Troll Lobbyists Go To Washington + Goodlatte Gets Cold Feet = Coincidence?

There are a couple of interrelated things going on here which may require me to use the bulletted list feature (why does WordPress insist that bulletted is not a word?) and I’m not generally predisposed to that so this should be an interesting Wednesday.  Nevertheless, here we go:

  • Senator Goodlatte introduces a bill that yours truly doesn’t quite like.
  • A whole heap of lobbyists for patent trolls, Nathan Myhrvold and the Innovation Alliance (which may or may not be redundant, you decide)  included, show up in town and start shopping their sob story to whoever will listen which is to say they took Senator Goodlatte for a round of golf, let him win, and paid the after-round bar tab.
  • Goodlatte amends his bill to take out one of the biggest things the sorry group of whiners was crying over, namely the extension to the covered business methods provision that would have allowed defendants to request re-exam over non-financial based patents in infringement cases, specifically putting software patents in the crosshairs.

Let me ask a question:  How is it a good thing to allow the USPTO to take another look at software patents when this is the agency that granted them in the first place?  And, correct me if I’m wrong, but don’t those folks take a bazillion years to get anything done now?  Putting more things on their potential “to do” list would…speed them up?  Maybe I’m not getting it but this was a suggestion in the Schumer patent reform bill as well.  I didn’t like it then and I don’t like it now.

But at the same time, to IBM/Microsoft/Apple, all you big players bellyaching about it, I say a big fat “Are you kidding me??  You realize that by not wanting to open your software patents up to re-exam you’re effectively saying ‘it’s because they’re bad’, right?  You get that, don’t you?” Ai-yi-yi-yi-yi!

RickyRicardo-big

I understand the frustration at the fact that the big players, either as individuals or as part of a lobbying group, have stormed The Hill and stamped their little troll feet and boohooed until the thing they didn’t like was removed.  It’s awful.  But it’s also allowed  by law.  Lobbyists are a scourge, but not illegal and sometimes a necessary evil.

Patent trolling is like this as well, except for the “necessary evil” part of course.  A moral scourge but not an illegal one based on current laws.  Many of the efforts to make their behavior a matter of breaking federal law will serve only to either reduce the problem temporarily while the trolls find a way to skirt said new laws (they’re already searching Teh Google for ways to undermine the Schumer law) or it will have an as-now unforeseen affect on another part of the population that uses patent litigation legitimately and those poor saps will get lost in the shuffle.  This is why, in my never-to-be-humble opinion, broad legislation to fix the patent troll problem will create more strife than it alleviates.

Of course there are some changes to the laws that would be helpful, I don’t mean to throw the baby out with the bathwater.   Holding off on discovery, a huge cost, until after any motions to dismiss are heard, would be a great thing.  Requiring full transparency as to the owner, all assignees, and all parties-in-interest to a patent would also be good.  Force these folks to be on the up and up about who they are.  Thumbs up on that!

But going too much further to bend and shape American laws to ward off the trolls seems ill-advised.  There are things in the market like Article One Partners and their prior art searching, efforts at collecting demand letter data so that victims and targets of trolls can collaborate…those are great things.

And they’re great mostly because they don’t require government intervention and new laws and votes and lobbying.

JustSayin_small_New

IPTT

{Image of Ricky going bananas over Lucy found here.  And on a t-shirt, no less!}

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That Big Sonic Boom Late Last Week? That Was Rockstar, Getting The Party Started

First of all, I feel not unlike Rodney Dangerfield these days, what with the President’s lack of regard for my schedule and now the reports of Rockstar Consortium’s decision to file a lawsuit that came on Halloween night when I’m busy trying to ferret out all the Reece’s Peanut Butter Cups from the candy my kids got.  Thanks, Rockstar.

So here’s my question for the consortium members:  At what point do you spend your time improving your own products and innovating instead of hiring people to deconstruct the success of others?

