Rosetta Stone for Patent Transactions: IP Nav Edition

My PTT™ (Patent Troll Translater) has been traditionally used for small snippet-like quotes, so  I thought it high time to try it out on something a little longer and perhaps more complex and see how things go.  Since we Rosetta Stoned Acacia Media last time, I figured we’d run ye olde IP Nav through this time.

Get your spurs and chaps, and saddle up for the ride into the great Wild Wild West that is one of the world’s most notorious patent trolls.

You would have thought they’d make it hard, but they laid out the perfect comments for this experiment right there on their website in the form of a link to their philosophy, which right off the bat takes liberties with so much.  Like the words “core” and “beliefs” and “philosophy”, to name a few.

Let’s take it paragraph by paragraph, shall we?

Numero Uno:

At IPNav, we’re driven by one thing: achieving our clients’ financial objectives.  If we think those objectives are unrealistic, we’ll turn down the engagement.  If we fail to achieve agreed-upon financial objectives, we expect to be terminated.  We thrive on being held accountable, and we don’t get paid until our clients make money.

{Sounds of PTT™ whirring in the background…}

At IPNav, we’re driven by one thing:  money.  If we think that objective is unreasonable, then we don’t want anything to do with you.  If we don’t meet our financial objective and have to drop you like a sack of concrete, then we drown ourselves in shots of the Grand Patron Platinum instead of  the Barrique de Ponciano Porfidio.

Numero Dos:

We believe that our clients’ interests are best served by a “litigation light” model:  we use our in-depth knowledge of IP licensing transactions to enable rational price discovery, leading to greater liquidity, faster transaction processing, and a more flexible engagement model.

{Sounds of PTT™ whirring in the background…}

We believe that our clients’ interests are best served by threatening long and expensive litigation against anyone who might remotely have heard of their patent and are in any way vulnerable to a shake down of epic proportions.  Using our in-depth knowledge of IP licensing transactions and how the US patent system favors those who can find and abuse loopholes in the law, we are able to discuss irrational license fees and get the supposed infringers to pay up very quickly.  We like to think this is a flexible engagement model in that we allow our targets to decide how badly their asses will get beaten, and how quickly.  We’re nice that way.

Number Tres, Their Approach:

  • Business driven, not litigation driven.  Because the patent system is based on patent holders being willing to go to court to enforce their rights, many patent monetization firms are litigation driven.  At IPNav we’re not afraid to litigate, and we work with first-rate patent litigators, but we’ve found that alternatives to litigation often produce better and faster results.
  • Client-centered.  We recognize that every client is unique, and we work with our clients to structure deals that make the most sense for them.  Our interests are aligned with our clients’ interests – we don’t get paid until our clients get paid.
  • Global.  With offices in the US, Europe, and Asia, we can offer clients up-to-date and in-depth knowledge of the global IP marketplace, and we can monetize in the most favorable jurisdictions.  With teams located in different time zones, our workday doesn’t stop when US business hours are over.  And our talent pool is global.
  • Results driven. Our record speaks for itself.  We achieve remarkable results for our clients.

{Sounds of PTT™ choking and trying to figure out how to parse bullet points…}

  • Litigation driven, totally litigation driven.  Because the patent system is based on patent holders being willing to go to court to enforce their rights, many patent monetization firms are litigation driven just like us.  At IPNav, we prefer to litigate, and we work with first-rate patent litigators, and we’ve found that alternatives to litigation are not nearly as much fun and don’t get us nearly as much press.
  • IP Nav-centered.  We recognize that every client is unique, and we work with our clients to structure deals that make the most sense for us.  Our interests are aligned with our objective to make as much money as we possibly can – we don’t get paid until our clients get paid, which is why we only take on clients that we know we can win on behalf of.
  • Omnipresent.  With offices in the US, Europe, and Asia, we can come after anyone, anywhere at any time.  With teams located in different time zones, our workday doesn’t stop when US business hours are over because if someone is awake anywhere in this world, we  can find a way to get their money.
  • Results driven. Our record speaks for itself: check your local police blotter for incidents of busted kneecaps in your area and see for yourself.

Whew.  I really thought those bullet points were going to be the killer for a second there, but we made it through.  While this effort involves the written rather than spoken word, you can rest assured that that most famous of rhetorical questions to ask yourself when vetting anything these guys put out there is wholly applicable:

How do you know a patent troll is lying?

It’s lips are moving.

Just sayin’,

IPTT

That New Schumer Law Proposal: How Does Anyone Think This Is A Good Idea?

I know this article about Charles Schumer’s new law came out a few days ago but I have shoe shopping to do a new product coming out so I haven’t had time to comment on it.  But may I be so bold as to comment with a giant WTH?

