What Made The Trolls Trolls, Anyway?

I know what it was…they were mistreated as children.  Their Mommies wouldn’t let them eat ice cream for breakfast, and made them make their beds and bring their laundry down each morning.  When the Look of Death failed to frighten her into submission, they packed up their marbles and went in search of better living accommodations where they soon realized that they actually couldn’t do much better out on their own and maybe, just maybe, Mom knew what she was talking about but out of spite, settled under bridges and scared passersby into paying them a toll to cross over to the other side.

Actual Look of Death from my actual child.
Be afraid. Be very afraid.

 

But if we’re talking about patent trolls, the road to perdition is a little less clear.  There are lots of different reasons, the way I see it, that the problem has  gotten out of hand.  Here’s a list of where I think things went wrong.  These are just my opinions, of course.

Lack of Court Competition – It’s been posited to me on Twitter that perhaps it isn’t the Federal Circuit, as this article by Timothy B. Lee suggests, that has been a factor.  I disagree.  I think that whenever there’s a lack of competition for something, be it a consumer product or justice, that’s not good and it breeds advantage-taking.  From the article:

 The Federal Circuit Court of Appeals enjoys a monopoly over patent appeals, and it has used that power to shift patent law in a direction more favorable to patent holders, including trolls. Taking away the Federal Circuit’s monopoly over patent law would be a big step toward bringing balance back to the patent system.

Now, maybe they didn’t use their power to shift patent law to favor patent holders.  Patents themselves favor the holder!  But when there’s no check or balance built in, this is a risk you run. That’s an issue, and something that trolls are wont to take advantage of because that’s how trolls roll.

Further, there’s the idea of “pay to play”:

They don’t just hear patent lawyers’ arguments in their courtrooms, they also mingle with them at conferences and social events.

This is what Gene Quinn at IP Watchdog was getting at when he talked about the big corporations rubbing elbows with lawmakers, and about how they didn’t really care about patent trolls so much as they were in bed out playing golf with them.  Timothy Lee makes a similar argument, only with troll lawyers and judges.  If there’s only one circuit of appeals (Supreme Court notwithstanding because we all know very little makes it that far) and those judges are hobnobbing with the lawyers who appear before them, then how impartial are they, really?  This is why I think the Federal Circuit is a part of the problem.

The Death of the ‘Dust Docket’ – Whether it was a result of tort reform or people having had enough of the huge judgments against companies as a result of shady personal injury trial lawyers, the dockets for things like asbestos poisoning began to dry up.  So where’s a sneaky lawyer to go?  Hmmm…patents.

The barriers to entry to file a patent infringement suit, or better yet, simply send out a bagillion demand letters, are low.  All it takes is an attorney with some free time and pretty (or not) letterhead, and there you go.  Some patent attorneys are complicit in the problem, is my point, and I’ve written about that.

Bad Patents – Patent quality matters.  When patents that are overly broad and cover obvious claims are issued by the USPTO, it creates the perfect scenario for troll tactics.  Article One Partners chose an excellent tag line, and they’re going after the problem at the very lowest common denominator.  You have a host of patents related to business methods and software that should never have been issued.  But now that the genie is out of the bottle, how do you put it back in?

Very expensively.  You either file an IPR, fight full-on in court, seek declaratory judgement…whatever you do is going to cost you something.  And that’s just what the trolls are counting on when they seek to buy up these rogue patents and throw them around like daggers.

The issue of bad patents is partially a result of patent examiner practices, which you can read about here, here, and here.  It’s a related problem, and it helps feed the trolls.

Lack of Desire to Fight– Not all companies that are hit with a demand letter or an infringement suit are going to fight.  They have their reasons that they don’t want to be on the Patent Troll Fighter Heros Gallery, and that’s OK.  (It’s not, really, it’s very hurtful to me personally but I recognize that it’s not about me even though it totally should be.)  But every time someone rolls over, it makes the trolls stronger.  It reinforces their business model and they learn that if they just keep trolling, the money will keep rolling in.

Sometimes, victims of troll-ish tactics actually approach another troll for help.  This makes zero sense to me, but I’m not trying to save my company so I try hard not to put on my Judgy McJudgesteron pants.  Although it is very difficult.

