NPEs? Prepare To Have Your Mind Tableau’d

I’m on the email update list for npedata.com and they recently came out with stats for 2012 patent litigation.  My first thought was “Yay!  Now I have something to do on Saturday night!” because normally my dance card is all filled up with The Nanny reruns.  My second thought was “.csv files?  Seriously?”

It’s not that downloadable .csv files aren’t cool, they’re just so plain.  Normal.  Uninteractive.

Enter?  Tableau.  Data visualization software that makes it super easy to create dashboards that not only show you something in a pretty way (maps! bars! scatter plots!) but that let you interact with your data.  You can touch it and feel and hug it and kiss it and call it George.  If you want to, I mean.  Not that I do that during commercial breaks of The Nanny.  As far as you know.

The NPE Data has been put into a Tableau workbook for your downloading and interactive pleasure here, at my number one Alter Ego, Interworks.

NPE Data Grid

 

This is the first of many visualizations to come, as there are many different kinds of  NPE litigation-related data and patent data and honestly?

They could all use some tarting up.

JustSayin_small_New

IPTT

Oh, Intellectual Asset Management Magazine, You Silly Thing, You!

You slay me, I AM.  A while back you published this article about a study that came out, touting the damage that patent trolls do to start ups.  OK, not necessarily start ups, but “entrepreneurial activity”.  And not necessarily “patent trolls”, but NPEs/PAEs/Euphamisms-of-the-Month.  But whatever, we all know what we’re talking about here and if you don’t, I have no idea what would land you on this blog other than a search for Big Derrieres.  And if that’s the case, well then let me introduce you to Mr. Charles Barkley.

Disclaimer: Mr. Barkley is not a patent troll and even if he was I wouldn't call him one because dude is huge.

Note: Mr. Barkley is not a patent troll and even if he was I wouldn’t call him one because dude is huge, and I value my life.

 

Back to the article, Mr. Joff Wild says the following:

I am not going to argue with the idea that VCs would have ploughed more money into certain companies if they had not been hit with lawsuits by PAEs. That seems pretty self-evident to me – VCs, like any other kind of investor, dislike uncertainty.

So we’re on the same page then, right?

Only no.  No we are not, because he goes on to say:

However, what I did not see in the study is any evaluation of the merits of the cases brought by the PAEs Tucker writes about. Instead, I saw a few anecdotes about what seem like egregious cases, but nothing that demonstrated these were typical. It seems inarguable to me that PAEs willing to spend millions of dollars taking their cases to court when they cannot get someone to take a licence believe that their patents are being infringed and that they have a good chance of convincing the court to agree. Thus, it could just be that Tucker has spent her time and the CCIA’s money discovering that VCs are unlikely to sink money into companies whose products infringe patents.   I could be wrong, of course; but we don’t know because Tucker does not look into it.

You’re forgetting something:  With patent trolls, the merits of the case don’t matter.  That’s sort of the whole point of all the railing against them.  Whether the patent is invalid or infringement occurred matters not to the entrepreneur looking for money:  once you’re sued by a troll you have to respond, and that eats time and resources that would have been better spent on things like growing a business and hiring employees.  Tucker didn’t spend her time deconstructing the cases?  Probably because she likes to spend it doing something worthwhile.  Like making the point that patents can be used as a weapon to slow down start ups and innovation.

As for the patents themselves, Mr. Wild notes:

Furthermore, the patents that PAEs seek to license and are sometimes forced to litigate do not just appear out of the ether.

No they don’t.  They appear out of the USPTO, who has clear issues with their patent examiners.  See my three-parter here:  Interview With a Patent Examiner Series.  Sorry it sorts them Part III first.  Dunno what’s up with WordPress on that…

I do agree with Mr. Wild on one thing though:

All in all, therefore, this study does not come close to making a case for legislative patent reform.

Right.  Well, “right” in the sense that I don’t think patent reform is going to solve the patent troll problem.  Certainly things are ripe for updating in the grand ol’ US of A patent system, like how examiners are vetted and hired and what skill sets they have and by that I mean you need to hire lawyers at the USPTO so they can fight off the lawyers that the companies hire to get their client’s stuff patented.  I think we can agree on this.

