Limiting the Impact of Patent Assertion Entities on the Open Source Community

By Keith Bergelt
July 14, 2020

“While the patenting of non-obvious and novel inventions does not hinder innovation, but rather promotes it, the issuance and use of poor quality patents as weapons against organizations seeking to advance and commercialize new technologies not only stifles innovation but creates a tax that ultimately is shouldered by the consumer.”

https://depositphotos.com/31248541/stock-photo-opinion-business-concept.htmlThere has been a great deal of discussion over the years regarding patent trolls, also known as non-practicing entities (NPEs) and Patent Assertion Entities (PAEs). As most of the IP world knows, these organizations, either alone or in partnership with an inventor, look to leverage a patent or a portfolio in order to seek financial return from companies allegedly utilizing the technology. On the other side are organizations that have in many cases advanced and refined the base technology and created products therefrom who are seeking a way out of potentially high litigation costs by working to determine the need to potentially license the patent/portfolio or to fight patent infringement claims if the PAE has moved beyond assertion to litigation.

PAEs have a unique business model which involves leverage and forcing a target company to make a decision between risk and reward. PAEs acquire a patent, patent family or multiple unrelated patents at a low cost and serially assert those patents against a broad group of companies in order to seek licensing fees and/or infringement damages through litigation. The PAEs may request steep licensing fees but not at a level likely to approach the costs a company would face if it chose to defend itself in court. Quite often large companies, in particular, will settle for a modest fee and take a license to the patents rather than bear the costs of litigation required when defending against patent litigation claims.

[[Advertisement]]

PAEs Love Low-Quality Patents

Patents by their very nature are valued based on the quality of their claims, degree to which the claimed functionality is practiced, priority date and time until expiration. The fact that a patent is granted by the U.S. Patent and Trademark (USPTO) creates a presumption of validity, requisite novelty and insufficient or non-existent prior art.  It is this presumption, despite the fact that critical defects may exist such as ineffective examination that did not properly consider relevant art, overly broad claim scope, etc., that enables PAEs to mount serial patent assertion campaigns designed to generate financial return from licensees.

PAEs generally rely on poor quality patents as these patent assets are generally less expensive to acquire than more fundamentally sound and defensible high-quality patents. In this way, PAEs are able to generate sufficient return to make their business model efficacious.

The Open Source Community Is Not an Easy Target for PAEs   

The open source software (OSS) community relies on distributed and collaborative innovation whereby single contributors and integrators of open source code could mistakenly be viewed as attractive PAE targets. Because of the foresight of pioneers in open source such as IBM, Red Hat, NEC, Philips, Sony and SUSE, the open source community has operated under the protection of a global community-wide cross license since 2005, coordinated by the Open Invention Network (OIN). While initially focused on operating company patent risk, OIN has more recently turned its attention to the mitigation of PAE risk as it seeks to broaden the scope of protections and, in so doing, enable freedom of action in and around the core of Linux and adjacent open source project code.

Long time participants in the pre-issuance submission program ushered in by the America Invents Act, OIN’s actions and those of a diverse group of entities across the open source community directly resulted in the rejection of dozens of patent applications and the reduction of claim scope/disallowance of claims in literally hundreds more poor quality patent applications. OIN continues to expand its PAE interdiction role and supplement its pre-issuance submissions while expanding its patent risk management activities to include more broadscale PAE interdiction. IBM, Microsoft, the Linux Foundation and OIN’s founding of Unified Patents’ OSS Zone in 2019 is expected to be a strong positive step in that direction. Unified Patents’ deterrence strategy for the OSS Zone includes challenging poor quality patents through IPRs (inter partes review), identifying prior art through its Patent Patroll crowd-sourced prior art collection initiative, its NPE tracking and data analytics, online litigation and PTAB databases and patent landscaping and market transactional data, among many others. This program expands the partners’ patent non-aggression activities by deterring PAEs from targeting Linux and adjacent OSS technologies relied on by developers, distributors and users.  The ultimate goal is to harden the open source community against PAE attacks while continuing to monitor and limit the patent aggression of the predominantly proprietary operating companies seeking to use patents to slow or stall the progress of Linux/OSS.

Sample activities in support of PAE interdiction includes OIN’s frequent provision of prior art to facilitate the negotiation of positive outcomes by entities facing aggressive PAE assertion or litigation. One such case dealt with the late-2019 patent litigation brought by Rothschild Patent Imaging, a PAE, against the GNOME Foundation. Rothschild claimed that GNOME’s Shotwell, an open source desktop image organizer and editor, infringed its patent 9,936,086 – a patent for “Wireless Imaging Distribution System and Method.”

Rothschild, a serial litigator, was looking to leverage a patent of questionable quality in order to establish a pattern of wins through relatively modest settlements, with the goal of coercing other businesses to settle without a legal fight in the courts. No doubt the outcome of the GNOME case will hinder Rothschild’s assertion/litigation activities going forward.

Specifically, Rothschild was granted the patent in April of 2018, although the USPTO should not have granted it in the context of the U.S. Supreme Court’s Alice decision. GNOME made an explicit decision to stand its ground and fight the PAE instead of paying the licensing fees Rothschild demanded. Shearman & Sterling provided pro-bono representation. OIN helped to uncover prior art related to 6086 and, coupled with assistance that poured in from other quarters in the open source community, enhanced GNOME’s defensive positioning.

