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.}

 

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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.}

Demand Letters And The Entry (Or Not) Of Such Into A Repository

Almost a year ago, because President Obama has no regard for my schedule, I launched an online patent assertion/demand letter repository called That Patent Tool.  It’s been well received, and lots of people, really really cool people to boot, have signed up.  There’s data in the system, and for that I am most humbly grateful!

I had a discussion with Julie Samuels just before she left EFF.  I have to admit that I was kind of upset when I saw that they came out with trollingeffects.org because, like the Highlander, I was thinking “There can be only one.”  THE WORLD CANNOT HANDLE TWO DEMAND LETTER REPOSITORIES, PEOPLE!!  I think I may have even given the folks at the Application Developer’s Alliance some {ahem} feedback for throwing their weight behind Trolling Effects rather than behind me.  Ah, the insecurity foibles of youth.  Sorry, ADA!!

therecanbeonlyone

 

Only Julie’s point, which she made ever so calmly and with much less drama than I myself am prone to, was “Um, no I don’t think so.  If people are willing to put the information in one repository, that almost makes them more likely to put it in another.”  Well Bob’s your uncle, I never thought of it that way.

But you know what?  People are not flocking to enter demand letter information at nearly the rate either of us expected.  I mean, the President himself said we needed a Demand Letter Registry.  Right there out in the open, he said that.   The President said you should do it and yet hordes of people have consistently not done it which means someone’s getting sent to bed without supper tonight.

As serendipity would have it, this article by Megan M. La Belle was posted on Twitter by @PatentWire  It includes a lot of things I personally hadn’t thought about in terms of the effects of settlement (either through the use of demand letters or settlements after a lawsuit has been filed) on the patent industry in general.  While the entire article is worth a full and focused read, I think the very best summary of the issue is right at the beginning:

Not only are patent settlements frequently coerced, they also come at the expense of judicial precedent, which is particularly valuable in the patent context since an invalidity judgment estops the patentee from ever asserting that patent again.18 A related concern is that patent settlements may achieve peace between the parties, but not justice. When patent litigants settle, the accused infringer usually agrees to pay the patent owner, stipulates to the patent’s validity, and promises not to challenge the patent in the future.19 Even assuming such an agreement is in the best interests of the parties, it may undermine the public·s interest by allowing a potentially invalid patent to remain intact.20

Note:  footnotes are left in the quote, but you’ll need to refer to the original article, linked above, to view them.

Let’s pull out a quote from a quote: “A related concern is that patent settlements may achieve peace between the parties, but not justice.”  Peace is what demand letters are designed to achieve, if only for the asserter and through a very Reagan-esque “through strength” approach.  The trolls don’t want justice, they want money, they want their toll.  They know that going to trial is not only expensive for them as well as the defendant, but it means the potential for loss, either on invalidity or non-infringement.   By exposing what they are asking for and who they’re asking it of, other recipients can get a lock on how to respond.  This is the primary goal of collecting the letters: exposure.

What the article seems to indicate is that in some cases, going to trial (or “adjudicating”, because that’s a much fancier word) is better for the public good because it will remove bad patents from the system, the data indicating that when patent suits go to trial, invalidity is a very likely outcome.  I won’t go into all the details of which cases the author feels are better going to trial vs. settling because that would be plagiarism.

What I’d like to touch on is that those companies in the Patent Troll Fighter Heroes Gallery believe in this mantra, that it is better to fight (litigate) than settle with the trolls.  To me and to them, it is about the moral issue and how you should never not ever let the bully win.  According to the article, there is empirical data to back that approach up, suggesting that not settling is the better way to both justice and more effective patents.  With all the talk about “bad patents” out there, and there are many (hint: mostly software), I wonder if part of the reason is that so few patent cases actually get litigated?

Here’s another issue with demand letters and settlements:

Another reason scholars have denounced settlement is because it is shrouded in secrecy.73 Unlike adjudication, the outcome of which is available to the general public, settlements are usually confidential, so that only the parties know the terms of the agreement.74

And again, this is why I and others have created an online demand letter repository.  It’s a way to de-shroud settlement requests, which is what a demand letter is, if we are wanting to use the most euphemistic term possible.  I do realize that, in order to avoid declaratory judgment or venue issues, many trolls no longer put all the information into a demand letter that they used to.  But a surprising amount of trolls still do, as you can tell by both my data and EFF’s data.

donotfeedthetrolls

I’m working on a post about why recipients are reticent to upload letters, because I’ve spoken with a lot of people about their fears which are frequently summed up in two words:  “outside counsel”.  As in, my outside counsel won’t let me.  We’ll get to that faulty lawyer logic in due time.  The most common response people give so far is the age-old “What’s in it for me?”

I’ve been looking since the beginning for ways to incentivize or entice or coerce or somehow get people to provide this data.  Recognizing that settlement may not always  be in the public’s best interest in patent litigation, when it comes to dealing with trolls I think that exposure of those “settlement” demand letters actually is in the public’s best interest.

