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.


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.



{Bret Michaels image found here.}


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