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Posts Tagged: "patent troll"

Big Tech’s Great Patent Troll Smash and Grab

Big Tech’s patent troll narrative is really just the great Big Tech smash and grab. Jean Ann Booth explains in the Waco Tribune what patent trolls are by taking Big Tech’s cartoonish characterization as her own: Patent trolls are rich investors who buy up patents from failed startups just so they can sue companies commercializing the invention in order to extort their money. Extortion – that’s what patent trolls do. And they are wrecking U.S. innovation to boot. They sure sound scary. Patent trolls are indeed frightening. Flush with big bucks, Big Tech lobbyists pushed the patent troll narrative on Congress, the administration, and the courts, demanding that we gut U.S. patent law (the same U.S. patent law that drove over 200 years of American innovation) if we are to save American innovation. Government bureaucrats and politicians complied by smashing the U.S patent system. Now Big Tech can grab whatever technology they want.

Becoming Harder to Justify a One-Size-Fits-All Patent System

Meanwhile, all patents— good, bad, revolutionary, and stupid— have eroded to the point where continued use of the U.S. patent system must be questioned. Despite the statute saying that patents are to be treated as property rights, the Supreme Court has ruled that patents are merely government franchises that can be stripped at any point in time during the life of the patent regardless of how much time or money has been invested by the patent owner. It simply cannot make any sense for all patents to become increasingly worthless simply because of the victimization of large multinational corporations who are incapable of crafting a strategy that solves the nuisance litigation problem that does not destroy the entire system.

How One ITC Initial Determination Highlights the Links Among a Strong Patent System, Jobs and International Cooperation

An Administrative Law Judge (ALJ) at the International Trade Commission (ITC) recently determined that Samsung Phones violate key patents on magnetic emulator technology for contactless payment systems from Pittsburgh’s Dynamics, Inc. We have been collaborating for years in the academic and public sectors on issues raised in that case, and are consulting consult with Dynamics because we think these issues are vital to our innovation ecosystem, our national economy, and our commitments to international partners. It is especially illustrative of the serious risks facing these vital public interests that far too frequently when there has been a full and fair adjudication determining that there has been infringement of multiple patents and that those patents are neither invalid nor unenforceable, the headline more than suggests that the infringer has been cleared of responsibility.

Managing the Perils of Public IP Company Ownership

The movements of IP-centric business have never been easy to appreciate. With technology patent and licensing values slowly returning to higher levels, it is a good time to revisit a business model which has been a lightning rod for criticism: the public intellectual property company or PIPCO. PIPCO is a term coined by this Intangible Investor columnist in 2013, when there were 30 or more publicly held patent licensing companies with a collective market capitalization of about $9 billion. That may sound like a lot to some, but when you look at the largest patent licensing company, Qualcomm, whose market cap is currently $136 billion, you realize almost everyone else in this group is or was relatively small, typically a micro-cap, with a market value under $1 billion. These companies’ lack of size, unpredictable quarterly revenue and attractive but unpredictable assets positioned them below the radar of most institutional investors. When it comes to weathering financial storms, like ocean-going vessels, sizes matters.

Unified Patents Jumps the Shark with Patroll Contest to Invalidate KinectUs Patent

In early October, social networking firm KinectUs LLC filed a lawsuit in the Western District of Texas alleging claims of patent infringement by Bumble Trading, LLC, the operator of the popular Bumble dating app. In the suit, KinectUs accused Bumble of infringing upon claims of six patents that protect systems and methods for connecting mobile device users via a collaboration system that enables users to connect with other users based on search parameters like common interests or location data. KinectUs’ infringement allegations focus on Bumble’s platform, which allows mobile device users to connect with others based on similar parameters. While the actual analysis of whether Bumble’s user matching system infringes claims of the ‘428 patent would normally require at least a Markman hearing and some discovery, certain members of the U.S. patent community would prefer to harness the power of crowdsourcing to make this determination. IP litigation risk management firm Unified Patents is hosting a Patroll contest seeking prior art to invalidate the ‘428 patent owned by KinectUs. U

A Conversation with Cloudflare Co-Founder Michelle Zatlyn on the Future of the Internet and the Role of IP

The IP Tech Summit, researched and produced by Premier Cercle, took place virtually this year, on December 3-4, and focused on new intellectual property strategies for open innovation and digital transformation. As part of the summit, IPWatchdog Founder and CEO Gene Quinn conducted a Fireside Chat with Cloudflare Co-Founder and COO, Michelle Zatlyn, who said that we are presently in a critical phase of the internet’s development and have an opportunity to redefine it to make it work. But—if we act too quickly—we could potentially go backwards.

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

There 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.

