Patent reform advocate Mark Cuban reportedly threatens Walmart with patent litigation

By Gene Quinn & Steve Brachmann
October 11, 2015

Mark Cuban

Mark Cuban

Mark Cuban is the owner of the NBA’s Dallas Mavericks. He’s also one of the many voices that have entered the political fray over the supposed need to push broad patent reforms through Congress. In November 2013, Mark Cuban’s name was one of 39 found on a letter submitted to Congress on behalf of a coalition of tech investors to support patent reform that suppresses the “troubling growth and success of the patent troll business model.” In order to protect the interests of small, innovative start-ups, this group argued the need for higher levels of specification in demand letters, more avenues for patent review and better protections for technology end users.

Those familiar with the patent debate will also recall that the Electronic Frontier Foundation (EFF) has a position known as the Mark Cuban Chair to Eliminate Stupid Patents. Mark Cuban and Minecraft creator Markus Persson collectively donated $500,000 to the EFF to endow the Mark Cuban Chair to Eliminate Stupid Patents. The purpose of this position has been to hunt down and destroy “crappy patents that have been recklessly granted by the US Patent and Trademark Office to unscrupulous ‘inventors’ who claim to have invented things that were obvious and/or already extant; and to pay for activists to fight for substantive patent reform.”

The EFF has been pretty clear in its support of the Innovation Act (H.R. 9), a piece of patent reform legislation that has languished thus far in Congress because of fears surrounding certain aspects of the new regulations, which could prove to be disastrous to the overall system. Previous posts on IPWatchdog have pointed out some of the negative aspects of that bill.

Digging a little deeper, it’s not hard to see that Mark Cuban is bringing a lot of his trademark flamboyant bravado to his anti-patent stance and it’s gotten his voice heard, to be sure. Mark Cuban has called for extreme measures such as the elimination of software patents, even going so far as to say that “patent law right now holds us back in every which way, shape and form.” In at least one episode of TV’s Shark Tank, he has taken the chance to berate a patent owner who wanted to license his technology as patent trolls; in that particular case, there are reports that Cuban took to Twitter and offered to pay the legal fees for the makers of products infringing on an invention presented on Shark Tank. Cuban has argued in the past that patents that aren’t used in five years should become public domain after that period of non-use.

With so much brash bluster, it was inevitable that Cuban would argue himself into a corner eventually. It finally looks like Cuban’s shoot from the mouth first approach is exposing him as something of a patent hypocrite. More specifically, Mark Cuban recently made what multiple news outlets reported were threatening comments toward Wal-Mart Stores Inc. (NYSE:WMT), threatening the retail giant with a patent infringement lawsuit of his own. It would seem that Cuban, like so many others who so loudly want patent reform, have an exceptionally dim view of your patents, but his patents are rock solid and deserve to be respected. Such hypocrisy is not new in the patent reform debate, but it is extremely telling. 

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EDITORIAL NOTE: After this article published Mark Cuban took to our comments section to say that the did not threaten Wal-Mart, but was merely telling them that if they moved forward with their plans that some patent owner might give them a nightmare. He claims now that he was warning Wal-Mart about the possibility of patent trolls.

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Walmart is looking to capitalize on the recent popularity in hoverboards, motorized personal transportation units also known as self-balancing scooters, by offering a self-balancing scooter product in time for the holidays. Thanks to patents covering the invention Cuban seems poised to take aim at Walmart, threatening a patent infringement lawsuit if the retail chain sells the units this holiday season. I guess when it comes to patents Cuban’s philosophy is do as I say not as I do.

So why is Walmart “in for a nightmare,” to use Cuban’s words? It’s been speculated that one of the hoverboard products that Walmart will market is IO Hawk, which offers an upscale hoverboard model for about $1,800 USD. IO Hawk, however, is currently facing a lawsuit for patent infringement from Shane Chen, an inventor of a similar product known as the Hovertrax. Cuban is involved because he invested in licensing Chen’s technology when Chen presented the Hovertrax on Shark Tank. While it’s unclear what product Walmart will eventually sell, BuzzFeed has reported that Chen was in talks with Walmart for licensing his patented version.

Cuban has been very quick in the past to decry the millions of dollars wasted in patent infringement lawsuits and the costs that are supposedly passed on to the consumer. Interestingly, however, is that when corporations are hit with patent damages for infringement the costs of the goods and services provided never rise. This clearly suggests that those who are in the business of selling, or infringing for profit if you prefer, have baked into their price point a certain amount to cover necessary licensing fees and patent damages. This obviously calls into question whether consumers are at all injured by patent infringement lawsuits. Indeed, it tends to suggest that retailers who are in the business of infringing are pocketing rent payments on the back of innovators. That is not what the patent system is supposed to allow. The innovator, not the infringer, is the one who is supposed to be rewarded for inventing and the associated risk taking involved.

So why does Mark Cuban want to start patent litigation against one of the largest retailers in the world? Such a threat is curious given that in an August 2011 post on his personal blog Cuban argued that litigation adds millions of dollars to the costs of commercializing technology and kills jobs? Why won’t he just live and let live, as it were? After all patents are the root of all evil and do nothing more than harm consumers, at least according to Cuban. Of course, the reason Cuban is pounding his chest and threatening Walmart is simple. In this case Cuban has locked into what he believes to be an exciting innovation and he controls the patent rights. In a way that can only be achieved by the truly petulant, Cuban has undermined a great deal of his own patent reform position without even seemingly realizing what he has done.

An even more delightful part of this farcical situation is the fact that the very patent reforms for which Cuban has already invested hundreds of thousands of dollars in pursuing would prevent him from going after Walmart, at least initially. The EFF, that organization which received such a generous gift from Cuban, supports the Innovation Act. Customer stay provisions in pending patent reform in Congress contains mechanisms through which Walmart could possibly request a stay, claiming itself as a covered end-user and shifting the lawsuit’s focus to the manufacturer of the IO Hawk. We’ve already pointed out other negative aspects of customer stay provisions in patent reform legislation in other posts on IPWatchdog. How ironic would it be that patent reform supported by Cuban and the EFF could entitle alleged infringement to continue indefinitely as he, the patent owner, is forced to chase the maker rather than the seller. Perhaps Cuban will learn why going after the seller is frequently a preferred pain point in an infringement battle when an innovator can’t seem to get anywhere with a manufacturer who simply ignores all business inquiries.

Much of this legal situation has its foundation in the somewhat murky story of the hoverboard’s development in China. The IO Hawk started getting a good deal of notice after premiering at the 2015 Consumer Electronics Show in Las Vegas. However, a very similar product was released last August by Chic Robotics and after that company unveiled its Smart S1 at a Chinese trade fair, sales of the hoverboard were quickly followed by an explosion in the number of hoverboard brands on the market, which suggests some pretty excessive copying of the original product. Conveniently, the trademark for the IO is simply Chic’s logo, a circle below a straight line, rotated 90 degrees. IO is importing the units from China and it’s not clear that there is any patent protecting the self-balancing scooters that it’s marketing.

self-balancing vehicleChen, however, has been issued U.S. Patent No. 8738278, entitled Two-Wheel, Self-Balancing Vehicle with Independently Movable Foot Placement Sections. It claims a two-wheel, self-balancing vehicle having two foot placement sections coupled to each other and independently movable, two wheels in parallel spaced apart from each other and associated with either foot placement section, and then control logic that drives each wheel toward self-balancing their respective foot placement sections in response to sensor data. Diagrams attached to the patent show a hoverboard that is remarkably similar to the other products that are being attached to such recognizable celebrity names as Justin Bieber or Wiz Khalifa.