It may not be so much a lack of desire to fight as it is a lack of funds to fight.  I do recognize that.  And then there are the companies that just don’t give a rat’s.  They have the money to fight but it’s not really a big deal to them.  If they can pay a license fee, even if it’s higher than it should be because trolls are greedy and awful, then so be it.  It keeps their in-house counsel focused on other issues more germane to the bottom line, so they cut the check and move on.  I hate it when that happens, because it sends exactly the wrong message to the trolls, which is that trolling works.

patent-troll-graphic-final

Image by Alan Schoenbaum.
Awesome.

 

Just like there’s not a single, reliable litmus test for who’s a troll and who’s not, there’s not just one reason that patent trolls troll.  I think these are the most obvious ones, and what started me off on this topic was the push back on Twitter regarding Timothy’s article about the Federal Circuit.

I wasn’t able to articulate my response in Twitter’s 140 characters because, and you may have noticed this, I tend towards verbosity.

No really, it’s true.

JustSayin_small_New

IPTT

{Image of Michael, now age 11 and still scowling like a madman, by me.  Troll drawing by Alan Schoenbaum of Rackspace.}

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How Many Normal People Does It Take To Equal A Thug, Anyway?

From IP Nav’s comments about the recent Consumer Electronics Show, that ratio sits at about seven to one.  I always enjoy IP Nav‘s comments on things mostly because I think that Barry Leff writes them and I like him.  Never having met him in person, I do believe that he genuinely believes he’s on the right side of this debate, and I like that in a person.

Anyway, here’s a visual for you right-brainers out there:

ThugsVNormalPeople_updated

Evidently, Erich Spangenberg was unhappy that he was the only one on his side of the line up for a talk that was part of the CES Innovation Policy Summit.  Leaving aside the fact my opinion that patents do not equal innovation, it seems the summit drew a crowd, or at least the “Patent Litigation Reform: Who are You Calling a Troll?” panel did.  (For the record, the answer to the question is “You, Erich.”)

Barry’s blog post for IP Nav takes us on a trip down memory lane, because nothing holds one’s interest more than a story about how a troll became a troll.  But oops, wait just a second.  We shouldn’t call Mr. Spangenberg a troll because

He’s not uncomfortable with the term “troll,” as the term has come to mean anyone who files a patent lawsuit.

Don’t make me pull out the Harvey Specter eye roll so early on a Monday morning, please.  *sigh*

Not anyone who files a patent lawsuit is a troll.  You sound like J Nicholas Gross or Andy Pitchford now.  Further, definitely not everyone who files a patent lawsuit is a troll either, only those who behave like thugs are.  You know, like people who go after everyone and their uncle (and even the US Government, for crying out loud) because they have a crap patent that says you can’t scan and email without paying them to do it.  And oh, look!  You agree (emphasis mine):

Picking on app developers, tiny companies and sending letters with no justification is crazy—

Indeed.  But want to hear what’s even crazier?  Suing people using one of your shell companies and not even telling them what they infringed on.  (This is a good write up of those wanton antics, with a great quote from a Techdirt article on same.)  Oh, don’t throw out that tired line about it affecting declaratory judgment and venue.  What you’re trying to do is extract a settlement because taking it to court is more expensive.  That’s the troll MO, whether the troll uses base-less threatening letters or not.

One final quote from the article:

Bad behavior is not exclusively the province of patent owners.

No, it isn’t.  But it’s the province of companies like IP Nav, and there are at least seven normal people who can agree on that.

JustSayin_small_New

IPTT

Hodgepodge And Sundry Developments

Lots of doings in the patent arena last week.  I’m not a “weekly recap” kind of gal because I’m way too lazy other people do it so much better than me, but there are a lot of little things going on that I can’t drag out into a full blog post, even as verbose as I am, so I figured I’d just hit them all in one post and call it a hodgepodge.  Plus, I get to use the word hodgepodge and delight the over-70 crowd so win-win!