Now all I have to do is convince the rest of you…

 

JustSayin_small_New

IPTT

{Meme found here. Incredibly awesome troll sign found here.}

On The Definition Of A ‘Patent Troll’: Let’s Get Personal Once Again

Despite this review, I actually love Love Actually.  Mostly because of the wicked moves Hugh Grant pulls of to the Pointer Sisters, but also because of the way he defends Natalie, who’s ex evidently felt she was a little thick in the middle:

Oooooo, would we call her chubby?

The point is, of course, that he loves her and doesn’t see her that way, even though his staff and others totally do.

Hugh Grant Love Actually Dance

“I’ll take you down, I’ll take you down… where no one’s ever been before!”

 

I don’t love Jim Logan (no offense, but I’m a one man woman!) or Personal Audio.  But what I do feel is the need to break from my buddies over at EFF and examine once again if they, and by “they” I mean Jim, can truly and rightly be labeled a troll.

After suffering  through about 25 million ads sliding in and out at random locations (and the alliterative title), I was able to get through this article at The Economist.  I also read the comments, which is usually where the most fun is.  Also at Techdirt. If you don’t read the comments there then you’re missing 95% of the story.

The article talks about the most outspoken recipient of Mr. Logan’s attention, one Adam Carolla.  If I were Marc Maron, I would be a little irked that his fight is getting more play than mine, but whatever.  I don’t have a beef with Adam at all, and I’m sure he’s right irritated at having to deal with a lawsuit.  But let’s take a look at what we can really call a “troll”, because I don’t think the definition holds water in this situation.

From the article:

his company, ACE Broadcasting Network,being sued a year ago by Personal Audio, a non-practicing patentholding entity (a “patent troll”)

Hold on just a second.  I am at this very moment listening to an NPR podcast (how ironic) where they are playing a cassette tape of what they called the “very first podcast”.  If one of the main definitions of a patent troll is that they are non-practicing entities who don’t produce anything and simply sue over patents, and Jim Logan produced a cassette tape podcast, then how does that not immediately negate at least that part of the troll litmus test?

Now, Mr. Logan’s behavior should be analyzed because as I’ve said before and others have too, you have to look at a pattern of behavior to determine if someone is a troll.  It’s really not a hard and fast definition no matter how much my OCD brain would like for it to be.  The fact of the matter is that Personal Audio is indeed going around suing a lot of people.   Some have settled/taken a license and some are barking about it.  LOUDLY.  (Adam, I’m looking at you.)

While the suit does not detail a specific financial demand, Mr Carolla tells Babbage that he was asked for $3m, a sum he finds laughable based on his network’s revenue (which he does not disclose).

adamcarolla

Your season of Celebrity Apprentice was nuts. Aubrey O’Day? Really?

 

So, the suit didn’t detail a specific demand but Adam was asked for $3M.  That’s…inconsistent.  But the second half of that statement speaks to what I said in a previous post about this:

If Jim Logan had put it all out there in the demand letter and made a reasonable demand for a licensing fee by realizing that Adam Carolla, for all his funny, is not going to have the same resources as an Apple or Microsoft maybe he wouldn’t be so vilified?

I don’t know what Adam’s revenues are and I don’t know what Jim would think a reasonable license fee would be.  But I think that there has to be a somewhere in the middle on this kind of thing.  You cannot argue that Jim Logan didn’t try to monetize his patent with a product when it was issued, something troll are rightly accused of, even though the author of the article tries to do just that in both the above quote and this one:

First, Personal Audio fits the definition of a “patent troll”, or an entity formed for the basis of prosecuting patent lawsuits and licensing without manufacturing products or services.

You could, however, argue that he was ahead of his time, that the technology that would have made his idea more successful hadn’t gotten there yet.

This is why Personal Audio is now saying, “Look, I invented this.  I sunk $1.6* million of my own resources into trying to make it work but the timing wasn’t right.  Now it is, and I would like a cut of what you’re doing because it piggybacks off of what I was doing and oh by the way, I patented it and I have the right to exclude you from doing it unless you pay me a license.  That’s how patenting works.”

*I had incorrectly put a $4M figure here, thank you to my friend for the correction!

{Just to interject here, my beef is with the calling of Personal Audio a troll.  Arguments about prior art on the patent or whether or not the patent should ever have been issued are not the subject here.  Those are different and good arguments and I suppose we’ll see in May what the results of the IPR filed by EFF are.}

You know what would have helped both sides in this sort of thing?  A company like idealAsset, the “match.com for IP”.  If Jim had had a repository in which to place his IP asset, a searchable database with buyers and sellers hooked into it, he might not have had to go around suing.  And if Adam’s lawyers (and other podcaster’s lawyers) had a place where they could go looking to see if there was any IP surrounding what they were trying to do, they could have been matched up, gone on a date, and checked to see if there were any sparks flying that might lead to a permanent engagement or, dare I say it, marriage.

Maybe Jim did ask for decent terms in his original demand letters (if he sent them vs. just straight up suing).  I don’t know, he hasn’t entered any of them into That Patent Tool so we can see, and neither have any of the recipients.

All I know is this is one case where I feel it necessary to channel my inner Hugh Grant/Prime Minister and say:

“Ooooo, would we call him a troll?”

JustSayin_small_New

IPTT

{Adorable Hugh Grant image found here. All business-y image of Adam Carolla found here.}