Finally, I want to address this comment:

It might not be ideal, but it is a whole lot better than passing sledgehammer laws based on anecdotes and flawed research.

I’m aware that the plural of anecdote is not “data”.  I’m also aware that all research is inherently flawed, if it’s done by humans, that is.  We all bring a sense of bias to our research, I’m not sure that will ever not be the case.  That doesn’t mean you throw it out and decide unilaterally not to make decisions based on it.  Again,  I agree that “sledgehammer laws” are stupid and ineffective but articles like Catherine Tucker’s highlight that the problem does in fact exist, even if it doesn’t delve into every level of detail that I AM would like to see.

In closing, though I like to make great sport of people who do not completely agree with me, I do want to say thank you for this:

None of this is to say that there are not problems and issues to address with regards to abusive patent litigation in the US, clearly there are.

There are real problems and real issues with patent litigation today.

I happen to think Ms. Tucker’s article does a great job of highlighting a specific one, even if you and Barry don’t agree with me.

JustSayin_small

IPTT

{Sir Charles image found here.}

Life360 Founder Uses Foul Language, Still Gets Sued

You know what the biggest problem with patent trolls is?  Oh sure, it’s that they cost companies buckets of money and stifle innovation by shutting down start ups.  Those are bad, of course, but the real tragedy here is that they make people like Chris Hulls call someone a “piece of shit” and then look stupid in the process.

Side note:  I was always taught as a child that if you had to use foul language, you were stupid because smart people are wordsmiths and can come up with a much better way to say whatever it is that a good, solid “FUCK YOU!” was meant to convey.  That, and I got a mouth full of Ivory soap for calling my older brother a jackass once (which his 11-yr-old self totally was) so yeah, I don’t cuss very often.

The story goes that Life360 has been patent trolled to death, they’re mad as hell, and they aren’t going to take it anymore.  Tell me that’s the wrong attitude?  You can’t.  But the problem here is that AGIS doesn’t fit pretty much anyone’s definition of a “patent troll”.

To start with, they have 11 patents, with more pending.  Your typical troll will have one, perhaps as many as two, and both are so old they fart dust.  These guys?  Not so much.  Additionally, they actually make a product called LifeRing that services our military and first responders.  These aren’t the droids you’re looking for, Chris.

notThedroidsyourelookingfor

 

Which is the problem with trolls:  if they come at you often enough, you’re going to get fed up and react poorly to anyone’s attempt at a licensing deal.  It’s a sad by-product of the culture of trolling.  Life360 has been hit by four or five trolls so not exactly a hoard, but when you’re the start up, as we’ve talked about, every hit hurts.  And Hulls wasn’t in the mood to put up with anymore shenanigans and ballyhoo, so he blew up on the last guy to come after him.

The Pando Daily article quotes him as follows:

“I’m getting a huge groundswell of support for shunning standard legal advice, which feels great.  My plan is to take this fight the duration, invalidate the patent, and make sure they can’t do this to anyone else.  Who knows.. maybe it will make others take a stand?  As a broader idea, maybe this type of action needs to come from Series B/C/D companies, as smaller ones don’t have the cash for a fight, and bigger ones are beholden to their own legal teams.  We are right in the sweet spot where I can still make these brash decisions and apologize for the mess later.”

Listen dude, I’m all about the shunning.  I get that.  And to shun a lawyer?  DOUBLE POINTS.  But I don’t own a company and people aren’t depending on me for their livelihood and you so should have listen to your legal counsel because I think you picked the wrong guy to make an example of.  The AGIS request for licensing discussions is one you should have accepted.  You’d have paid a fair price, far less than what it will cost you to “take this fight the duration”, as it doesn’t seem these guys are out for blood, just recognition that they got there first.   Further, it doesn’t seem like you’ll get this thing invalidated (said she who gave it a cursory read and is not a patent attorney).

hulls-224x300

Nice guys don’t cuss, just ask Jerry Seinfeld.