  • GO NEWEGG.  These guys are already in the Patent Troll Fighter Heroes gallery, and this just proves why.  They are all over the troll take-down M.O. and it’s awesome.  The supreme court said “No, thankyouverymuch” to Soverain, which means their no longer sovereign over the online shopping cart world.  Obviousness, thou art quite the slayer.  Lee Cheng is a National Treasure, to be sure.
  • Next up, we’ve got PTAB (Patent Trial and Appeals Board) news. It seems IP Nav is not happy ever with Polly Patent Owner not getting her (ill-gotten) infringement award in due time because someone that she didn’t sue found prior art.  If your patent is as solid as you claim it is, then shouldn’t it hold up under any and all scrutiny?  That’s kind of how I look at this.
  • The Scanner Dudes have completely jumped the shark and are now suing (are you ready for it?) The Government.  Wait, what?  Oh yes, yes they did.  And by “they” we mean Jay Mac Rust, who is behind the entire company and all of it’s 101 six-letter named subsidiaries.  This one actually deserves its own write up and it will get one as soon as I clear some other work off the desk.
mac-rust_mustang

Just one man. All those companies and it’s just one guy.

  • From the “that’ll learn ya, dern ya!” files we have Nintendo who, in addition to sucking more money from me than I care to admit and turning my kids into consummate gamers, has won the ultimate victory over a troll in that they bought it’s patent portfolio after squashing them in court.  Well, uh, played, Nintendo.  They got the patents at a fire sale, held because Nintendo was awarded legal fees to be paid by IA LAbs only Shazaam!  IA Labs couldn’t pay.  Which is interesting because a judge decided, all on his/her own, to make the loser pay.  So, really, as an aside to this bullet point, do we need a new federal law mandating this?  If the judges can decide on a case-by-case basis to do this anyway, what’s all the huffing and puffing about it being an official law?  And besides which, this case illustrates how that really won’t work anyway because in the end, the loser didn’t so much pay as the winner.  At the auction.  To buy the trolls’ patents.

There you have it:  hodgepodge and sundry developments because that’s just how we roll.  And be “we” I mean “I”.  Hey, if Jac Mac Rust can pretend to be a lot of people, why can’t I?

JustSayin_small_New

IPTT

{Jay Mac Rust image via Ars Technica.}

In Which Forbes Coins A Fancy New Term (Subtitled: I Already Hate You, Spherix)

Janal Kalis, who is a founder of one of my favorite apps called Patent Buddy, shared a Forbes article about the coming “Patentocalypse“, which is totally a made up word.

Remember the Rockstar consortium? I don’t know what this says about me, but I followed that Nortel auction like a Jimmy Choo sale at Nordstrom’s. Man, were those fun times. A group of buyers outbid Google (who didn’t want to win, in my opinion) and won a pot of patents in the process. That consortium is selling to Spherix, who used to be a pharmaceutical company.

I’m going to start keeping a list of companies who used to add value to society by making something and then when that something either wasn’t making money anymore or got beat out by a better something, decided to start patenteering. <— Who’s making up words now, Forbes?

From Spherix’s website, “the Spherix team identifies undervalued IP assets held by individuals, universities and corporations.” By “undervalued” I suspect they really mean “under-litigated”, but time will tell.  Rakesh Sharma, who wrote the article for Forbes, asks if, both by it’s dealing with Rockstar itself and the company’s history given the current focus on patent trolls, might not Spherix “be mistaken for a similar company attempting to earn cash from a now-defunct company”?

Mr. Hayes’ (he’s the head honcho at Spherix) response was telling, and it identifies my biggest beef with privateering or patenteering or whatever you want to call it:

The fact that the company (In this case, Nortel) failed doesn’t mean that the people who were involved in the creation of those patents shouldn’t be compensated (for their time and effort in developing the industry standards),” he says. He explains the situation with the analogy of the situation that arises when a famous building (such as the Empire State Building) declares bankruptcy. “No one thinks renters (in the building) need to stop paying rent when something like this happens,” he says. “If a company fails, everyone expects the company’s assets to be put to use for return on investment for people who created that property.”

First of all, the people who were involved in the creation of those patents already were compensated for developing those patents insomuch as they were paid a salary to do so.   It isn’t as if the claims and innovation that drove the patents were ripped, screaming and hollering, from the brains of the engineers.  The way I figure it, they got up and showered and drank their coffee and went to work and did their job and got a paycheck for it.  So you can say that those patents may have additional value (that you can litigate out of companies using trollish – or perhaps not, we’ll see – tactics) after the company went belly-up, but you can’t say that they need to be compensated outright because they already were.