What’s interesting is that the bill proposes a new process by which all patent cases will get vetted by the USPTO — not just the “extortion” (his word) brought by trolls.

You’re kidding, right?  You want all patent cases to be vetted by the USPTO, who evidently hires patent examiners who “[drink] scotch and whiskey with a side of crack cocaine”, if the Angry Lawyer is to believed?  You want this same entity reviewing all patent cases?

I suppose on the one hand this is good news…all those software patents people don’t want issued?  Well, they’ll languish forever now with the patent office reviewing cases for a living.  It’s kind of like when Congress gets deadlocked: that’s a good thing because if they can’t agree?  They can’t make more stupid laws.

To quote Schumer:

“This will apple to all patent cases, but if you have a legitimate case it will go forward in a month. It just eliminates all the frivolous suits. We think it’s the best solution.”

Typo of the year goes to?  The author of the article, Ingrid Lunden, for the hilariously Freudian “apple” vs. “apply”.

But to the quote, cases will go forward in a month.  Huh?  How is that even remotely possible?  The government can’t get anything done in a month.

I’m not a fan of solving these problems through litigation, one reason for which will be readily apparent soon enough.  The problem is that you can’t out-smart these trolls with mere legality.  Whatever law you put in place, they’ll find the loophole.  It’s what trolls do.

Throwing crazy-stupid legislation together so that you can tell your corporate constituents that you are trying to solve their problem?  That’s what politicians do.  Right Chuck?

schumer

Sell your crazy somewhere else, pal.
We’re all full up here.

Just sayin’,

IPTT

The Newest Troll Under The Bridge Is At It Already

A colleague and fellow shutterbug sent me this link to an article about Marathon Patent Group (I’ll call them MPG for short because I am a super lazy typist) and then suddenly, we see this article about one of their holding companies/subsidiaries/lackeys/shell companies filing suit.

My initial thought was, as I tweeted, that it must be getting awfully crowded under that bridge.  In my head, I’m picturing a swamp-like environment with a whole  bunch of ugly green-faced, hairy-knuckled, short and stubby, tattered-clothes wearing little creatures all milling about and elbowing their way through the crowd, jostling for position and perhaps commencing to odd man from time to time trying to divvy up who’s going to sue who next.  Occasionally, out of the corner of your eye, you see one of the little troll wives, hairy hands on her wide hips, going all freak nasty on the men telling them “Would you all please clean up this mess?  I am not your maid, you know!”

My second thought was “OMG, they’ve been Spangenberged!”  These guys are totally in bed with IP Nav:

Earlier this year, Marathon Patent Group announced that it had entered into a strategic partnership with an industry-leading patent monetization company, IP Navigation Group,

and

After all, Mr. Croxall has known and done business with IP Navigation Group’s CEO Eric Spangenberg for more than a decade, and their working relationship continues to this day. Finally, the financial relationship between the two companies is also complimentary: Spangenberg and his wife are substantial equity holders in Marathon Patent Group.

Is that wrong?  I mean, I don’t know a whole lot about financial relationships and what’s allowed between companies because I took finance in the summer at The University of Texas in Austin and if you know anything about summer school at UT, then you know what I really did was study 6th street and how to prove I was 21 when I wasn’t.  (If you’re reading this and were at all financially responsible for my education, then I am totally just kidding.)  This sounds a little bit too much like marrying your cousin.  Which, while totally legal in some states, is still gross.

This is only my interpretation, but the relationship with IP Nav means that they feed MPG patents that they have successfully litigated and allow them to continue to monetize them.

On April 24, one week prior, Marathon Patent Group announced some clarity on another IP portfolio acquisition from CyberFone Systems. Refreshingly, this portfolio also has a documented track record of revenue generation: $15.5 million from 32 settlement and license agreements over the last 18 months. Like the portfolio acquired on Wednesday, this portfolio has active litigation against 16 defendants, including some very big time names like Federal Express (FDX), Siemens (SI), UPS (UPS), Mitsubishi, Nintendo, and Alcatel Lucent. Marathon Patent Group again purchased an asset that will provide future cash flow when revenue trickles in from these 16 defendants. As before, an investor need only discount the average historical revenue onto the line of future defendants.

It’s risky.  You take patents or portfolios that are popular in litigation and purchasing them for their future revenue potential.  But what I don’t get is how do they know they’re going to get anything from, in the example above, any of the 16 defendants?  Once things go to litigation, you’re involving a lot more people and people?  They’re the worst.  There’s Markman hearings, judge’s attitudes, the team of lawyers the other side hires, juries…lots of different things come into play.   Further, if you purchase patents that have been litigated or used to shake down a bunch of companies before you even buy them, don’t you risk that the portfolio is played out?  Everybody goes after the big guys first so if you get it after that, who’s left?  And is whoever’s left going generate the kind of revenue you’re looking for?