I don’t know the going rate for cell phone reverse engineers is these days, but I know that it’s probably a pretty penny especially since Rockstar reportedly hired 10 of them.  Ten people.  To spend all day and night ripping apart a product to see if it infringes on one of 4,000 patents.

Haystack, meet the needle.

It took you a little over two years to do it but low and behold, you feel as though you’ve gotten the smoking gun, the holy grail that will do…what?  Tie your money up in litigation for years?  And in that time span, your hope is that the Android share of the cell phone market will decline, right?  That the man on the street is going to go “ZOMG!  My Android-based phone was made by a company who infringed on a patent!!  I simply must change platforms now, for I cannot be a party to this madness.”

Yeah, I’m sure that’s exactly what’s going to happen.

Harvey Spector eyeroll

What is so disconcerting about this whole thing is this:

“The principals have plausible deniability,” said Thomas Ewing, an IP attorney who spoke to Wiredabout Rockstar. “They can say with a straight face: ‘They’re an independent company. We don’t control them.’ And there’s some truth to that.”

“Plausible deniability”?  What is this, the movie Independence Day?  We’re not talking about some alien holed up in Area 51 which is (probably) fictional and no one told the President so that if the aliens ever did attack, the public wouldn’t go crazy saying he knew all about it which is pretty much the whole plot of the movie so I totally just saved you a Netflix rental, you’re welcome.

What we’re talking about is heads of the major smart phone manufacturers getting beat into the ground by phones using an operating system that is, whether better than theirs or not, out-selling them so they have stamped their little feet and said “Fine.  We can’t beat you fair and square?  We’ll have our consortium sue you.”

Smartphone_marketShare_macRumors

Again, “plausible deniability?”  Please do not pee on my leg and tell me it’s raining.  Any deniability on the facts surrounding what is really going on here is completely implausible.  When it  comes to Google specifically, there’s this:

Rockstar may want to keep the patent conflict as a kind of “proxy war” between Google and its competitors. But Google has plenty of patents, and this new attack seems assured to bring a counterattack.

Right?  I mean, in what world does Microsoft and Apple and the other 10%-ers believe that Google won’t retaliate?

Here’s the final kicker, from this article by Seth Fitzgerald:

One of the most intriguing aspects of the lawsuit is that Google had tried to buy the Nortel patents for $900 million but lost when Rockstar put up a significantly larger bid. Google went on to counter Rockstar by acquiring Motorola Mobility for $12 billion. Despite losing the chance to acquire Nortel’s patents, Rockstar claims Google went about using Nortel’s ideas anyway.

I maintained back then and still do now that Google didn’t want those patents (read here and here).  What they wanted to do was drive the price way up, and they did.  Fast forward to now, and while Rockstar has spent two years and lots of money digging for their “Ah ha!” moment so they could come out swinging, Google went right on with their bad self and put their money into innovations such as Google Glass.  I’m not all up in Google’s financial business but I can only presume that since they weren’t paying off that $4.5 Billion bill, they also instead used their money to buy an actual operating company that comes with a whole set of patents that they can now pull out of their back pocket and use.

When I was in the 4th grade with Mrs. Unger, she had us all draw a picture of a nuclear warhead.  Each picture represented X number of weapons that the US had.   Then, a certain sub group of students was asked to draw a warhead that represented X number weapons that the USSR had.  The whole point was to show us that really, after a certain point, it didn’t matter how much fire power each side had because the minute one country or the other fired off, we were all assuredly going to be dead.

Mutually assured destruction, I think is what she called it.

Right.

JustSayin_small_New

IPTT

{Harvey Spector eye roll found here. Chart of smartphone market share found here.}

VirnetX In The Crosshairs: Troll Gets (Potentially) Trolled With New Tactic

Note:  Edits at the end, based on new info.

