Backin’ It Up, Backin’ It Up, Backin’ That Big Derriere Up!

Many moons ago when Phi Slamma Jamma was big and then they all moved to the NBA I watched a lot of basketball.  The Houston Rockets in the Olajuwan/Sampson era were something. While watching a game against the Phoenix Suns, the announcer said one of the funniest things I have ever heard.  Charles Barkley is known for being slightly more {ahem} rotundified than your average basketball player, and he was moving backwards into the lane to take a shot.  Hilarity ensued as the announcer said, and I’m not even kidding:

…and here comes Barkley with the ball…backin’ it up, backin’ it up, backin’ that big derrier up!

I’m in tears over my Special K this morning, laughing riotously all these years later.  I mean, imagine the nerve it took to say that to a man who could and, on the right day and in the right mood, absolutely would squash you like a bug!  Sportscasters.  You gotta love ’em.

What all this has to do with patents is something I can’t get out of my head since reading an IP Watchdog post written by Andy Gibbs re: lawyers and the patent process.  He writes about how the patent prosecution process will change now that First To File is in effect.  Salient point #1:

However, the elephant in the room is the client’s implicit desire not for a “patent”, but for a mechanism to deliver superior market position, protect competitive market share, and to create increased shareholder value. They believe the “patent” is their ticket.

Exactly.  This is what the Fuzzibunz lady had…a patent, when what she really needed was a business degree and some guidance from someone who knew what the hell they were doing in the cloth diaper market.  She admitted she had bad lawyers, and that’s the point Gibbs is making:

Just as most of society wrongly considers doctors as “gods”, many patent clients wrongly think that patent attorneys will help them achieve these business objectives simply by filing a patent.

He’s right, that’s exactly what people are thinking.

I’m a big proponent of fighting the patent troll battle using the lowest common denominator:  the patent itself.  That’s why what Article One Partners does is sheer genius.  But there’s another lowest life form common denominator that Mr. Gibbs brings to light: the patent attorney.

We have to get the USPTO to start issuing better patents, and we have to start whittling down the spate of awful ones already out there.  But what about backing the ol’ derriere up even further and starting with the attorneys who file these stupid patents to begin with, just because their clients tell them to?   Here’s the key:

IP strategy, or in the current context, “Patent Strategy” is nevertheless foundational to mutually beneficial patent attorney / inventor client engagements.

Companies and inventors need to distinguish between the idea of a “patent strategy” and an “IP strategy”.  I’m not fully convinced 1/2 the ideas out there even need patenting.  If you get the right attorney, one with an MBA and some general business smarts, s/he can advise you that instead of wasting years getting that patent issued, you could just go on ahead with your idea by actually making something with it and, just for kicks, selling it.  For a profit.  To make money.  Isn’t that what business is about, or do I need to return that BBA to UT?

“But IPTT”, I hear you cry, “what if someone (huff, huff) STEALS MY IDEA??”   Well, I guess I’d pull out that old phrase that “imitation is the sincerest form of flattery”.  In so many markets (pharmaceuticals excluded due to the vast amounts of R&D required), the answer to that question is “so what?”  Let ’em.  While the rest of the world is out there trying to reverse-engineer your product and get their own version out there, you could be miles ahead. Market share beats margin nearly every single time.

If someone builds a better mousetrap using your idea, then guess what?  You’ve just been pwned.  That’s how the game of business is played, only nowadays everyone is scrambling to get their patent before they’ve even flushed out the business plan.  Lawyers are at the very start that process and as such should be asking more questions of their IP clients…things like what’s your product?  Where’s your market research?  Where’s your business plan?  Do you need an attorney to file your incorporation papers?  Do they even ask any of that?  No.  They write up the patent and ship it off to Washington and then send the bill to the client.  Silly.  <— (The lawyer I mean.  And the client, who just thinks he needs a patent.  Or  both.  Both are silly, really. Never mind, there I go again.)

Backing up the train just one more step to the attorney, or IP Strategist, that you choose is a good way to stay out of the patent fray altogether.  You may still end up patenting something and that’s fine.  Just be sure you really need one and that you have more than just that piece of paper as a business plan, that’s all.