In May of 2020, it was widely reported that GNOME entered into a free license to all Rothschild patents and secured protections for the balance of the open source community seeking to implement the targeted OSS project functionality.

Committing to Patent Non-Aggression

While the patenting of non-obvious and novel inventions does not hinder innovation, but rather promotes it, the issuance and use of poor quality patents as weapons against organizations seeking to advance and commercialize new technologies not only stifles innovation but creates a tax that ultimately is shouldered by the consumer. Given the unique innovation benefits of collaborative development on which all who adopt and use open source software rely, it is imperative that individuals, foundations and organizations across the technology spectrum commit to patent non-aggression through broad based cross licensing of core open source functionality. In addition, companies in the open source community must work together to lessen the effects of PAE activities through the crowdsourcing of relevant art that can prevent poor quality patent applications from being granted and poor quality granted patents from derailing the innovation agenda that open source uniquely fosters.

Image Source: Deposit Photos
Author: tashatuvango
Image ID: 31248541 

 

The Author

Keith Bergelt

Keith Bergelt is the chief executive officer of Open Invention Network (OIN), the collaborative enterprise that enables innovation in open source and an increasingly vibrant ecosystem around Linux. Previously, Mr. Bergelt served as president and CEO of two Hedge Funds – Paradox Capital and IPI – formed to unlock the considerable asset value of patents, trademarks and copyrights in middle market companies. Prior to his extensive private sector experience, Mr. Bergelt served for twelve years as a diplomat with postings at the United Nations in New York and the American Embassy in Tokyo, Japan, where he was involved in the negotiation of IP rights protection in Asia.

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 41 Comments comments. Join the discussion.

  1. Anon July 14, 2020 8:06 am

    Pure bollocks.

    While I have not seen an update in awhile, the (old) 271 blog ran a study on the “quality” of patents that NPE’s typically obtained (I believe that one contrast was with the same measure of “quality” that operating firms had with their patents), and the level of “quality” was remarkably higher.

    Consider the source here — this is nothing more than a commercial espousing a desired narrative and should be dismissed as the tripe that it is.

  2. Pro Say July 14, 2020 11:22 am

    Sorry Keith, but repeating “troll tripe” over and over again doesn’t convert it into Filet Mignon.

    It’s still tripe.

  3. Curious July 14, 2020 11:50 am

    the issuance and use of poor quality patents as weapons against organizations seeking to advance and commercialize new technologies not only stifles innovation but creates a tax that ultimately is shouldered by the consumer
    This old trope gets trotted out again. Let’s be clear, to the anti-patent software crowd, any software patent is a “poor quality patent.”

    PAEs Love Low-Quality Patents
    What an imbecilic comment. Every loves high-quality patents. Low-quality patents are easily invalidated, which does not help anybody — including PAEs.

    PAEs generally rely on poor quality patents as these patent assets are generally less expensive to acquire than more fundamentally sound and defensible high-quality patents.
    Not really. Patents are pretty cheap these days as it is nearly impossible to even enforce high-quality patents without paying an arm and a leg in litigation costs (as well as for the inevitable trip to the PTAB). Having a high-quality patent actually costs more. A low-quality patent gets invalidated quickly. A high-quality patent just means that patent infringers have lots of chances to throw stuff up against the wall to see what sticks (costing the patentee on every attempt). A patent for a small entity these days is likely a negative value asset, as it costs more to acquire and assert than it gives back in value.

    In May of 2020, it was widely reported that GNOME entered into a free license to all Rothschild patents and secured protections for the balance of the open source community seeking to implement the targeted OSS project functionality.
    Free license? I find that surprising since the license supposedly covered all the patents in this portfolio. Widely reported? I don’t recall any such mention in the press releases, and I couldn’t find anything in what was reported based upon my perusal of the internet today. Something smells very fishy here.

    I suspect the real truth of the matter paints a different picture.

  4. Henry Hudson July 14, 2020 12:52 pm

    Written by a former diplomat who also happens to have been the head of two hedge funds. Oh, and, IBM, Sony, Phillips, NEC are hardly anything but PAEs themselves. Where are the facts?

  5. Shawn Ambwani July 14, 2020 7:45 pm

    Wow Henry, you really took him down!! Though I am not sure cherrypicking OIN’s 3000 member list and mentioning IBM and Sony as PAEs really helps with your credibility unless you consider companies that make 99% of their revenue from selling products PAEs. 🙂 Where are the facts !!!!! 🙂

    And, Curious (of should I say Karen), I think it is entertaining that you are calling people imbeciles given you are too chicken to say your real name. My guess is you are just another angry old white guy who is probably balding, playing some golf, and has a lot of time on his hands so you lurk the IPwatchdog message forums since your life has nothing better to do. Just a guess. : ) How close and am I?

    There are PAEs, we track them all on our portal for free. portal.unifiedpatents.com And if you see we track the NPEs and they do use lower quality patents. There is extensive empirical data to show that since the more an NPE sues, generally speaking the more they know their patents are bad. There are some with really good ones as well. But that is less often, hence the forum shopping.

  6. Anon July 14, 2020 9:48 pm

    Mr Ambwani,

    And, Curious (of should I say Karen)

    It is classic that you would say such a thing.