It looks like Mark Cuban has a point in this case: he’s licensed patented technology and in order to keep cheap derivatives out of the market, he wants to enforce Chen’s patent rights. That is a reasonable position and it is supposed to be exactly what the patent system is intended to allow. Of course, Cuban’s use of the patent system in this legitimate way shines a spotlight on his hypocritical views on the subject.

If we can make one more point about Cuban’s cluelessness on patents and innovation, we have to go back to that public appearance where he made his impassioned plea to end software patents. To support his claim that patents aren’t necessary for technology innovation, he makes a pretty bold statement: “I read somewhere that in 1989, Apple had one patent. One. I mean, back in the early days of computers, no one talked about patents.” Well, Cuban read wrong. Such a careless, inaccurate and provably incorrect statement shows just to what length Cuban will go to bolster his arguments even when the truth is the first casualty.

A quick online search of patents issued to Apple between 1976 and 1989 shows that the company held 63 U.S. patents, earning 11 in 1989 alone. And to provide some proof to our readers, just check out: U.S. Patent No. 4870357, titled LCD Error Detection System; U.S. Patent No. 4786893, titled Method and Apparatus for Generating RGB Color Signals from Composite Digital Video Signal; U.S. Patent No. 4742448, which is titled Integrated Floppy Disk Drive Controller; or U.S. Patent No. 4852830, titled Computer Monitor Stand. Wozniak’s name is listed in four other patents issued to Apple during this time period, showing that an inventor pioneering technology in a new field does not need many patents to maintain a leading position in that sector.

Unlike Apple, which held many patents, Chen only holds the one hoverboard patent. If Cuban’s positions were consistent you might imagine that he would conclude that patents aren’t very necessary because if you only have one patent they can’t be very necessary. Of course, when it is his “only one patent” Cuban probably views things very differently.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Gene Quinn

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than seven years. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 61 Comments comments.

  1. Night Writer October 11, 2015 2:53 pm

    I just recently started to watch Shark Tank, but I am pretty sure that the sharks regularly ask whether the entrepreneur has a patent and also tell them that without a patent they will just be copied as soon as they get some “heat.”

    From what I’ve seen, the comment in the article that your patents are a waste, but my patents are the real thing is at the core of this type of anti-patent. It is interesting, but when there is some movement like the anti-patent movement that there are always people that try to make a buck from it and will play either side to help their own wallet.

  2. JNG October 11, 2015 3:53 pm

    What’s equally farcical about this his whole “software shouldnt be patented” argument is that the Shen patent itself is a prime example of mostly… software when you consider that key component is:

    “…control logic that drives the first wheel toward self-balancing”

    Where does Mark think this magic comes from?

  3. Hank Rearden October 11, 2015 5:58 pm

    Would be great to file a petition for IPR of this patent. Anyone interested?

  4. Night Writer October 11, 2015 6:29 pm

    >>Would be great to file a petition for IPR of this patent. Anyone interested?

    No. Too much work. But, it does seem wrong that anyone can just file an IPR whenever they want for no reason against your patent. I mean you could file an IPR against his patent because he doesn’t clean up after his dog on your front yard.

    Great point JNG.

  5. Mark cuban October 11, 2015 8:35 pm

    You have no idea what you are writing about. All you had to do was email me to ask for facts. I’m certainly not hard to find

    What I said was that the boards would be a nightmare for Walmart.

    Had you asked like others have , you would have found out that the nightmare refers to the number of IP holders coming out of the woodwork asserting some questionable patent rights on the boards. Walmart will get sued. Not by me.l, by the trolls showing up like they do in every tech growth area

    My position hasn’t changed on software patents. Nor will it.

    And I’ve been clear that if you just copy someone’s original work then you should pay. That is fair You see a product and knock it off. You are infringing.

    But that is not what causes trolls to sue Most never put their ip to work. To have IP that is useless to the inventor and then to have someone else create something new, not even knowing about the first Ip and to be sued for including it is wrong in every way

    Now as far as Apple. Thank you for making my point. I may have been wrong about the absolute number of
    Patents but come on now , 63 patents over 13 years. That’s one week these days.

    So let me rephrase , Apple was able to grow significantly and become a leader in technology and innovation with limited IP protection

    Sound better ? And fortunately for Apple Xerox Parc also wasn’t a big believer in Ip protection

    Trolls are a huge drain on technology companies and the economy

    Get rid of all software patents and I will HAPPILY put all the new IP we develop for the boards In the public domain. The trade off in value would be huge for us and every start up. That’s how horrible Patent laws are today

  6. Mark cuban October 11, 2015 9:14 pm

    Curious if you moderate the comments. My just posted comment appears to be gone

  7. Curious October 12, 2015 9:52 am

    It would seem that Cuban, like so many others who so loudly want patent reform, have an exceptionally dim view of your patents, but his patents are rock solid and deserve to be respected.
    LOL — as a matter of business strategy, it makes perfect sense. As a business person, you want access to ALL technology — especially the technology of your competitors. At the same time, you don’t want your competitors to have access to YOUR technology.

    However, what makes perfect sense for a business person does not make good policy for the United States. Our economic greatness is owed, in no small part, to our longstanding policy of vigorously protecting innovation. No matter if you are a small business or large business, our patent system will protect your innovations. I really hope Congress understands this — sooner rather than later for our economy’s sake.

    As far as Mark Cuban goes, he is trying to maximize his own wealth, and there is nothing wrong with that. However, there is something wrong with him trying to burn down (or support those that are doing so) the patent system.

  8. Gene Quinn October 12, 2015 12:03 pm

    Mark cuban-

    First, yes. We get a lot of spam messages so there are procedures in place to make sure that our comments are not overrun with diet pills, NFL jersey sales, and various other commercial spam comments.

    Second, your position on patents is horribly misguided and enormously hypocritical.

    You say: “My position hasn’t changed on software patents. Nor will it. And I’ve been clear that if you just copy someone’s original work then you should pay.”

    You say that software patents should not exist and without pause you say that if someone takes original work they should pay. Those statements are inconsistent unless you actually believe that software innovations cannot be “someone’s original work.” Would your software patents should exist position extend to IBM’s Watson? How about to what GE is doing with alternative energy? Would it extend to the patent you now have some kind of interest in? The claims specifically include mention of “control logic.” Why would “control logic” not create a patent problem for your patent? You don’t actually believe that logic manifested as hardware is patentable but when that same logic is manifested in software it is for some arbitrary reason unpatentable, do you?

    As far as your comment about Apple, that pretty much sums up most of your comments, doesn’t it? You shoot from the hip without any real facts and grossly over exaggerate.

    As for patent trolls, I’ve never written or suggested that they are not a drain on the economy. Quite to the contrary. I’ve written numerous times that they are a drain, but that the problem is not nearly as bad as it is made out to be. People like you want to label everyone who owns a patent you don’t like as a patent troll, which is ridiculous. There are bad actors for certain and something can and should be done to stop those bad actors. Independent inventors, start-up corporations, research and development companies and universities are NOT patent trolls. Seeking egregiously naive solutions that would wreck the patent system to deal with a small handful of evil actors is just plain stupid.

    As for your patent in question, I think Walmart and their manufacturers should simply embed the control logic into software and then sell the unit without your permission. Your claims clearly wouldn’t cover an identical unit where the control logic is software driven. Maybe when that happens you will start to wake up and stop making arbitrary distinctions.