And that, folks, is how you tie Charles Barkley and his big derriere to patents.

Just sayin’,

IPTT

I’m Bringing “Fark-y” Back (With Apologies to Justin Timberlake)

So it’s not really me so much as it is Bloomberg bringing them back.  Whatever.

Remember this post re: Fark Farks A Troll?  Have you seen Drew Curtis’s Bloomberg interview yet, because it’s totally worth watching.  If you don’t have time, here’s my summary:

Q:  So how did you take them out?

A: {loosely translated}

I used the Golden Rule:  Do Unto Others As They Have Done Unto You.  I took the troll out by being just as obnoxious and time-consuming to them as they were to me.

Exactly.  Do not let them win, ever.  There’s no crying in baseball and there’s no settling with trolls.

Q:  How stressful was it dealing with these clowns?

A: {translated almost exactly}

It’s about as stressful as if you woke up in your living room to find the police are discussing with the robbers about how much of your stuff they’re going to take.

So the robbers are the trolls in this scenario, but who are the police?  At times, it feels as though the entire court system is, in that we don’t (yet) have enough judges who’re going to toss these craptastic suits out and we don’t have a USPTO that’s issuing decent patents.  This is such a great analogy and I wish I had cartoon-drawing skills to put a visual to it.

Q:  Did you ever find out who was behind it?

A: {loosely translated}

Nope.  These  guys hid, like the cowards that they are, behind shell company after shell company because they’re too embarrassed to have the light of day shined on them.

Here’s a tip:  if you can’t do operate out in the open, then something’s wrong with your business model.

Just sayin’,

IPTT

Big Data v. Intuition: And The Tie Goes To…

Is there a lot of data coming out about patent troll litigation these days or what?  Entire companies are built around the collection, analysis, and packaging of NPE litigation data so there’s clearly a market for it.

Reading this article from Wired about Big Data and what it does to the concept of a SME (which, when pronounced “smee”, is almost as much fun to say as “nastygram”), I’m struck by the balance of how much of the litigation data can be taken at face value v. how much of what we think about these guys is just pure personality driven.  For example, I don’t care much for Nathan Myhrvold.  The main reason is that he refuses to come out and say what he’s doing, even though we all know.  You just want to walk up to him and say “We can see you, Karl.  C’mon man, you’re the King of the Jungle!  You’re better than this…”  Besides which, he looks just like Daniel Hardman, the antagonist in USA Network’s brilliant legal show Suits.  Strike two, if you’re counting.

The Big Data op-ed was online, but in the current print edition of Wired, there’s an article on page 24 entitled “What If Your Gut is (Gasp) Wrong?”  I thought this was a particularly salient point, though I don’t necessarily find it applicable:

There’s so much information that it’s easy to build a case for what we wanted to do all along.

In the troll-o-sphere, I don’t think we can say that the data doesn’t point to the conclusion that there are companies out there extorting money for patents, from big and little guys alike.  So it’s not like we’ve come to that conclusion and genned up data that matched it.  But I think Colleen Chien is right, and it’s a point I’ve made as well, that litigation data does not, as her point #10 indicates, tell the whole story.  The award for the sentence with the most commas goes to:  IPTT.

I agree that Big Data can prove right over gut feelings.  Though I haven’t seen it because it is not likely to make me laugh and does not star Harrison Ford, my two criteria for any movie I’m going to spend two hours of my life on, Moneyball evidently makes this point re:  The Oakland A’s in 2002, who used pure statistics to drive player decisions and won the pennant.  Having raw data and numbers in front of your face does lead to more informed decision-making.  Point made.

But what if you can have both?  What if you can take the raw numbers and then match that with gut feelings that have been data-fied?  (When there’s not a word for what I want to say, I just make one up. That’s how I roll.)  I think you can take the raw data about litigations and you can take raw data about what happens prior to litigation and you can take softer, more gut-level data about the personalities running the trolls (and the legal teams defending them) and you can paint a very nice picture of what needs to be done to solve the problem.  By codifying  relationships in the industry you can put those gut reactions into a form that can be queried back out.

What I’m saying is that I don’t think we’re getting all the data points we need.  Start collecting the points you’re not catching now and put the screws to the data and see if you can come up with a different set of solutions to fight these guys than we have now.

