Recently I interviewed Ray Niro. Our wide ranging discussion touched on all things patent, we first discussed the announcement that Niro, Haller & Niro is now doing patent infringement defense on a flat fee basis. We wrap up our discussion of this new defense business model for the patent litigation industry below. We then transition into a discussion about fee shifting in patent litigation, first discussing the recently failed patent reform and then moving into a discussion of the Supreme Court fee shifting cases from the October 2013 term.
QUINN: How many lawyers do you have at your firm currently?
NIRO: 28. Between 28 and 31 most of the time. We are in the process of adding a few, so we’re I think 28 now; we’ll probably be 31 in the fall.
QUINN: Okay. And the reason that I ask that is because I suspect that as this word gets out that you’re doing this that you’re probably going to see a lot of interest. And how do you envision things developing? Are you going to be able to grow? Are you going to try and choose cases, which cases you can get involved with? What’s the mechanical process?
We always make sure to pay good attention to the major developers of consumer technologies here in the Companies We Follow series, and IPWatchdog is back with an in-depth look at the innovations recently stemming from AT&T. The U.S. Patent and Trademark Office has published many patent applications and has also issued plenty of patents assigned to this corporation in recent weeks. Our most recent search of AT&T patent filings showed us a great deal of intriguing improvements to wireless communication products and services.
We begin today by sharing our featured patent application with our readers, a technology designed to create a privacy zone to disable unauthorized functions in mobile devices which are within the zone. This would enable a meeting administrator to ensure that smartphone device owners cannot produce a recording of a meeting from within the privacy zone, for example. Other patent applications we explore discusses systems for transmitting calls and messages to the proper destination device for more effective communication between those who own multiple devices, as well as a system for better providing local advertisements to device owners who are on the go.
WALKER: Let me give you an example, Gene, that would be simple. I would like to be the nonexclusive agent for your blog in South America. All right? I think I can get people in South America to pay to read your blog. Because how it works in South America they pay to read blogs. I don’t know how much I’m gonna generate for you, Gene, but you can revoke it at any time. I won’t license to any of the major television networks, publishers, et cetera, I’ll only license to small people. And 85% of any money I collect in South America for the blog licenses that I generate for you I’m going to give you. Would you be willing to list your blog with me to try to generate revenue for you in South America?
QUINN: Yeah, I mean that’s a no brainer.
WALKER: There you go. It’s no different. Exactly the same. It’s a no brainer. Listing with us is a no brainer. The only reason you wouldn’t list with us if you didn’t want to have a nonexclusive agent. If you only wanted to license on an exclusive basis.
Ray Niro is one of the most well know patent litigators in the country. In some circles he may be referred to as “infamous,” and in other circles he may be simply referred to as famous. It all depends upon whether he is your attorney or whether he is the attorney on the other side. Regardless, he is well respected within the industry and has made a name for himself as a winner. But not only any kind of winner, but a champion for inventors who have patents infringed by some of the largest, most well funded companies in the world.
Over the past few years I have gotten to know Ray, he has written several op-ed articles for us, and about once a year we catch up with him in an on the record interview. What prompted this interview was seeing an announcement that he and his firm are now offering flat fee defense representation in patent litigation matters. Ray Niro defending a patent infringement case? I have to admit I didn’t realize he did defense work, so I wanted to talk to him about this new business model. He agreed.
In order to discussing his defense activities, we also discussed the failure of patent reform, the inevitable future patent reform efforts that are now a permanent feature of political activity in Washington, DC, and the recent Supreme Court patent decisions from the October 2013 term.
It’s tough to describe what access to the Internet has meant to our contemporary society, especially in terms of technological progress in our country and across the world. It can easily be said that the spread of Internet-based technologies has revolutionized our society and brought about the birth of what many consider to be the Information Age. Free and open access to a wide array of informational resources and software application through the Internet is now widely used in corporate, governmental and private individual situations to connect people and organizations to valuable communication networks.