Patent monetization is all the rage so it’s not surprising that people are jumping on the bandwagon.  I’m not sure these MPG guys are really any different from any of the other trolls out there.  They, like the rest of their ilk, are in desperate need of a spray down:

Just sayin’,

IPTT

Google? Look Out For The Word Boomerang

Google, you slay me.

Gene Quinn at IP Watchdog posted about a symposium wherein a Google rep claimed that they do not sell patents to patents trolls.  Referring to his original article, Gene reminds us:

Thus, the premise of my article about whether patent litigation is really a problem if big technology companies are selling to patent trolls holds.

Yes, patent litigation is a really big problem.  Just because big technology is part of the problem doesn’t mean that it isn’t there and it certainly doesn’t mean they started it.  It’s not really, therefore, a question of “if” patent litigation is a big problem.  But I’m with you on the hypocrisy issue and you know that:  You cannot complain that the trolls are coming after you if you’re selling them the baseball bats used to beat you.  It’s really that simple, Mark.

Suzanne Michel’s(she was the speaker for Google at the symposium)  point was that  if companies are buying up patents in droves in order to have a defense against the Dark Arts (which really they’re doing that as a defense against their own kind because as we know, having a stable of patents does not protect you from trolls because you can’t counter-sue them because they don’t make anything that you might  be infringing on which is largely what the troll problem is all about and yes this sentence is finally over)  then Google has to too and what happens over time is that …

 you can’t maintain [your mountain of patents], because the maintenance fees are too high, so you sell them off to trolls,

In true “it depends on what the definition of the word ‘is’ is” fashion, a disagreement arose over the use of the phrase “you sell them off to trolls”.  Is that “you” meaning everyone but Google, or “you” as in “one in the tech industry being sued by patent trolls”?

Either way, you have to be very careful with statements like that because if you’ve ever been a parent or had a dog, you have learned that you cannot ever say never.  I said I would never allow a dog to sleep on my bed, but actually that’s a poor example because I don’t let my dog sleep on my bed.  He lets me sleep on his.

MaydayOnBed

Texas Blue Lacy dog, at your service.
His ancestors are rolling in their graves.

I also said my kids would never leave the house in mismatched clothes and then I had Michael, my artsy kid who created the ComicCon and dude cannot match to save his life and ain’t nobody got time for that when you’re late for a Frosty at Wendy’s school.

What Google should say is “We never intend to sell to a patent troll.  We may at times thin out our portfolio to save maintenance fees or build cash to purchase other portfolios, but to the extent that it is within our control, we will not knowingly participate in the patent troll litigation problem by letting our patents fall into enemy hands.”

Google probably really does want to avoid selling to patent trolls.  But the reality is, because of the shell game the trolls often play you may not even know who you’ve sold to, and they’ll just resell or reassign it anyway so you can’t say “We don’t/won’t sell to trolls.”   Those words will come back and bonk you on the brain sure as the sun shines.  Kind of like a word boomerang.

Just sayin’,

IPTT

When Is A Survey Not a Survey? When It’s Really A Marketing Campaign By Intellectual Ventures

What long-term positive PR that IV thought they were going to accomplish with this survey is anybody’s guess.  No, really…anyone have a guess?  It’d be just as good as mine because I’ll admit to being Clueless in Katy.  The thing of it is, we’ve already seen your underpants and it’s hard to unsee that.  Two rounds of eye bleach were wholly unhelpful, be forewarned.

I asked @IVInvents (ridicule of that twitter handle will commence shortly) how many of the respondents were investors.  Their response was as follows:

Intellectual Ventures Twitter Exchange with @CandidCanon

Note:  Edited below because I evidently forgot the 3rd grade, where I was supposed to have learned which direction the pointy-bracket thing goes for “greater than” v. “less than”.

To pull out the statistics, most of the CEOs that responded headed up companies with less more than 1,000 employees and under over $100M in revenue.    From their own analysis of their own survey comes this:

In our Market Research on Patent Attitudes study, the majority of the C-suite executives we surveyed believe patents are good for innovation; they believe patent rights should be respected; they believe people should pay a license fee to use technology that is patented. Yet, they don’t fully recognize how patents apply to them.

They don’t fully recognize how patents apply to them, huh?  Let me guess…you’re going to show them, right?

These executives rank product development and competitive edge highly in their 2013 business priorities, but the C-suite does not have the information or expertise to leverage patents within their business strategy.

Right.  And Intellectual Ventures does.  So this was not so much a survey as it was a marketing campaign, am I right?  Go out and ask leading questions to get the answers that you want so that you can provide {Shazaam!} just the information and solution they didn’t know they needed.

