Posts Tagged: "PAE"

On August 1st, a jury verdict entered in the Southern District of California awarded $145.1 million in reasonable royalty damages to Canadian IP licensing firm Wi-LAN in a patent infringement case against Cupertino, CA-based consumer device giant Apple Inc. The jury determined that Apple infringed upon claims of two patents owned by Wi-LAN.

John Thorne was VP and deputy general counsel for Verizon during its legal battle against former American cable television company Cablevision where Verizon asserted a series of patents it owned… A closer look into the patents renders some interesting information about the patents Verizon asserted and the company’s legal strategy in the case. Two of the eight patents asserted by Verizon in the District of Delaware weren’t originally invented by Verizon, Bell Atlantic or other any other of Verizon’s predecessor companies; they were acquired from outside entities… And haven’t we been told by the likes of Unified Patents that all patent owners who enforce their patents are patent trolls? One would have to assume if Unified is being logically consistent they would have extraordinary problems with Verizon’s activities particularly here where the patents used to sue Cablevision were acquired and not the subject of in-house innovation.

Patent trolls – as well as calls for changes to the law to prevent them – date back to at least the 1800’s. A look at their history suggests that they have more to do with fluidity in the definition of patentable subject matter than any unique feature of a particular class of inventions… A change in a fundamental definition of what comprised patentable subject matter, and that change brought a major building block of commerce into the ambit of the patent system. In the age of the sharks, the farm remained the core of the U.S. economy, driving a gold rush of new patents covering every element of the farming process. Such a rush also encourages the formation of patent thickets, as speculators scramble for any potentially protectable chunk of the market. The same phenomenon drove the development of modern tech and software patents. In the aftermath of State Street, once again the market found that the machinery that undergirded the economy was suddenly open to being patented, leading to a similar gold rush.

The HuffPost recently published a piece authored by Massachusetts State Senator Eric P. Lesser (D), which is titled Patent Trolls Are Trolling Startups In Massachusetts – And We Need To Change That. The piece attempts to engage readers by taking a situation from the HBO sitcom Silicon Valley and apply it to real world business activities currently ongoing within the state of Massachusetts. However, critical analysis of Lesser’s article indicates glaring flaws with his logic in a way that makes it look like Lesser is more interested in following a false narrative in service to patent infringing interests than he is in supporting Constitutionally-protected property rights.

House IP subcommittee chair Rep. Darrell Issa (R-CA) led off the hearing by discussing the large number of interests who are often on Capitol Hill to discuss their issues with “patent trolls,” including the “genius ones” which have only been developed in recent years. Despite the intent of the America Invents Act (AIA) of 2011 to weed bad patents out of the system, “patent trolls” remain active. Issa felt there were a few reasons for this, including the fact that such entities make money and that good patents could still be used to assert unreasonable claims. “Why innovate when it’s far easier and more profitable to simply purchase a patent, acquire one, acquire the rights to a patent, perhaps one that has never been licensed, bully businesses into writing a check, go away without ever seriously litigating,” Issa said. He said that 80 percent of “patent troll” litigation focuses on small business. “Simply put, we should not confuse ‘Making America Great Again’ with ‘Making American Patent Trolls Richer Again,’” Issa said. Although Issa was pleased with the U.S. Supreme Court’s recent decision on patent venue in TC Heartland v. Kraft Foods Group Brands, he recoiled at what he felt was an “overreach” by Judge Rodney Gilstrap from the Eastern District of Texas (E.D. Tex.); Issa felt that Gilstrap misinterpreted the Supreme Court’s decision in TC Heartland by denying a motion to transfer venue from E.D. Tex. in Raytheon v. Cray. “It is, in fact, an act that I find reprehensible by that judge,” Issa said.

A $1 trillion a year industry not wanting to pay innovators less than a 1% royalty on the innovations they appropriate (i.e., steal) for their own profits seems like a terrible price to pay given the national security and economic consequences of forfeiting our world leadership to the Europeans and Chinese… Google and Uber are locked in a patent battle over self-driving automobiles, so does that make Google or Uber a patent troll? What about General Electric, Apple, Samsung, Microsoft, Cisco, Oracle, Whirlpool, Kraft Foods, Caterpillar, Seiko Epson, Amgen, Bayer, Genzyme, Sanofi-Aventis, and Honeywell, to name just a few?