The Electronic Frontier Foundation Still Believes in Fairy Tales

Joe Mullin, a policy analyst at the the Electronic Frontier Foundation (EFF), recently penned a misleading article about the Inventor Rights Act  (H.R. 5478). He says it will promote and protect patent trolls. To unravel what he really means, it is first necessary to understand early stage investment, and from there, to define what a “patent troll” truly is. Through organizations like EFF and their companion organization, Engine, Big Tech often writes scary stories about how patent trolls hide under bridges for no other reason than to utterly destroy innovation. Very scary stuff. Scary because this fantasy has misled the courts, Congress, and multiple administrations, convincing them to change the law in ways that destroyed America’s startup engine. Scary because early stage investment is fleeing to China at the expense of American startups. Scary because it has created perpetual Big Tech monopolies with no allegiance to the United States that are immune to American competition and taxes. These forces now control what we read and say, how we vote, and even what we believe to be true.

Twisting Facts to Capitalize on COVID-19 Tragedy: Fortress v. bioMerieux

Unfortunately, some simply cannot help themselves but to use every opportunity – real or imagined – to take a cheap shot at a patent owner for having the audacity to seek to enforce patent rights, so it should come as no surprise that false and misleading reports would surface in the life sciences world relating to the latest coronavirus (named SARS-CoV-2) and the disease it causes (named “coronavirus disease 2019” abbreviated COVID-19). It was only a matter of time. The true story begins in 2018, when Fortress Investment Group acquired the patent assets of Theranos Inc. Fast forward to March 9, 2020, when Labrador Diagnostics LLC filed a patent infringement lawsuit against BioFire Diagnostics, LLC and bioMerieux S.A., asserting U.S. Patent No. 8,283,155 and U.S. Patent No. 10,533,994, patent assets acquired by Fortress Investment Group from Theranos. This patent infringement lawsuit was not directed to testing for COVID-19, and instead focuses on activities by the defendants over the past six years that are not in any way related to COVID-19 testing.

Subsequently, two days after being sued for infringing the ‘155 patent and the ‘994 patent, on March 11, 2020, bioMerieux announced the forthcoming launch of three different tests “to address the COVID-19 epidemic and to meet the different needs of physicians and health authorities in the fight against this emerging infectious disease.”

Changing the Presumption: Shifting U.S. Patent Policy From a ‘Bad Actor’ to ‘Rational Actor’ Model (Part I of II)

Since the Supreme Court’s Alice decision in 2014, the Judiciary’s development of 101 law has caused such an upheaval, Congress may need to intervene. In a July 2018 joint position paper entitled “Congress Must Remedy Uncertainty in 35 U.S.C. §101 and Return Balance to the U.S. Patent System,” the American Bar Association’s IP Law section, the IP Owner’s Association, and the American Intellectual Property Law Association contended the “Supreme Court’s jurisprudence has injected significant ambiguity into the eligibility determination . . . .” and there is now “[u]ncertainty about what types of inventions qualify at the most basic level for patenting.” This ambiguity, however, may be a blessing in disguise. By creating demand for Congress’ intervention, we have an opportunity to change course from the patent policy that has resulted in this mess. But to turn a corner, Congress needs to first understand the shortcomings of its and the Judiciary’s fundamental assumptions that have created this situation. For more than a decade, both Congress and the Judiciary have approached patent policy from a foundational presumption: the inherent problem with our patent system stems from a bad actor.Under a single-minded bad actor presumption, the Judiciary and Congress have framed our patent policy to increase roadblocks for this bad actor, to prevent it from taking advantage of the system. But this presumption has spawned a policy that is contrary to economic principles, and it has systematically weakened and undermined the U.S. patent system. Even if Congress manages to fix 101 law, if it fails to correct its and the Judiciary’s foundational shortcomings regarding patent policy for the past decade+, we’re doomed to repeat mistakes of the past. If, on the other hand, we switch our patent policy principles to a rational actor model, we can begin to understand our patent system from a foundation rooted in economics. More importantly, we can use economic principles to improve our patent system.

