Today's Date: September 24, 2014 Search | Home | Contact | Services | Patent Attorney | Patent Search | Provisional Patent Application | Patent Application | Software Patent | Confidentiality Agreements

Fighting Patent Trolls is the REAL Solution


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
Blog | Twitter | Facebook | LinkedIn
Posted: October 7, 2013 @ 8:00 am
Tell A Friend!


Last week ZDNet ran an article about how Kaspersky Lab took on and prevailed against Lodsys, one of the more notorious patent trolls operating presently. Lodsys first appeared on the scene several months ago when it started chasing Apple App Developers and demanding that they take a license to the Lodsys patent portfolio, and then later going after Google Developers who provide Apps for the Android operating system. Essentially, the model followed by Lodsys is to sue everyone, big and small and everywhere in between. Lodsys purchased its patents from Intellectual Ventures, who as they were amassing a giant patent portfolio lead the industry to believe it was for the benevolent purpose of taking patents out of the hands of patent trolls, thereby insulating them from such lawsuits. See Tech Guru Riles Industry by Seeking Huge Patent Fees. IV has at times found it easier to sell patents to willing patent trolls or has used various shell companies, but also now files lawsuits of their own. See, for example, IV Sues Motorola Again and Intellectual Ventures Becomes Patent Troll.

I have absolutely no problem with enforcing patent rights, and frankly I don’t think it should matter how the patents were acquired, but there is something exceptionally seedy about the use of shell companies and taking a back-end on revenues like Intellectual Ventures is routinely accused of doing. But if there is infringement of solid patents then there should be recourse. Having said that, it would be naive to pretend that there is not real evil lurking in the patent infringement realm. Stories of $500 to $1,000 offers to settle and avoid patent infringement litigation that would cost millions of dollars to defend abound. Some courts have openly acknowledged what feels like “extortion-like” activity. See Indicia of Extortion and Troll Turning Point? 

That there are bad actors is hardly surprising, particularly given the lucrative nature of the business model and the fact that many district courts feel as if they do not have the tools to do anything other than allow their courtrooms to be used as the main prop in the extortion-like shakedown. Of course, despite what some district court judge say, there are considerable powers that can be exercised if judges really do want to stop the bad behavior. See Judges Can Make Patent Trolls Pay. But the shell game played with the ownership of patents does add a layer of complexity to figuring out what is really going on and who is calling the shots. Why is it so necessary to have such secrecy? As Justice Brandeis once said “sunlight is the best disinfectant.” The troll industry could use some disinfecting. It is a sin that these nefarious actors tar those innovators with real, strong patents that are infringed.

Of course, judges cannot stop the bad actors alone. All too often companies settle crap cases for a few thousand dollars and then naively proclaim that it is better business to settle than to fight. Unless and until the Silicon Valley elite stand up and fight this problem will continue to go on and there is little or nothing the Congress can or will do to stop it, and nothing that even willing district court judges can do to prevent it from damaging the patent system and the integrity of the Federal Judiciary.

At an earlier time in my career, when I was a new associate fresh out of law school, I worked for a general civil litigation firm that did any type of litigation, regardless of subject matter. There was an attorney for practically every specialty, but virtually everyone handled automobile accidents, although it was a rapidly decreasing line of business for the firm.

During the 1980s the auto insurance companies would settle everything, just like the Silicon Valley elite tech companies do today when faced by bad patent infringement cases. If you were to sue an insured motorist the insurance company would calculate how much they would spend on defending the litigation and then offer you nuisance value to settle, which was of course a little less. They would dispose of the case and feel confident in the believe that they had saved money doing so because, after all, they could pay their attorneys and ultimately lose. So if they could pay less than what they calculated the attorneys would charge they did.

It doesn’t take a rocket scientist to know what happened next. Every attorney with a pulse signed up every client they could who had been in an auto accident and sued. There was easy money to be had because insurance companies would settle bad cases. It was win-win for everyone except the insurance companies. You see, their decision to settle everything without a fight lead to far more claims and that cost them big over time. In fact, it wasn’t until about the early 1990s that the gravy train was over and auto insurers figured out that they had to fight and stop settling specious claims. And fight they did. They fought everything and for a while it was difficult, if not virtually impossible, to settle even good cases where there were real damages and solid liability. The lesson was and is clear: If you don’t fight, and if you make yourself an easy target, people will sue you on both good and bad cases.

Whenever I explain this I get push back from those in Silicon Valley who would like to pretend that I don’t know what I’m talking about. They say it is complicated and they have to settle. Of course, they are talking out of both sides of their mouth because while they will settle crap cases where there is clearly no infringement and/or the patent claims are almost certainly invalid, they will fight solid patent infringement claims to the end. There is no business justification for settling bad claims and wasting time and money fighting good cases, unless of course there is a hidden agenda. The hidden agenda here seems to be to settle bad cases to fuel the patent troll problem so that they can run to Capitol Hill complaining that they are unable to do anything and are helpless. They need reforms that weaken the patent system damn it, and they need them now!

Those companies advocating for a weakening of the patent system have been hard at work since at least 2005. When they were unable to get what they wanted from Congress initially they turned to the courts, and for the most part the Supreme Court has complied with a string of anti-patent decisions that not only ignore the Patent Statute, but also ignore several generations of Supreme Court patent jurisprudence. Ultimately, however, they managed to achieve sweeping patent reform, but now they are back again seeking additional changes. See A Summary of the Goodlatte Patent BillEventually on their wish list is an International Trade Commission that lacks the authority to issue exclusion orders. See Infringer Lobby Seeks to Strip ITC of Patent Powers.

