem too insignificant in terms of what revenue they could contribute to interest IV.  Furthermore, IV has started directly enforcing its own patents where appropriate.

In the midst of the soap opera saga unfolding as the result of Lodsys turning patent troll, the Article One network of individuals has sprung into action.  The Article One network is extensive and geographically diverse. They have over 1 million researchers worldwide signed up on their platform, so when a study is initiated each of those researchers are notified. These researchers are located all across the world, with 37% in the United States, 37% in Europe, 10% in Japan and 16% elsewhere. In addition to this geographic diversity nearly 50% of researchers hold advanced degrees. So far approximately 10,000 researchers have actually submitted prior art references to a study and more than $1 million in reward money has been paid out.

There are three separate Lodsys studies, as the open call request for prior art is called by Article One.  Each of the studies close on Monday, July 25, 2011, so there is a little more than 2 weeks to participate if you think you have knowledge of prior art that could be used to invalidate claims from one of the four Lodsys patents.  These separate searches are as follows:

1. Systems for Automated Collection of Information and Feedback Responsive

This Study relates to two patents (U.S. Patent No. 5,999,908 and U.S. Patent No. 7,133,834) that claim systems that enable the collection and transmission of information and feedback between users and providers of products.

2. Systems for Gathering Information from Units Across a Network

This Study relates to a system comprising: units of a commodity that can be used by respective users in different locations, a user interface, a memory within each of the units of the commodity, a communication element associated with each of the units of the commodity, and a management component. See U.S. Patent No. 7,222,078.

3. Customer-based Product Design Module

This Study relates to a component or unit of a system comprised of a memory; a transmitter; and a processor, coupled to the memory and to the transmitter. They are configured to: monitor a product for an occurrence in the product of a trigger event of a predefined plurality of trigger events, increment a counter corresponding to the trigger event upon detection of the occurrence of the trigger event, cause the display of a user interface, configured to probe for information regarding a use of the product, if the counter exceeds a threshold, cause the memory to store an input received from the user interface, and cause the transmitter to transmit the input to a server. See U.S. Patent No. 7,620,565.

It will be a while before we know what will become of these Lodsys patents and the various lawsuits, but in the meantime the search for prior art goes on.  Perhaps there will be requests for reexamination filed on one or more of the patents; indeed that seems likely if you ask me.  Someone really wants to find prior art, which is why Article One Partners is involved.  No doubt many of the larger defendants are also engaging in their own due diligence to locate prior art that will be useful for one purpose or another during litigation proceedings.

In any event, those faced with a lawsuit brought by a patent troll have little or no ability to turn the tables to create leverage.  Simply stated, those sued by patent trolls are targets and they might as well be wearing deer-like camouflage during hunting season.  I don’t understand why more defendants facing patent infringement litigation do not pursue a reexamination strategy, which can be an exceptionally effective way to take the fight to the patent troll.  You need to turn up the heat and make the patent troll fight to defend.

Things promise to get far more interesting in the months (and years) to come.

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Posted in: Apple, Companies We Follow, Gene Quinn, IP News, IPWatchdog.com Articles, Patent Litigation, Patent Trolls, Patents, Reissue & Reexamination

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

15 comments
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  1. I’m very much in favor of peer/community involvement in prior art search. Under the current system, however, we’re doing things in the wrong order. It would be better to do the peer search first, then re-exam, then litigation. That is why I also favor a multi-tier system which would require a peer search to get a top-tier patent before being able to enforce it in court. Lower-tier patents could still be used quite effectively for busniness negotiation and licensing purposes.

  2. Ron,

    Once again you trot out your worthless “lower tier” patent idea.

    Is your undertanding of business that poor that you think that any sane business person would pay for a worthless “lower tier” that is not enforceable in court?

    Seriously, I wish you would just stop advocating such nonsense.

  3. I personally negotiated a 6-figure non-exclusive license agreement for a provisional patent application and any future applications and patents claiming priority thereto, none of which have yet issued or are enforceable in court. Businesses are forward looking and understand the concept of potential future value. As I have repeatedly explained, lower-tier patents in a multi-tier system would be upgradeable to the higher tiers, subject to additional fees and a more rigorous prior-art search.