 

I do want to say though, that I totally {heart} you for the whole “we can clean up the mess later because we’re funded, beotchez!”  I can only imagine how good it felt to say that.

My point though is that it’s sad that this is what companies have come to:  either being bankrupted trying to fight the real trolls or coming out swinging against an enemy that isn’t really there.

As the awesome folks at Above the Law put it in their write-up:

A response like this is what happens when you’ve been patent-trolled one time too many.

Exactly.

JustSayin_small_New

IPTT

{Obi-wan image awesomeness found here. Picture of Chris Hulls found on Life360’s website.}

 

 

“Then I Looked At Twitter And There Was A Tweet Saying It Was Dead”

And that’s how patent reform ended last week:

On Wednesday morning, tech sector lobbyists thought they were in the final stages of pushing through a hard-fought compromise on patent reform. “Tuesday night it was moving forward, Wednesday morning it was moving forward,” said Julie Samuels, director of Engine, a group that lobbies for startups. “Then I looked at Twitter and there was a tweet saying it was dead. What the hell?”

That quote from Julie Samuels in Joe’s article pretty much sums it all up, no?  Well, as it happens, probably no.

Tech sector lobbyist should know by now that it’s never over until the fat lady sings, and she hadn’t even opened her mouth yet on this one.  Not only has there been push-back on patent reform legislation from inventors and patent trolls, it seems the real bugaboo was the pharmaceutical companies and (*gasp*, can it be??) trial lawyers.  That certainly came out of left field…or did it?  < — That links to a post about how  the tech sector as a target will eventually burn out and the trolls will start going after oil and gas and pharmaceutical companies, in case you don’t want to make the jump.

fat-lady-sings

 

Here’s where it gets interesting for me personally, referencing this quote:

Leahy’s public statement saying that the two sides “couldn’t compromise” isn’t true. There was a compromise draft, hashed out mainly by Senators Chuck Schumer (D-NY) and John Cornyn (R-TX), that was expected to move forward and be marked up by the committee.

So Chuck Schumer, he of the bill that was never a good idea, and my hometown boy John Cornyn were working behind the scenes.  Let’s fill in a gap here…

Friday, May 9th, I was in an airport in Philadelphia awaiting my flight  back to my lovely family of teenagers whose angst and disgust with life in general I didn’t miss at all was longing to rejoin, when I received an email asking if I knew anyone in the Houston area who’d been hit by a patent troll.  I’m pretty darn organized if I do say so myself, but  didn’t have my spreadsheet handy so I agreed to look up some companies and reply when I had more info.   It seems that Mr .Cornyn was organizing a local press event and wanted someone who’d been a victim of a patent troll on hand to make it personal.  Always a good plan to have people tell their story in their own words.

Only before I could research who might be a good front for the soiree, I received a second email saying “Oopsies, never mind.  Not needed now.”

I’m no conspiracy theorist because all that over-thinking eats into my social life,  but I do wonder if maybe the signs of a crack in the process weren’t already showing?  Here’s my thinking…you set up press events to hail good news, to indicate that you’ve won something.  It takes a while to set up a press event.  You have to find a venue, line up speakers, alert the press, buy a new suit for yourself, make sure who ever you’ve lined up to talk has time to clean up for the cameras, all of that.  If you think a bill is going to come to a vote and pass towards the end of May and you want to trot out reps from a company that it will directly affect, then you better start getting that house in order.  Say, around the 9th of May.

Did John Cornyn have a whiff of Harry Reid’s move back then?  Was there some other conflict in his schedule that made a public forum undesirable?  Not sure, but the timing does strike me as interesting.

There are those who think that patent trolling was born out of tort reform during the Age of Asbestos, and this quote from the Ars Technical article makes reference to that:

Many law firms working in traditional plaintiffs’ areas like personal injury or securities class actions have added patent work as other sources have dried up. In Texas, there has been talk about how tort reform in that state had a hand in creating the patent litigation hotspots like the Eastern District of Texas, as lawyers went “from PI to IP.”