These companies supporting a weaker patent system want to make issued patents easy to challenge and much more difficult to get. They are companies who built their corporate empires on patents and other forms of intellectual property rights, growing from small company to mega-giant company while building an enormous intellectual property portfolio heavily dominated with patents. Those patents gave them a competitive advantage and now that they have their market dominant position they really don’t need the patents as much. They seek insulate themselves from competition by making it harder for the next individual inventor, start-up tech business or small business to innovate, protect and grow up the corporate food chain. They know what they did to succeed and they know to keep their dominance they cannot allow others the same benefits and rights. The self created patent troll problem is merely a diversion to accomplish their end goal.

In the end the strategy being pursued by the Silicon Valley elite is extraordinarily short-sighted. Sure, a weaker patent system will prevent start-up technology companies from gaining meaningful patent rights on their new innovations, which will make it very difficult for smaller companies to grow and challenge larger companies that have lost the ability to implement paradigm shifting innovation. Of course, by weakening the patent system and patent rights, and by stripping the ITC of its authority, the Silicon Valley elite will make themselves extremely vulnerable to challenges from abroad, particularly from China.

You see, if patents are weaker, getting injunctions are unlikely and there is no ability to stop infringing products before the enter the U.S. what will stop Chinese companies from becoming the dominant technology corporations in America? Absolutely nothing! This is particularly true since technology companies doing business in China have to open up their patent and intellectual property portfolios, including trade secrets, to their Chinese “partners.” We see over and over how those one time “partners” soon become worldwide competitors using technology not invented in China, but rather technology handed over to China. A strong patent system, with strong patent rights and a meaningful ITC with real jurisdiction is the only thing that will prevent the ultimate gutting of the U.S. technology sector.

What I don’t understand is where are the shareholders in these companies? Where are the lawyers and law firms that specialize in shareholder derivative lawsuits? The strategies being pursued by much of Silicon Valley are calculated to lead to irrelevance and utter disaster, which will cripple shareholder value. Maybe the legal system is set up so that the only recourse is to address the disaster once it has happened, which would be truly unfortunate.

What we need are more visionary leaders who understand how to deal with bullies and know the lessons of history. Eugene Kaspersky, the CEO of Kaspersky Labs, is one of the few who will stand up to patent trolls. In this case because he stood up Lodsys ultimately caved as trial approached and rather than obtain a negative ruling about the questionable patent claims at issue they dismissed the case with prejudice. Now if that doesn’t speak volumes I don’t know what will.

Time will tell, as it tells with all things, but I suspect Kaspersky Labs will be scratched off the “easy target” list because they have shown the will to fight and prevail. True patent trolls, with specious patents and no legitimate claims of patent infringement, don’t want to fight those who will fight back. They are like the school-yard bully. Stand up to the bully once and the bully leaves you alone. The added benefit is that other bullies normally also take notice.

The ONLY real solution is to fight patent trolls. That means no longer settling bad cases and showing that you have the backbone to fight and win, as the insurance companies proved would work on a much larger scale in the 1980s. Of course, not all non-practicing entities are patent trolls, so let’s also cease with the ridiculous rhetoric and actually make a distinction between innovators and those who use bad patents where there is no infringement as a weapon to exploit judicial inefficiencies. Innovators are not patent trolls and those who exploit inefficiencies without regard to whether there is infringement of a valid patent claim are the extortion artists. It won’t kill you to acknowledge that objective truth, nor will it kill you to start negotiating fair license deals with true innovators with solid patents.

In life and in business you never make a mistake by doing the objectively right thing, and here there is clearly an objectively right thing to do. The solution is (or should be) obvious: Stop paying litigators to settle with the extortionists and stop fighting to the end against innovators.

- - - - - - - - - -

For information on this and related topics please see these archives:

Tags: , , , , , , , , ,
Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patent Litigation, Patent Troll Basics, Patent Trolls, Patents

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.

 

54 comments
Leave a comment »

  1. I find this to be well-reasoned and balanced.

    Bravo.

  2. What a great piece.

  3. Interesting article, Gene. You write:

    “These companies supporting a weaker patent system want to make issued patents easy to challenge and much more difficult to get.”

    It’s not clear that “making issued patents easy to challenge and more difficult to get” is a sign of a “weaker” patent system. Those who favor such changes might argue that such changes would make the patent system better and less prone to abuse. Also, the people seeking these changes are hardly restricted to “those companies” that are already successful and sitting on huge patent portfolios. I believe those companies are the minority of such entities who favor the changes you alluded to. Are you aware of polling to the contrary?

    “let’s … actually make a distinction between innovators and those who use bad patents where there is no infringement as a weapon to exploit judicial inefficiencies”

    I agree. But why not also make a distinction between “innovators” and “those who use bad patents where there IS infringement”. The latter description applies to a great many patent trolls and represents what many would find to be the quintessential patent trolling activity: acquiring a broad invalid patent and using it to shake down vast numbers of players who can’t or don’t want to spend the massive amount of time and resource required to “prove” invalidity under our current system.