    -Gene

  9. Curious October 12, 2015 12:19 pm

    Get rid of all software patents and I will HAPPILY put all the new IP we develop for the boards In the public domain.
    Hmmm. You’ll trade a handful of millions worth of IP (i.e., the IP for the Boards) for getting rid of all software patents (worth untold billions, maybe well over a trillion?). You drive a hard bargain (no surprise you’ve become as successful as you have been), so let me think it over. OK, I thought it over, but I’m going to have to pass on that deal.

    Trolls are a huge drain on technology companies and the economy
    ALL middlemen do the same, and your so-called patent trolls are simply middlemen. A middleman simply facilitates transactions between buyers and sellers. It seems obvious not to buy your apples from the grocery store when you can go direct to the orchard and buy them for 50% less. However, not everybody has easy access to an orchard and the orchards may not have exposure to as demand as they can supply. Patent trolls simply facilitate the right to transfer rights to use technology from producers to users.

    Also, patent trolls exists because large corporations do not want to pay for the apples they use. Few inventors are in a financial position to enforce their intellectual property — it simply costs too much. As such, if they want to monetize their invention, they have to sell it to a so-called “troll.” If more corporations did not take the position of all patents except mine are invalid so we don’t license technology, then there would be less trolls.

    Most never put their ip to work
    Putting your IP to work is not a requirement. Should I be denied a patent for a new design of a jet liner that will save 10% in fuel costs because I do not have the untold billions it will take to “put [my] ip to work”? Some people are good are developing technology, others are good at implementing technology. Should we penalize the developers of the technology because they are incapable (for whatever reason) of implementing the technology?

    Putting aside whether or not a patent is valid (i.e., a junk patent) since that is a USPTO problem — not an inventor problem, ultimately, we have a choice. Do we want to incentivize the copiers of the world or do we want to incentivize the innovators of the world? Personally, I am in the camp of the innovators.

    As for the patentability of software, I have a hard time believing that it is not technology — it is the preeminent technology of our times. As such, what makes software so special that it does not deserve protection while other technologies can be protected?

    As an aside, I’m not the moderator. Also, your post is still up. Finally, Gene Quinn (who runs this board) has interviewed many high-level people in this field (both pro and anti-patent). If you are really Mark Cuban, then I’m sure Gene would give you a platform, via an interview, to air your views.

  10. Night Writer October 12, 2015 12:32 pm

    Mark out of curiosity do you obtain freedom to operate opinions? It seems to me one of your assumptions is that your engineers invented whatever product you are building. But did they? There many engineers that just copy what they saw someone else do either consciously or unconsciously. A freedom to operate opinion can often identify key patents that might be asserted against a product and possible design alternatives to avoid the patents.

    Also, disclosure is enormously power in creating innovative environments. I think too that you underestimate how easy it is to copy products /software.

  11. Night Writer October 12, 2015 12:37 pm

    >So let me rephrase , Apple was able to grow significantly and become a leader in technology and innovation with limited IP protection

    Mark, that was a different era. That was when corporations had huge R&D for the public good (to avoid anti-trust problems.) That was when universities and government research were the springboard for the early research in computers. Those things aren’t true anymore.

    Also, how is it that the US is something like 80 percent of the software industry in the world and we have had patents for software for 20+ years. Can you explain that?

    (And, again, I think you do not understand how patents enable inventors to disclosure their inventions to magazines/journals and enable inventors to move to other companies.)

  12. Night Writer October 12, 2015 1:04 pm

    One final thought about Apple: I seem to remember that Apple did clamp down on their IP. Apple would sue anyone that tried to sell an Apple compatible computer, so no clones. And, I seem to remember they had some other things in place to protect their IP for the software on their computers so it couldn’t be copied.

  13. Hank Rearden October 12, 2015 2:11 pm

    >>No. Too much work. But, it does seem wrong that anyone can just file an IPR whenever they want for no reason against your patent. I mean you could file an IPR against his patent because he doesn’t clean up after his dog on your front yard.

    Too much work? C’mon. Killing this patent in an IPR would be a piece of cake. And, of course, that’s precisely the purpose of the “horrible Patent laws” Mr. Cuban is referring to — right Mark?

  14. Mr. V October 12, 2015 2:20 pm

    Count me in for this IPR.

  15. nat scientist October 12, 2015 2:28 pm

    Steve Jobs already tried that going thermonuclear on Android and apocalysptic on Samsung; no offense the great Harold McElhinny in Apple v Samsung I especially. Give me your rounded corners, but forget the belly button, etc.

  16. Night Writer October 12, 2015 2:48 pm

    Hank, I work for a large law firm. I couldn’t work on the IPR without running a conflict check. I agree IPRs are not hard. They are basically super duper office actions.

  17. David Stein October 12, 2015 3:03 pm

    Very interesting to see Cuban threatening litigation over this particular patent.

    A central plank of the EFF’s “Mark Cuban Chair to Eliminate Stupid Patents” is this:

    > Functional claiming – Patents should cover specific solutions to specific problems.

    > Too often, software patents apply broadly to all possible approaches to a problem, rather than to a specific solution. This is known as “functional claiming” and is endemic to software patents.

    > This problem can be fixed by requiring patent applicants to claim their particular solutions. We’ve recommended that patent applicants should have to submit working code with their applications, or at least detailed notations explaining how their code works in order to get a patent. And if they do get a patent, they should be limited to the invention they claimed.

    Okay, so let’s look at the claims in the patent that Cuban is now using to threaten Walmart:

    > A two-wheel, self-balancing vehicle device, comprising: a first foot placement section and a second foot placement section that are coupled to one another and are independently movable with respect to one another; a first wheel associated with the first foot placement section and a second wheel associated with the second foot placement section, the first and second wheels being spaced apart and substantially parallel to one another; a first position sensor and a first drive motor configured to drive the first wheel, a second position sensor and a second drive motor configured to drive the second wheel; and control logic that drives the first wheel toward self-balancing the first foot placement section in response to position data from the first sensor and that drives the second wheel toward self-balancing the second foot placement section in response to position data from the second foot placement section.

    This raises some obvious questions:

    1) The foot placement sections are “coupled to one another and independently movable.” How exactly does that happen? Looking at the specification:

    > Pivoting or rotating shaft arrangements are known in the art, and others may be used without deviating from the present invention as long as the foot placement sections may move independently.

    That seems an awful lot like “functionally claiming any known solution to the problem,” right? I guess that Cuban is perfectly fine with hardware being claimed in a results-oriented manner – but we can’t allow that sort of thing with software, because… why, exactly?

    2) “Working code” and “detailed notations explaining how it works” as new requirements for software. Right. Meanwhile, for this critical element of Cuban’s device, the “detailed notation” is shown in Fig. 2 as a “shaft (170)” and “flange brackets (165).” The details are omitted simply because they are “known in the art.”

    I presume that a patent claiming a “database (210)” coupled with a “user interface (212),” and asserted that computer scientists know how to assemble these components, would be a strong candidate for the Electronic Frontier Foundation’s “Stupid Software Patent of the Week.”