The story goes like this:  trial lawyers were building entire practices out of suing companies who’d used asbestos in their building materials, even before it was shown to be a carcinogen, by trolling for victims and exacting huge settlements, most of which they themselves retained because that’s how they roll.  When tort reform became a reality and punitive damages were capped, they had to go somewhere else.  Patent infringement became their next big stick.

And this is why I think legislation is the wrong way to handle the patent troll problem.  Why?  Because people who want to game the system will always find a way.  If you want to stop them, you have to play the game differently.  Or, in the case of our Patent Troll Fighter Heroes, refuse to play at all.  Running to Uncle Sam and those on Capital Hill won’t help you, and if it does it will come at a too high a lobbying price and won’t last long anyway.

This first great attempt at patent troll legislation is dead for now.  Who know when and in what form it will resurface, but I hope that the good guys have learned a good lesson out of the process.

I’ll let them decide what that is.

JustSayin_small_New

IPTT

{Opera singer image found here.}

 

 

Dear Patent Reform Haters…

If the supposed mantra from the anti-patent troll camp is that “anyone who sues for patent infringement is a troll”, then the view from the other side must be “all patent reform will drive inventors into the ground and kill us all and OMG the sky is falling!!!”  That sentence is totally worthy of three exclamation points.

Why do I over-exaggerate?   Because of articles like this by Louis Foreman from The Hill.  Oh, brother.  They are highly critical of the troll haters and I think they even said that there’s no such thing as a troll, unlike leprechauns which are of course very real and probably living in my closet as I type.  The article begins with this gem, wherein they take exception with the very term “troll”:

First, there’s the name—no one wants to be associated with something that sounds like the evil cousin of a leprechaun.

leprechaun_final_a_by_giovanikososki-d5v0q46

Zoinks! Maybe they *are* cousins?

 

Opening with a funny?  Who do you people think you are, me?  Anyway, Louis moves on to say:

For one thing, the issue of so-called patent trolls isn’t as all-encompassing as one might believe to hear the talk from Congress (not to mention the barrage of advertisements addressing the issue).  In fact, an overwhelming majority of patent infringement lawsuits from 2007-2011 were brought by operating companies.

‘So-called’ patent trolls?  Dear Innovation Alliance and all of you who retweeted the link to this article, please let me introduce you to eDekka. Yeah, I’d call them trolls and you should too if you want to be taken seriously.  From the Matt Levy article at Patent Progress:

The most prolific filer was a patent troll called eDekka, which filed 87 separate patent infringement suits. In this latest flood of suits, eDekka sued companies like the NFL, Etsy, FTD.com, GameFly, and 1–800-Flowers. (eDekka had previously sued another 70 or so companies, including Apple, Lowe’s, Walgreens, and JCPenney.)

Eighty-seven separate patent infringement suits and these guys aren’t a troll?  Look y’all, I’m on record many many times stating that I don’t think this is a problem that major federal legislation will resolve, except where it relates to lawsuits/demand letters and the things that the trolls should be required to put in.  And I don’t even think it should go too far.  But requiring that a plaintiff explain at least where infringement is alleged to occur, on what patent and in what product, is not too much to ask.  Why?  Because mounting a defense costs money, and much more so if you don’t know what you’re defending yourself against.  It is not unreasonable to expect that if someone’s suing you, you should be able to decipher why.

In other words, just because eDekka is allowed to file a uselessly vague complaint, companies like B & H are going to have to waste tens of thousands of dollars on these lawsuits.

This is the problem with trolls:  once they file a lawsuit, you’ve already lost.  Even if you win, it will come at too high a price for some companies (mostly startups) to bear.  It’s insidious and it’s mean and abberation of what patent law was created for.

Heightened pleading requirements would increase eDekka’s costs substantially, because it couldn’t simply reuse one complaint 87 times.

Why would anyone complain about this?  I keep thinking to myself “Self?  If I were so convinced that someone had infringed on my patent I would be all up in that business and list out every single instance of infringement and find a way to prove it was willful if I could (and snag those treble damages).”  Why don’t the trolls like to explain what they’re suing over?  Ooh ooh, I know this one!  THEIR CLAIMS ARE BOGUS.