It’s this incredible value intrinsic to the Internet that has been central to the debate over net neutrality. What was a fairly esoteric term just a few months ago has lately jumped to the forefront of the American political debate, thanks to newly proposed regulations set forward by the U.S. Federal Communications Commission (FCC). Just several days ago Tech Crunch reported that the FCC had received some 647,000 comments relating to its activities associated with net neutrality, a staggering sum. And thanks to glitches with the comment system, the announced yesterday that it would be extending the deadline to provide comments until midnight on Friday, July 18.
With all this in mind we wanted to take some time to look at this issue, which could affect all users of the Internet, from various angles to give our readers an opportunity to gain a clearer understanding of what’s at stake. At the core of the debate is government oversight of private Internet networks, and whether free access to all online resources is a basic right of all Internet users.
Last March I attended a conference at the Stanford Law School entitled “Patent Trolls and Patent Reform.” From the title, the agenda of the conference was evident, so it was no surprise that the majority of professors who presented papers found that patents were bad. They cost society money, they stop the free flow of information, they make undeserving people wealthy, and they suck resources from legitimate businesses. Research done by these professors from elite universities around the country explained why patents, and those who license or litigate them, had made the United States such a plodding, backward nation that is desperately trying to catch up with progressive countries like China, Russia, and Europe. Fortunately, a few professors actually did support the U.S. patent system, and their research did too.
There are three main reasons that the paper is a ridiculous example of how our universities are putting out “research” that is terribly shoddy, detached from the real world, and simply reinforces generally faulty assumptions about how the world works.
Recently I had the opportunity to interview Jay Walker, the founder of Priceline.com. Walker, with over 700 patents and pending patent applications, is one of the most prolific living inventors in the world. He is embarking on the monumental task to commoditize patent licenses in a way that streamlines the process, keeps costs down, maximizes the number of licenses and charges a low flat fee. A daunting task no doubt, but his methodology is unique and seems to me to be more likely to succeed than any other efforts, which really bear no resemblance to the Patent Properties model. Still, to call the task difficult is an understatement, but if anyone has the ability to pull it off it would be Jay Walker.
WALKER: Let’s switch to the other side before we go to the theory. On the other side are users of patented technology, most of whom don’t know which patents they are using. They have no way to run the kind of sophisticated outlook to say, well, if I’m using patented technology how do I know what it is? I can’t read claim lines, which takes a federal judge to interpret whether I’m actually am infringing or not. It takes a whole Markman Hearing to figure that out. And on top of that when I try to look through the patents that are already issued as a way to learn they’re not written up in a user-friendly language, and I’m often advised by counsels not to do that.
Patent licensing company Conversant Intellectual Property Management today launched an educational campaign against the use of extortionist demand letters that are victimizing thousands of small and medium-sized businesses. The goal of Conversant’s Stand Up to the Demand campaign is to help small businesses spot unscrupulous demand letters sent by patent trolls. Conversant’s Stand Up to the Demand campaign follows the company’s November 2013 release of a set of ethical patent licensing principles, which built upon the belief that patent licensing companies should take the lead in curbing patent abuses within their own industry.
Bad demand letters are a big problem for U.S. small businesses, costing them millions of dollars in settlement fees and legal costs annually. Patent trolls often operate through shell companies and these bad acting companies send form demand letters to hundreds or even thousands of small businesses at a time, claiming with little or no evidence that they are infringing on patents. These mass demand letters are often misleading and sometimes outright false. This type of activity has been characterized as “extortion-like” by the federal courts, and gives hard working innovators a bad name. See also Extortion Patent Style.
Earlier this year New York Attorney General Eric T. Schneiderman announced a groundbreaking settlement that sanctioned a patent troll that was engaged in abusive pre-litigation tactics by sending letters with the intent to deceive those receiving the demand letters, scaring them into settling. Additionally, recognizing the stakes involved, a dozen U.S. states have already enacted laws to curb extortionist demand letters, and 14 other states are actively considering such laws.