    You’ve got a widely read platform here. It’s easy to simply tell other people what to do (e.g.,”fight patent trolls”!) and fighting back is a great idea but it’s certainly not the only valid “solution” to address the problem. For instance, you could actually use your expertise and your forum here to help people who have been targeted by patent trolls. You could help those people understand what a “bad patent” looks like by identifying such claims when they are asserted by patent trolls (or, better yet, when they are first presented to the patent office) and explaining to everyone why (in your opinion) those claims are invalid. There’s no reason to believe such contributions wouldn’t be helpful.

  4. Gary-

    You say: “It’s not clear that “making issued patents easy to challenge and more difficult to get” is a sign of a “weaker” patent system.”

    Actually, it is very clear that this weakens the patent system. Serial challenges (which is what the legislative proposals want to allow) to a patent means it is not really a property right. That clearly weakens the patent system, particularly given that the tech elite settle back claims on bad patents and only challenge good, solid patents.

    You say: “acquiring a broad invalid patent and using it to shake down vast numbers of players who can’t or don’t want to spend the massive amount of time and resource required to “prove” invalidity under our current system.”

    The problem is with those who “don’t want to” fight. If they don’t want to fight then they should pay and shut up. Their choice to cave and enable the problem really shouldn’t factor into a policy discussion. They created the problem with their own inaction and constantly settling bad cases. The problem is with those who can’t afford to fight and are being shaken down.

    You say: “fighting back is a great idea but it’s certainly not the only valid “solution” to address the problem.”

    I fundamentally disagree, as articulated in this article and many others. History is on my side. Paying bad claims only causes more bad claims.

    You say: “You could help those people understand what a “bad patent” looks like by identifying such claims when they are asserted by patent trolls…”

    Thanks for the invitation, but I don’t have the funds to fight Silicon Valley’s patent battles for free. I’m available to defend patent cases for a fee, but if they don’t want to fight I’m not going to go and do an exhaustive search to prove one patent claim or another is bad. If it doesn’t matter to them why should I do it? Of course, when they do fight and they do prevail I do tell that story.

    The real problem is that the Silicon Valley elite say over and over and over again that all patents are bad. Microsoft gleefully at conferences repeats the mantra that they don’t infringe valid patents. That is laughable. So to them any patent they are sued on is bad. Trouble is they lose a lot at trial and on appeal, so obviously those “bad patents” that they claim are being asserted against them aren’t so bad. The same is true of many of the Silicon Valley elite, so just because they say it is a bad patent doesn’t make it so. For example, everyone always complains about the WiFi patents, but they stand challenge after challenge after challenge. Seems like a good patent to me despite the serial challenges.

    -Gene

  5. Mr Quinn, you write:

    “I have absolutely no problem with enforcing patent rights,…”

    but I wonder whether the “absolutely” is intended.

    Me, I have absolutely no oproblem with the swift enforcement (including injunctive relief) of patent claims that are not invalid. With bad claims though, I do have a problem.

    Seems to me a strong patent system is one that swiftly revokes bad claims and swiftly enforces good ones.

    Seems also to me that a strong patent system is one that uses a TSM test to explore the obviousness issue without hindsight bias. You know, like the EPO (and latterly also the courts in Europe) does it. Then the presumption of validity on issue has some credibility. When I read on the Ryan Alley blog that the Federal Circuit has no way of judging obviousness except ex post facto, on whether the claimed subject matter is within a successful product (like the iPhone) I shudder and fail to see a “strong” patent system.

  6. You might be interested in viewing Drew Curtis’s short TED talk on the subject. He adds an interesting point about non-disclosure in settlement agreements.

    http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_troll.html

    Great post, Gene.

  7. Benny, I looked at Curtis’s talk. Thanks for the link. His anger and vindictiveness were pretty clear.

    He made a couple of legal errors:
    1. He said the burden of proof of non-infringement is on the accused. Wrong. The accused ought to have a good argument why he does not infringe, but the legal burden is on the patentee.
    2. He recommends that the accused infringer be (I forget the precise words but the essence of the recommendation is to be) uncooperative and vexatious. Attorneys who do that are unprofessional. Yes, some patentee’s attorneys are unprofessional, but as we all learned in kindergarten, two wrongs don’t make a right.

  8. Long-time fan of the blog. Excellent article.

  9. I continue to think the solution is to make it as expensive for the plaintiff as for the defendant. I suggest making it a matter of right for the defendant to bifurcate the trial into a first part for infringement and then a second part for invalidity. That would even up the costs upfront.

  10. You know, the other point I would make is that the SCOTUS is causing most of these problems. They have made it so difficult to examine a patent application with bad case law. 101 is a total mess and it is not just a binary issue, but the fact that applications are crafted to get around 101 issues and for contingency purposes.

    Benson is the root cause when the SCOTUS began to stop trying to understand inventions, but rather try to find a nuclear bomb .

  11. NWPA, I agree that SCOTUS has made things worse, in general, by fuzzying up every close to a bright line rule the Fed.Cir. tried to craft. As a result, there is an argument both ways on so many issues in very many cases, so there are lots of things to litigate. The more there is to litigate, the more expensive it becomes and the stronger the incentive to settle, even if you have arguments to put forward about those fuzzy issues.

    The Fed.Cir. has tried to make patent law clear so attorneys could give predictions with some confidence. Can’t do that much anymore.

  12. “but I don’t have the funds to fight Silicon Valley’s patent battles for free”

    That’s very interesting Gene. What makes you think that they have the money to fight all these battles you would have them fight?