The analogy of the Empire State Building is fair, but what building owners don’t do is go hunting the streets of NYC, dragging people into the building, and forcing them to pay a rental fee that’s far beyond the value of the property.  When companies sell patents to trolls, that’s what happens (continuing the anology):  they go out on the street looking for companies who look like they might want to rent space in the Empire State Building or who have ever at any time in the past rented space within a 20 block radius and demand that they take up residence on the 88th floor and pay triple what previous renters were paying.  Let’s hope that’s not the approach that Spherix takes with their 101 networking-related patents from Rockstar.

bret_michaels_1

Cause we all just wanna be big rockstars
And live in hilltop houses driving fifteen cars

 

Spherix has already sued twice over Rockstar-assigned patents (5,581,599; 5,752,195; 5,892,814; 6,614,899; and 6,965,614), against VTech Communications and Uniden.

Given this quote from Mr. Hayes?

Based on his experience as a litigation lawyer, he says negotiation and licensing  is preferable but doesn’t always work. “I have been personally and routinely blown off by companies (when he tried to negotiate with them),” he said.

I’m given to think that Spherix isn’t going to play nice with it’s 101 new toys.

JustSayin_small_New

IPTT

{Bret Michaels image found here.}

Celebrities 2, Blackberry 0: That’s How This Will Probably Play Out

If anyone’s keeping score, that’s about the size of it.  First, they hired Alicia Keys to be their Creative Director.  I’ve got nothing against the woman, and may or may not have belted out a tune or two of hers in the shower which is too much information for a Tuesday morning.  Sorry.  But really?  Creative Director of a cell phone company?

Blackberry, you slay me.

It comes as little surprise then that the relationship, and whatever media cache’ they were going for with it, is over.  But after righting that wrong, they’ve gone off the deep end and are now suing the Ryan Seacrest-backed Typo for patent infringement.  I’m going to type that again because how often do you get to write about Ryan Seacrest on a patent troll blog?  That’s right, never.  Once more for good measure:

But after righting that wrong, they’ve gone off the deep end and are now suing the Ryan Seacrest-backed Typo for patent infringement.

typo-keyboard-635

I need to pre-order this bad boy.
Not a fan of the iPhone keyboard, never have been.

This does not make Blackberry a troll.  And this one instance does not even put them on par with the likes of Ericsson and Panasonic, who are starting to use patents instead of products for profit by privateering.  But you do have to wonder if they would be going this route if things were better for them financially.

If they were still at the top of their game, and actually they could do this now, they’d approach Typo Keyboards and Ryan not with a lawsuit, but a business proposition.  This product (and others) could be a whole new business sector for Blackberry that, while at $99 it is not a product line that is going to save a sinking ship, it could at least keep them afloat for a little longer, or allow them to branch out into something a little smaller for a bit.  Keep a few employees on the payroll while they reinvent themselves.

Ryan Seacrest Typo Keyboard

Jude Edginton/Redux for Wall Street Journal.
(Photoshop notwithstanding.)

Their mobile devices lost out to the likes of the iPhone and Droid and Galaxy.  Big whoop.  That happens to a lot of products over time.  But don’t make it worse by being a sore loser and going after a company that came up with a very cool idea!  You don’t own QWERTY and you don’t own tactile keyboards.  If you did, this very laptop I’m typing on would be in violation of your patent.  (If Blackberry now decides to sue you, I’m sorry Dell!)

“We are flattered by the desire to graft our keyboard onto other smartphones, but we will not tolerate such activity without fair compensation for using our intellectual property and our technological innovations,” [Steve Zipperstein, BlackBerry’s general counsel] added.

Why you gotta be that way, Steve?  I don’t know Blackberry very well because they’re not a patent troll so maybe y’all did approach the Typo Keyboards folks and talk deal-making.  Who knows.  But it sure looks like you started negotiations with the daisy cutter bomb approach.  I’m all for shock and awe, just ask my kids, but is that really the preferred method?

I don’t know, I think the kinder, gentler approach may have been better here and it could also have opened you guys up to the peripheral market.  If mobile devices aren’t bringing home the bacon anymore, go find another pig.  This could have been your oinker, is what I’m saying.

Here’s the deal though…He may be no Ashton Kutcher when it comes to tech-savvy investments, but I’m betting Mr. Seacrest is willing to bankroll a pretty stiff defense to a move that smacks of desperation.

