UPDATED: May 2, 2013 at 12:17am ET — An earlier version of this article explained that Google sells to patent trolls. Google has since informed me via telephone that they do not sell to patent trolls, but other big tech operating companies do sell to patent trolls, which concerns Google. See Google: We Don’t Sell to Patent Trolls.
Recently at a conference at American University Washington College of Law a senior patent attorney from Google — Suzanne Michel — lamented that big technology companies are practically forced to sell their patents to patent trolls. See Fixing the Patent System. So as it turns out big tech companies are responsible for creating at least a portion of the so-called “patent troll problem” by and through their own actions and business decisions. So how and why should their position relative to patent litigation be taken at all serious when they themselves admit to creating the problem in the first place?
If big tech companies are selling unwanted patents to patent trolls who then turn around and monetize them there are a lot of questions to ask. First, why are they selling to those who then turn around and sue them? There is an obvious solution to this problem, if it is indeed a real problem and not one made up for sake of publicity and swaying public opinion (and political opinion on Capitol Hill). Second, what are they doing selling patents that can be monetized? If they are giving these patents away how is that appropriate at all when the company needs to answer to shareholders? Isn’t the goal of any company to maximize returns for shareholders? Finally, if operating companies are selling to patent trolls then how is it possible that patent litigation is as big a problem as it is claimed to be? Something just doesn’t smell right here, but a room full of symposium attendees were told that big tech companies sells out to patent trolls. Curious.
As counter-intuitive as big tech companies selling to patent trolls may be, equally head scratching is how big tech companies complain about getting sued but refuse to negotiate unless they are sued. Seems like their actions force lawsuits that they complain about and hoist up to proclaim the patent system broken. Talk about the emperor wearing no clothes!
Microsoft Corporation was a huge winner at the U.S. Patent & Trademark Office this past week, as the Washington State-based computer software developer received no fewer than 65 patents from the USPTO and had another 49 patent applications published. Many of Microsoft’s more intriguing applications deal with upgrades in responsiveness to user input, including e-mail address book synchronization and a collection manager for content users follow online. Microsoft also received a patent that improves the parsing of handwritten digital text for conversion into textual characters.
It’s very easy for a computer user to obtain multiple e-mail addresses from which they can send and receive e-mail. These different accounts are housed in separate servers and come with a variety of features to aid digital communication, like an address book to store contacts. These features don’t sync well between accounts and can cause conflicts in certain cases, such as when an e-mail application tries to communicate with contacts from multiple addresses. If a contact is listed in two different address books, it can cause a communication error if the e-mail application simply copies the contact lists from both addresses, and managing the application by removing duplicated e-mail addresses can be time consuming.
The emergence of mobile computing as a technology platform has been a game changing development in many ways. The ability to be connected anywhere and to have real time information at our finger tips has transformed the way we do business and live our lives. As this computing paradigm has gained mass market acceptance we’ve witnessed a series of patent battles among firms vying for their share of this lucrative market. These so-called smart phone patent wars have in turn motivated patent system critics to vociferously decry the system as an impediment to innovation, which must be eliminated or radically overhauled. Defenders of the system respond that patent battles are a characteristic of market competitionoccurring with other breakthrough innovations throughout our history, and that patents address the need to protect innovations to encourage investment in innovation.
Despite all the chatter however, there is something that we have not heard in the discussions about these smart phone patent wars. The debate seems to have focused on patents and the patent system and it has ignored the fact that this current patent battle is really a battle between three competing business models advanced by the three highly competitive mobile OS providers and members of their ecosystems. Apple is pursuing a fully proprietary business model where mobile OS and mobile hardware are proprietary to Apple. This is consistent with Apple’s prior business model in traditional computing which has worked quite well for them. Similarly Microsoft is advancing a business model much like its successful traditional computing business model with a proprietary OS and an “open” hardware platform that allows third party handset makers to provide phones running the Windows mobile OS. Finally, Google is advancing an “all open” model in which it uses Android, an open source mobile OS and an open hardware approach.