  13. “You know, the other point I would make is that the SCOTUS is causing most of these problems. They have made it so difficult to examine a patent application with bad case law. 101 is a total mess and it is not just a binary issue, but the fact that applications are crafted to get around 101 issues and for contingency purposes.”

    You really think that the Supreme Court caused most of these problems? And you give as an example their having supposedly made a mess of 101? How does making a mess of 101 lead directly to trolling (which I believe was the topic in this thread)?

  14. John Smith, SCOTUS and NPE’s are linked because SCOTUS’s decisions make patent litigation unpredictable and expensive. The claim is that NPE’s “extort” settlements from so-called “innovators” to avoid the cost of litigation, and Scotus has created the environment where that strategy works.

  15. NWPA – “I continue to think the solution is to make it as expensive for the plaintiff as for the defendant.” The problem is that the independent inventor often has very few resources, but yet has been a very significant part of innovation. A friend of mine was an engineer at a large tech company. When someone within the company came up with something “too good,” it was shelved because it would compete with existing product lines. The large corporation simply cannot innovate like the independent inventor(Apple with Steve Jobs was a rare exception). The original support of the American independent inventor (pre-America Invents Act) helped America become the greatest innovator and most powerful economy in the world.

    The key to innovation, and the person that our original patent system intended to support, does not have the resources to fight legal battles. Evening out the costs won’t hurt the vested interest, it is just a cost of doing business. Evening out the costs will eliminate most independent invention, to the great detriment to this once great nation.

  16. Like most of Gene’s pieces – this is filled with completely dishonest logic. Over 50% of all patent troll claims are made against small companies that CANNOT afford to fight back. This is extortion through and through. Call a spade a spade. In addition, to all readers, please know that Gene either fabricates or completely misrepresents facts. For example, there is no historical evidence that a patent system benefits society in any economic or social manner. To the contrary, the greatest surges in innovation in countries have ALWAYS been in countries that had no (or weak) patent systems. Monopolies are inherently anti-competitive. These are all concepts that virtually ALL economists agree up. These are FACTS. The only person who doesn’t seem to get it is a Gene – a lawyer and shill. There is clearly a reason why Gene has been basically discredited in pretty much everyone’s eyes. I strongly urge you all to read: http://c4ss.org/content/1374

  17. Everyone should read this. Recent article by Posner (Nobel Prize winning economist and legal giant): http://www.becker-posner-blog.com/2013/07/patent-trollsposner.html. Just more evidence that Gene is out to lunch or some sort of lobbiest.

  18. Randy, a suggestion then – even out the costs unless it is the independent inventor himself fighting in court. How’s that?

  19. A rising tide sinks all of those without boats.

    John, would you advocate a pure means-based policy across the board for all court (and court costs)?

    Careful – this ‘free’ is not a free lunch and someone has to pick up the tab…

  20. I don’t know if I’d prefer it across the board in all sorts of litigations. I just threw out a suggestion. Further I should say that it seems that if independent inventing, and rewarding independent inventors is something the US seeks to promote then perhaps it is worth subsidizing. Or perhaps it is not, that is a call for congress.

  21. John,

    I grant that you were just throwing out a suggestion. But that is why I responded as I did – often such throw-outs are throw-aways because the entire picture needs to be evaluated and what seems good at first blush turns out to be unworkable.

    I would also point out that you appear to be working under the impression that the patent system is some type of guarantee for business success, that an inventor is guaranteed a profit for his invention. That would be a fundamental misunderstanding of the Quid Pro Quo of the patent right. Gene has written articles explaining the difference between patent rights and monopoly – and your misunderstanding is one of the things that fuels that confusion. The nature of the negative right of a patent still leaves the work of being a business success to the work of the inventor. No guarantee of that success is provided, nor meant to be provided. The market still decides.

  22. John Smith: You really think that the Supreme Court caused most of these problems?

    I agree with American Cowboy, and John the other issue regarding the SCOTUS is that it has made it hard for the PTO to do its job. For example, TSM is probably supported by the 1952 Patent Act. And, would it be so bad to say that if you can find a TSM then it is obvious and if you can’t then it isn’t obvious. What would be so bad about that? It would provide a relatively straightforward test that have a few bad outcomes but would allow the vast majority of cases to be examined fairly and quickly. The reason we don’t have this test is that the SCOTUS has decided that its common law is more trumps the Congress’s laws. Is that really the right outcome given the language in the Constitution? I don’t think so.

    And, John, information processing application simply are not examined properly now. I think that is because Benson mischaracterized them which made it so that the PTO never adopted a proper way of examining them. (This is a long subject, but Benson trys to say they are laws of nature or abstractions.)

  23. Michael-

    Actually, no. Gene is not out to lunch. Posner is well known to be completely wrong whenever he speaks about patents and innovation. He suffers from a syndrome whereby he thinks he knows everything about everything and is an expert of the top magnitude on everything. He is clueless and the fact that you believe him rather than a true patent expert like myself suggests you are even more clueless.

    Perhaps you should read Judge Rader’s writings. Judge Rader continually explains in easy to understand English exactly why Posner is wrong.

    Finally, one thought. Posner has been on record saying that he doesn’t think there should be a right for a patentee to go to federal court for every patent infringement. That is breathtakingly stupid really. Patents are one of the few substantive areas of law actually mentioned in the Constitution. For a Judge to have that opinion is remarkable. For a Judge to both hold that view and say it out loud boggles the mind. Obviously Judge Posner knows nothing about patents and very little about the Constitution.

