Two Things About The NetApp Victory Over Acacia Media

Two things struck me immediately when I read Joe’s article over at Ars about the recent victory of NetApp over Acacia:

A.  Acacia Media is the country’s largest patent troll?  What?  When did they usurp the throne from my favorite CEO-turned-world-infamous-chef Nathan Mhyrvold, et al at Intellectual Ventures?

and it’s sometimes considered the largest “patent troll,” since its various subsidiaries have filed more patent lawsuits than any other single company.

How can they have more subsidiaries than IV?  Or rather, how can their fewer-than-IV-subsidiaries have filed more lawsuits than IV’s?  It’s possible and highly likely because Joe’s a very thorough guy and wouldn’t say that if it weren’t true.  It’s just surprising that I didn’t know that because I pride myself on knowing all the things about all the trolls.

Joe 1, Pride 0.

2.  Judge Gregory Sleet should get an award for nailing down the troll problem with a single paragraph.  I, of course, did it in 17 words but who’s counting?  Anyway, what he said regarding this case needs to be spliced up, put on a series of sandwich boards, and paraded in front of every Federal District Court every single day until it has been memorized by all of the judges and regurgitated verbatim every time a troll files a lawsuit:

The facts of this case demonstrate that Summit pursued an action against NetApp without any basis for infringement, delayed disclosing the existence of the Licensing Agreement for eighteen months, extracted settlements from co-defendants worth a fraction of what it would actually cost them to defend the lawsuit, and then voluntarily dismissed its claims with prejudice prior to the court issuing a ruling on the merits… The claims were frivolous—Microsoft’s initiator software [was] licensed, so no system employing it could infringe the asserted patents. Summit’s motivation was to extract quick settlements that were dwarfed by the costs to litigate. Summit was objectively unreasonable in bringing a lawsuit against NetApp mere months after executing the Licensing Agreement that effectively eliminated its theory of infringement. Finally, the court is convinced that an award of attorneys’ fees in this case is necessary to deter this sort of reckless and wasteful litigation in the future.

We have a winner, folks.

_38891263_bingo_b203

B-I-N-G-O!

 

Also, this quote here from Acacia subsidiary Summit’s “expert” is pretty telling:

Summit’s expert said that Microsoft users infringe the patents, but he couldn’t determine whether Linux or UNIX systems infringed because he “didn’t have time.”

Let’s run that through the Patent  Troll Translator™, shall we?

“Seriously?  You expect me to dig through and find out if these people have actually infringed?  Please.  Just pay up, dude, and it all goes away.”

One last thing that’s curious…the article states that RPX took licenses to the two patents in the suit (7,392,291 and 7,428,581) and that NetApp therefore (as an assumed subscriber of RPX’s) already had a license.  RPX purchased PriorSmart which sends out a daily recap of recently filed patent litigation.

I can’t find Summit or Acacia Media listed in any of their emails as having sued NetApp.

JustSayin_small_New

IPTT

{Shot of British bingo winner found here.}

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An Open Letter To Matt Krantz At USA Today

Dear Matt Krantz,

A few days ago, you were asked a question and I think you didn’t do the best job of answering, so I’m going  to rebut your reply here.  The question was “Is there a way to profit from patent trolls?” (Link here.)

OK first of all, this is totally not about you so no offense meant, but I take issue with the question-asker.  Although I’m no wordsmith**, the question is ambiguous as written.  Did s/he mean “Is there a way to make a profit by patent trolling, by buying sham patents and suing people over them even though you don’t contribute anything to society that actually uses that patent?”, or did s/he mean “Can I make money from a patent troll, perhaps by teaching them a trick or two, creating a viral YouTube video, and getting an appearance on the Today show?”  Because really, those are two entirely different questions.

As it turns out, it doesn’t matter which question was actually asked because the answer you provided a) isn’t even really an answer and b) doesn’t apply to either interpretation of the question.

Lets start with your definition of trolling:

For decades, companies would pour millions if not billions of dollars into research and development to create patents. These patents would often just sit around in research labs, and while companies felt they had value, they were never sure how much.

But that’s all changed as companies are waking up to the fact their patent and technology portfolios are valuable, especially if another company is infringing on them. Some companies are finding that competitors are illegally using their patented technology and are now asking them to pay royalties to keep using them.

This is not the most widely-accepted definition of patent troll, I don’t know if you knew that?  But nevertheless, I don’t think it’s so much that “companies are waking up to the fact [that] their patent and technology portfolios are valuable” so much as they are being shaken awake with a big ol’ air horn to the ears, blown by patent trolls looking to monetize anything they can get their hands on.

And then there’s this description of what Acacia Media does:

 Acacia then goes to the company it says is infringing on the patent, collects the royalty and then shares the payment with the patent owner.