This article over at Seeking Alpha (which sometimes requires a log in and other times not, which tells me they need to make up their mind already) was sent to me by a hipster tipster.  It contains a whole lot of information about stocks and prices and the market and shorting stock and honestly?  I don’t comprehend a whole lot of it.  I was 10 when I read The Westing Game and, being the overachiever that I was, checked out a stack of books from the library (<— ha ha, remember those?) about the stock market but completely failed to finish any of them because math.  I can’t wrap my brain around it any more than I can wrap it around the fact that George Lucas sold out off to Disney.

kramerPimp

Definitely hipster, not my tipster.

But thankfully you don’t have to understand the ins and outs of Wall Street to know that New Bay is using IPR and the USPTO to go after VirnetX.

Hmm…

Here’s how it’s working:

VirnetX sued Apple for infringement (that’s one of many links about the suit, Google is your friend for history on that).  New Bay Capital is a brand new baby company born of another brand new baby company named Eastern Shore Capital, neither of whom has an expressed interest in the patents in suit between Apple and VirnetX.  According to the rules of IPR, it would appear that they don’t have to have an interest (quote from the USPTO site):

A person who is not the patent owner and has not previously filed a civil action challenging the validity of a claim of the patent may petition for an inter partes review of the patent.

An inter partes review must raise a substantial new question regarding the patentability of the patents in questions relating to obviousness or prior art references.  In this case, there is no certainty that the review will be granted much less actually result in any real change to the scope of the patents.  But it doesn’t matter and here’s why:  from the chart in the Seeking Alpha article, just the filing of the IPR (both by Apple and by New Bay) have brought VirnetX’s stock price down by 20%.  I don’t even understand this stuff, and serious thanks to Tom Shaughnessy for doing the actual math, but that’s not an insignificant amount.

While New Bay filed the IPR, they also went and played golf with the head honchos at VirnetX because I have it on good authority that trolls like to play golf, and told them they’d drop the whole thing in exchange for 10% of winnings from the Apple suit.

SueListen_virnetx

Just to recap:

  • New Bay files IPR.
  • Runs VirnetX’s stock price down, and probably buys a lot of it knowing they’re going to hit it rich in the Apple suit and the stock will thereby rise again.  This would allow them to sell at a higher price than they bought which, if I’m given to understand anything at all about this world, that is the way you want things to go if you play the stock market.
  • Just to ensure that they get something if the IPR fails and/or the stock price doesn’t go up because evidently stock prices are super fickle, they agreed to back off altogether in exchange for 10% of the final judgment in the Apple case.

All we need now is someone to tie these New Bay cats with someone at Apple or Cisco or anyone else who’s been trolled by VirnetX.

If the black hats can play the shell  game, why can’t the white hats?

UPDATE:  From Tom at Seeking Alpha, we have this update which tells us that New Bay did indeed request to pull their IPR.  From his analysis, it sounds like they’re a smidge afraid of discovery in EDTX.  Such a pesky, troll-friendly venue after all these years.  I contend that the damage was done…again, I have not much clue or interest in the stock market but can we get a read on who bought VHC stock while it was down and what they’ve done with it since?  It feels like a loss in the troll-fighting scheme of things, but from a financial standpoint for New Bay folks, they might be in the market for a new car or two with their winnings, is what I’m saying.

JustSayin_small_New

IPTT

{Kramer image found here.  Internet meme of cute little toddler at a screen door can be found virtually everywhere on the internet.}

Why Companies Settle With Patent Trolls

Subtitle:  Velvin Hogan, We’re Looking at You.

Probably there are many reasons that companies settle with patent trolls, but honestly I think the fear of a jury trial is at the top of the list.  Look what happened in the Samsung/Apple vendetta by Steve Jobs trial.  Turns out, the jury foreman would have been good friends with Steve, in that he too behaves out of spite.  You get one guy on there who doesn’t disclose his history in voir dire, and you’re sunk.  Which begs the question in my mind that, hey, isn’t that juror misconduct or contempt of court or something?  Can you really omit relevant facts before you serve on a jury?  I don’t think you can.  This specific problem with a juror is an anomaly, but it points to one potential issue avoided if you just settle out of court.