The true agenda of those who support further reform of the U.S. patent system is as follows: to discriminate against entities which license technologies instead of manufacture; to increase the costs of asserting patent rights to the detriment of individuals and startups; and to stilt the conversations surrounding tech licensing in favor of the infringer bringing a product to market. “If you trip over our patent, you’re a thief. If we trip over your patent, you’re a troll,” Giancarlo said… “Let’s call patent reform for what it is: a blatant economic and power grab by tech firms to infringe on technology created by others,” Giancarlo said. In his opinion, the true trolls are the entities trolling Congress to get a competitive advantage over smaller entities.

The U.S. Federal Trade Commission (FTC) will not be radically changing the analysis used to address antitrust issues presented by patent law issues. The news stems from comments made by FTC acting chairman Maureen K. Ohlhausen at the 32nd Annual Intellectual Property Law Conference sponsored by the American Bar Association (ABA). Ohlhausen would go on to explain that the recent updates to the IP Licensing Guidelines, which occurred in January 2017, were “modest”, provided the FTC with flexibility, and continue to recognize that “IP law grants enforceable rights.”

IP departments are often forced to spend their limited budget defending patent troll lawsuits targeted at the base computing and service layers instead of where it should be spent – protecting application layer innovation. There has been no shortage of such litigation due to the glut of vague and ambiguous software patents directed to basic computing technologies. These broad, vague patents have become glaring targets for trolls, who are eagerly buying them up and asserting them wherever they can. As a result, companies are being sued for patent infringement for things that aren’t directly related to their end products and services.

If Bill Hewlett and David Packard were just starting in their garage, they might be wise not to waste money acquiring them… An individual inventor, or SME, may defend patented inventions against unauthorized use – by everyone and anyone. However, it is disingenuous to say it is reasonable for them to do so, no matter what Congressional soundbites trumpet. The system is severely biased against these entities to the point of no longer serving them.

NPEs are uniquely positioned to help China by attacking foreign entities to clear the way for Chinese companies by exerting pressure in ways that only NPEs can. Even if Chinese semiconductor companies had the necessary patents and experience to engage their foreign competitors, they would risk retaliation from these foreign parties. NPEs, on the other hand, can unilaterally attack foreigners without fear of retaliatory patent suits. Although there are a few of antitrust issues, I do not believe that NPEs that act in the best interest of China should, or will, be attacked by the NDRC or any other antitrust agency in China.

Activist Supreme Court decisions in the last decade have been principally responsible for these changes, stimulated by aggressive technology company incumbent lobbying. The combination of these decisions has had a far greater effect on the patent system and the economy than the Court originally intended. The U.S. is now in a compulsory licensing regime in which large technology incumbents that control at least 80% of collective market share employ an “efficient infringement” model of ignoring patents and forcing patent holders to enforce patent rights in the courts.

Being targeted by PAEs is nothing new for Apple — but in an anti-trust complaint dated December 20, 2016, Apple finally said enough was enough. Pulling no punches, Apple accused the PAEs of “conspiring with Nokia in a scheme to diffuse and abuse [standard essential patents] and, as the PAEs and Nokia fully intended, monetize those false promises by extracting exorbitant non-FRAND royalties in way Nokia could not”. Using PAEs for direct attacks against Apple would be a smart, albeit sneaky, strategy for Nokia. Since PAEs do not themselves sell any products, there would be little risk of a countersuit from Apple – as well as a general lack of commitment to FRAND licensing terms that spell lower royalties.

To come up with the list below I’ve reviewed all of our patent articles, and have come up with these top 10 patent stories for 2016. They appear in chronological order as they happened throughout the year. Just missing the top 10 cut were the Supreme Court denying cert. in Sequenom and the USPTO being sued for Director Lee declaring a federal holiday. As interesting as those stories may have been, there was far more consequential patent news in 2016. Also missing the cut, but particularly interesting were the rather egregious and insulting response filed in an Office Action in September, and the embarrassing concurring decision by Judge Mayer in Intellectual Ventures. While the latter two were truly train wreck moments, they were fleeting. Judge Mayer has completely marginalized himself on the Federal Circuit with no one embracing his extreme and inaccurate reading of Alice, and that type of albeit cringe-worthy and unprofessional response to an Office Action happens very rarely.