What?  You make it sound like Acacia and their ilk are the resident Eagle Scout, standing  on a street corner in the old part of town awaiting sweet innocent elderly women who need a hand with their groceries as they cross the street, and then jumping in to provide all the assistance they need, taking only a portion of the change they got from their purchase as reimbursement for their kind deed.

That right there?  SO NOT WHAT PATENT TROLLS DO.  And you can’t say you didn’t think Acacia Media was a patent troll because the (albeit poorly worded) question was asking you about patent trolls and you answered with a description of Acacia Media.

Then you throw in this one-liner about the exact opposite of a patent troll:

Another company in the field is RPX, which helps companies protect themselves from patent claims.

I love that you mentioned them because they are one of the great American capitalism success stories, in that they saw a problem and are using a market-based solution to fight it.  I suppose it’s not wrong to say they are “in the field” of patent trolls, but a stronger distinction as to which side of the battle they’re on would have been nice.  They are not just there to help protect companies against patent infringement claims.  They are there to help protect companies against patent infringement claims brought on by patent trolls.

The very best part of your reply was the summary box, which I acknowledge that you may or may not have actually created because probably a cute summer intern does them for you.  But honestly, what is this?

USA Today Article

First foul?  Unnecessary single quotation marks on the words “patent trolls”.  Ten yard penalty, loss of down.

Secondly, does anyone use the term “cottage industry” these days?  (Note  correct usage of quotation marks.)

Lastly?  “…investors may want to look into it.”  Into what, patent trolling?  They already are, though you should ask Intellectual Ventures if their backers are happy with their returns…

Look Mr. Krantz, I’m not trying to be harsh, truly.  It’s just that I think you missed a great opportunity to educate, that’s all.  There are a lot of great folks out there doing a lot of great things to fight a problem that is costing this country in terms of real dollars and in lost innovation opportunities.  I may or may not be one of them.

You’re probably wishing you’d just taken the opportunity to talk by phone now, huh?

=)

Just sayin’,

IPTT

**Turns out?  I actually am a wordsmith.  Boggle says so.

Boggle…and because I’m nothing if not the most competitive person you’ll ever meet on the internet, I feel compelled to point out that that is not, by a long shot, my best score up there in the right-hand corner.  Someone who shall remain nameless (JOHN!) got a hold of my iPhone and messed with my Game Center account.  That’s my story and I’m sticking to it.

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

Elon Musk Is Not a Perfume From Avon?

Just to clear up that misconception for anyone else who thought so, Elon Musk is the creator of Tesla Motors, and makes the kind of car that I will likely never own. It’s not the price tag or availability, you see, it’s the lack of cup holders. If I don’t have a place to put my Big Gulp, it ain’t happenin’.

He’s been in the press lately because Iron Man 3 is coming out and he was the prototype for the Tony Stark character. Kidding. He’s been in the news because his space transport company, SpaceX, has made the decision not to patent any of the technology associated with it. Here’s one reason he gives:

“Our primary long-term competition is in China—if we published patents, it would be farcical, because the Chinese would just use them as a recipe book.”

This is one section of the patent area where I’ve always been a little fuzzy. In order to patent your idea, you have to describe it in painstaking detail. This by definition gives other people the “recipe” they need to do exactly the same thing.  Of course, the patent gives you the right to prevent them from doing it, one giant flaw being that the onus is on the creator to go out and find the infringers, or, you know, pay someone to do it for them.

Instead of going that route, SpaceX has decided to just put their product out there. In cases where the idea is very complex or the investment capital needed is large, it’s not an unsafe bet. By the time anyone else reverse engineers his rocket technology, Mr. Musk will be (wait for it) light years ahead of the competition. He’ll have captured enough market share that it will be hard(er) for anyone to come in and start taking over, unless they build a better mousetrap. In which case he’d get beat fairly and squarely. No patent required.

Except whoops! We live in a very litigious society. This may come as a surprise, but there are whole companies devoted to sniffing around trying to figure out if anyone is infringing on anything even modestly resembling their spurious patents. So even though you don’t feel the need to patent your stuff, other people can still come after you if they think you stole their stuff.

Further, having not patented anything, you can’t threaten to counter-sue anyone who comes after you. This is what makes the trolls so dangerous: they have far less incentive to settle because they don’t make anything that you can counter sue them for infringing on.  Likewise, if SpaceX has no stable of patents of its own to draw on, you’re exposed. This is why I think Google bought Motorola, or at least part of the reason.

Cheryl Milone of Article One Partners makes this point very eloquently:

“Simply eliminating one area of IP protection is risky because, regardless of whether or not you participate in the patent system, you are subject to its obligation,”

You have to play the game the way it’s currently set up, and work in the background to change the rules if you don’t like them.  But just like when your toddler puts his hands up over his own eyes and says “You can’t see me!!”, he’s only fooling himself.  Just because he can’t see you, doesn’t mean you can’t see him.