Then there is the problem of putting very technical arguments in front of the general public.  That’s not a slam on the general public, for I are one of them.   Patent infringement trials are fraught with all manner of industry-speak and jargon and terms that people have to look up in order to understand.  Or worse, they need the lawyers to explain it them and we all know how that is likely to end up.  (Hint:  lawyers are terribly partisan explainers, in that they explain only the part of the definition they want you to know, the part that will tip the verdict in their favor.)  Unless you just enjoy spending your time reading about the ins and outs of your newest gadget, all that stuff is going to fly over your head.  And if you buy into the rhetoric that corporations are E.V.I.L. and don’t deserve to make money, then you’re almost always going in with the attitude that Deep Pockets is wrong and the Patent Troll is right.  It’s an easy assumption that is difficult to overcome no matter how good your lawyer is.

The way you stay out of court, the solution the trolls are banking on, is that you’ll settle for their outrageous licensing fees.  Increasingly, we see companies go after invalidating the patent with prior art, which is a step in the right direction.  I still claim the best solution is coming back at the trolls with all the firepower you can amass via collaborative defense.  There is a whole slew of people being sued in Central California by Digitech:

IP Lawsuits

** data via PriorSmart, email them to sign up.

Every single one of those companies ought to pool their resources and fight them.  Get in bed with the enemy long enough to defeat the bigger enemy, and see what happens.  I’m telling you, you stop bullies by punching them in the nose.  Time to take a swing, folks.  Or, go to court and hope you don’t end up with someone like Velvin Hogan on your panel.

Irwin M. Fletcher, you choose.  (I love that movie.)

Just sayin’,

IPTT

This Bears Repeating

Zach Epstein, you’re my new hero.  He wrote an article about a Samsung verdict in Germany, and there are some golden nuggets that need to be repeated plastered on billboards in Silicon Valley:

Judge Johanna Brueckner-Hoffman stated, “The court is of the opinion that Apple’s minimalistic design isn’t the only technical solution to make a tablet computer, other designs are possible.” Other designs are possible.

They are, in a world where you are not sued within an inch of your life on a daily basis by people bullies claiming patent infringement.

Again, designs and innovations need to be protected, but to what extent and at what cost? The current system is not sustainable.

Truer words, my friends.  Truer words were never spoken.

The simple truth is that a system shaped by lawyers may not be the best system for corporations. And it is certainly not the best system for consumers. Things need to change.

This is chiefest among my complaints about patent litigation.  The only true winners are the attorneys.  They always get paid first and most.  Love him or hate him, you can’t deny the amount of pithy little sayings that have come out of the formerly nicotine-filled mouth of Rush Limbaugh, among them this little ditty:  “Follow the money.”  And when you do, you will find attorneys.  Or at the very least a man with a heinous vendetta.  Or possibly both.

Just sayin’,

IPTT

Bullies: Weighing in on The Verdict

This is a rarity for me, because I’m not going to link to or quote anyone else’s blog or news article in this blog post.  Can you even stand how original that will force me to be??  I think I feel a nervous tic coming on…

The thing that has always fascinated me about the patent realm, and it’s red-headed step-siblings copyright and trademark, is the personalities involved.  How much do you have to think of yourself to want to trademark the phrase “You’re Fired!”?  Donald Trump, I’m looking at you.  I’m a huge fan of The Donald, read The Art of the Deal when I was 13 and his personality has fascinated me ever since.  Same is true of the people involved in this blog’s namesake fiasco.  The very idea that two grown men can get so out of sorts for being called exactly what they are is just nuts.  Niro and Albritton went all batcrap crazy when Frenkel called them out for filing a lawsuit on behalf of ESN against Cisco for a patent that had yet to be issued.  Ooopsies.  So Frenkel labels ESN a troll and Niro and Albritton as their allies and they go freak nasty.  Again, personalities are cuhRAZY in this business.  Guys?  How about not doing stuff like that if you don’t want the label?  Or, if what you’re doing (i.e., being a Patent Troll) is nothing to be ashamed of, then why the lawsuits for defamation of character?  I’m no math whiz but something doesn’t add up.