No Justice for Small Company Innovators: Make Your Voice Heard on the America Invents Act, IPRs, and the CAFC’s Rule 36

My company, Chestnut Hill Sound Inc. (ChillSound), has been victimized by a U.S. patent system that for nearly a decade has been in a sorry state. Changes wrought by the America Invents Act (AIA) in 2011 and other recent developments cost my company, its investors and inventors millions of dollars. These changes have allowed a large company to reap great profits at our expense. Even more unfortunately, our story is too typical of many other inventors and small companies. Small businesses are the backbone of our economy and need to be cultivated, as they are the most dynamic source of new jobs and competitive products and technologies. There have always been reports of large corporations stealing inventions from small businesses, but it used to be possible via the courts to vindicate the patent rights of owners and obtain ultimate redress.  The AIA—sold by the “efficient infringers” lobby as a measure to protect big business from the expense and nuisance of so-called “patent trolls”—has turned into a weapon of deep-pocketed big businesses that enables them to steal with impunity inventions from small businesses and independent inventors. The AIA brought with it the Patent Trial and Appeal Board (PTAB) and Inter Partes Review (IPRs), a post-grant adversarial proceeding at the United States Patent and Trademark Office (USPTO). As has been amply discussed here on IPWatchdog, the Court of Appeals for the Federal Circuit (CAFC) recently opined that the so-called Administrative Patent Judges (APJs) were unconstitutionally appointed from the beginning. Yet these unconstitutionally appointed APJs continue to kill patents, especially when the patent owner is a small company that has sued a large company for infringement, as was the case with ChillSound.

One Inventor’s Unsolicited Congressional Testimony Following Arthrex

Since inventors are rarely allowed to participate in patent discussions in Congress, I would like to submit my testimony here. In Arthrex, the Federal Circuit in effect decided that our rights are subordinate to the government, so the government has the authority to giveth them to us or taketh them away. I would like to remind the Federal Circuit, the Supreme Court, and Congress that you are tasked with the honor, privilege and duty to defend our rights. That is the very basis on which you are employed, and you have no function other than that. Our rights preexist you, supersede you, and come from sources that are above your pay grade. They exist as a matter of our birth. You have no legitimate authority to take those rights just because it is inconvenient for the huge multinational corporations that have to now deal with the illegitimate position of owning our rights because so-called judges unconstitutionally took them from us and gave them to those huge corporations.   

The Absurdity Continues: Blackbird Cast as Latest Patent Troll

Two days ago, TechCrunch published an article touting an important victory by Cloudflare against an evil patent troll—Blackbird Technologies. In the article there is no mention of any inappropriate tactics used by Blackbird, and there is nothing to suggest that Cloudflare was not infringing the patents they were accused to have infringed. In fact, that article seems to practically admit that Cloudflare was infringing on the patents because the defense tactic used by Cloudflare was not to argue that they were not infringing, but instead to argue that the patent claims asserted were invalid. Indeed, on November 4, Cloudflare published a description of their strategy, which does not mention anything about demonstrating that they were not infringing the patents issued by the United States Patent and Trademark Office (USPTO). Instead, the strategy was to: (1) not settle; (2) make a public cry for help and seek the submission of prior art that might invalidate the patent claims they were facing; and (3) file ethics complaints against the attorneys representing Blackbird. In this case, the Blackbird patent claims were found invalid. Cheering for Cloudflare, who had no reason to know that at the time they recklessly infringed those claims, is beyond the pale and speaks volumes as to why innovators are leaving America and heading to Europe, China and elsewhere around the world.

Were the Wright Brothers Patent Trolls? One View of R Street Institute’s Capitol Hill Panel on Patents

On Tuesday, I attended a panel discussion on the National Security Implications of Patents along with my siblings, Madeline and Gideon Malone, and we were informed that inventors like the Wright brothers pose a threat to innovation. We were joined by approximately 50 attendees at the Capitol event moderated by Charles Duan from R Street Institute, along with panelists Abby Rives from Engine, Daniel Takash from Niskanen Center, and Ian Wallace from New America. They argued that patents harm innovation, and government subsidies are a better alternative to incentivize innovation. In order for R Street (a free-market think tank) to justify these blatantly anti-free-market claims, they focused on the problems with “bad patents” and how patent monopolies prevent competition. To top it all off, their example of a “bad patent” was the one granted to the Wright brothers, which the panelists felt unreasonably excluded their competitors from making improved versions of their airplane.

Chrimar v. ALE: Federal Circuit Approves PTAB Nullification of Previously Affirmed Jury Verdict

Yesterday, the Federal Circuit once again breached a fundamental boundary of our American system of law. This particular transgression has occurred only a handful of times, but each is more ominous than the last. If this is allowed to stand, we can no longer be considered a democratic republic, but will have become a banana republic. What is rapidly becoming routine to the patent litigation industry will create shockwaves throughout the other 12 circuit courts, upend the rule of law, and damage our nation. In Chrimar Systems, Inc. v. Ale USA, Inc. FKA Alcatel-Lucent Enterprise USA, Inc. (Fed. Circ. Case No. 18-2420), the Federal Circuit allowed the Patent Trial and Appeal Board (PTAB) to overrule an Article III court and jury. That is, the Executive Branch of government directly and unequivocally has overruled the Judicial Branch, including a jury.