    And not get why that makes you look bad.

    The “real name” schtick was old more than 250 years ago as even the founding fathers would often write in pseudonym.

    Your “free” forum is tied to your business model. Do you really think that people don’t see what you are selling?

  7. zoobab July 15, 2020 6:45 am

    “While the patenting of non-obvious and novel inventions does not hinder innovation, but rather promotes it,”

    OIN is useless against trolls, there is no way to countersue.

  8. Curious July 15, 2020 12:36 pm

    And, Curious (of should I say Karen), I think it is entertaining that you are calling people imbeciles given you are too chicken to say your real name.
    Too bad your reading comprehension skills match your reputation. I didn’t call Mr. Bergelt an imbecile. I said that his comment was imbecilic. As for saying my real name, I don’t need to drum up business, as you have attempted to do on this blog time and time again. You wouldn’t be here if all you were doing was expressing your own opinion.

    My guess is you are just another angry old white guy who is probably balding, playing some golf, and has a lot of time on his hands so you lurk the IPwatchdog message forums since your life has nothing better to do.
    Stop projecting — you are definitely balder than me. You look pretty pale to me. I haven’t played golf in decades. I come here to intellectually stretch my legs. You come here to drum up business.

    There are PAEs, we track them all on our portal for free. portal.unifiedpatents.com And if you see we track the NPEs and they do use lower quality patents.
    I didn’t read this part before I wrote that you come here to drum up business. LOL. Business so bad that you are lurking IPWatchdog for leads? Sorry. I wish I could help you out but I don’t have any boots that need licking.

  9. Fusilier July 15, 2020 1:10 pm

    The facts on the ground diverge significantly from the assertions made in this article that the OSS community is not an easy target. Look at Sound View Innovations. They have filed a number of suits and sent numerous demand letters alleging that OSS software from Apache infringes their portfolio. I have two clients on the receiving end of Sound View. The users of the software they sue/threaten typically don’t have a third party to provide defense/indemnity precisely because the software is OSS. Mr. Bergelt, I would respectfully ask what a defendant in such a situation should do? Will ONI provide assistance? Please address Sound View specifically. No, I do not work for or with Unified. Best regards

  10. Bob Zeidman July 15, 2020 9:16 pm

    This article is incredibly biased and, as many have pointed out, not only has the facts wrong but actually the opposite of the truth as shown by many studies, my own experience in over 100 patent cases, and just simple logic.

    For just one example, there are many types of NPEs, not just the simple model that he uses as a strawman. Most NPEs want high quality patents because they almost always need to go to litigation, and litigating a weak patent is foolhardy. It’s just common sense.

  11. Keith Bergelt July 16, 2020 7:34 am

    First and foremost I would like to thank Gene and the editorial review board at IP Watchdog for its inclusion of my recent article submission. I would also like to thank those who read the article and those who commented on it. Several of the comments reflect a decided disconnect between what OIN does, its mission and the perception that some have formed.

    OIN is the largest patent non-aggression community in the history of the technology sector. Its mission is to serve as a guardian of the modality of open source which enables previously unattainable levels of innovation through collaborative development. Open source, at its core, is a movement which breaks down social, cultural, ethnic, national, and religious barriers and enables individuals and companies to come together to solve technical challenges in software through the development of code that can be shared and used under a set of rules dictated by the licenses under which the code was developed.

    OIN uses a patent cross license premised on the notion that where we collaborate to produce core code, we should not be subject to the threat of patent litigation. Everyone actively participating in a particular open source project needs to use and adopt it, without fear of doing so due to patents. As such, OIN works with its funding members companies — IBM/Red Hat, Sony, NEC, Philips, Google, Toyota and SUSE — and key technology leaders in the community of ordinary licensees to establish a “patent no-fly zone” around core Linux and adjacent open source project functionality that is critical to the proliferation of innovation yielded by open source projects managed by the Linux Foundation, Apache, Eclipse, Open Stack and others involved in bringing some of the world’s most significant technologists and enterprises together to participate in project-based innovation.

    Additionally, OIN has developed, through acquisition and an active internal invention program, a portfolio in excess of 1,350 global patents and applications. This portfolio has been developed at an investment of in excess of $100MM. Historically OIN was primarily focused on operating company risk, prior to Microsoft becoming a member of the OIN licensee community in the Fall of 2018. OIN has allocated $15MM to troll interdiction and actively acquired portfolios from patent assertion entities or from inventors whose only other alternative was to sell to patent assertion entities. In addition to these acquisitions, OIN has been among the largest pre-issuance submission filers under the AIA and has routinely used its unique network of relationships in the open source community to identify and source prior art to be conveyed to licensees, at risk or in litigation, in order to prevent patent assertion entities from mounting successful serial licensing campaigns on open source-related functionality.

    OIN has supported dozens of companies in this manner and expended hundreds of thousands of dollars in engaging blue chip IP litigation counsel to provide thought leadership in order to bolster the efforts of licensees seeking to address pre-litigation assertions and/or litigation. OIN will continue to work to mitigate patent risk from both operating companies and patent assertion entities and to safeguard the interests of companies in banking/financial services, networking, energy, cloud, automotive, enterprise, blockchain, mobile communications, computing and a host of others industries seeking to adopt open source code to so they can innovate more rapidly and secure the cost and technological benefits attendant thereto.