    I’d welcome the opportunity to debate Judge Posner at any time and expose his views for what they are — misinformed and radical.

    -Gene

  24. Adam-

    Can you read? I’m just asking because it would seem that you either are unable to read or you have a reading comprehension problem.

    I acknowledge in EVERY article that I write that there are truly evil people in the patent space and THAT is where we should focus. We should focus on those who are engaging in extortion and suing mom and pops who cannot fight back. But I have no pity for the large companies that can fight back and choose to be targets. So it is YOU that are being intellectually dishonest. So what is your agenda? Why must you misrepresent what I say and write? Are you that insecure in your beliefs that the only way to prevail is to lie? Who is paying you?

    You say: “here is no historical evidence that a patent system benefits society in any economic or social manner.”

    WRONG! It is almost funny to read such an obviously ignorant statement. Please educate yourself. Start here:

    http://www.ipwatchdog.com/2012/12/06/forfeiting-the-future-over-irrational-fear-of-software-patents/id=30957/

    Now for the standard warning that I give to liars like you. If you want to comment here on IPWatchdog you will keep your comments factually accurate. Saying there is no evidence that patents provide economic benefit is ridiculous and ignorant to the extreme. There are plenty of places where your brand of lies are accepted online, but not here. We deal with truth, facts and foster legitimate debate. Pretending that innovators would spend billions of dollars to innovate with the promise of an exclusive right is moronic and I demand better from those who would like to participate in the comments.

    -Gene

  25. Adam, which country is it that had a great surge in innovation without a patent system?

  26. NWPA,

    I am reminded of the quest often invoked by my namesake: Go out and find one example of a modern advance country that has ‘seen the light’ and eliminated all IP laws.

    Every time I see thuis request, the person who make such an announcement as Adam tends to disappear, never to be heard from again. I wonder why that it is so.

  27. NWPA-

    Adam will be hard pressed to answer your question since those countries without a patent system or with weak patent rights either have no economy or one that ranks them in the bottom tier worldwide. Take a look at:

    http://www.ipwatchdog.com/2012/07/05/wipo-announces-2012-global-innovation-index/id=26111/

    If patents were bad for an economy you would expect to see run away innovation and tremendous economic growth in countries without patent rights. The exact opposite is the case. Those countries with the strongest patent rights are high income countries. The data all supports a strong patent system.

    Doubt Adam will answer your question. Those who spew nonsense that is blatantly false rarely want to engage in meaningful debate. I guess they think if they lie enough perhaps it will be considered to be true.

    Cheers.

    -Gene

  28. Alas, Gene is correct.

    The blogosphere (and the real world) runs rampant with those who do not want to debate on the merits and who would rather engage in a rhetorical style of “merely say the lies often enough they become true.”

    That is why marketing exists. That is why commercials exist. Peddle the message often enough and people will assume that the message must be true.

    Excuse the plug for State Farm – no affiliation and no recommendation, but patent law discussions are too often filled with would be French Models.

    http://www.youtube.com/watch?v=rmx4twCK3_I

  29. Just to balance out some of the last remarks – it is of course true that the patent system creates a financial incentive for innovation, BUT it has its’ dark side too – it holds back genuine marketing competition. To give a real world example, a recent article in a technical magazine predicted a “market explosion” in low cost 3-D printers next year, when the original patents covering the technology expire. Good news for consumers, bad for manufacturers.

  30. Benny,

    What you call the “dark side” is anything but. It is the deal struck by the government, the Quid Pro Quo.

    Referring to it as “dark side” only highlights an implicit bias.

  31. Anon,
    As I mentioned in the last line, it is a “dark side” for you as a consumer who purchases products or services, not for a manufacturer or an attorney. As a designer, I am familiar with many parts whose use only becomes after cost-effective for the consumer after the patents covering them have expired and they are freely manufactured by all and sundry. The accelerometer in your smartphone which flips the display when you turn the phone is a good example of such a device.

  32. Benny,

    You tread into the realm of “Infringer’s Rights.”

    Sorry, but patent law does not work that way. Is not meant to work that way, and as I mentioned, you are showing a bias and a non-understanding of patent law by your choice of “dark side” as a reference.

    I recommend that you refresh your understanding of the word ‘exclusive,’ and the notion that if a person with a patent wanted NO ONE to practice that patent, that that is a perfectly acceptable portion of the Quid Pro Quo.

  33. Anon,
    Your comment is entirely unrelated to the point I am trying to get across. I made no reference to patent law, rights or infringement. I merely stated that the consumer is the biggest loser in the patent system because certain inventions are effectively priced out of the market due to uneven competition.

  34. Benny,

    The plea to the ‘consumer’ is a thinly veiled “Infringers’ Rights” position.

    Try to think of it this way: without the invention in the first instance, the consumer has nothing. After the limited time of the patent right, the consumer has everything.

    In between, the right of the patent holder is supreme. There is no loss to the consumer because the rights structure gives the power to the patentee and the patentee can LEGALLY do what he wants, including keeping it off the market in its totality.