Well played.

Less than half the executives we surveyed had heard of patent licensing companies (which were described in the blind survey as “a company that purchases patents and licenses them to companies who have existing products in the market”).

You’re kidding, right?  The reason less than half of them had heard of a patent licensing company is because you sugar-coated it with your definition:  “…a company that purchases patents and licenses them to companies who have existing products in the market”.  Your article-writer is being very inefficient because you could have said that in 15 fewer words by typing “patent troll” or “Intellectual Ventures” because that’s who and what you’re describing.

My very favorite thing about the “survey” is the Insights that run across the bottom of the slides, the first two of which had me howling with laughter:

Insight:  Patents are not stifling American innovation.

Insight:  The U.S. patent system is not broken.

Oooh, boy.  Where’s Emoji for WordPress when you need it?  I could use about a hundred of these 😆 right now!

And as for the Twitter handle @IVInvents, I have a question for you:   What does IV invent?

Survey says?  New ways to polish a turd.

Just sayin’,

IPTT

Neiman Marcus Pulls a Rackspace And Attempts to Pwn IP Nav

How can you not love an industry that pulls out such vocabulary as “apophasis” and “pellucid”?  I am not ashamed to admit that I had to look that first one up.  Turns out?  It’s a real word.  Here’s the definition:

Apophasis:  The raising of an issue by claiming not to mention it (as in“we won’t discuss his past crimes”)

I think that’s an insult to IP Nav (as seen below), but I’m not sure.  If it’s not, what I’m about to write most certainly is.

It seems that Neiman Marcus was sent a letter by IP Nav.  Evidently, the subject of the letter was “proposal to negotiate patent license”, which, when run through my PTT™ (Patent Troll Translator) means “We are going to sue the #$%* out of you if you don’t pay up.”

It’s true.  My PTT is never ever wrong.

The letter goes on to say:

“We would very much welcome the opportunity to enter into constructive discussions with your company to determine whether we can agree to a mutually acceptable patent license agreement or that you are not using our client’s patents,” the letter continues. “We are focused on addressing these issues without the need for costly and protracted litigation.”

To which PTT translates:

“We would very much like you to bend over so we can shove our patent where the sun don’t shine, which is to say have you sign a singularly acceptable patent license agreement.  If you think you’re not using our client’s patent, well you’re wrong.  You are.  So, let’s just get your ass-whooping over with, shall we?  Send the check to Eric Spangenberg, 2515 McKinney Ave, Suite 1000 Dallas, TX 75201”

But oh noes!  Neiman Marcus, having not been born yesterday and also able to use Teh Interwebs to read the news, knows all about IP Nav’s going after Rackspace and how Rackspace didn’t just roll over and play dead.  So what does NM do?  THE SAME DAMN THING RACKSPACE DID.  OK, close.  They said “No, Thank You” to your little threat there, buddy, and filed for declaratory judgment.

Here’s what kills me:

 The letter, the company notes, doesn’t even hint at what patents it is allegedly infringing upon other than to say they have something to do with “automation.”

Seriously, IP Nav?  That’s, like, the height of arrogance.  Just because you’re you, you assume that people will not even question you, they’ll just pay up.  This ain’t the mafia, pal, and you’re not Don Corleone.  (Is he a mobster?  Please tell me he is…I don’t watch mob movies because blood and guts and death do not entertain me the way Hugh Grant and Harrison Ford do.)

If the pen is mightier than the sword, you got run through on this approach back in 2011 by Judge Ed Kinkeade:

[IP Nav’s letter is] an unmistakable and intentional warning shot across the bow. The actual message is pellucid to any patent litigator, so that IP Nav’s use of apophasis is disingenuous and unavailing. Remember Mark Antony’s funeral oration in Julius Caesar? That’s how an experienced business executive or lawyer would view IP Nav’s assertions that ‘we are focused on addressing these issues without the need for costly and protracted litigation’ and ‘our client’s preferred approach is to conclude licensing discussions without resorting to litigation. We hope you share this objective.’ The implied ‘or else!’ oozes from this letter like lye from lutefisk. To paraphrase an observation attributed to Anton Chekhov, you don’t hang a gun over the mantle in Act I unless someone is going to fire it in Act III.”

(Kudos to Eric Nicholson at the Dallas Observer for digging up that little slice of heaven.) If ever in the history of ever there was a paragraph that pwned IP Nav, this is it.  And yet they came back for more?

What’s that quote about the definition of an idiot?  Oh, I remember:  One who does the same thing over and over again expecting the same result.

IP Nav, you may or may not be an idiot.

Just sayin’,

IPTT