    I would be remiss in not mentioning that participation in the OIN licensee community is free, as is an unlimited field of use license to all of OIN’s owned patents. Additionally, OIN does not charge for its provision of prior art or its engagement of counsel to support OIN licensees at risk or in litigation. OIN is enabled to do so because of the sizable capital commitment it receives from its funding members and their foresight at a time 15 years ago, when the open source community was faced with patent challenges from large patent holding companies seeking to slow or stall the progress of Linux and sustain an anti-innovation agenda associated with proprietary platforms.

  12. Anon July 16, 2020 1:35 pm

    More pure B$ from Mr. Bergelt, who enjoys spinning his own disconnects.

    TO wit: the closing shot is a shot in Mr. Bergelt’s own (pompous?) foot (emphasis added):

    large patent holding companies seeking to slow or stall the progress of Linux and sustain an anti-innovation agenda

    Newsflash for you sir: if someone else has a patent and seeks to keep you from what that patent protects, you do NOT get to define this as “slow or stall” and it certainly is NOT “anti-innovation.”

    The driving force of patents can be exemplified by the stick and carrot paradigm. The carrot to the inventor AND the stick to those that would infringe.

    There is another adage that you may be familiar with: “Necessity is the mother of invention.”

    Necessity – by the way – by those very people that you would deign to denigrate.

    You are more than welcome to set up and run OIN to your heart’s content.

    You are NOT welcome to make up your own facts and engage in spin that at day’s end serves to weaken and denigrate the US Patent system.

    Please connect with that.

  13. Benny July 17, 2020 2:39 pm

    Bdergelt writes, “The fact that a patent is granted by the U.S. Patent and Trademark (USPTO) creates a presumption of validity, requisite novelty and insufficient or non-existent prior art. It is this presumption, despite the fact that critical defects may exist such as ineffective examination that did not properly consider relevant art, overly broad claim scope, etc., that enables PAEs to mount serial patent assertion campaigns designed to generate financial return from licensees.”

    Does anyone dispute this? Ineffective examination encourages abuse of the system,. PAEs do not abuse the system in legal sense, but their ethics are questionable.

  14. Henry Hudson July 17, 2020 2:44 pm

    Shawn,
    It doesn’t take much to see how your company has destroyed SMEs & independent inventors. That’s what your oligarch handlers want you to do.

    As for your mischaracterizations Golf? White male? Balding? The comments made by Bergelt & his follow-on are still silly at best.

    Let’s speed up the day when Unified Patents can be hailed into litigation as a front for Serial Infringers.

    You certainly don’t represent invention or innovation. Just a lot of infringement & destruction of America’s industrial policy.

  15. Bob Zeidman July 17, 2020 3:00 pm

    I dispute it. NPEs want really strong patents because they need to pass IPR, 101 challenges, a jury trial, and one or more appeals. A weak patent will fail at some point along the way. If NPEs don’t win, their whole business goes under, so they choose the strongest patents, not the weakest.

    Some NPEs aggregate patents to get a settlement, and there they need large numbers of patents, but at least some of those need to be very strong in case they need to go to court. Then the accused infringer makes a business decision based on a cost/benefit analysis.

    There are the stories of NPEs suing mom-and-pop shops, but there are very few examples of that kind of NPE. However, those wanting to weaken the patent system focus on those stories because it fits their narrative.

  16. Benny July 17, 2020 5:32 pm

    Bob, invalidating a patent is a lengthy and costly business (ever tried it?). Settling a nuisance litigation can be an order of magnitude cheaper. The ideal business case for a PAE (not NPE) is many quick settlements.. They have zero interest in fostering innovation, the quality of the patents they assert is immaterial to them. ?

  17. Bob Zeidman July 17, 2020 10:15 pm

    Benny, look me up. You’ll see that I’ve invalidated many, many patents. I’ve worked for and against NPEs. Since the America Invents Act, the cost for invalidating a patent is relatively small for the alleged infringer, relatively high for the patent holder.

    Litigating patents through trial will cost the patent holder from $2 million to $10 million. The damages need to be at least ten times that much, $20 million to $100 million, to justify the risk. That means that no alleged infringer will settle without first spending $100K to $500K to attempt to invalidate the patents. The nuisance litigation you refer to is mythical (except for one case where mom-and-pop shops were sued for $10K each). It makes no financial sense.

    Also, you differentiate between NPEs and PAEs, but they are two names for the same thing.

  18. Benny July 18, 2020 3:18 am

    Bob, 500k is not small change for a 40 million dollar p.a company. I do differentiate between NPEs and PAEs. In my book, a PAE is a small law firm which exists solely to aquire patents and monetize them, with or without justification. Innovation is not part of their game. An NPE, can be an innovator which doesn’t actually reduce their own inventions to practice. My company, I, think, is fairly typical in that only about 20 per cent of the patents we own actually relate to real world products. The others serve mainly to keep the competition at bay.

  19. Anon July 19, 2020 7:29 am

    Benny,

    Your Efficient Infringer positions do not have credibility.

    You continue to evidence a LACK of understanding of the property (and the US design of full alienability of that property). There is NO nexus between the property and any requirement of ‘making.’ One is a negative right while the other is a positive action.