  4. And I should add the athe aforementioned agreement was for the benefit of a major corporation, paid in full in cash. It was a bonafide money-making business deal.

  5. Ron,

    You assume too much given the fact that I have deconstructed your nonsense in great detail on previous threads (the same threads wherein you fail to supply adequate details of how your system would actually work). – So, to the contrary, you have not explained how your tier system would actually be of any use, since the faults I pointed out have not been explained away.

    There is quite a large difference between how any major corporation would assess value to a patent portfolio (even that which was only in the nascent stage of provisional patent applications) and the unworkable tiered system you would foist.

    And I would add that the aformentioned major corporation doing even the future valuation exercise (under the current patent system) does not mean that such is at all an indication that your idea is a valid workable concept.

    By all means if you think your idea has merit, return to the old threads and actually answer my questions which you have never done. Simply throwing out the same idea without providing the details that I have repeatedly asked for only leads us to the same merry-go-round (and leads us to the same point that your idea is still worthless).

  6. To save interested readers the trouble of dredging through the archives, here are some specific details regarding one possible multi-tier system that I posted in January:

    Tier1: Lower fees, applicant-controlled delay, publication after favorable initial examination based on simple keyword search, unenforceable. Can upgrade to Tier 2 or 3 by paying additional/higher fees.

    Tier2: Same as current utility patent, but with a lower evidentiary standard for invalidation and no injunctive relief available. Can upgrade to Tier 3 by paying additional/higher fees.

    Tier3: Higher fees, immediate publication and active solicitation of prior art through the “peer-to-patent” or Article One Partners model, accelerated examination.

    The USPTO multi-track initiative and/or Kristen Osenga’s multi-tier proposal would also be a step in the right direction.

  7. Tier1: will be treated as PCT ChapterI/II searches to Examiners = easy counts, no serious effort since theres no chance of troublesome rebuttal cuz who would argue a useless application

    and unless the difference between Tier2 and Tier3 is a million dollars no one would want to settle for anything but da best

  8. specific lack of details” is more like it.

    Ron – Do not be duplicitous. Tell the whole story or none of it – your pandering of nonsense is insulting.

  9. BD & Ron-

    At the risk of stepping into the debate in the middle, let me throw this out, which may or may not directly relate to the ongoing discussion.

    For a long time I have been a sometimes advocate of a two tiered patent system. I do think that would make sense in a broad scheme, although a lot less sense if it is just thrown into the system we already have. My thinking is this:

    1. It takes too long to get a patent and opportunities are being wasted by that delay. Businesses cannot attract funding and grow without patents being issued, and something needs to be done.

    2. At least some inventors and businesses don’t have the resources necessary to obtain a patent, but do have innovations worthy of being patented.

    3. I have never thought it makes a ton of sense to treat every patent application the same, knowing that somewhere between 2 to 6 percent are commercially viable. Even if we assume 10 percent are commercially viable that means that 9 out of 10 patent applications are clogging the system, but demand similar amounts of effort. That means 90%+ of time spent by patent examiners winds up being largely useless.

    I have long been in favor of something akin to what the EEOC does with respect to discrimination. Before you can file a discrimination lawsuit you need a right to sue letter. If the patent equivalent were the case we could have far more speedy reviews of patent applications and issuance of more patents. If the patent became valuable then prior to a lawsuit you have to go back to get it thoroughly examined by the USPTO before being able to sue. That would allow for a far more efficient allocation of resources.

    I certainly agree with BD that we don’t know how companies and investors would perceive a quickie patent, but life (and business) is about choices. You could wait in line for a fully examined patent from the start, or you could get something quicker. With that quick review there would be consequences, but I suspect we could create a system that is far more efficient and with better resource allocation. It would also be in keeping with the Three Track philosophy that one size does not fit all.

    -Gene

  10. Gene,

    It is not as if you are stepping into the middle – it is that I wish to avoid stepping into the middle of a pile of ill-thought out, um, “handwaiving” (we have Congress for that).

