Choose To Chance The Rapids, Dare To Dance The Tide

No matter how I feel about his policy not to sell on iTunes, and I feel fairly strongly about it, you gotta love Garth Brooks.  Or at least the 58 bagillion people at the ACM Awards this past Sunday night do.

So.  Let’s just come right out with my point…the “podcasting patent” is no more.  I’m not quite sure how to feel about it because I never really saw Personal Audio as a troll (as evidenced here and here).  Why?  Well, chiefly because the company’s owner actually patented something himself rather than buying a patent on the open market for the sole purposes of extorting payments from (alleged) infringers, or, worse, purporting to be “inventor friendly” and convincing people to “innovate” for him and then monetizing whatever crap he can manage to patent out of the process.  You know, like Intellectual Ventures does.  Further, Mr. Logan spent his own money trying to commercialize the idea, something a troll would never do because the idea isn’t to add value of any kind, it’s to add volume to their wallets.

IP Troll Tracker

Joe Mullin puts it this way:

The history of Personal Audio dates to the late 1990s, when Jim Logan created a company seeking to create a kind of proto-iPod digital music player. But his company flopped. Years later, Logan turned to lawsuits to collect money from those investments. He sued companies over both the “episodic content” patent, as well as a separate patent, which Logan and his lawyers said covered playlists, that wrung verdicts or settlements from Samsung and Apple.

I’m not inside Mr. Logan’s head, but I’m imagining that it was less “turning to lawsuits to collect money from investments” as it was “Daaaang, those dudes are doing what I tried to do, and I even paid to patented the idea, and I think I’m owed something for my trailblazing.”  I love you anyway Joe, even though I disagree with you on this.

But as I said in prior posts on this topic, the issue for me in this particular case was never “should the patent have been issued”, it was “the patent was issued and I felt he had a right to assert it”.  Plus, I don’t have any first-hand knowledge that his tactics in trying to get licenses was trollish-like.  We’d know if it was, if anyone who received such a letter would be willing to upload it to That Patent Tool.  (HUGE HINT. PLEASE TAKE IT.)

I feel a little sheepish that it was EFF that took the patent down because I like those guys.  I was a total and complete bumbling idiot fangirl when I met Julie Samuels in person that one time.  I know, she’s not there anymore but she was when I met her and went all Kristen Bell and a Sloth.  In my mind, of course.

What would have saved us all this heartache would be if the USPTO actually did a better job of vetting patent applications and quit issuing stupid ones.  But there again, I’m not even sure this one qualifies as stupid, though the cases of prior art would seem that it was, at least in part, not non-obvious.  <— Double negative, FTW.  You’re welcome, Mrs. Fritchy my Junior English teacher.

Mr. Logan, through Personal Audio, chose to chance the rapids.  He patented an idea and tried to use it in a product in the market place using his own money, and then made an effort to capitalize when technology brought forth the right tools to make it all work.

And because I am incapable of not completing my lyric reference, he didn’t sit along the shoreline and say he was satisfied, he danced the tide until the music was stopped.

I had to get it out, y’all and now feel as though my next post must have quadruple the snark to offset the maudlin tone of this one!

JustSayin_small_New

IPTT

{Oh no you didn’t picture found here.}

Chris Hull of Life360 Beats AGIS, Necessitating A Second ‘Dear Piece of Shit’ Letter

I know the Life 360 app because my husband installed it on my iPhone prior to a trip to NYC.  I went there because first of all, New York City is the best place ever for short visits where you don’t mind not seeing the sky and are comfortable standing out like a sore thumb because you’re from Texas and bring your boot bling with you everywhere.

Secondly, I was there to support my in laws through my Father-in-law’s cancer scare.  The city is built on a grid and the streets and avenues are all numbered and the street signs are very clear so pretty much?  If you get lost in NYC there is something seriously amiss with your internal GPS.  Nevertheless, all parties involved (read: elderly in-laws from Alabama) felt it might be best if I had some way to check in from the mean streets of mid-town Manhattan when I would venture out after dark to get my Subway sandwich and black and white cookie.  Fair enough.