  20. Curious July 19, 2020 10:17 pm

    Bob, invalidating a patent is a lengthy and costly business (ever tried it?). Settling a nuisance litigation can be an order of magnitude cheaper.
    A bad patent (e.g., one with 102 art) could be invalidated with ex parte reexamination for about $20K or less. Hardly lengthy and costly. If the patent is software, just file a 12b6 motion to dismiss under 101. 80% of it is boilerplate and the district courts/federal circuit just slurp it up. A halfway decent attorney could whip one up in a day.

    They have zero interest in fostering innovation, the quality of the patents they assert is immaterial to them. ?
    Ignorance at its worst. The quality of the patent has everything to do with it. Ever try to sell a patent portfolio over the last 5 years? Nobody (including PAEs) wants to touch them unless they are rock solid. Asserting bad patents exposes the attorneys to Rule 10 sanctions so they don’t want to touch those.

    The simple fact is that any patent asserted against the serial patent infringers is almost, by definition, a bad patent. They’ve never run into a “good” patent (unless they own it).

  21. Benny July 20, 2020 2:45 am

    Curious,
    Now for the real world:
    I wouldn’t trust an ex-parte re-examination, not when the the applicant himself submits 102 prior art in an IDS and still gets the patent. (Actual case) 20K? Work that out for me, at $500/h attorrney rate, prior art searching, large entity fees etc. Go, on , show me the math.
    Never been bothered by a software patent. That issure is irrelevant to me.
    A PAEs business case is best served by settlement rather than litigation. PAEs are in it for profit. They don’r employ engineers and don’t engage in innovation. We are not talking innovators who don’t have the resources to reduce their inventions to practice. We are talking law offices out to make buck doing what they know best. The quality of the patent is immaterial,, the assumption is that it makes sound financial sense to take a license if that is less costly than invalidation.
    We have run into good patents. We don’t infringe them. We’ve seen our competitor’s genuinely novel applications unfairly rejected by the USPTO. We have also seen the USPTO grant patents which do not meet the requirements of 102 and 103, because the examiners were not doing their job.

  22. Anon July 20, 2020 6:33 am

    Benny,

    “Now for the real world” — indeed, but just not how you want to spin it, as your mantra is nothing more than Efficient Infringer script, and does not have the persuasiveness that you merely want it to have.

    You dismiss out of hand cheaper options based on your projected feeling of “trust” after you project a basis of “they didn’t do their job” at a different branch. All that you do is insist on your position regardless of what others provide as counter points. You do nothing more than stick your fingers in your ears, clench tight your eyes and chant “I can’t hear you.”

  23. Benny July 20, 2020 7:16 am

    Anon, as another commentor pointed out, your comments have no substance, and convey no information. You would be at a loss to explain what part of my comment is relevant to efficient infringement, so I wont even ask. It seems to be just a buzzword you trot out anytime someone disagrees with your personal point of view.

  24. Anon July 20, 2020 10:46 am

    Benny,

    You do NOT do well to depend on the comments of TFCFM as criticism of my comments.

    (for that matter, the only other people to whine of late – Paul Cole and MaxDrei are likewise VERY p00r candidates to listen to, as each whine for their own petty reasons very much having to do with the fact that my being critical of them are met with silence from them on the substantive matters for which I am critical.

    Quite the opposite of your naysaying, my posts convey plenty of information. Just because that information is not liked, does not mean that there is no information, I would NOT be at a loss to explain what part of your comment is relevant to Efficient Infringement, as we have in the past discussed exactly WHY your views sound in their mantra.

    NOTHING has changed in your views and the reasons why your views continue to sound in their mantra.

    Further, This has NOTHING to with my ‘merely trotting out a buzzword.” Efficient Infrignement is a very real and very well know actual thing. It is NOT a mere ‘buzzword.’ And the reason why “it is trotted out” is because YOU engage in your rhetoric of that nature, and it is the nature of that rhetoric that is harmful to strong patent rights.

    Does this ‘disagree’ with my person point of view?
    Certainly.

    Does this ALSO ‘disagree; with my professional point of view?
    ALSO certainly.

    My professional point of view comes from a lifetime of being involved with innovation (as an engineer), managing innovation (as a manager) and protecting innovation (as an attorney). I have studied the science and history of innovation. I understand FULL WELL the ‘rational actor’ basis of Efficient Infringement – from both the business and technical angles.

    Your attempt at spinning this to be ‘merely’ some personal thing that I do not like falls FAR short of reality.

    THAT is the real world.

  25. Curious July 20, 2020 2:47 pm

    I wouldn’t trust an ex-parte re-examination, not when the the applicant himself submits 102 prior art in an IDS and still gets the patent. (Actual case) 20K? Work that out for me, at $500/h attorrney rate, prior art searching, large entity fees etc. Go, on , show me the math.
    You are bringing me a bad patent, which means you’ve already found the 102 art. If you haven’t found the 102 art, you are giving me an open-ended project, and I’m not going to even guarantee that I can even find prior art in that instance.

    On a straight-forward application with a reasonable amount of claim terms, and a reasonable amount of limitations, it shouldn’t take more than a day to get really familiarized with the specification/prior art and shouldn’t take more than a day’s worth of effort to give the Examiner an easy framework with which build a 102 rejection — the result being a far more detailed document than what an Examiner would produce if he/she were to create the rejection from scratch.