    It is not that I would be against a Tiered System. Don’t let my antagonims of Ron fool you. It is that I am against the specious reasoning that Ron has supplied to my efforts to have him flesh out his tiered idea (and the lack of actual reasoning why the three tiered system that has been posted would actually work). “Oh, let’s just give it a try” is simply not an acceptable line of reasoning given the impact that the patent system has on the country.

    Ron still has failed to answer the tough questions I had for him the very first time he floated his idea. Had he attempted to provide answers, or flat out simply answered “I don’t know“, I would not be inclined to ride him so hard every time he posts the tiered concept as a ready-made answer. It is not a ready made answer simply because it isn’t so.

    For him to pretend that he has given an adequate presentation is simply wrong. For him to ignore the points I have raised and repeatedly insist that his view is detailed enough is duplicitous.

    I have no problem at all calling this to his attention.

  11. In some sense, we already have the beginnings of a mutli-tier system with provisional and non-provisional applications. Provisionals could evolve into Tier 1, with Tier 2 being somewhat comparable to today’s non-provisionals, and a new Tier 3 being for more urgent and/or higher value applications. Client requirements vary both in terms of time and money. In some cases, the client may want to deliberately delay examination, perhaps to save money while doing market research on its commercial viability, or to continue refining the invention and claim priority to it in a subsequent application, or to license/assign at a lower price point given its early-stage risk level. In other cases, the client may view the application primarily as IP insurance, or to bulk up a patent porfolio for general cross-licensing purposes, but has no plans to aggressively license or litigate it as a profit center in its own right. In yet other cases, time may be of the essence due to likely or impending infringement by a competitor, or a very robust high-value patent is anticipated requiring at least a credible threat of litigation to enforce it, thereby justifying a greater investment. As for the cost of Tier 3, it would probably be comparable to an Article One Partners search, but far less than the cost of litigation, and would cut down dramatically on frivolous litigation based on weaker patents.

  12. On behalf of the Article One community, I appreciate the analysis and notification of the opportunity on our platform to research this litigation. As the CEO of AOP, I am honored to work with our community and the success of the company that is referred to is due to the tremendous quality our community produces. In turn, we have been pleased to be able to compensate our community for their research, with more than $1.4 million distributed to date.

    This is a very healthy conversation on the imbalance and inefficiencies in the system. I want to thank Gene for covering this issue.

    Gene makes the point, “I don’t understand why more defendants facing patent infringement litigation do not pursue a reexamination strategy, which can be an exceptionally effective way to take the fight to the patent troll. You need to turn up the heat and make the patent troll fight to defend.”

    More companies are pursuing the crowdsourcing for prior art strategy, and for different reasons. Some for patents in litigation, some looking to identify assertion risks prior to litigation and some to better understand the value of their portfolios. The common thread is patent quality. While patent reform is dearly needed, the reality is that companies need more tools in their arsenal to quickly and accurately the true value of patents to save what can best be estimated at millions of dollars in management time and legal expenses.

    Should your readers be interested in working on the specific research on Lodsys, they can go here http://info.articleonepartners.com/lodsys-study/ to access the searches.

    I invite further input from your readers and appreciate the opportunity to be part of the dialog of your blog Gene, which is the best in class source of insights in our patent industry.

  13. Cheryl, can you give us a ball-park range for the cost of an AOP crowdsourced search? Just to see where it fits within the current spectrum of patent prosecution and litigation options.

  14. Thanks for the comment Cheryl, and thanks for the kind characterization of the blog and our discussions.

    Talk to you soon.

    -Gene

  15. Thanks for the inquiry Ron. Our searches when compared directly to traditional searches are deemed to be a scorch the earth approach, which generally is a scaling fee structure under traditional approaches. AOP’s searches are a flat fee, include translations of our Studies into 8 languages to prompt foreign language speakers to research in their own languages, and our visitors are from 176 countries with daily visitors from foreign countries exceeding U.S. visitors.

    So the reach is beyond even the high quality traditional research, because it extends the reach to foreign language speakers to remote locales that generally are not typically tapped.

    Please contact us directly for our fees per search, we are happy to provide that information directly to you. http://www.articleonepartners.com/contact.php