I know the app, is my point.  I “internet met” the owner, Mr. Chris Hull, when he potty-mouthed a reply to a supposed patent troll and I wrote about it here.  Today, Joe Mullin (Hi Joe!) wrote up the end of the story and boy are there some gold nuggets here, my friends.

The issue I had back then was that under my definition, AGIS didn’t look or feel like a patent troll to me.  They had built a product using their patented technology (LifeRing) for one, as opposed to just buying up old stodgy patents and trying to litigate them.  They only have a portfolio of 11 patents, which is somewhere south of the 500 bagillion that, say, Intellectual Ventures has.  Still, I understood Chris’s frustration, as he had been sued a few times in the past by legitimate trolls and was smooth fed up with it.

I predicted then, and it looks like I was right, that he wouldn’t get the patents invalidated (they weren’t).  But what he did do is spend a fair amount of money fighting infringement.  He won there, but that’s not why I’m adding him to my Patent Troll Fighter Heroes Gallery.

Chris Hull, you and Life360 are hereby officially inducted into the Gallery because you and your attorneys succinctly nailed one of the underlying problems in the patent industry, and were not afraid to say it:

[AGIS’s] lawyers sold him a bill of goods, that he invented this very well-known concept.”

Sometimes the trolls collect old patents and go out and hammer everyone for them, a business model IP Nav and Intellectual Ventures and Marathon Group espouse.

This isn’t the case here.  Mr. Beyer (CEO of AGIS) had attorneys who saw an opportunity, thanks to the likes of the real and larger trolls, to try and capitalize on patents when they weren’t able to capitalize as well as they’d like to on actual products.

That’s a true shame, because I think in the absence of the patent trolling industry the outcome of this would have been completely different.  The dialogue on the front end would have gone differently and perhaps resulted in, if not a patent licensing agreement, some sort of synergy between Life360 and AGIS.

Because his lawyers are jerks and took a page from the trolls, Mr. Beyer is also a victim here:

Beyer, reached by telephone yesterday, said he “resents Mr. Hull characterizing me as a troll.” His company has sold software for 10 years, and won one contract in 2015 already.

“I also resent him dragging AGIS and me through the mud because of ads,” he said, referring to the Stop AGIS and malcomkbeyer.com websites. “I’ve never said anything bad about Mr. Hull and I don’t intend to. I’m exhausted, and I’m going to have to take time to think about life, and this in general.”

What Mr. Beyer needs to think about, in addition to life in general, is sending a “Dear Piece of Shit” letter of his own to his attorneys for getting him into this mess.

JustSayin_small_New

Wherein I Attempt To Define “Patent Troll” To Paul’s Satisfaction

There’s a gentleman who I “internet know” and we’ll call him Paul Morinville, mostly on account of that’s his name.  Paul is an inventor and holds at least one patent.  I do not have permission to share the exchanges we’ve had by email, and therefore I don’t feel comfortable getting into his whole story here.  I’ll leave that to you in the comments, Paul!

I can tell you that his concerns about patent trolls, which I’m fairly certain he believes do not even exist which is why there’s no formal definition that he will accept, stem from having his inventions used by big players in the market without regard to his actually having invented them.  From his perspective, Big Companies steal from inventors on a regular basis and therefore inventors need a way to go after them without being called patent trolls.  Even though no such thing exists.  According to him.

cover-your-ears-rapgenius

I get that, wrote about it, and didn’t bother printing t-shirts because is that even a thing anymore?  No one is arguing logically that small inventors need a way in the door to larger companies, or at least no one should be.  The Backgrounder has been a link on this blog since it began over three years ago, this is not news.  But you cannot say that because there is are legitimate businesses out there set up to help the little guy that some of those business aren’t started to help, oh, I dunno, themselves.  That’s what patent trolls are, and that’s part of what I would call an “official definition”.

Let’s not confuse “official definition” with “litmus test”.  I’ve talked with Lenny Kravets via twitter and we both agree that a single test does not exist to determine who is and is not a troll.  It would be super convenient if there were, but alas life is not that simple.  But I think that we can get pretty close to a definition of a patent troll that is acceptable to everyone, even Paul.