Patent reform haters say

We simply want to be part of the discussion and make sure that we are not the collateral damage from a rushed and not-so-well-thought-out legislative process.

If that’s the case, then quit pretending there isn’t really a troll problem.  I’m constructing my Q&A with an inventor right now, it’s not like you guys don’t have a forum.  Just be smart about how you use it, and not say things like ‘so-called’ trolls.

Some companies are ‘so-called’ because they so are.

JustSayin_small_New

IPTT

 {Creepy trollechaun image found here.}

I’ve Been Cheating On You, Patent Troll Haters

Maybe that’s a slight over-exaggeration.  Which, what is that anyway?  One can exaggerate, so does “over” exaggerate mean you’re exaggerating your exaggeration?  See?  This is why you shouldn’t give people like me a blog.

My point is, I’ve been talking to the “other side” for a while now, sort of clandestinely behind the scenes.  Which is what clandestine means, for those of you who went to school here.  I’ve spoken to a few inventors who’ve been screaming VERY LOUDLY IN LARGE SHOUTY CAPITALS AND NOW YOU KNOW WHAT KIND OF BOOKS I READ about how patent reform will do more to hurt them than it will to tame the patent troll problem which, by the way, they claim doesn’t exist.  How’s that for fuzzy logic?

Don’t think for one minute that I’m going soft on trolls because that will never happen.  But I don’t think we can argue that the landscape hasn’t changed over the course of the last, say, three years.  And by “changed” let me just enumerate a few goings on in the patent litigation realm:

  1. The majors are getting smacked down with increasing frequency.  There are a few very well known trolls who’ve run up against some litigious resistance.  IV just lost a  big round in court.  MPHJ, despite suing the FTC (stifles laughter), has lost in NY regarding their demand letter tactics.
  2. States, even states like Kentucky (you’re welcome, Drew) are coming up with fairly decent ways to curtail the sending of demand letters.  See NY example in #1.
  3. IP Nav is trying to go legit by helping David Ditto fend off Goliath 1-800-Contacts.  One reason people try to switch sides is that they think they’ve done something wrong, and been on the wrong side and now they’ve seen the light and have switched. Other times, they just see an opportunity to make themselves look good in the press and so they take it.  I’m not sure which this is with IP Nav, but I get a feeling that Erich is tired of being the thug and wants a little love.  Either way, it was a telling move.
  4. The issue has gotten attention at the Federal level, which means that whether or not real action takes place (my opinion: it won’t come from legislation if it does) there’s much more visibility to the tactics of the bad players in the industry.  Just like roaches when you turn on the light in the summer camp cabin, patent trolls are scrambling to find a place to hide as a result of the exposure.

Back to what I’ve been doing a lot lately, which is talking to inventors. I like to think of myself as anti patent troll and I am.  I do not now and never have liked the underhanded bully tactics they use in their demand letters and I don’t like how they co-opt old, worthless patents and try to dummy up some value out of them, especially when said patents should never have been issued in the first place.

But as the abbreviated list above points out, things are changing.  So is it time to focus on other issues in the patent space?  Like accessibility to ideas if you’re an operating company and accessibility to buyers if you’re an inventor/patent holder?  Maybe, I dunno, a Match.com for IP?

As I wrote in the Backgrounder, inventors face a legitimate problem of how to get exposure to their ideas (nee’, patents) at the right levels.  They’re in a tough spot sometimes, and I see how they would turn to the nasty folks to get help.  Likewise, you could say that larger companies, operating companies, may be more than willing to license technology that they need but how do they know it’s out there?  They can commission a Prior Art search, and I know that many do because Article One Partners has a good thing going.  It’s a great start and a great market-based solution to the problem that gets us part of the way there.

What I hear when I talk to inventors is that they just want people to listen.  They want a forum for their ideas. They’re sick and tired of companies co-opting their stuff and shutting down negotiations and all but forcing them to go the litigation/PAE/troll route to get any kind of relief.  Inventors are a special breed of individual.  They live and breath this stuff and just want what’s coming to them.