I’ll end with one of my favorite quotes, and why I think Big Data v. Intuition ends in a tie:

You can lead a man to knowledge, but you can’t make him think.

Getting the data you need is only 1/2 the battle.  What you do with it is the other 1/2.

Just sayin’,

IPTT

Hold the Phone, Someone Put Out Bad Numbers?

It was bound to happen, and it finally did.  Someone is disputing the claim that patent trolls cost companies $29 Billion in damages.  I’ve used the claim myself so that makes me part of the spread of bad information.  I can see The Internets shaking it’s collective finger at me now, using it’s best “for shaaaaame!” voice. Adam Mossoff has done a pretty good job of ripping gigantic holes in the numerical claim, the people who helped create the number, their methodological failures, and, just to beat the dead horse a little harder, the SHIELD act.  It’s like he dropped a daisy cutter bomb on the whole party.  Ouch. Edit, 12:15 PM CDT:  Adam pointed out that the study of the numbers, linked here, was done by David Schwartz and Jay Kesan.  The article to which I linked is his analysis of it, and I’m glad to have the opportunity to add the link in to their original work.  Also, Adam?  I can one-up you on the geek-o-meter by saying that not only are trolls a hot-button issue now, some of us actually read this stuff for fun.  True story.  You may send my “Geek Goddess of All Time T-Shirt” to me at  505 E Travis St, Marshall, TX 75670.  (Kidding, that’s a Rick-Roll.) Totally with him on the SHIELD act, as we all know.  My reasons differ from his, but whatever, we’re on the same side of that particular battlefield. To the quotes:

The entire U.S. court system is an inefficient cost imposed on everyone who uses it.  Really?  That’s an assumption that reduces itself to absurdity—it’s a self-imposed reductio ad absurdum!

{Clutches pearls and looks around nervously.} ZOMG, did he just use a Harry Potter spell on the Internets?  My Latin is rusty but I think what he means is that we’re all going to get dizzy again trying to follow the logic that the people who drew the $29 Billion conclusion have a vested interest in the number being as high as it is.  Point: Mossoff. Next:

There are several reasons why the extremely broad definition of “NPE” or “patent troll” in the study is unusual even compared to uses of this term in other commentary or studies. First, and most absurdly, this definition, by necessity, includes every universityin the world that sues someone for infringing one of its patents, as universities don’t manufacture goods.  Second, it includes every individual and start-up company who plans to manufacture a patented invention, but is forced to sue an infringer-competitor who thwarted these business plans by its infringing sales in the marketplace.

To the first point in this quote, I’m baffled.  Do we not know the names of the Universities in the US, and can we not exclude them from the study?  I’m not going to do it because, well, it would just be showing off but my guess is that in three clicks or less someone could generate a list that would pretty much handle 90% of the institutions you’d want to exclude from a study like this.  You take this list, match it to the data you have, do a really delete quick query and voila!  They’re disappeared.  I’d love to know the logic behind not excluding them, if that’s in fact what happened. To his second point though, that’s a whole lot harder to quantify.  How do you really know what a company’s intentions are?  And further, what if those intentions change?  A company can, for all the world, “plan to manufacture” all sorts of things that they never get around to for reasons that are anywhere on the scale from Completely Troll-ish to Not At All Trollish.  So excluding companies like that may actually hurt you, if you can even get the names of them at all. Finally,

There are many other methodological flaws in the $29 billion cost study, such as its explicit assumption that patent litigation costs are “too high” without providing any comparative baseline for this conclusion.  What are the costs in other areas of litigation, such as standard commercial litigation, tort claims, or disputes over complex regulations?  We are not told.  What are the historical costs of patent litigation?  We are not told.  On what basis then can we conclude that $29 billion is “too high” or even “too low”?  We’re supposed to be impressed by a number that exists in a vacuum and that lacks any empirical context by which to evaluate it.