    3) Bonus: “The first and second wheels being spaced apart” sounds awfully similar to “electrodes spaced at a distance apart” – which was the core issue of “ambiguity” in Nautilus v. Biosig… about which the Electronic Frontier Foundation harshly criticized in its amicus brief:

    > “Spaced relationship” could mean a foot from the highway, or a yard, or a mile. The developer could guess at the meaning, but a wrong guess could render the entire investment in building the hotel a waste. Should the case be brought to court, different judges or juries could reasonably disagree on the meaning. Worse yet, when the easement owner sues the developer, the owner will have the benefit of hindsight
    in making his argument for interpreting the property claim, but the developer has no such bene
    fit when choosing where to build the hotel. The cards are stacked against the developer, a deadweight loss for the hotel business and for the economy at large.

    For all three reasons, I propose that the EFF should highlight U.S. Patent No. 8,738,278 as its “Stupid Patent of the Month.”

  18. patent leather October 12, 2015 3:56 pm

    Mr. Cuban,

    I took a look at the patent you mentioned in the video that you were sued under and I agree, it probably shouldn’t have been granted. However, there are easy measures to deal with these things (such a patent could likely be easily knocked out in an administrative proceeding before the USPTO such as inter partes review). This is no different than a pharmaceutical patent that shouldn’t have been issued and is challenged this way (happens all the time). A Nuisance? Yes.

    But your solution to this nuisance, abolishing all software patents, is shocking and incredibly short sighted. I am a patent attorney who represents many startups who protect their technology via software patents. To some of these companies, their patents is all they have, otherwise the big guys would “Squish them like a cockroach” (as is said on Shark Tank). Copyright protection is absolutely useless in this field and a smart guy like you should know that.

    I have clients who license their software patents to larger companies (after spending a lot of resources to develop their technology). If their patents were suddenly abolished, then they will basically lose all they have worked for and will have to get a job flipping burgers somewhere. Do you think this is a fair solution to your patent nuisance problem? What if someone simply took away all of your wealth and companies? Abolishing software patents is a convenient solution to you because you have already made it, but many entrepreneurs and companies need our patent system. Without it, the bigger companies will simply take what they want and get bigger.

    While some bad patents give our patent system a bad name, there are many software patents on real technology (e.g., voicemail systems, video games, GPS navigation, etc.) which required real work and have honest hardworking inventors behind them. You are man who promotes entrepreneurship in america and I respectfully request that you reconsider your “hard line” on software patents.

  19. step back October 12, 2015 4:17 pm

    Dear Mark Cuban,

    Thank you for attaching your esteemed brand name to this usually overlooked web site.

    I very much enjoy watching you and your fellow sharks on the Shark Tank TV show.

    In one episode you berated a pair of security software peddlers for not sharing how exactly their purported to be better security system works.

    Let’s assume for sake of argument that they did have a better way. How could they possibly prove it to anybody without first having a patent to protect themselves? (NDA’s aren’t worth the napkins they’re scribbled on once you disclose to more than 2 parties.)

    Indeed for every other kind of endeavor, your fellow shark, Mr. Wonderful always asks, Got a patent for that? And if not what stops me or anyone else from simply copying you?

    Save the Inventor, not the Cheerleader.
    Save the World. 😉

  20. Mark cuban October 12, 2015 5:53 pm

    First. I have no intention of suing Walmart. And if they want to create their own boards with their own software, more power to them

    As for software, copyright laws more than cover the ability to protect software from being duplicated line by line

    Beyond that if you can get to the same result with your own ingenuity. Congrats

    And as far as me shooting from the hip, if that’s what you call starting multiple successful technology companies and my experiences. I’m fine with that

    I stand by what I said and what I do.

    You can try to explain it all away, but if your really want to explore self interest, Look in the mirror. Look at the industry that has sprung up over the past 10 years around trolls and patent lawsuits in general.

    How were we able to survive and thrive all those years with a fraction of the number of lawsuits? . How were we able to thrive and how were software developers like me able to make significant sums of money in the 80s when there essentially was no patent protection for software

    The tech industry and the individuals , even the smallest of software developers writing in basic or scripting languages were able to thrive. Now small tech companies can barely get through their first year of existence without the threat of a patent lawsuit

    Coming up with an idea first is useless and worthless if you don’t use it .

    I dont care if it’s for an airplane and you can’t build it because you can’t afford it. That isn’t a good enough reason to prevent an airplane company who comes up with the same idea independently , with no knowledge of your patent or idea from using it

    We had more progress when clones helped push cpu technology. If you want to clone my work and can reproduce it independently. Feel free

    Financially I would have made.more money if we had patented everything we did when we helped pioneer streaming . There are more streaming related patents today for things we viewed as common sense in 1995 than I can count

    It’s ridiculous and wrong

  21. Gene Quinn October 12, 2015 6:11 pm

    Mark cuban-

    Your understanding of the law is dangerously naive. Copyright laws prevent little more than copying and pasting, which is clearly not enough protection for innovators who require substantial investment. I doubt even you would consider investing in an innovation protected only by copyrights.

    With respect to shooting from the hip, what I said was exceptionally clear. You try and twist what I wrote for your own purposes. I didn’t suggest or say your business experience isn’t substantial, or that you haven’t been wildly successful. What I said is that you seem to like to say things with careless disregard about whether they are true. Apple had more patents, but you made it seem like they didn’t have any, which is factually wrong. You tilt the debate with your inaccuracies and people believe you. It is reckless. It is also nonsense to pretend that Apple’s patents were extremely meaningful. Steve Wozniak revolutionized personal computing and the patents Apple received covered that innovation.

    As far as looking in the mirror, again you don’t know what you are talking about. I am not a patent litigator, I do not represent patent trolls, I write that there is true evil in the industry. I do, however, stand up for strong patent rights for true innovators. So if you are going to criticize me why don’t you actually get my record straight. Pretending that I am something I am not is just more shooting off at the mouth without a clue.

    I seriously doubt you would be where you are presently without the patent system. Perhaps you would be, but you would be the first mega successful innovator I’ve ever met for whom that would be true. Nevertheless, one thing I do agree with you on is that there are a lot of patents, particularly old patents, that should never have been granted. Those patents that do not describe the technological underpinnings of the innovation shouldn’t have been granted. That has been and at times continues to be a serious problem with the patent system. That hardly justifies throwing out the patent system given the enormous benefits we have received from the patent system.

    Finally, I’ll point out that this patent that you have an interest in is one of those patents that really should never have issued. It is a good thing you don’t plan on suing Wal-Mart because there is no way that this patent would ever stand up to any kind of scrutiny. There is little to no technical disclosure, which in my opinion makes this patent hardly worthwhile to own.

    -Gene

  22. anonemouse October 12, 2015 6:42 pm

    Mark Cuban at the end of the video, “Software is math”

    Wrong, Mr. Cuban. Rich people think they know everything and don’t care about the little guys. A real shame.

  23. Steve Brachmann October 12, 2015 6:42 pm

    Mr. Cuban,

    Thank you for your interest in our finely penned article.

    Might I suggest some additional reading? Take a look at “Smartphone innovation has soared because of patents” – http://www.ipwatchdog.com/2015/03/17/smartphone-innovation-has-soared-because-of-patents/id=55667/. You seem to suggest that more patents, especially more software patents, prevents inventors and industries from thriving. You must be very relieved to learn that, despite smartphone patents (many of which relate to software) making up one out of every six active patents as of October 2012, that industry has thrived. Almost everyone I know has a smartphone and there’s no way that can happen without the patents to protect a product’s commercialization. The smartphone explosion would not have happened without patents, including the software patents.

