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.
Prior art research is playing an increasingly important role for companies with potential exposure to IP litigation. Companies are spending millions of dollars in legal expenses to understand the true value of patents. In some cases, entire industries are threatened by growing litigation from non-practicing entities (NPEs). Look no further than the now infamous Lodsys lawsuit filed against the App Developer community, including Angry Birds developer Rovio, which is facing a much bigger threat than pesky evil pigs. It is essential that these companies perform the most complete prior art search to defend in this litigation.
Crowdsourcing for prior art has recently emerged to revolutionize the patent research space and overcome the limitations of traditional search techniques. Traditional searches generally involve Western-language based digitized searches. For foreign non-patent publications, only the abstracts are digitized for inclusion in Western-language based digitized databases. The research thus misses the full text and footnotes. It also is important to note that, for digitized publications, critical content is not digitized – such as tables, figures, graphs and photographs. In addition, whole classes of publications besides historical publications (e.g., out-of-print books) are not digitized. These include editorials, business materials, physical products, out-dated manuals on products, software, and standards meeting notes.
Recently several of my articles have been critical against patent trolls. This is not something new for me, I have been critical of patent trolls for quite some time. Over the years I have also been very supportive of patent owners having the right to bring patent infringement lawsuits to enforce rights that have been granted in the patent; after all, if you cannot enforce a right is it really a right? I think not. This has lead me to at times champion the patent grant and oppose any watering down of the rights of patent owners, as was contemplated in years past with previous versions of patent reform.
For some my pro-patentee and anti-patent troll positions have been difficult to reconcile. I have been contacted privately by some who have urged me to tone down my use of the term patent troll, and that is a fair point. After initially resisting using the term for a great while I embraced its usage years ago, back when earlier versions of patent reform were seeking to curtail the right of a patent owner to obtain due compensation (in the form of damages) for infringement by a defendant. Periodically the Supreme Court has even raised the issue of patent trolls in a casual manner as justification for one bad ruling or another. Typically most use the term “patent troll” to refer to non-practicing entity, but doing that is simply absurd. So I turned to embracing the term. Does it feel right to call a university a patent troll? I think not, and I think most would agree. So not all non-practicing entities can be patent trolls, can they? See how the usage of the term starts to really crystallize the issues?
On Thursday, July 21, 2011, attorneys for Lodsys LLC, a company rapidly becoming a reviled patent troll, filed an amended complaint in the United States Federal District Court for the Eastern District of Texas. (*) As a result of this amended complaint some big names in the gaming world have been brought into the ongoing patent litigation battles being waged by Lodsys. Lodsys had already sued a number of Apple App developers and others such as Best Buy and the New York Times, see here and here. More specifically, as a result of the filing of this latest complaint Lodsys has brought patent infringement charges against Atari Interactive, Inc. and Electronic Arts, Inc. (NASDAQ:ERTS), among others. But in the mind of the general public the highest profile defendant to date will almost certainly be Rovio Mobile Ltd., the maker of the extraordinarily popular game Angry Birds, which is available for iPhone, iPad and Android, among other platforms.
Article One Partners is at it again, this time with four patents in the cross-hairs owned by the company suing Apple App Developers for patent infringement — Lodsys. Article One Partners has made a name for itself as the premiere crowd sourcing, prior art locating company in the world. Now they have three different studies (see below) aimed squarely at the four Lodsys patents. In addition to being used against Apple App Developers, these four patents were also used earlier this week to sue the New York Times and others, and earlier still against Best Buy, Adidas, CVS and others. Indeed, it seems that Lodsys is becoming quite a nuisance for defendants, which places them at or near the top of the patent troll most wanted.
Earlier today Apple, Inc. (NASDAQ: AAPL) poked a finger straight in the chest of alleged patent troll Lodsys, LLC, saying in no unmistakable terms — back off Apple App developers! For several weeks Lodsys has been sending threatening letters to Apple App developers (see ComputerWorld report) and Apple has had enough and isn’t going to take it any more!
Indeed, in a letter from Apple’s Senior Vice President & General Counsel, Bruce Sewell, Lodsys was told in no uncertain terms: “There is no basis for Lodsys’ infringement allegations against Apple’s App Makers. Apple… is fully prepared to defend Apple’s license rights.” According to the letter sent to Mark Small, Lodsys’ Chief Executive Officer, Apple is a licensee of each of the four patents in the Lodsys portfolio and the terms of the license allow Apple to grant sub-licenses to Apple App developers. According to Sewell’s letter, “Lodsys’s infringement allegations against Apple’s App Makers rest on Apple products and services covered by the license.”