  35. “The plea to the ‘consumer’ is a thinly veiled “Infringers’ Rights” position”
    Rubbish.
    I said no such thing, no did I hint or convey any such idea. You are reading shadows.
    After all, my company holds patents, takes care not to infringe other patents, and would not uphold the rights of others to invade our turf.
    But if all those in our industry put out more “defensive publications” and filed less trivial applications, you could have a better product in your hands today, for the same money. (Yes, we also file defensive publications sometimes)

  36. Benny,

    What exactly are you saying about the consumer? How is any advantage to a consumer that comes at teh cost of my client’s rights not as I depict?

    Do you even realize your bias? (and yet again you insert bias with comments about “defensive publishing” and “trivial applications”).

    Your message is garbled at best, and I am trying to make sense of it the best that I can. Instead of mere empty ad hominem towards my points (rubbish?) try to actually make a counter point against what I have said. Try to use a legal principle, or some fact rather than an opinion.

  37. Anon – you think I misunderstand something and thus have the impression that the patent grant assures business success and/or profits. I do not. And I’m not sure what gave you that ludicrous impression. Surely nothing in this thread.

    NWPA – you ask what would be so bad about implementing TSM. I’m not anti-TSM or even anti-strict TSM. Then again, I’m also rather in favor of applying the law. And currently the meaning of section 103 is rather clear. Obviousness is the criteria, not TSM. If the congress wishes to make TSM the criteria then it may do so.

    And just for the record, I don’t think that the SCOTUS making a higher bar on obviousness compared to TSM would lead to more trolling as opposed to less trolling. it appears quite self-evident that a lower number of patents, or narrower claims therein, which is the only result of a stricter obviousness standard, must lead necessarily to less trolling.

    NWPA also states that “The reason we don’t have this test is that the SCOTUS has decided …”

    Actually the reason is the statute. Wahmp wahmp. It is a very easy statutory override for the congress to implement to make TSM the test.

    NWPA also asserts that information processing applications just aren’t examined correctly nowadays. I agree, though for different reasons.

  38. Actually John, I believe the opposite.

    A patent grant is absolutely no guarantee of business success or profits.

    That is one reason why “monopoly” is not the right word to describe a patent grant.

    Further, I have been very firm and consistent in my believes and I would ask you why you think that I would hold otherwise.

    Put simply, the patent grant is a right to exclude – and that means exclude the consumers if the patent holder so chooses.

    And to your view that a lower number of patents would necessarily lead to lower amount of ‘trolling’ (which you have not defined as an illegal activity as far as I can tell) can be reduced to its most absurd point and eliminate all patents to get rid of “Trolls.’

    The elephant in the room, of course, is the act that the “trolling” problem has already been blown way out of proportion in order to weaken the patent system. I would refer you to both the excellent series of articles by Steve Moore and the GAO report (with the caveat that even the GAO report has tainted data supplied by entities that are not patent friendly).

  39. John,

    I would also point you to post twenty-one – it appears that you are accusing me of the very thing that I noted of your behavior.

    Very poor form.

  40. Anon,
    You wrote – correctly – “Put simply, the patent grant is a right to exclude – and that means exclude the consumers if the patent holder so chooses.”
    I think that answers your own question, when you ask what I am saying about the consumer.

    No, I don’t think there is any inherent evil or bias in defensive publications. They have their place and usefulness. I ‘m not even sure what “bias” you are talking about. Your suggestion that I am biased against IP law is plain wrong. Can we put this argument to rest now? We obviously have our differences, we can both learn from each others view-points, but we’re all friends on this forum, aren’t we?

  41. anon – “A patent grant is absolutely no guarantee of business success or profits.”

    Right we are agreed.

    “Further, I have been very firm and consistent in my believes and I would ask you why you think that I would hold otherwise.”

    Um I never said you did. If you’d kindly read what I wrote you’ll note that. The only thing I responded to was your accusing me of holding some outlandish belief about profits being assured or something. Indeed, what you brought up was tangential to the thread and I don’t even understand why you brought it up.

    “And to your view that a lower number of patents would necessarily lead to lower amount of ‘trolling’ (which you have not defined as an illegal activity as far as I can tell) can be reduced to its most absurd point and eliminate all patents to get rid of “Trolls.’”

    I quite agree. And I still don’t see why making the obviousness bar higher would lead to more trolling. Perhaps you guys could reiterate how that happens in more detail.

    “The elephant in the room, of course, is the act that the “trolling” problem has already been blown way out of proportion in order to weaken the patent system.”

    According to you and Mr. Moore. According to the people being trolled it is quite the opposite.

  42. John Smith writes: NWPA … TSM.

    The question is does the Federal Circuit or the SCOTUS get to decide what obviousness means? Your response to me assumes that the SCOTUS’s common law somehow is right in some absolute sense (in the sense that common law views law as being absolute discovery divinely inspired ). But, I don’t think that is the case.

    To my mind, the great conflict that is going on is the SCOTUS sticking to common law that was developed over 200 years without considering the changes that the 1952 Act brought. There is plenty of evidence of the SCOTUS’s arrogance in this regard including the SCOTUS saying that all the 1952 Patent Act did was codify all their common law despite the 1952 expressly overturning at least one recent SCOTUS case.

    To my mind, the problem is that the SCOTUS refuses to re-interpret their common law in light of the 1952 Patent Act. Consider, that obviousness (whatever that is) can certainly be differently determined depending on a global method that is used to examine a patent application or invention.

    So, again, your comments seems to say that the SCOTUS has divinely determined patent law (which is what I think they think) and all must conform to their law. But, the 1952 Patent Act should change that.