I’m going to give it a shot here, because that’s how I roll:

Patent Troll, n

1/  A company or individual who, using patents that either never should have been issued or are broadly constructed (intentionally for the purpose of misuse, or as a result of poor USPTO patent examination practices), sends letters to various and sundry companies and/or individuals that simultaneously request license fees and threaten legal action if the recipient fails to respond correctly by paying up and who will, in the face of inaction by a demand letter recipient, actually file suit in Federal District Court, the District of East Texas being the most popular venue.

2/ A company set up to act as a cover for large corporations who try to breathe new life into older patents which they would ordinarily let expire but, as a result of greed and/or pressure from Wall Street, have decided are ripe for assertion or litigation.

3/ Intellectual Ventures

What do we think?

I believe the reason that inventors are all up in arms about patent reform is that they think it will hurt their ability to go after larger corporations that steal their stuff.  Pulling out my broken record here, I’ll say that I once again agree that any reform out of Congress is going to have it’s butt handed to it by the Law of Unintended Consequences faster than a Thanksgiving turkey disappears.  Capital Hill is not the place to solve this problem, the market is.

There’s a recent thread over on TechDirt about how the trial lawyers are the ones who got to Harry Reid and killed patent reform in the Senate last session.  If you don’t read the comments on sites like TechDirt and Huffington Post and Ars Technica, then you’re literally only getting 1/3 of the story.  That’s where I found these gems:

Ideas can be stolen?! What next, someone will steal my feelings?! I’ll never feel again! – by Bengie

and

1) Coming up with your own idea independently is not stealing. (Even if you were not the first to ever think of it.)

2) Ideas are a dime-a-dozen, as any VC will be happy to explain, and de minimis non curat lex. (The law does not concern itself with trifles.)

Implementation and execution are what have value. – by OldMugwump

Right and right.

Though I think my attempt above is rather valiant, probably the best definition of a patent troll is similar, as I’ve previously pointed out, to the definition of obscenity:

 I’ll know it when I see it.

Maybe by using the definition above or parts of it, we can come to some agreement? Because as much as Paul would like to assert that they don’t exist, covering your ears and closing your eyes doesn’t make it all go away, my friend.  Trolls are out there, most assuredly.

Even so, having said all that, the point I made in my previous post on a definition of patent troll is still my favorite:

The way you determine whether a company is a patent troll is not by a single definition, it’s by a pattern of behavior over time, by looking at the results of that behavior and ascertaining “Is this behavior that is good for American businesses or is this behavior that gets in the way of progress?”  In a lawsuit it’s the stage where you “prove up” your case.

So how do we do that with trolls?  I’ll tell you how: we enter demand letter data and over time, the question of what is a troll, never mind who is a troll, will all but answer itself.  We build a community around how these guys behave…what they ask for in settlements, what they demand in their initial leaflet drop from their G-5′s, how they handle their claims construction when things get to litigation, the list goes on.  By looking at behavior over time we will be able to tell which companies are the real villains, and which are just victims of circumstance.

JustSayin_small_New

IPTT

{Cool red-headed ear plug image found here.}

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.}

So Where Are You Taking Me To Dinner With Your $450,000, Adam Carolla?

Just read this update from Joe Mullin on the Adam Carolla whiney-baby fight against the “podcasting troll”.

We all know by reading this and this that I disagree with Joe on the labeling of Personal Audio as a patent troll in the general sense of the word.  As previously stated, he differs in my mind from the standard troll because he a) actually created a “product”, if you will, using the patented idea and sank his own money into it, and b) he sues people who are actually in the same line of business that his patent covers (as opposed to, say, people who have never come close to infringing on anything in their lives).

Adam’s a funny man, and I like his comedy but I don’t like when people are disingenuous.  So you’re telling me that Personal Audio moved to dismiss their case, and Camp Carolla said…no?  Whaaaaat?