    If you don’t trust the Examiner to reject the application, then perhaps the prior art isn’t as good as you think it is (and likewise, the patent isn’t as bad as you think it is). Bad patents are easy to invalidate — close calls are much harder. That being said, Examiner will always err on the side of rejecting rather than allowing. After prosecuting a couple thousand patent applications, I’m fairly confident in that pronouncement.

    Now, if you are talking to a litigator, there is no way that you’ll get a patent invalidated for anything less than a half-a-million because they’ll ensure that every i is dotted and every t is crossed and they’ll overwhelm the Examiner with unnecessarily and unwanted analysis.

    Good prior art doesn’t need much assistance, and if you don’t have good prior art, then you don’t have a bad patent.

    Every Examiner draws the line between patentable and unpatentable differently. And many patent attorneys will try to get up as close to that line as possible to get as broad of claim scope as possible. However, the fact that you may draw the line differently doesn’t mean that it is a bad patent.

    A PAEs business case is best served by settlement rather than litigation [blah, blah, blah] … if that is less costly than invalidation.
    Nothing there explains why a weak patent is preferred by PAEs (i.e., “PAEs Love Low-Quality Patents”). You never know if a PAE is going to run into an individual (or an individual with lots of friends, e.g., part of a trade group) that is going to challenge your patent. If so, you want to make sure that you have a good patent.

    Getting back to a “real world” instance, I once countered a demand letter with a two page letter establishing that the patent at issue was covering material that we had been sourcing for years and years before the filing date. Two page letter that probably didn’t get billed out for more than a few thousands dollars (after the research), and we never heard of the patentee again.

    We have also seen the USPTO grant patents which do not meet the requirements of 102 and 103, because the examiners were not doing their job.
    That’s your opinion. Maybe the Examiners missed prior art. Or perhaps you were overlooking key limitations that distinguished the invention over the prior art. Or perhaps you were relying upon your own “experts” who think everything is obvious in hindsight.

    Regardless, good prior art cures a lot. The better the prior art, the less attorney time you need.

    We have run into good patents. We don’t infringe them.
    Right … you really think I believe that? Unless you are operating in a very isolated space, you are very likely infringing patents.

  26. Benny July 20, 2020 5:48 pm

    Curious,
    We operate in a niche market. We can’t afford the risk of infringing a vompetitors patent. Cross licensing rules.
    Examiners miss prior art because they don’t do thorough searches. They leave that to us after the patent has been granted and bites us.
    We had a competoror who wouldn’t back down even after we provided documentation showing that their claimed invention was on the market before their priority date. They trusted – correctly – that the dishonesty of their attorney and the ineptitude of the patent office would see them through.
    I did NOT suggest that PAE’s prefer weak patents. I made the case that the weakness or strenghth of a patent is immaterial to their business model.
    Contrary to the bleats of Anon, our company does NOT “efficiently infringe”. The valuable patents in our field — other than those we own – are in the hands of competitors who would sue our trousers off if we tried any funny business.

  27. Anon July 20, 2020 6:05 pm

    Contrary to the bleats of Anon, our company does NOT “efficiently infringe”.

    You are not paying attention, Benny.

    I never said that your company “efficiently infringes.”

    I have always stated (and discussed in detail) why YOUR views align with the Efficient Infringer mantra.

    If you are going to disagree with me, you should at least try to pay attention to what I actually state.

  28. Curious July 20, 2020 6:34 pm

    We had a competoror who wouldn’t back down even after we provided documentation showing that their claimed invention was on the market before their priority date.
    That is what Rule 10 sanctions are for.

    I did NOT suggest that PAE’s prefer weak patents. I made the case that the weakness or strenghth of a patent is immaterial to their business model.
    If that is the line of tact you are using, then the weakness or strength of a patent is immaterial to anybody who is attempting to get patents. That doesn’t fly with me. It is a lot harder to bring patents suits these days. No short form pleadings. No combining of defendants. When you have garage door openers getting invalidated under 35 USC 101, very little is safe. In that instance, if a PAE is going to take the time to run a licensing campaign, they are going to want good patents that cannot be easily knocked out. Otherwise, they risk losing all of the effort they spent with zero return.

  29. Shawn Ambwani July 21, 2020 12:19 am

    Calling someone an “efficient infringer” is innane. It is like calling an NPE an “efficient asserter”. Or someone who advertises an “efficient marketer” Or someone who goes to the backroom, an “efficient potty goer.” Everyone and everything does what they think is efficient based on their perspective. If someone infringes any law, they believe it is always the efficient course of action at that time from their perspective. Call companies which make the products and jobs which drive the economy all you want. Our economic report showed it. https://www.unifiedpatents.com/insights/2020/6/23/the-perryman-group-releases-economic-report-an-assessment-of-the-impact-of-the-america-invents-act-and-the-patent-trial-and-appeal-board-on-the-us-economy You have no data to back up anything you say, just anonymous sniping on a discussion board with no traffic and ever less importance. All your comments hold no weight because no one wants to actually put their reputation on the line. Some of you might have some interesting things to say, but no one will take anything seriously as long as they are behind a mas and with no data to back them up 🙂

  30. Anon July 21, 2020 8:18 am

    Contrast “If someone infringes any law, they believe it is always the efficient course of action at that time from their perspective.

    with

    Calling someone an “efficient infringer” is innane

    Do you even understand what you type yourself?