    Apple, Google and others are obtaining software patents all of the time and commercializing those products. If they couldn’t, they wouldn’t be Apple, or Google. Where would Google be if someone could have copied their search engine? Getting rid of software patents is not an effective way to deal with patent trolls. It simply makes things harder for the sole innovator who wants to develop a successful software product.

  24. step back October 12, 2015 7:49 pm

    Dear Mr. Cuban,

    Certainly everyone is entitled to their opinion as to what the word “software” means and as to what “software patents” are and do.

    However that does not change the fact that “software” means different things to different people and many are naive as to the wide berth covered by that vague and oft misused word.

    In the patent world, there should be no credible difference between machine-implemented inventions that are carried out by “hardware” or by “software” because the electrons don’t care what we call them. They do their thing irrespective of the noises that we sharks and apes make.

    (BTW, they say that when in the shark tank, one can’t hear the electrons scream –too salty.)

  25. Curious October 12, 2015 8:29 pm

    Look at the industry that has sprung up over the past 10 years around trolls and patent lawsuits in general.
    I would hardly call it an “industry.” You have a few bad actors that have misused the system. However, asserting valid patents against legitimate infringers is not “trolling.” That being said, those that one to change the system (i.e., the big corporation infringers) want to make that the story — the “trolling” problem.

    Now small tech companies can barely get through their first year of existence without the threat of a patent lawsuit
    I’m calling serious BS on that statement. It takes several million dollars to take a suit to jury (plus the requisite appeal to the Federal Circuit). At best, what can you ask for in royalties? One percent? You’ll be exceedingly lucky to get that. Simple math tells me that to recoup your investment, you’ve got to have an infringer that has several hundred millions in revenue. Of course, there is the risk factor (i.e., that your patent could be held invalid or the company deemed not to be an infringer). What kind of multiple do we need to add to adjust for that risk? Regardless, unless you are dealing with an essential patent, then the potential targets are hardly small tech companies barely through their first year of existence. Just so we are clear, Google and Facebook are not “small tech companies.”

    And as far as me shooting from the hip, if that’s what you call starting multiple successful technology companies and my experiences. I’m fine with that
    That is called a non-sequitur — a legal fallacy that most attorneys easily pick up on.

    Coming up with an idea first is useless and worthless if you don’t use it.
    Here we have a fundamental misunderstanding of patents. The inventor’s part of the grand bargain between the inventors and the public, for which inventors secure exclusive right to their invention, is the disclosure of the invention. Instead of being kept secret, that knowledge can be safely disseminated, Society, as a whole, benefits because others can build off of that invention (or design around it). Your opinion derives from your experience as a businessman — however, it isn’t good policy.

    That isn’t a good enough reason to prevent an airplane company who comes up with the same idea independently , with no knowledge of your patent or idea from using it
    Ah yes, the “golden rule” … those that have the gold make the rules. You too small to fight back? Too bad, I’m not, and I’ll roll over you and not think twice about it. What you are advocating for is the entrenchment of the status quo and reduced competition. Let’s face facts here, if there was no IP available to software, no one could compete with the likes of IBM, Microsoft, Apple, Google. You develop a good software product, they have the money and engineers to replicate it in weeks or even days. They then have the market power to make sure you cannot compete head to head. Again, it all makes sense if you are businessman, like yourself, running a company. However, it doesn’t make for good innovation policy.

    There are more streaming related patents today for things we viewed as common sense in 1995 than I can count
    These patents are likely far more narrow than what they appear. From my experience (going back several decades), nearly every article that I have ever read written by a non-patent attorney about a patent has overstated the scope of the patent. Additionally, had you filed for patents in 1995, they would have expired and that technology would have been in the public domain today.

  26. nat scientist October 12, 2015 8:36 pm

    Hey Mark,
    I love your dancing, but you sound like you’re ready for Thanksgiving dinner until you find yourself a turkey and then it’s time to start meditating on your navel.

  27. angr\|_dude October 12, 2015 11:06 pm

    Gene,

    I know you banned me here for “asinine” posts about the gross unfairness of our patent system but, for the last time, please… or maybe you can just repost the point I want to make to Mr. Cuban:

    Mr. Cuban apparently has no good understanding of high-tech inventions, especially of “software” kind – how to protect them and how to steal them.
    I suggest that he watches HBO’s Silicon Valley Season 1, Episode 2 “The Cap Table” – where Richard gets a call from Big Head about Hooli brogrammers trying to reverse-engineer Richard’s algo from decompiled compression library he foolishly put on github
    This stuff happens in SV all the time – ripping off someone else’s idea from decompiled code or from published patents and it has NOTHING to do with ingenuity or competition as Mr Cuban suggests…

    What Mike Judge of HBO’s “Silicon Valley” (The guy who created “Office Space” and “Idiocracy”) gets Mr Cuban completely misses: small startups with groundbreaking algorithmic inventions WILL get ripped off if large competitor gets a hold of their binary executable code – copyright or not

    Copyright is NO protection at all if serious money is at stake

    The Choice is between Patents and Trade Secrets

    Take your pick, Mr Cuban

  28. autrige dennis October 13, 2015 2:13 am

    Interesting article with interesting comments.

    Autrige Dennis

  29. Mark cuban October 13, 2015 2:43 am

    Why haven’t you changed the headline of the article, despite knowing it’s absolutely incorrect ?

    Do you think the increase in patent litigation benefits your website /business ?

    I have not benefited from software or process patents.

    I wrote software that did the first X.12 implementation for Walmart

    I was one of the first integrators of local area networks and wrote more software applications than I can remember that were firsts. Fun things like integrating pictures into multi user databases for purchase orders. In 1985 Asset management systems that are still used today. The list goes on

    Never tried to patent any of it. It was software. I just competed

    Same with the streaming stuff

    I just competed.

    If I had patented it all, there may not be a Pandora , Spotify , YouTube , periscope and more. Little that they do didn’t have its origins in what audionet and broadcast.com in fact I’m certain they wouldn’t exist today if we and other pioneers were focused on patents

    We also were the first to do pop up ads. Wish I patented that so we could have stopped them 🙂

    On the flip side I have been sued for a process I created

    I have seen letter after threatening letter to not just start ups but to companies in business for years Doing business the same way for years. Having no knowledge of the patent. They get threatened with lawsuits tying to extort license fees from them.

    How is that right ?

    And as far as control logic on a board. So what. It’s software. It shouldn’t be patented

    There are COPYRIGHT laws against reverse engineering aren’t there ? Smart companies won’t patent them because they get more protection from the dmca because they don’t have to reveal what they are doing

    Get rid of software patents and you will see investment go up

  30. Mark cuban October 13, 2015 3:05 am

    +curious. Microsoft. Apple. IBM. We’re all built and with the exception of Apple at their apex before software patents became prevalent

    And as far as the patents expiring. Correct. But all those companies would not exist

    Another example of a company that wouldn’t exist is google.

    They were able to violate the pay per click patent and yahoo which owned the patent settled for a preposterously low amount. Yahoo to their credit was reasonable.

    Imo no way that happens today. It would be part of yahoos patent war chest and a start up like google which yahoo wanted to purchase would be held to the fire

    Just my opinion. But happy to read the responses so I can be told what the facts are

  31. step back October 13, 2015 5:54 am

    Never tried to patent any of it. It was software. I just competed.

    Cuban @27

    You brag about having written lots of code and about not patenting any of it as if that makes you the smartest guy in the room.