What the Ars Technica article doesn’t state is when Personal Audio backed off. Their statement released yesterday is pretty ouchy, though:

“Adam Carolla’s assertions that we would destroy podcasting were ludicrous on their face,” said Personal Audio CEO Brad Liddle. “But it generated sympathy from fans and ratings for his show. Getting his fan base to continue to donate to his legal fund is a cynical exploitation of the publicity power he enjoys as an entertainer.”

cars-adam-carolla-top-gear-ko

 

If you want material for your comedy show Adam, I invite you to spend a day in Texas.  The funny just writes itself in the Lone Star State.  I’m wondering if it embarrassed you to have the suit dropped, because of this:

When Personal Audio first began its litigation, it was under the impression that Carolla, the self-proclaimed largest podcaster in the world, as well as certain other podcasters, were making significant money from infringing Personal Audio’s patents. After the parties completed discovery, however, it became clear this was not the case. As a result, Personal Audio began to offer dismissals from the case to the podcasting companies involved, rather than to litigate over the smaller amounts of money at issue.

Oooh.  It’s the “small amounts of money at issue” thing that got you, no?  Look, I get it.  I’d like to think we could all make bazillions of dollars off Teh Interwebs but not everyone can be a Goop.  Personal Audio is no longer coming after you though, so you’re swinging for the fences and no one’s even pitching to you.  Your site is still up, and there’s been no update letting contributors know that their funds aren’t needed anymore.

You’re behaving like the man in line at Sonic who got tots instead of fries and no matter how many times the clerk tells you she’ll gladly swap them out for what you ordered, you insist upon a lifetime of free slushies just because YOU WAS WRONGED, MAN!!

You got what you wanted, Personal Audio dropped the suit.  You’re now the one who’s wrong by leaving your crowdfunding site up and collecting money for something you no longer need.

 

JustSayin_small_New

 

IPTT

{Adam Carolla punch image found here.}

Oh, Intellectual Asset Management Magazine, You Silly Thing, You!

You slay me, I AM.  A while back you published this article about a study that came out, touting the damage that patent trolls do to start ups.  OK, not necessarily start ups, but “entrepreneurial activity”.  And not necessarily “patent trolls”, but NPEs/PAEs/Euphamisms-of-the-Month.  But whatever, we all know what we’re talking about here and if you don’t, I have no idea what would land you on this blog other than a search for Big Derrieres.  And if that’s the case, well then let me introduce you to Mr. Charles Barkley.

Disclaimer: Mr. Barkley is not a patent troll and even if he was I wouldn't call him one because dude is huge.

Note: Mr. Barkley is not a patent troll and even if he was I wouldn’t call him one because dude is huge, and I value my life.

 

Back to the article, Mr. Joff Wild says the following:

I am not going to argue with the idea that VCs would have ploughed more money into certain companies if they had not been hit with lawsuits by PAEs. That seems pretty self-evident to me – VCs, like any other kind of investor, dislike uncertainty.

So we’re on the same page then, right?

Only no.  No we are not, because he goes on to say:

However, what I did not see in the study is any evaluation of the merits of the cases brought by the PAEs Tucker writes about. Instead, I saw a few anecdotes about what seem like egregious cases, but nothing that demonstrated these were typical. It seems inarguable to me that PAEs willing to spend millions of dollars taking their cases to court when they cannot get someone to take a licence believe that their patents are being infringed and that they have a good chance of convincing the court to agree. Thus, it could just be that Tucker has spent her time and the CCIA’s money discovering that VCs are unlikely to sink money into companies whose products infringe patents.   I could be wrong, of course; but we don’t know because Tucker does not look into it.

You’re forgetting something:  With patent trolls, the merits of the case don’t matter.  That’s sort of the whole point of all the railing against them.  Whether the patent is invalid or infringement occurred matters not to the entrepreneur looking for money:  once you’re sued by a troll you have to respond, and that eats time and resources that would have been better spent on things like growing a business and hiring employees.  Tucker didn’t spend her time deconstructing the cases?  Probably because she likes to spend it doing something worthwhile.  Like making the point that patents can be used as a weapon to slow down start ups and innovation.

As for the patents themselves, Mr. Wild notes:

Furthermore, the patents that PAEs seek to license and are sometimes forced to litigate do not just appear out of the ether.

No they don’t.  They appear out of the USPTO, who has clear issues with their patent examiners.  See my three-parter here:  Interview With a Patent Examiner Series.  Sorry it sorts them Part III first.  Dunno what’s up with WordPress on that…

I do agree with Mr. Wild on one thing though:

All in all, therefore, this study does not come close to making a case for legislative patent reform.