    You are so consumed with a (truly) inane ‘out yourself’ that you don’t bother understanding the concepts being discussed.

  31. Curious July 21, 2020 11:31 am

    Calling someone an “efficient infringer” is innane. It is like calling an NPE an “efficient asserter”. Or someone who advertises an “efficient marketer” Or someone who goes to the backroom, an “efficient potty goer.”
    Oh boo hoo. You come here throwing insults left and right yet when somebody targets your own little fiefdom you start crying like a petulant child. The term “efficient infringer” accurately describes many big-tech’s patent strategies. Why pay a license for a patent when you can just ignore it — knowing that the costs or enforcing it are extremely high and the Federal Circuit (and the rest of the judiciary not to mention the PTAB) are bending over backwards to invalidate any patents that get asserted.

    It is an accurate description that encompasses the patent environment we live in. Big companies can afford to acquire thousands and thousands of patents, which can all be asserted (regardless of the quality) because it’ll cost too much to invalidate them. Notably, these grand portfolios can be used as leverage against smaller companies. However, smaller companies with a handful of valuable patents are at the mercy of larger companies that will either 12b6 their patents into oblivion or send their patents to the patent killing fields of the PTAB. Again, why pay a licensing fee when it is easier (and cheaper) to just kill everything? Moreover, the more patents that gets killed the less likely new entrants will be to try to assert their patents. In addition, fewer and fewer attorneys want to represent the smaller companies that go after these larger companies, and consequently, there are even less suits being filed.

    In the end, infringement becomes very, very efficient to these large corporations (many of which have cross-licensing deals with one another so as to avoid bloodying one another).

    Our economic report showed it.
    LOL. You paid a bunch of hired guns to tell you want you want to here. How Kardashian of you. All it showed that was the efficient infringers got to keep money that was likely rightfully owed to the true inventors of the technology that these infringers were infringing upon.

    You have no data to back up anything you say, just anonymous sniping on a discussion board with no traffic and ever less importance.
    No data to say that a functioning patent system is a great benefit to any economy that employs it? Hmmm. That’s an interesting take. The current problem is that a properly functioning patent system helps inventors both large and small, and the current system is not properly functioning. How many big judgements have little guys gotten from the big-tech oligopolies over the last 5 years? How many times have Facebook, Google, Microsoft, or Apple lost in an original judgement at the District Court level over the last 5 years? Google, Microsoft, and Apple have something along the order of 51K, 59K, and 75K patents in the portfolio (give or take but the magnitude should be correct), and Facebook obtained nearly 1000 patents in 2019 (their numbers are harder to obtain). I find it hard to believe that these companies were the first to obtain all of the patentable technology they use. and if so, they are probably infringing lots of other patents. With that in mind, how many times have these companies been successfully sued for patent infringement over the last 5 years?

    All your comments hold no weight because no one wants to actually put their reputation on the line.
    You are a riot. You come here to sell your company — plain and simple. This is a marketing exercise for you. Your comments are frequently peppered with links back to your own website. On the contrary, most of us are here to merely engage in intellectual discussions over the issues that impact our industry. I’m not attempting to make any money off of my conversations — yet you say that my opinion doesn’t hold any weight because I refuse to out myself. You really have some twisted logic going on — no wonder you are on the side of companies who are stifling innovation by muscling out anybody who interferes with their turf.

  32. shawn ambwani July 21, 2020 5:44 pm

    curious, you keep saying “stifling innovation.” but you can never show data to demonstrate it. Here is an intellectual exercise. Prove it through data. You can’t. You don’t have any.

  33. Curious July 21, 2020 9:45 pm

    Prove it through data. You can’t. You don’t have any.
    You really aren’t as bright as you think you are. To get the data you are looking for, you need both a tested sample and a control sample against which the tested sample is being compared. Explain to me how that can be accomplished when we are talking about laws that impact an entire country?

    Perhaps you can use different countries with different systems, but then you are introducing a vast number of variables that could also impact the comparison — rendering such a comparison mostly useless.

    With that in mind, I can throw the same question back at you to prove that the current system has not stifled innovation. For example, you could argue that the number of patent applications have increased, but you cannot show that the increase was not because of something else (e.g., broader macroeconomic factors).

    The data I have involves working with individual inventors and having a general awareness of the environment in which I practice. I don’t know of an individual inventor who would go through the process of obtaining a patent and trying to enforce again if they could go back in the past. Name me all of the successful small-time inventors that have successfully prevented large companies from stealing their inventions over the last 5 years. Show me all of the wins at the Federal Circuit in which the small guys had their patents deemed valid and infringed over the last 5 years. They are few and far between.

    The opinion I have shared on this blog (for many years now) is that the patent system doesn’t work for small-time inventors anymore. Unlike you, I’m not shilling for business. I’m making statements against my own self interest because that is what I believe.

  34. Bob Zeidman July 21, 2020 10:06 pm

    For an analysis of historical data, read Zorina Khan’s book “The Democratization of Invention.” It shows how strong laws to protect patents have increased innovation and productivity and weak laws have decreased them.

  35. Benny July 22, 2020 12:05 am

    Curious,,
    Commentator Paul Moneville once posed the same question about individual startups that you did, and in response I provided him with a list of startups which were bought outright by big corporations, patents included. Does that count as encouragement of innovation? Or is it stealing inventions?