    I’ve worked for many years with some of the smartest guys in Silicon Valley (hardware and software). They have no qualms about patenting their work product because they understand their employers have spent large sums of R&D money to attain a certain position in a highly competitive market place. If it were not for patents (for innovations in hardware, firmware and software) everyone would be sitting around waiting for the next fool to give away their work product for free. (And in that I am not saying folk who do open source are fools. What they do is very admirable as long as they understand their options. Indeed I am very grateful for some of the open source stuff out there and the dedication of those who make it public domain.)

    You truly don’t know what you are talking about when you say copyright is good enough. Have you not heard of software clean room procedures?

    You truly don’t know what you are talking about if you think patent practitioners here at this web site have never written code and do not do so even now. Yes some code is extremely easy to write and very “obvious” (where the latter is a term of the legal arts). On the other hand some ideas, even if implemented in software, are very clever, not obvious and worthy of patent protection.

    It is a testament to how much shark bait is out there when technically sophisticated people exhibit their financial and legal naiveness by buying into that “software wants to be free” BS. Real estate wants to be free too. But it ain’t. Just go try and move into Cuban’s quarters for free shouting the ‘real estate wants to be free’ slogan and the ‘I’m just competing for space on this planet’ slogan. See where that gets you.

    Cheers. 🙂

  32. step back October 13, 2015 6:32 am

    At least one Fed. Cir. panel appears to not be buying into the “idea” and “abstract idea” BS.

    You can download the audio of the oral arguments at the below link:

    Panel Pushes Back on Software Patent Challenge
    http://www.therecorder.com/id=1202739616859/Panel-Pushes-Back-on-Software-Patent-Challenge?slreturn=20150913060542

  33. Night Writer October 13, 2015 6:34 am

    Cuban @27

    We are about the same age. I am a patent attorney and the first job I had was with a high tech start-up back in the early 1980’s. The world has changed. Now, if you don’t patent it, then another company will come along and copy it as soon as it is worth something. The big companies you mention are some of the ones most likely to just take it. I work with real high tech start-ups. I have a real technical background.

    There is a problem with litigation. I think it is because of the imbalance that a defendant has to incur big costs upfront with discovery and counterclaims. The is that the litigation system needs to be fixed so that if you have weak claims you pay as much as the defendant. As an example, in many jurisdictions, you have to file ALL your counter claims within months of the plaintiff filing the complaint. It can be very difficult to change the counter claims. This may mean that your prime arguments for invalidity (including which references render their patent invalid) have to come almost immediately. This can cost the defendant a lot of money, which can easily be a million dollars. Whereas the serial plaintiff can just produce an infringement chart for 20 hours of time of the attorney.

    That is the problem. It is the imbalance of costs that allows someone with a weak chance of ultimately prevailing forcing a defendant to spend more money than they are spending.

    There is also the problem of the courts. They are overloaded. Same number basically since 1930 and yet we have 4 times the number of people and the society is much more sophisticated. The courts create draconian laws and procedures to try stop disputes from going to court. The courts love that people are blackmailed into taking plea deals so they don’t show up in the courts.

    So, the courts are broken. That is the real problem.

  34. Night Writer October 13, 2015 6:43 am

    @Mark Cuban:

    One other thing, one thing that economist all agree on is that employees being able to move to other companies and do similar work is key to innovation. Patents enable this.

  35. Bemused October 13, 2015 7:29 am

    Mr. Cuban,

    According to multiple press stories, you invested in a publicly traded company called Vringo which has often been derided as a “patent troll” because they engage in patent enforcement. You were quoted in Business Insider as stating that your investment in Vringo was a hedge against the unlimited patent risk faced by companies that you have invested. You were further quoted in Business Insider as noting that Vringo’s search patents (which were initially assigned to Lycos) “are far stronger than most.” I’m curious. Do you consider Vringo a “patent troll” that shouldn’t have asserted these patents against Google, et al? In your earlier comments (I’m paraphrasing here) you took the position that if a company comes up with an idea independently of a patent they shouldn’t be penalized (sued) by the patent holder. Ostensibly, and not withstanding the strength of Vringo’s search patents, Google independently came up with the search methodology they were sued on by Vringo. Following your reasoning, if Google shouldn’t have been sued Vringo, didn’t your investment in Vringo just help perpetuate the “patent troll” business model?

    Bemused

    PS Good luck to the Mavs this season. Carlisle is a great coach.

  36. patent leather October 13, 2015 9:10 am

    Mr. Cuban,

    First I want to thank you for taking part in this forum. Patent law is a very complicated field and unlike sites like Slashdot and TechCrunch who spread what they think is the law, this site is frequented by patent lawyers and veteran inventors who really know the landscape. I was planning on sending you and Julie Samuels a letter once regarding your position on software patents, but I figured (perhaps mistakenly) that it would never actually get to you.

    In addition to my comment in #18, I would like to point out the following.

    “There are COPYRIGHT laws against reverse engineering aren’t there ? Smart companies won’t patent them because they get more protection from the dmca because they don’t have to reveal what they are doing”– I disagree. I have yet to see software technology that could not be legally reverse engineered one way or another. Once something good is put out there (off patent), expect it to be re-coded by coders (good ones in India are currently working for $1/hour).

    You also complain (rightfully) about patent trolls and frivolous demand letters. Nobody on this board will support patent trolls and bad patents. The AIA has addressed this with the Inter Partes Review proceeding which has been referred to as “patent death squads” because of its high kill rate. You get a frivolous demand letter, file an IPR. Problem solved.

    “Get rid of software patents and you will see investment go up” — Consider this scenario: Promising startup shows up on Shark Tank with software they developed on a new video game system for use with existing game consoles. The question that will inevitably be asked is, “do you have patent protection?” If they respond with “no”, I can just picture the “you have nothing proprietary… You will be squished by the big guys… I’m out” from all of the sharks (and I would agree). There would be no investment in startups if there is no potential for patent protection. The big companies would just get bigger.

    And what about the retroactivity problem? Assuming you had your way and abolished software patents, do you think its constitutional to just take away people’s property like that? And destroy countless businesses?

    As I said in my comment in #18, I represent many startups who would not have any investment in their tech if not for the potential to have it patented. Yes, there are bad actors which obviously soured you on our patent system, but to abolish the system in view of some bad actors is like abolishing professional sports because a small number of athletes were found to be fixing games.

    Between Inter Partes Review and the Alice v. CLS Bank case which now renders unpatentable many software applications as “abstract ideas” (the frivolous “buy before it is released patents you were sued on are now undoubtedly invalid under Alice), it is clear the system has “corrected itself” (some including myself would say these “corrections” are too extreme). To campaign for a continued weakening of our patent system and the abolishment of all software patents at this point is really to the detriment of smaller companies who would not exist and get investment without the patent system.

  37. Luis Figarella October 13, 2015 9:25 am

    Fantastic discussion, Goodlatte would do well by inviting every poster above me to the hearings. But then, if he did that, he would actually have both sides of the coin.

    As someone who has been ‘the big guy’ (United Parcel Service R&D Group) and the little guy (www.extremetix.com AND http://www.stereoimaging.com), and has over 50 issued patents to clients during the past decade as an Agent, I agree ‘in part’ with most of what has been said above.

    Having to go to court (Defendant or Accuser) is no fun, and we don’t want to make it too frequent, but we sure as ‘expletive deleted’ don’t want to prohibit it. Making you pay legal fees, is sure as ‘expletive deleted’ prohibiting it.