Right.  Well, “right” in the sense that I don’t think patent reform is going to solve the patent troll problem.  Certainly things are ripe for updating in the grand ol’ US of A patent system, like how examiners are vetted and hired and what skill sets they have and by that I mean you need to hire lawyers at the USPTO so they can fight off the lawyers that the companies hire to get their client’s stuff patented.  I think we can agree on this.

Finally, I want to address this comment:

It might not be ideal, but it is a whole lot better than passing sledgehammer laws based on anecdotes and flawed research.

I’m aware that the plural of anecdote is not “data”.  I’m also aware that all research is inherently flawed, if it’s done by humans, that is.  We all bring a sense of bias to our research, I’m not sure that will ever not be the case.  That doesn’t mean you throw it out and decide unilaterally not to make decisions based on it.  Again,  I agree that “sledgehammer laws” are stupid and ineffective but articles like Catherine Tucker’s highlight that the problem does in fact exist, even if it doesn’t delve into every level of detail that I AM would like to see.

In closing, though I like to make great sport of people who do not completely agree with me, I do want to say thank you for this:

None of this is to say that there are not problems and issues to address with regards to abusive patent litigation in the US, clearly there are.

There are real problems and real issues with patent litigation today.

I happen to think Ms. Tucker’s article does a great job of highlighting a specific one, even if you and Barry don’t agree with me.

JustSayin_small

IPTT

{Sir Charles image found here.}

“Then I Looked At Twitter And There Was A Tweet Saying It Was Dead”

And that’s how patent reform ended last week:

On Wednesday morning, tech sector lobbyists thought they were in the final stages of pushing through a hard-fought compromise on patent reform. “Tuesday night it was moving forward, Wednesday morning it was moving forward,” said Julie Samuels, director of Engine, a group that lobbies for startups. “Then I looked at Twitter and there was a tweet saying it was dead. What the hell?”

That quote from Julie Samuels in Joe’s article pretty much sums it all up, no?  Well, as it happens, probably no.

Tech sector lobbyist should know by now that it’s never over until the fat lady sings, and she hadn’t even opened her mouth yet on this one.  Not only has there been push-back on patent reform legislation from inventors and patent trolls, it seems the real bugaboo was the pharmaceutical companies and (*gasp*, can it be??) trial lawyers.  That certainly came out of left field…or did it?  < — That links to a post about how  the tech sector as a target will eventually burn out and the trolls will start going after oil and gas and pharmaceutical companies, in case you don’t want to make the jump.

fat-lady-sings

 

Here’s where it gets interesting for me personally, referencing this quote:

Leahy’s public statement saying that the two sides “couldn’t compromise” isn’t true. There was a compromise draft, hashed out mainly by Senators Chuck Schumer (D-NY) and John Cornyn (R-TX), that was expected to move forward and be marked up by the committee.

So Chuck Schumer, he of the bill that was never a good idea, and my hometown boy John Cornyn were working behind the scenes.  Let’s fill in a gap here…

Friday, May 9th, I was in an airport in Philadelphia awaiting my flight  back to my lovely family of teenagers whose angst and disgust with life in general I didn’t miss at all was longing to rejoin, when I received an email asking if I knew anyone in the Houston area who’d been hit by a patent troll.  I’m pretty darn organized if I do say so myself, but  didn’t have my spreadsheet handy so I agreed to look up some companies and reply when I had more info.   It seems that Mr .Cornyn was organizing a local press event and wanted someone who’d been a victim of a patent troll on hand to make it personal.  Always a good plan to have people tell their story in their own words.

Only before I could research who might be a good front for the soiree, I received a second email saying “Oopsies, never mind.  Not needed now.”

I’m no conspiracy theorist because all that over-thinking eats into my social life,  but I do wonder if maybe the signs of a crack in the process weren’t already showing?  Here’s my thinking…you set up press events to hail good news, to indicate that you’ve won something.  It takes a while to set up a press event.  You have to find a venue, line up speakers, alert the press, buy a new suit for yourself, make sure who ever you’ve lined up to talk has time to clean up for the cameras, all of that.  If you think a bill is going to come to a vote and pass towards the end of May and you want to trot out reps from a company that it will directly affect, then you better start getting that house in order.  Say, around the 9th of May.