BackToTheFuture

 

I am scheduling an interview with my favorite inventor (assuming he agrees, he doesn’t know yet because I haven’t asked him because I’m chicken I’ve been working a lot) and plan to address his take on the troll issue out in the light of day, instead of just whispering behind the scenes in email.  My goal here on IP Troll Tracker has always been to track the shenanigans and ballyhoo of the trolls in an effort to expose them, but as I say on the intro page at That Patent Tool, I also want to be a part of the solution.

Education about the “other side” of the troll issue, the inventors, is part of that for me.

JustSayin_small_New

IPTT

{Awesome 80’s movie image found here.}

 

Idaho Comes Out Of Left Field, Takes Its Turn At Bat Against Trolls

Idawho?  What?  Man, you gotta be awful quick around here not to miss something major.  The State of Idaho, under the governance of one Butch Otter has stepped up and passed Demand Letter legislation to attempt to thwart patent trolls.  Here’s a link to the actual bill that passed, and here’s a picture of Idaho:

Idaho, land of...waterfalls??

I’m not even kidding you, this is Idaho. I want to move there yesterday.

 

So it all goes swimmingly until we hit section 48-1703, which is of course the heart(land) of the matter.  Is Idaho considered the heartland, or is that parenthetical assuming too much?  Never mind.  I think a), b), and c) are very nice and reasonable and for Pete’s sake, trolls, if you can’t at least divulge that then you’re the pond scum we think you are.  But at section d), the ball seems to roll a little left of the foul line:

The demand letter demands payment of a license fee or response within an unreasonably short period of time.

You know what I can’t stand?  Imprecision.  Unprecise-ness.  When people don’t give a specific timeline.  An “unreasonably short period of time” is relative.  If I’m starving, a 90-120 minute wait is an eternity.  If I’m waiting on an appointment for a root canal, 90-120 minutes is coming up on me WAY too soon.  Why not scope it out fully?

The person offers to license the patent for an amount that is not reasonably based on the value of a license to the patent.

This has been argued before, I can’t remember where but I will hunt it down and find it.   Ah yes, here it is:  the idea was that you can’t charge more for a license to the patent than the patent itself costs.  Huh?  Of course you can.  It’s called “market value”.  I don’t think you can legislate patent market value,  besides which you used that non-specific “reasonable” word again.  If trolls were reasonable, we wouldn’t be in this position, now would we?

And really, why spell it out at all if this is the case:

Any other factor the court finds relevant.

So essentially, if we say you are trolling, you’re trolling.  Which you would think, given the level of…frustration?  Anger? Incredulity?  that I have had over the years for patent trolls that this would be a good thing to me.

But there’s this small voice in the back of my head, the part that really likes the idea of free speech and market-driven solutions, that says we ought to have stopped with just this part:

(a) The person sends a demand letter to a target without first conducting an analysis comparing the claims in the patent to the target’s products, services or technology.

(b) The demand letter does not contain the following information:

(i) The patent number;

(ii) The name and address of the patent owner or owners and assignee or assignees, if any; and

(iii) The factual allegations concerning the specific areas in which the target’s products, services and technology infringe the patent or are covered by the claims in the patent.

(c) The demand letter does not identify specific areas in which the product , services and technology are covered by the claims in the patent.

Anyone demanding anything to do with patent infringement ought to logically and transparently produce that information.  That’s reasonable.  So while I commend Idaho for being Idaho and being so pretty and being about so much more than just potatoes like we’ve all been taught since the third grade, I do think this oversteps a little bit.

I like the trend though, the trend of getting involved in the issue and trying to go at it on the state level (v. monolithic Federal reform).  Just to beat the dead horse again, I don’t like the idea of legislation to solve this problem, but when it’s smart and lays out expectations like sections a), b) and c) in the Idaho law do then I’m surprisingly for it.

And to that end, well (partially) done, Idaho!

JustSayin_small_New

IPTT

{Awesome Idaho image found here.}