Patent and technology firm, Intellectual Ventures (IV), recently brought a new complaint against computer security company, Symantec, claiming that the company infringed on three of its patents. To be specific, the complaint alleges that three of Symantec’s products (Replicator, Veritas Volume Replicator, and ApplicationHA) “actively, knowingly and intentionally” infringed on three separate IV patents. Symantec was also sued as part of a different complaint by IV back in 2010, along with Trend Micro, McAfee, and Point Software Technologies.
The First Round
In 2010, former Microsoft exec. and IV founder, Nathan Myhrvold, brought three separate lawsuits against the three above-mentioned companies and six others, claiming that they would not sign licensing agreements, yet they continued to use IV’s patents. Apparently IV had held out on filing the lawsuits against the companies for as long as possible, and according to the company attorney, several attempts were made to negotiate with the companies; however, the negotiations were either unsuccessful or the companies refused to talk about the situation altogether.
On Friday, March 22, 2013, Administrative Law Judge David P. Shaw of the United States International Trade Commission issued a remand determination relating to the investigation instituted by the Commission to investigate patent infringement allegations leveled against Microsoft’s Xbox . Judge Shaw determined that the Xbox does not infringe the remaining patent involved in the ITC investigation, which is a complete reversal of his earlier determination that the Xbox did infringe (see below).
Shaw’s remand determination was brief:
It is held that a violation of section 337 of the Tariff Act, as amended, has not occurred in the importation into the United States, the sale for importation, or the sale within the United States after importation, or the sale within the United States after importation, of certain gaming and entertainment consoles, related software, or components thereof that are alleged to infringe asserted claims 1 and 12 of U.S. Patent No. 6,069,896.
The full Commission now has until July 23, 2013, to consider Judge Shaw’s remand ID.
The month of February was busy. As I write this I’m on a Southwest Airlines flight back from the AUTM annual meeting in San Antonio, where I spoke yesterday on the Bayh-Dole panel. Look for more on that later today or over the weekend. John White and I have been earnestly going through the first-to-file rules and examination guidelines updating the PLI Patent Bar Review Course, and I spoke at the 7th Annual Patent Law Institute in NY earlier in the month. As busy as February was, March will be even busier, but busy is good.
As far as interesting deals and industry news goes, this month easily one of the biggest, and perhaps strangest news items relates to a trademark infringement action brought by Tiffany Co. against Costco. The lawsuit relates to allegations that Costco was selling counterfeit Tiffany Diamonds in at least one of its stores. That has to be filed under the “what where they thinking” category. Good for Tiffany defending its trademarks. Also good for Costco stepping up to the plate to cease this activity right away, but Tiffany does deserve a public apology (as they ask for in the complaint) and for customers to be notified they purchased fake Tiffany Diamonds. Kudos to Tiffany for turning this potentially harmful event into a real PR positive; a real textbook case on how to defend trademarks and generate all kinds of good, positive, free press.
Now, what follows, are some of the other lawsuits, licensing deals and settlements that piqued our interest during the month but wouldn’t necessarily support an independent article. Still, these items are worth knowing about if you want to keep your finger on the pulse of the industry.
Microsoft Corporation finds itself on the defensive side of a lawsuit that could make them pay for infringing two patents on reflexive advertising in search engines. The lawsuit is being brought forth by I/P Engine, Inc., a wholly owned subsidiary of mobile technology innovator Vringo, Inc.
The patent infringement lawsuit, filed in the Southern District Court of New York State, seeks reasonable royalties from Microsoft for not only infringing on I/P Engine’s patents in Microsoft’s own search engine, which employs filtering technology, but also for continuing to engage in the practice for years after alerted to the patents. I/P Engine alleges that Microsoft has been knowingly infringing upon U.S. Patent No. 6,314,420 (the ‘420 patent), which is titled “Collaborative/Adaptive Search Engine,” since at least October 2003 and U.S. Patent No. 6,775,664 (the ‘664 patent), which is titled “Information Filter System and Method for Integrated Content-Based and Collaborative/Adaptive Feedback Queries,” since at least December 2008.
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more.
Without hesitation I recommend One Simple Idea and think it should be required reading for any motivated inventor. There is so much to like about the book and so much that I think author Stephen Key nails dead on accurate. The book is educational, information and inspirational. For the $14 cover price it is essential reading.
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