JustSayin_small_New

IPTT

{Image of the Typo Keyboard found here, but it looks like that link now 404s.  Sorry!  Image of Mr. Seacrest found here, in a very interesting article about him.}

The Godfather Goes To Washington

The singular best part about this article by Jeff John Roberts is the summary at the top:

The giant patent troll Intellectual Ventures decided to publish a partial list of the more than 40,000 patents it holds. Why is it doing this?

What’s so funny is, in today’s world where everything has to be over the top and choosing little-used but powerful adjectives is a journalistic sport, he chooses the word “giant”.  It struck me as very, very funny because it’s just so…true.

And then of course he includes the picture of Nathan Mhyrvold where he looks exactly like Daniel Hardman from Suits and I just have to say again what an incredible casting coup that was by USA Networks.  Spot.on.

mhyrvoldhardman

Mr. Roberts links to the page on IV’s site where they provide the as-noted partial list of patents.  Let’s drag out the Patent Troll Translator™ for it’s 2014 debut and run this page through, shall we?

At Intellectual Ventures, investing in invention is the core of our business. We routinely buy and sell patents, and are issued patents based on our in-house inventions. As part of managing our portfolio, we also prune patents that have expired, that do not meet our standards of quality, or are otherwise no longer valuable to our future plans. Since 2000, we have acquired more than 70,000 IP assets. Today, nearly 40,000 of those assets are in active monetization programs.

PTT™ says:

At Intellectual Ventures, extracting money from anyone who does business in America is the core of our business.  We routinely convince smaller entities to hand over their patents and “sell” patents (by which we mean we extort large licensing fees or exorbitant sales prices from unsuspecting victims), and are issued patents based on our in-house inventions, none of which have ever been brought to market but who’s counting? As part of managing our portfolio, we also prune patents that we don’t think will get us a big enough margin to afford the good stuff and are therefore no longer valuable to our future plans to take over the world.  Since 2000, we have acquired more than 70,000 IP assets.  Today, nearly 40,000 of those assets are actively being used as a stick to beat companies with until they comply and fork over our outrageous licensing fees.

If “investing in invention” is the “core of [your] business”, whey haven’t you actually invented anything?  Scratch that, I’m sure you’ve invented lots of things.  But why haven’t you actually brought a product to market using something you’ve invented and patented?  I mean, if I say that “bringing down patent trolls” is the core of my business, I ought to be able to show people what it is I’ve done to further that goal.  “The proof is in the pudding”, as my Mother used to say.  Where’s the pudding, IV?

Anyway, on to paragraph two on the Search Our Portfolio page:

We’ve made it convenient to search for assets by assembling the majority of our portfolio in one place. Customers interested in buying or licensing assets from our portfolio can search the database to find individual patents or whole technology areas of interest to them. Inventors looking to sell their patent assets to us can browse to better understand the technology areas of interest to us. Everyone can use the interactive tool to locate patent assets by number*, title, or country.

PTT™ says:

We’ve made it convenient to search for assets by assembling the parts of our portfolio that we don’t mind people knowing about.  Customers interested in determining if they’re next on our list of victims can search the database to find individual patents or whole technology areas of interest to them and their livelihood, after which they should immediately commence with lawyering up.  Inventors looking to team up with the giant patent troll that we are can browse to better understand how we might be able to pay you a pittance for what we will turn into a cash cow of litigation.  Everyone can use the interactive tool…see how generous we are?  Everyone can use it!!

It’s no secret these guys are trying to find ways to show the world that they’re on the up and up because of recent legislation seeking to derail the troll train.  To wit (from the Jeff John Roberts article):

In response to a question about the timing of the release, a spokesman said by email that, “this week was simply the week the list was ready.”

I’ll just let Harvey Spector reply to that:

Harvey Spector eyeroll

My Mother taught me many things growing up, one of which was “where there’s smoke, there’s fire.”  In this case, you’ve got Intellectual Ventures and it’s ilk coming under tremendous scrutiny by the Feds and that’s when they choose to send the Chief Cook* and Bottlewasher to Capital Hill to lobby, and that’s when they choose to “disclose” their (partial list of) patents?

We’re not stupid, IV.  The smoke signals are coming in loud and clear.

JustSayin_small_New

IPTT

*Raise your hand if you caught that.