So back to The Verdict, it’s public knowledge in IP circles that Steve Jobs had a personal issue with Samsung.  He was going to make them pay for stealing his design of the iPhone come hell or high water.  And he did.  And in the process do you want to know who really won?  The same people who always do in litigation:  THE LAWYERS.  I mean, don’t you guys watch television?  Harvey Spector’s suits don’t buy themselves, you know.  CLIENTS  (and by extension, customers) PAY FOR THEM.

You can take the Mark Cuban route and complain ad nauseum via twitter that you shouldn’t be able to patent a rounded-corner rectangle and that would be one angle (ha!) to take.  But it’s much more interesting to look at the whole picture, for me anyway.  You have a man who’s clearly a design genius.  If you look at the trial demonstratives that Apple put up vs. what Samsung put up Apple is the winner.  Don’t think that didn’t factor into the jury’s decision…patent law is confusing and if you don’t make it as easy as possible to understand then you’re behind the curve.

But my point is that a man who actually buys about $10 billion (it may be million, but again I promised myself no linking to other stories on this one)  in parts from Samsung was so burned by the fact that they designed a phone that looks similar that he dragged them into court and beat them to a pulp.  ??

If you can prove to me that someone who wanted an iPhone accidentally bought a Samsung phone and didn’t march immediately back to the store and exchange it then I’d be a little more OK with it.  But the fact is that if you want an Apple item you’re going to buy one, regardless of how similar-looking or similar-operating a competing product is.  Even if, and in some cases, for some people, especially if, it’s more expensive.  Why?  Because that’s the legacy that Steve Jobs built.  By suing Samsung he’s effectively saying “I don’t trust the company I built and  I don’t trust my customers to come to my stores if something else out there looks remotely similar.  So I’m not going to let anyone else come close.”

What are you so afraid of, Apple?  We love you.  I have two iMacs and three iPhones and if you made a DSLR I’d buy that too.  You don’t need to be a bully and knock everyone out of the game.  Just be who you are and build what you build.  People want it.  They will come.

Just sayin’,

IPTT

NPR: Now You’ve Gone and Pissed Me Off AND I Have to Find a New Book

WTH, Jonah Lehrer?

Every year I select at least 12 books to read just because it’s good for me I can impress my friends I like to stay well-read I like to sound smart in conversations with strangers I was forced to read as a child and I am still afraid my Mother will punish me if I don’t.  On this year’s list was Imagine, by Jonah Lehrer.  Only I just found out this morning that he’s a big fat liar liar and his pants are most assuredly on fire.

I had no idea it was considered plagiarism if you swiped words from your own self.  Isn’t that recycling?  Reusing?  Reducing the amount of time you have to spend coming up with new words?  Or do those concepts only apply to plastics in your garbage can that you have to put into a different garbage can on Mondays and Thursdays?  I AM SO CONFUSED.

Making up quotes or taking them out of context?  Not so confusing.  You totally cannot do that.

I was on page 102 of Imagine.  I’m sort of disinclined to finish it now, you know?  That’s sad, because a lot of what I read so far has meshed with books I read last year, like Enchantment and 10 Mindful Minutes.  Only guess what?  Those authors didn’t lie.  Good on you, Kawasaki and Hawn!

Really though, what’s most distressing is that the next book on the list is The Quest, a follow-up to the best book ever (Hello?  The Prize.) and I feel compelled to read my book list in order and I hadn’t planned on starting that one until the kids were back in school in three weeks.

Thanks.  Thanks a lot, Jonah.

Also, there’s a trial going on.  Something between Apple and Samsung?  The internal conversation in my head (is that redundant?) on that one is keeping me up at night.

What?

You don’t think of patent lawsuits in your sleep?  What’s even wrong with you?

Just sayin’,

IPTT