Some people, and I may or may not be one of them, contend that any litigation in this particular arena is bad.  That’s an over-simplification and one I freely admit, but I can see why the study labels costs “too high” regardless of the actual number. The question I have though, is does it matter?  Does it matter how much money the trolls have cost companies?  Is there even really a fair and methodologically unquestionable way to get at that information?  Pre-litigation settlement terms and even post-litigation terms are not always discoverable so really, any number that people throw out is going to be questioned, and rightly so. But just because this particular number can be proven to be falsely contrived doesn’t make the whole conclusion that patent trolls are a nuisance without merit.  They clearly are, even if, and especially if, all they cost companies is time.  Time to battle these guys, time to respond to nastygrams, time to consult with counsel, all of those things take resources away from a company’s core business.  Time is the one thing you cannot ever get back.  You can always earn more money…how many times has The Donald gone bankrupt?  And where is he now, besides firing people on Celebrity Apprentice (which, by the way Big D, Bret Michaels totally did not deserve that)?  That’s right: not bankrupt. My point, and I do have one, is that yeah we want all the numbers to be factually correct and all the research to be on the up and up with no bias and no flaws but it doesn’t really matter.  It does not take a genius or a flawless study to tell us what we already know:  trolls are bad for American business.  Full stop. Just sayin’, IPTT

Psssst…Intellectual Ventures? Your Shell Companies Are Showing

I see Paris, I see France, I see IV’s underpants.

I wish I had known about the crowdfunding effort going on to find out who all of IV’s shell companies are.  It’s not like the $20 I could have thrown into the coffers would have helped tremendously, but it would have felt good to at least participate.  That’s what I get for not reading Techdirt that day.

The title is a little misleading here because to anyone who follows the industry, we of course know that IV is suing people using shell companies right, left, and center over their hoard of patents.  Say…wouldn’t that be a fun send-up of the show “Hoarders: Buried Alive”?  Go have a look-see around the IV offices and for each shell company lawsuit you find, it can be represented by one mouse dropping.  Can you just picture the patent police coming in with little yellow gloves and HAZMAT suits, picking through the place?  I would totally watch that episode.

From the folks who the Techdirt article quoted, here’s this gem of import, emphasis mine:

Like all of the USPTO’s on-line systems, the assignment database is a technological abomination–sadly ironic for the agency that effectively manages the nation’s technology rights. (The USPTO does deserve credit for making raw XML data available through Google, which is where our project began.) It must be noted that Intellectual Ventures would have had a much harder time lurking in the shadows all these years if government information technology systems, such as the USPTO assignment database and different states’ corporation databases, were kept up to par. In fact, its business model would likely be impossible, as the courts would be likely to label the company as a vexatious litigant if they only knew how many lawsuits it filed.

I have a different question:  what if we didn’t focus on the lawsuits?  What if we went a step before that, to when companies first start trotting out their patents and testing the waters?  You know it costs money to file a lawsuit, but it costs a lot less to simply send out a feeler letter otherwise known as a nastygram, which next to “vexatious” is my favorite word. How many nastygrams are going out?  To whom?  From whom?  Someone should work on getting that data.  Perhaps someone is.  {Awkward silence.}

Edited to add:  Just read this article and her 10th item says the same thing I’m saying.

Litigations are only a tiny part of the story. While good data on patent demand letters is lacking,

The thing of it is though, even if the courts knew it was all IV suing, naming someone a vexatious litigant is tough.  Do courts ever really do that?  Maybe they do, I haven’t consulted the data on that one because I’m too lazy.  In all my internet perusing, however, I haven’t ever come across that call being made a judge in a patent infringement case.  Further, if lawyers could actually be disbarred for bringing a host of frivolous suits, this guy’s house in the Cayman’s would be for sale.  (Hint: it isn’t.)

Just sayin’,

IPTT

Well Wouldya Lookie There, Search Terms Edition

I was feeling a little lucky today so I  took a look at the site stats page.  Normally, my fragile ego can’t handle it, but today was special (read:  I had Mexican food for dinner and that means margaritas…) so I clicked.

And what to my wondering eyes should appear, but the following search terms:

InterestingSearchTerms

In case you don’t have your reading glasses, it says:

how trolls can avoid the shield act

It’s not even law, and they’re already looking for ways to skirt it.  I’m not quite sure what it says about IPTT that they landed here, but it’s interesting nonetheless.