    Just because you don’t like the color of the porch, don’t burn down the house!!!

    Luis

  38. Gene Quinn October 13, 2015 9:46 am

    Mark cuban-

    You ask: “There are COPYRIGHT laws against reverse engineering aren’t there ?”

    No. Copyrights protect only the copying of expression. If I notice how you do something and set out to create it on my own without copying the code there would be no copyright infringement. That is exactly why patent protection is necessary for software.

    In terms of the title, what would you prefer the title of the article be? There are multiple sources that say you threatened Wal-Mart. You come here and say that you didn’t threaten Wal-Mart, but that you merely said they would have a nightmare if they proceeded to sell something that you own patent rights on because someone other than you, and certainly not you, might sue them. You come here and say that you were warning them about patent trolls who might come after them. Do you really think Wal-Mart needed your warning about patent trolls? It doesn’t seem to me that your story passes the smell test.

    Also, just curious, are you also asking Sports Illustrated to change their story on this topic?

    -Gene

  39. Gene Quinn October 13, 2015 9:50 am

    Everyone-

    Mark cuban seems upset by the title. Multiple news reports say that he threatened Wal-Mart with patent infringement litigation, which based on how he was quoted certainly seems plausible. He has come here to tell us that he did not threaten Wal-Mart despite owning a patent on which Wal-Mart sales might infringe. Cuban says that he was merely warning Wal-Mart that they would have a nightmare dealing with patent owners other than him, such as trolls.

    Whatever the case may be, I’ve changed the name of the title to: “Patent reform advocate Mark Cuban reportedly threatens Walmart with patent litigation.”

    -Gene

  40. Mark cuban October 13, 2015 11:02 am

    +bemused vringo is absolutely a patent troll. I wish they didn’t exist

  41. Mark cuban October 13, 2015 11:04 am

    I got asked what I thought about Walmart entering the hover board market. I said it would be a nightmare. Nothing more. Nothing less. Someone then decided that comment was a threat to sue Walmart. You chose to continue that line of thought

    It’s wrong

  42. Curious October 13, 2015 11:10 am

    I have not benefited from software or process patents.
    You have benefited from patented technology. Anybody using a modern computer is likely infringing thousands of patents for which payment has not been given (and for which payment will likely never be given). Every business in this country is also likely infringing hundreds or even thousands of patents. However, the vast, vast, vast majority of patents never get asserted and even if they do get asserted, it is only against very few entities.

    wrote more software applications than I can remember that were firsts
    You mean you THINK were the first.

    Never tried to patent any of it. It was software. I just competed.
    You never THOUGHT to patent any of it. You are a shark – a business predator. Had you understood the power of patents at the time, do you really believe that you would have given up one of the most potent weapons in your arsenal against competitors. If, in 1999, Broadcast.com had a dozen competitors with identical websites, do you think Yahoo would have paid $5.9 billion for your 570,000 users? Do you even think Broadcast.com would have had 570,000 users in 1999 had you faced serious competition.

    You probably know him personally (I do not), but Jeff Bezos has over 100 patents to his name with the first being filed circa 1995. He seems to have done pretty well for himself, don’t you think? Had you thought to patent your inventions when Bezos was first filing for his patents, your wealth today could have rivaled his.

    I just competed.
    You were a visionary that sold a company with miniscule revenues for an obscene multiple at the height of the dot.com bubble.

    If I had patented it all, there may not be a Pandora , Spotify , YouTube , periscope and more.
    No. You would have waited to until these companies grew to a sufficiently large size and then approached them with your patents. If they were reasonable, you would have likely received an equity stake.

    On the flip side I have been sued for a process I created
    I had a client like that. After receiving a threatening letter, we provided their attorneys proof that we had been practicing their patented process more than 1 year prior to their priority date. Never heard from them again. Dealing with so-called patent trolls can be quite easy if the facts are on your side and you have competent counsel.

    Microsoft. Apple. IBM. We’re all built and with the exception of Apple at their apex before software patents became prevalent
    Take a list of the top-10 patent recipients. I believe IBM has headed that list for 21 years straight. Microsoft has frequently been in the top 10. Apple is close to breaking into the top 10. You may not realize it, but software patents have existed for a VERY LONG time. For example, Amazon’s “1-click” patent is due to expire in just 2 years.

    Yahoo to their credit was reasonable.
    Yahoo would have been smarter to take an equity stake — Google’s market cap today is 15x Yahoo’s market cap.

  43. Mark cuban October 13, 2015 11:10 am

    +night writer. Well stated and fair.

    The culture in the tech world has changed. That is the core problem

    How was technology able to thrive when the rush to patent and sue did not exist ?

  44. Curious October 13, 2015 11:21 am

    How was technology able to thrive when the rush to patent and sue did not exist ?
    What happens when you put 2 sharks in an ocean full of fish? They ignore each other because there is plenty of fish to eat. The sharks multiply (and/or other sharks enter their territory because of the rich supply of fish). Eventually, however, the territory becomes crowded. Where there was once plenty of plenty of fish for every shark, there isn’t anymore. That’s when the sharks turn on each other.

    Previously, in the software era, there was plenty of niches to fill and customers to be had. Sure, there was competition, but there was always plenty of new niches to fill. Eventually, however, the number of open niches become less and less and the competition becomes more fierce and the number of competitors increased. When competition heats up is when people take out the heavy artillery. Make no mistake, asserting a patent is like heavy artillery. It is expensive to both obtain and use and it is almost exclusively used against very large targets. However, it can be devastatingly effective.

  45. Mark cuban October 13, 2015 12:39 pm

    + curious

    Positive we were first. We started the industry and knew everyone in it

    Seach my blog. I post a couple of items I was looking at filing over and chose not to. Including some files from back then

    I chose to work in my business instead.

  46. Pro Se October 13, 2015 12:52 pm

    Mark: you bought the patent.. what’s the point of doing that unless you plan to enforce it, which by the way is 100% completely legally the right of the owner…

    A patent is a patent.. it all comes down to having a license to sue.. thats it.

  47. Eric Berend October 13, 2015 3:47 pm

    As an inventor, primarily in the physical-mechnical-EE areas, I am quite pleased to see some of the more subtle nuances of the position of such a well-known proponent of U.S. ‘patent reform’ expressed in such a forum as this site. While I find myself nearly completely in opposition to his views, I must compliment Mr. Cuban for taking the time and attention to participate in this discussion.

    I must ask, and perhaps also as many non-software inventors would ask of you: are you absolutely oblivious to the awful situation these ill-considered, heavily special interest influenced, so-called “reforms” have caused to actual inventors’ interests in U.S. society, today?

    Dare you answer the inexorable hypocrisy of having made your fortune originally on “PC clones”, that you seem to have no regard whatsoever for the empowerment of infringers upon *non*-software inventions?

    Second, do you really wish to pretend you have never heard of the Amiga computer in stating such fatuous claims about copyright law providing sufficient protection against ‘clean room’ reverse engineering?

    Because, if you see these words, know that there are some of us who lived through the entire development of the PC industry up from 8-bit Altair kits built by “enthusiasts” to the present, who also are *physical-mechanical-EE* inventors.

    So please do not insult the intelligence of those who have seen and performed far more ‘innovation’ than what you can ever lay claim to; and yet, do not presume to dictate such disingenuous nonsense to *true* innovators.

    Written by an inventor son of an inventor. Aside from software issues, just who the heck do you think you are?