    By the way, what I wrote above is not isolated to patent law. The SCOTUS is accused of being the problem in many areas of law where they are not re-thinking their previous common law cases in view of new modern methods of applying the law.

  43. “The question is does the Federal Circuit or the SCOTUS get to decide what obviousness means?”

    I disagree. Neither of them get to decide what it means. It means what it means and any attempt to insert other words for the words of the statute are anathema to the rule of law. The statute uses the word obvious and that’s what it means. But the SCOTUS definitely gets the final say so if either were to be allowed to do such and that’s not even questionable.

    “Your response to me assumes that the SCOTUS’s common law somehow is right in some absolute sense ”

    No, it does not. I “assume” only that we must abide by the statute and not some judge made version (perversion more like) of it.

    “To my mind, the great conflict that is going on is the SCOTUS sticking to common law that was developed over 200 years without considering the changes that the 1952 Act brought.”

    That’s as good of an explanation as any as to why your mind is not thinking correctly I suppose. Perhaps one day you will adjust your mind and stop coming up with such cockamamie ideas.

    “To my mind, the problem is”

    To my mind there is no problem.

    “that obviousness (whatever that is) can certainly be differently determined depending on a global method that is used to examine a patent application or invention. ”

    Only if you don’t know what the word obvious means to begin with, which, coincidentally, your comment indicates that you do not.

    “So, again, your comments seems to say that the SCOTUS has divinely determined patent law (which is what I think they think) and all must conform to their law”

    It might seem that way if you’re having trouble reading or comprehending the simple language employed in my comments. My comments have stated bluntly time after time that the state of obviousness has little or nothing to do with the SCOTUS and everything to do with the statute itself. Yet you seem to miss that, time after time. I tire of repeating myself.

    But look NWPA, I could look condescendingly down on you and your understanding of the law of obviousness forever, but we’re off topic. Trolls and the fighting thereof is the topic in this thread. Unless you’d like to tie in your rants about obviousness to fighting trolls then I suggest we simply stop discussing it.

  44. Gene,
    Post caught in the filter, please release.
    Thanks,

  45. Patent trolls function as one of the worst cancers on innovation and they must be cast off far, far away. They’re suing everyday people like podcasters, mobile app developers, etc as a way to make easy money. Kaspersky Lab has indeed set the tone for others to mimic.

  46. John Smiths says: NWPA … I could look condescendingly down on you

    John, what? Obviousness is a word that is used in the statute. The word obviousness has been interpreted. The SCOTUS came up with a way to interpret the word. The Fed. Cir. came up with another way. No kidding the SCOTUS gets the last word, but the question is should they get the last word, and is the SCOTUS being reasonable or not.

    Your continued assertion that obviousness means obviousness is ridiculous. It makes me doubt that you are an attorney. Obviousness is a word used in a statute that has been interpreted by the court. Obvious in the statute means what the court says it means–nothing more and nothing less. The SCOTUS has said how one must analyze whether it is obvious and what criteria one may (and may not use) and what must be used in analyzing obviousness. So, the SCOTUS has defined a procedure that must be followed with the finder of fact then saying yea or nah based on what the SCOTUS said they must consider (nothing more and nothing less). That is how the SCOTUS has defined obviousness. You aren’t an attorney are you? You must not be to not understand this.

    My rant? John, the battle between the Fed. Cir. and the SCOTUS is now epic with every patent blog and reporter having discussed the battle for years. As to me somehow not understanding what is going on: well, let me tell you that I have predicted the outcome of every major patent case correctly over the last 4 or 5 years. And the way I have done this is by recognizing that the battle that is going on is the Fed. Cir. trying to build case law around the 1952 Patent Act and the SCOTUS using their old common law. That is the reason they keep clashing.

    But, I agree let’s drop this. You appear not to be a patent attorney so this discussion is pointless.

  47. While I agree with most of this article, I’m not sure how app developers such as the ones Gene mentioned were being contacted by Lodsys could possibly afford to fight any “bad” patents being asserted against them when Gene acknowledges that such fights can cost millions of dollars. These developers do not have millions of dollars, which is why they are willing to settle for $500 or $1,000 rather than fight a patent, which is why Lodsys is going directly after them in the first place rather than going after Apple or Google.

    Insurance companies on the other hand usually have billions of dollars lying around, which made it feasible for them to stop settling all of the time and start fighting claims instead.

    As I have said before (usually to vehement disagreement on this site), the whole system would work a lot better if the USPTO was able to issue higher quality patents and not let so many of the “bad” ones through. If there were not so many patents out there that never should have been issued in the first place, fighting or settling litigation would more often be a moot point, and fighting would often cost less, since the argument would normally be just about infringement and not about whether the patent is valid in the first place.

  48. “but the question is should they get the last word, and is the SCOTUS being reasonable or not. ”

    That’s only a question in your own mind. When that question comes before congress, you know, the only people that could ever give the federal circuit such a power, then you may lavish me with rich discussions about the issues. Until then, if you’d keep your wild musings to yourself we’d all appreciate it.

    “The SCOTUS has said how one must analyze whether it is obvious and what criteria one may (and may not use) and what must be used in analyzing obviousness. ”

    And yet the final determination remains the same as it was years and years go.