  36. Shawn ambwani July 22, 2020 3:31 am

    Patent filings continue to increase, not drop since the AIA has come in. Curious admits he has no data to show innovation (which is apparently in the eye of the beholder) has decreased. His counter is asking me to show it hasn’t decreased. That is like saying Ghosts exist. Now disprove it. ?? I don’t have to prove anything since I never made any assertions that anything had changed. Curious, you are the one saying innovation has been effected in some measurable way. Not me. So I’m curious, is it now up to me to disprove something you can’t even define and measure? Seems…. curious. ???

  37. Curious July 22, 2020 11:25 am

    That is like saying Ghosts exist. Now disprove it. ??
    LOL. I see you IGNORED all of my questions (e.g., “Show me all of the wins at the Federal Circuit in which the small guys had their patents deemed valid and infringed over the last 5 years.”) asking for data that would support your position. There was a time when lots of entities were looking to acquire patents — that time is over and has been over for quite some time.

    You can easily determine the impact of the current legal environment on patents by looking at the price of the assets themselves. If current legal environment was helping the value of patents, where is the robust market for them? From where I sit, the market value for patents has gone down since the AIA has come into existence.

    If there was a robust market for patents, I highly suspect that you would shift your business to brokering patent acquisitions — not invalidating patents.

    I don’t have to prove anything since I never made any assertions that anything had changed
    The AIA didn’t change anything? Alice didn’t change anything? That is an interesting take on things.

  38. Shawn ambwani. July 22, 2020 12:24 pm

    It just just get curiouser and curiouser. ??. You specifically said innovation has been hurt. I responded you had no data and can’t even quantify innovation. Your response was I need to disprove that innovation hasn’t been hurt. I responded and said that was bizarre because I never claimed there was a metric or that it had been hurt in the first place. You response appears to be that the secondary market has been hurt so that means innovation has. But here is the rub. You still haven’t defined what innovation or put a metric on it. If you are saying the secondary market is related to innovation you have no evidence or data to back that up. So back to the beginning. Before you can say something has been effected by something you need to actually define it so it can be measured. You never did it for innovation. It is just whatever you want to it to be to fit your narrative. I am curious to see how you do actually measure it because then we can have an actual discussion. So, curious ,, again, what is the metric for innovation? ???. It’s ok to be forky btw and simply say “I don’t know. “

  39. Curious July 22, 2020 3:08 pm

    You specifically said innovation has been hurt. I responded you had no data and can’t even quantify innovation.
    Where did you write that I “can’t even quantify innovation” ?Regardless, why don’t you quantify it? As for my data, I work for innovators (whereas, you work for infringers). I talk with people that are frustrated with the inability of the patent system to protect their inventions. They don’t believe the system protects them anymore, and if that is the case, why should they bother innovating anymore? Why bring bring innovations to the market when somebody (bigger) will just take it for their own? Sure, there will always be some that innovate for free. However, altruism does not promote a lot of innovation.

    If you are saying the secondary market is related to innovation you have no evidence or data to back that up.
    Sometimes I wonder how you ever became an attorney with your intellect. You are an attorney, are you not? Let me explain it to you like I would a ten year old. Patents are a direct result of innovation (e.g., people inventing stuff). Patents, like most property, can be bought and sold. By way of example, if the price of gold is $2000/ounce and people can dig it out of the ground for $50/ounce, then there will be a lot of people digging for gold. However, if the price of gold is $51/ounce, then there won’t be a lot of people digging for gold — granted, some people will dig for gold just because they like doing it. Other people will dig for the gold regardless of the price because they are paid to do so and other people want the gold regardless of the price. The point being is that the price of the asset (whether it be gold or patents) is reflective of how motivated people are to obtain the asset. Smaller asset price = less motivation (or stifling).

    If a smaller inventor walked into my office today with an idea for a new product/service/improvement to software/whatever and asked if he/she should get a patent on it, my response would be the following. It costs a lot of money to obtain a patent, and there is no guarantee that you’ll get one. The USPTO is hostile to granting patents on many types of things, and the closer your invention comes to what is hot in new technology areas the more likely they’ll be hostile. Moreover, even if you do get a patent and somebody big tries to take your invention, the courts are hostile to patent owners, and owning a patent on valuable technology merely opens you up to spending lots more money with little chance of a return.

    That is my honest opinion of the current patent system, and I have zero problem giving out that advice — I have shared the same on this blog many times over the best several years. What would be your counter? How would you sell the current patent system to a prospective small-time inventor considering obtaining patent protection?

    because then we can have an actual discussion
    We’ve tried to have discussions with you in the past. You’ve always ended up disappearing on us for months on end. I’m not having a discussion with you now. You are merely being used as a foil through which I express certain opinions on these topics.

  40. Anon July 22, 2020 6:06 pm

    I stand corrected – at least as of 2014, Shawn was a member of the California bar:

    http://www.ipbc.com/Asia/2014/Speakers.aspx#Shawn_Ambwani

  41. Anon July 23, 2020 7:42 am

    It appears that a post of mine before the “I stand corrected” post has not made it through the “multiple link” filter.

Post a Comment

Respectfully add to the discussion.

Name *
Email *
Website