My mind is kinda split on this one, because I’m with Elon all the way, even though I’m sort of disappointed I can’t order his bath salts from the Avon World Sales Leader.  I think he’s focusing on just the right thing and if I were in his position I would do exactly what he’s doing.

But the other half of me is in the camp that says just because you want something to be true doesn’t make it so.  My mom used to have this saying when we were little:

Want in one hand, spit in the other and see which one fills up first.

In Elon’s case, I really do hope it’s the “no patents required” hand.

Just sayin’,

IPTT

Rosetta Stone for Patent Transactions: Acacia Media Edition

This just in, Rambus sells out to Acacia:

Rambus sells some of it’s display technology patents to Acacia.

From the horse’s mouth:

“Acacia is delighted to be partnering with a technology innovation leader like Rambus,” commented Paul Ryan, chief executive officer at Acacia. “The addition of these assets to our portfolio allows us to grow our base of future revenues.”

And when translated:

“Acacia is delighted to have purchased a larger stick with which to beat companies and force a licensee fee for these patents,” commented Paul Ryan, chief troll officer at Acacia.  “The addition of these assets to our portfolio allows us to shake down a broader range of companies so that we can keep our summer homes in Aspen.”

I am, of course, kidding.  Everyone knows that trolls summer in the Caymans.  Duh.

Just Sayin’,

IPTT

The Shakedown List: President’s Day Edition

Well, one of the troll’s lists, anyway.

I love when trolls list out their latest victims licensees/acquisitions.  It’s almost as if they’re proud of it?  Here’s Acacia Media’s Recent News:

AcaciaNextSteps

When you click the link with the bad date, you get this file, from which I’ve pilfered this quote:

Acacia’s CEO Paul Ryan, commented, “We see the energy industry as a significant new market for the continued expansion of our patent licensing business in 2013.  Acacia plans to continue this expansion and partner with patent owners who have developed new technological advances in all areas of the energy industry.”

Since I speak Troll, allow me to translate:

OIL AND GAS?  WE R HAZ U IN AR SITES.  U SHUD LOOK OWT!

And from lolspeak to english:

Oil and gas?  Hold on to yer ten gallon hat, you’re next.

This is interesting to me for a few reasons.  Firstly, because I spent the better part of my early career writing programs to track information for oilfield services companies.  I love that industry!  Technology is what allows us to get the oil out of the ground for cheaper, and it also allows for us to find more of it.  If you’ve been near or in the oil business for any length of time you know that there is no shortage of the stuff.  There’s more oil in the ground than we have used to date, worldwide.  You just gotta find it and get it to the surface.  Technology helps us do that.  And now the trolls will make it harder for companies to spend their money on those technological innovations because they’ll be spending that money on lawyers to fight off the guys in the black hats.  Which in turn will cause the price of gas to go up as well.  Bonus!  (Not.)

Secondly, I find it interesting/embarrassing because I should have seen it coming.  I thought (and still do) that the pharma community was going to be the hardest hit after the technology sector, and maybe the data will still bear that hunch out.  But this right here revelation from Acacia is going to force me to Google a whole different topic and see who else is on this bandwagon.

And here I thought I had the day off.

Just sayin,

IPTT

In Defense of the Indefensible: That’s Not The Whole Truth And You Know It

Hello, Erin.  Nice article.

Here’s the thing…it is certainly admirable that there are companies out there who want to help the little guy.  In fact, that’s a point I made in my very own Backgrounder right here at IPTT2.  (Is it wrong to link to yourself?  Is that bad protocol?  Will it make my hit counts go up artificially?  ACK!)  But we all know good and well that that is not predominantly what Acacia and InterDigital do.

This is kind of why, when you’re sworn in under oath, you’re told to tell “the truth, the whole truth, and nothing but the truth.”  I once babysat for a kid who, in a moment of “out of the mouths of babes” that you just can’t script, said it like this:

You should always tell the truth, the whole truth, and everything but the truth!

…you know, like politicians!  He was a good kid.  Often wondered how he turned out, but I’m too afraid to look him up because he’d be in his 30’s by now and Good God above I cannot possibly be that old to have babysat him when he was eight.

But I digress.

The Patent Troll issue gets tons of play and it should and this is but one more article to add to the mix that tries to show that not everything is as awful as those of us on my side of the fence make it seem.  I think personally that there’s nothing wrong with defending a troll or two if there’s good reason.  Sure, some trolls actually do work to get the little guy inventor a good deal, but it is always with their own bottom line in mind, so not quite as altruistic as Erin’s article would make us believe.  I also realize that, as I pointed out in my war of words discussion with Charles Arthur, not everyone who sues over a patent is a troll.

But Acacia?  InterDigital?

C’mon.  TROLLS!  BOTH OF THEM!

Just sayin’,

IPTT