    “So, the SCOTUS has defined a procedure that must be followed with the finder of fact then saying yea or nah based on what the SCOTUS said they must consider (nothing more and nothing less). That is how the SCOTUS has defined obviousness. ”

    Laying out a procedure is not defining obviousness. Obviously. Badump Shhhhh.

    And since you’re so very taken with discussing obviousness on this thread aboiut fighting trolls I’ll just bow out, thanks in advance.

    On a personal note though I will say that I doubt that you correctly predicted the outcome of every major patent case of the last 4 or 5 years. I’ve seen personally some of the predictions you made that were drop dead wrong and even backwards. I believe you were the one ranting over at PO just the other day about a decision that went against the way you thought it would, and should, go. But let’s presume you’re right. Care to take a stab at predicting Alice if ithe supremes take it up? Just so we can see this supposed streak of yours go on another couple of years.

  49. John Smith says: “I believe you were the one ranting over at PO just the other day about a decision that went against the way you thought it would, and should, go.”

    That is not true. I did rant against Lourie, but I did not predict it would go the other way. Lourie is very predictable. The one judge I got wrong was Moore. She has gone away from Lourie as Lourie has become more driven by policy and has ignored the law and the facts.

    John Smith says: “Laying out a procedure is not defining obviousness. Obviously. Badump Shhhhh.”

    Okay, so clearly you are not an attorney. The SCOTUS has defined what obviousness means. Sorry John, you need to read the law to understand that. But, the SCOTUS has defined what obviousness means. You would be hard pressed to find an attorney that would contest that.

    John Smith: “Care to take a stab at predicting Alice if ithe supremes take it up?”

    Oh yes. I will certainly do that. In fact, I am pretty much the only one that will make a prediction at PO. I not only make predictions but I challenge others to do so and they will not. There is one or two that will pick and choose at PO, but I am the only one that does consistently and on the record. I write a post: here is my prediction for X. I am the only one that does that consistently. But, I am not going to make one untill they take up a case. It is a lot of work to predict the outcome. But, if I do make a prediction, the core of the prediction will be that the SCOTUS continues to apply common law and the Fed. Cir. tries to apply the 1952 Patent Act. That is the core of the conflict, but it is a lot of work applying the two different methods to the facts to make a prediction.

    John get a clue. You do not have the education to debate me in law. I am highly educated in patent law and information processing. I have been honored for my achievements in both at top educational institutions in this country. I have no idea of your raw intelligence, but you cannot understand patent law with intuition. You have to read the law to understand it.

  50. Alright NWPA, I’ll keep your lack of a prediction in mind until they take the case up or not.

    As to your education, if you have one then perhaps you should consider exercising that education more often.

    Your implication that I have not read “the law” is amusing to say the least. I am quite well versed in the statute and the cases thank you very much.

  51. John Smith >>As to your education, if you have one then perhaps you should consider exercising that education more often.

    John, I am beginning to suspect you are a paid anti-patent blogger. If you had an education (and cared about intelligent debate), you would read on how courts construe words in statutes. You might then understand why I say that the SCOTUS has defined “obviousness.” Again, you would be very hard pressed to find an attorney that would disagree with that. For you to just tell me I am wrong about something so fundamental as statutory construction is a clear indication to me you have no interest in a substantive discourse. You appear interested in just mucking up posts by people you perceive as pro patent. So, I will ignore you from now on.

  52. Fighting back is not only expensive, but it is a myth that it protects you from future lawsuits from other patent assertion entities. Just look at the history with Kaspersky Labs who has fought back every time.

    http://en.ria.ru/business/20120626/174253507.html

    In the above first lawsuit filed on 12/30/08, Kaspersky Labs was the only one of 35 companies who refused to settle and the plaintiff, Information Protection and Authentication of Texas (IPAT) blinked and dropped the case with prejudice before trial (in part due to a partially accepted summary judgment decision). However, it cost Kaspersky Labs 3-1/2 years of distraction and $2.5 million in legal fees that was not recovered (i.e. no fee shifting and no sanctions).

    http://eugene.kaspersky.com/2013/10/02/the-patent-trolls-can-be-defeated-just-never-give-up/

    Then, as described in the above link, came Lodsys who filed on 2/11/11, where again Kaspersky Labs was the only one of 55 defendants who refused to settle and the plaintiff dropped the case before trial. However, this cost Kaspersky Labs 2-1/2 years of distraction and an undisclosed cost in legal fees (probably at least $2 million).

    But that is not the end of the story. On 10/18/13, Kaspersky Labs filed a lawsuit for declaratory judgment against Device Security who had sent them a demand letter dated 9/18/13. Also on 10/18/13, Kaspersky Labs was sued by Uniloc. So now they have two active lawsuits from patent assertion entities.

    Other companies who have a policy of always fighting back, such as Twitter and Newegg have not stemmed the tide of patent assertion entity lawsuits against them (do a Pacer search and correlate cases against known patent assertion entities if you don’t believe me).

  53. If you’re a small business with only 200k capital and you’re given the option to settle for $10k or lose it all due to legal expenses, what option do you pick? The problem is that the defendant must prove that he’s innocent and this costs a lot of money.

  54. Marc-

    Perhaps settling is what a small business has to do. That is not, however, the way larger businesses that can afford to fight should behave.

    It is also important for small businesses to understand the risk associated with simply jumping on board with a larger corporation and letting them fight. I’ve seen too many instances where the larger company settles leaving the smaller companies holding the bag.

    -Gene