  48. Eric Berend October 13, 2015 4:11 pm

    I must correct he above error in association from memory, for which i also apologize to Mr. Cuban. The reference to Dell comes from an article I read in Forbes about Mr. Cuban and is erroneous.

    Even so, the whole “PC clone” issue was notorious in the PC industry for years and certainly, as an “innovator”, of which Mr. Cuban cannot have been ignorant.

    The association regarding the Amiga computer is especially relevant. The Amiga computer was a pioneer is PC graphics and animation, to say nothing of the most elegant GUI (Intuition + Workbench) and a true multi-tasking OS; giving rise to such industry-leading *software* as LightWave.

    Would you assert that you had never known about LightWave, Mr. Cuban? After all, even if such a smart ‘shark’ as yourself can somehow claim ignorance of the more physical manifestations of inventions: isn’t it *software*, that is your area of particular expertise?

  49. Mark Cuban October 13, 2015 4:25 pm

    Eric berend. My fortune made on the back of clones ? What does that even mean?

    Of course copyright won’t protect against clean room reverse engineering. But who says that clean room reverse engineering is wrong ?

    I think we all benefited from having 8086 clones and it certainly hasn’t hurt Intel. It arguably made them innovate faster and better to stay ahead of AMD

    I’m curious what you have invented ?

    And let me also repeat what I said against the other post. There was no fact checking done on either of the articles Reconsider your posts accordingly

  50. Curious October 13, 2015 4:28 pm

    Seach my blog. I post a couple of items I was looking at filing over and chose not to. Including some files from back then
    Why did you choose not to?

    I chose to work in my business instead.
    Were you acting in the best interests of your shareholders by eschewing protection for your technology? Did you maximize shareholder wealth by not pursuing valuable property rights?

    Some people are great at developing technology. Other people are great at implementing technology. Still others are great at copying technology. Others are great at marketing a business. There are those that are great a generating profits. However, there are very few that do all (or most) of the above. Patents are about protecting (and incentivizing) that those develop technology.

    I’ve dealt with successful entrepreneurs that have developed new products, from scratch, based upon their own ideas. These same people tell me that they would never invest their money into their business if they didn’t have a way to protect their investment. Today, I can take a simple mechanical device (that is unpatented), get on a plane to China, and within weeks have shipping containers full of these devices on the high seas sailing to the US. I’ve seen it very successfully done. Similarly, I can take a basic software product, bring it to China or India and ask that they replicate the functionality of the product. Assuming that it isn’t too complicated and I have the money to throw at it, I can have that software product replicated in very short order.

    Competition today is a far different animal than it was 15 or 20 years ago. Anything you can make or code can be done for much cheaper in China or India (or in any of a host of other countries). If you develop valuable technology and you cannot protect it, you might as well not have developed it in the first place.

    I’ve proposed a comparable hypothetical to the anti-patent folks before, and I don’t recall any of them giving me a response. The hypothetical is that you and your buddy have spent the last year (3000 hours of coding for both of you) to develop a really cool app that runs on both the Apple O/S and Android. Although you aren’t giving it away, you’ve priced it so that it looks like you might actually generate a couple million dollars in sales over the next couple of years (perhaps much more if it really takes off). Outside of getting patent protection on your software, what is going to prevent Apple, Google, or Microsoft or one of the biggest app developers from independently copying your app. While it may have taken 6000 hours between the two of you to code the app, it is far easier for these companies to reverse engineer your app. Also, they can put a team of engineers on your app and have it running in a week or two. Moreover, they can more easily integrate the app with the rest of their products. So, how do you protect your investment? What do you tell the next couple of guys that want to develop an app as to how to protect their investment in time and intellectual capital? Are they SOL?

  51. Pro Se October 13, 2015 5:33 pm

    I think we all respect the business acumen of MC, and even more respect standing up for his views in view of the articles mentioning him here…

    But.. I like this question: “I’m curious what you have invented ?”

    On this forum you are going to run into some real-deal inventors..

    Hopefully through this discussion a more healthier understanding can divide those terrible 90′-00’s software patents and the software patents granted post 2013>

    Things have change since those patent troll patents we granted, there’s a higher standard to get software patents today, and it’s EXTREMELY hard..

    And just to give you an example of how viable software patents are today, I’d ask you to look at 12/766,337 (currently still pending) – this application is Apple’s iCloud patent application… now.. look closely at how desperately they are trying to get that patent… and now I take a bow as you will see who’s art is stopping them 🙂

    MC said once (to his credit) that an idea should only have a single patent, maybe 2.. (Shark Tank quote) and he’s stayed true to that statement as 8,738,278 is a single solid patent. I agree with this.

    Again, thanks for the great discussion (everyone).

  52. Pro Se October 13, 2015 5:34 pm

    ^excuse mobile typos.

  53. Pro Se October 13, 2015 8:33 pm

    Ill, disclose my post-Alice software patent… and what ended a few of my cases when I asserted it, very quickly…

    8,887,308
    Networked Tokenization

    There isn’t a law firm listed on that patent.. and it’s slayed dragons.
    🙂

    I think Software Patents are greatly important.

  54. Night Writer October 14, 2015 10:40 am

    Pro Se, so you are saying that 8,887,308 is your patent and that you asserted 8,887,308 in court?

    So, you are William Grecia? I basically agree with everything you just said, by the way. (What is odd too, is that at the PTO the standards for 101 among the art units varies wildedly. The variance is ridiculous.)

  55. angry dude October 14, 2015 12:28 pm

    2Pro Se:

    Actually, prosecuting a single patent in USPTO on your own isn’t such a huge deal and is not recommended for a majority of independent inventors:
    some money savings but not a lot (~20-25K), but a lot of hassle and REAL possibility of making unrecoverable mistake in claim language or elsewhere along patent prosecution path.

    It is the litigation side where real huge problems arise: noone (except guys like Mr. Cuban) can put up 2-3 mil to get the matter all the way to a jury trial, and if fee shifting is applied universally there will be no contingency based litigation – too much of a risk ( Patent trials are never black or white: in the very best case scenario you have say 80% chance of winning and most likely even less…)

    That is the REAL problem for us – small patent holders

  56. Pro Se October 14, 2015 10:56 pm

    @Angry Dude: I absolutley agree that independant inventors should not seek to prosecute patents without professional help.

  57. Pro Se October 14, 2015 10:59 pm

    @AngryDude – I won 3 patents currently active. And I’m willing to die for them 🙂

  58. angry dude October 14, 2015 11:30 pm

    @ProSe

    Oh, please, don’t die for patents 🙂

    I am going to live a long and happy life even if they reduce patent system to nothing

    There is a saying: “fool me once – shame on you, fool me twice – shame on me”

    I’ll just switch to trade secrets

    Maybe we can talk sometime, I live in Philly area
    (and I also publicly stated a while ago that some fruit company used my patent without my permission)

  59. Pro Se October 15, 2015 7:04 am

    @Andry Dude: I just completed a new project with 1) Trade Secret, and 2) Design Patent application – Due to the dev being done on the new stuff, I have the time now and will be around a few of the IP events and other tech events.

  60. angry dude October 15, 2015 9:24 am

    @ProSe

    I don’t participate in IP events anymore – reading this blog is depressing enough 🙂

    The last IP “event” I participated in was ICAP patent auction several years ago and it was a major disappointment to all participants and organizers

    What other tech events do we have in the area ?

  61. tom February 1, 2016 2:00 pm

    i agree you are great on shark tank