Just sayin’,

IPTT

Oh He’s An Idiot Alright, But That’s Not Why

In Gene O’Quinn’s diatribe, we find this hilarity:

Mark Cuban, the flamboyant owner of the Dallas Mavericks,

Flagrant use of a derogatory adjective in a blog post:  Fifty points!

That’s one way to describe Mr. Cuban, flamboyant is.  I prefer hypocrite, but that’s just me.  One cannot claim to hate patent trolls (and evidently, all lawyers who make money in the patent industry) and be invested in one as well.  It just doesn’t…what’s the word?  Jive.  The complaints don’t make sense to me when the blog maverick himself says “Yeah, those trolls are rotten!!  But if you can’t beat ’em, join ’em.  Just buy right into them that’ll take at least some of their patent bats out of the arsenal”  Holy Mother of God, what a bucket of stupid that is.

That’s why I think he’s an idiot.

Back to the blog post though, this is a great point:

Again, the only problem with what she says is that is it flat wrong! It is not nearly impossible to fight back. Choices are made — conscious choices — to pay extortion-like settlements of $25,000 rather than mount any kind of defense. Samuels wants the reader to believe that patent litigation defense costs many millions of dollars. That is true on average, but for those who cave and pay extortion the fees are substantially less.

I think it’s pretty well established that patent litigation defense does cost many millions of dollars so if Samuels wants the reader to believe that, she’s got a friend in me.  Gene’s right though when he says that those who pony up the coerced fees, as RPX’s chart shows, oftentimes pay less.  What I want to know though is this:  are the extortion payments as low as $25k?  I get the feeling that they are a lot more than that, on average.  Though the chart is, by their own admission, assumption-filled, I do tend to think that the average payment is minimum six figures.

So who is to blame? Aren’t those who complain about the system and say they will never settle and will fight to the death to blame for caving when they jump at that first, extortion-like settlement offer of $25,000?

I think this is spot-on part of the issue.  I have been advocating for a while now that you don’t ever settle, and that you bring the fight to the trolls.  I think it will take more than individual companies doing it though.  I think it needs to be a collaborative defense.  Once the suits are filed, it’s not like you don’t know who else got sued.  Pool your resources and force an all-out battle royale every time a troll sues.  Stamina, people!

Or, you round up the posse and meet the enemy in their own backyard.  This has to be done pre-litigation.  Find out who’s zooming who before it gets to the legal system. Then you’ve got some real leverage.

The thing is, what the patent trolls are doing is not illegal as Gene points out.  They are abusing an existing system and I think he’s right when he says that some of the judges are complicit in that they don’t do enough to toss out the most ridiculous of suits.  But the fact remains that the trolls are skirting existing laws and manipulating the system. And you think adding to that system by creating more patent laws (hello, ineffective SHIELD act) is going to help?  Haven’t these guys proven that they will worm their way around the laws, whichever ones you create?   It’s what they do.

Finally, this was something of which I was heretofore unaware:

Did you know that many of the so-called Silicon Valley elite play golf with patent trolls? Did you know that they go out to lunch and dine with patent trolls? Did you know that they are on first name basis? Many of the so-called Silicon Valley elite refer to those who they vilify in the halls of Congress as “my patent troll.” They believe that if they work together in a cordial way they will be able to get along better. Doesn’t sound like they are really all that upset about the phenomenon if you ask me, now does it?

He lost me at “play golf with patent trolls” because golf.  The only time golf was interesting was when that girl busted out her husband’s windshield with a nine iron.  That’s worth a Sunday afternoon inside to watch!  And I’m not sure you can substantiate that those kinds of back-room dealings are going on and even if they are, they are between the big players, the heavy hitters with access to lobbyists and to the daft morons congressmen and women on the hill.  The regular Joe patent troll target, the ones who are so hurt by the suits because they truly do hinder innovation by taking money out of their pockets that could be better spent bring a product to market, are not out on the green with anyone, troll or congressman.

But I’ll say this, I would really love to get me this “my patent troll” thing he speaks of.  I am imagining a little troll-doll wearing a sash that says “Patent” on it.  Someone should totally create that and sell it.  Ooh ooh, on The Shark Tank!  Mark Cuban would definitely invest in that.

Just sayin’,

IPTT