Did John Cornyn have a whiff of Harry Reid’s move back then?  Was there some other conflict in his schedule that made a public forum undesirable?  Not sure, but the timing does strike me as interesting.

There are those who think that patent trolling was born out of tort reform during the Age of Asbestos, and this quote from the Ars Technical article makes reference to that:

Many law firms working in traditional plaintiffs’ areas like personal injury or securities class actions have added patent work as other sources have dried up. In Texas, there has been talk about how tort reform in that state had a hand in creating the patent litigation hotspots like the Eastern District of Texas, as lawyers went “from PI to IP.”

The story goes like this:  trial lawyers were building entire practices out of suing companies who’d used asbestos in their building materials, even before it was shown to be a carcinogen, by trolling for victims and exacting huge settlements, most of which they themselves retained because that’s how they roll.  When tort reform became a reality and punitive damages were capped, they had to go somewhere else.  Patent infringement became their next big stick.

And this is why I think legislation is the wrong way to handle the patent troll problem.  Why?  Because people who want to game the system will always find a way.  If you want to stop them, you have to play the game differently.  Or, in the case of our Patent Troll Fighter Heroes, refuse to play at all.  Running to Uncle Sam and those on Capital Hill won’t help you, and if it does it will come at a too high a lobbying price and won’t last long anyway.

This first great attempt at patent troll legislation is dead for now.  Who know when and in what form it will resurface, but I hope that the good guys have learned a good lesson out of the process.

I’ll let them decide what that is.

JustSayin_small_New

IPTT

{Opera singer image found here.}

 

 

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.}

On Patent Infringement Trials And Their Jurors

Newegg lost their lawsuit with TQP Development Erich Spangenberg before the Thanksgiving break.  How does such a bad decision come out of such a pretty courthouse, is what I want to know!

historic.courthouse1-640x302

from Joe Mullins’ Ars Technica post. Did you take that photo? Lovely!

And you know what?  I do know.  I know exactly how this stuff happens, and because I’m cool like that I’ll go ahead and share the love.

Follow me along the trail here, if you will:

  • The people who file patents, by and large, have law degrees.
  • The people who issue patents, examiners at the USPTO, have engineering degrees.
  • The people who send out demand letters threatening an infringement suit are lawyers or self-described thugs.
  • The people who argue patent infringement cases have law degrees.
  • Yet, inexplicably, the people who decide patent infringement cases are…butchers?  Bakers? Candlestick makers?

Does anyone else see a problem here?

This is why, as I wrote about well over a year ago, so many companies settle with patent trolls.  Not only do the not have the money to fight a lawsuit, they don’t want to take their chances with a jury if they do.  You could end up with Velvin Hogan as your foreman, for heaven’s sake!  This is what I said then, and it’s apropos now:

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.

It’s probably not fair for me to blame this verdict on the jury, when the blame squarely belongs on poor patents and companies that abuse them like IP Nav.  But good grief, Charlie Brown.  This is not a situation where a “jury of your peers” applies.  If I’ve been mugged or my neighbor’s septic tank has overflowed into my backyard and they refused to pay for the resulting damage (not that that happened to my family as a child and has forever scarred me and now I can’t live in homes where there’s a septic tank) or if I were to spill hot coffee on myself and try to get money out of McDonalds then things would be different.  In those cases?  I need my peers.  People like me who live similar lives, and who do and experience similar things that I do and experience.

good-grief-charlie-brown_edited

Patent infringement is so not a mainstream “thing” that any of my peers get.  You want to know how I know this?  Because when I tell people that I write about patents and patent trolls and lawsuits and such their eyes glaze over they respond with a head-tilt and a very polite “Well.  That’s…interesting.” And then they nod off to sleep and their heads bob forward and slam onto the table at the little cafe where we’re having lunch, the cafe that I will never get invited back to because I talk about boring things like patent trials.  That?  That’s how I know.

I don’t have a solution for who should determine verdicts in patent infringement cases.  I know that outside of the patent troll issue there is certainly plenty of legitimate disagreement over patents and those disagreements need to be heard and vetted by a group of someones.  I’m just not sure it should be a group of someones who live in Marshall, Texas.

Which, by the way, does anyone track juror service up there?  I mean, there’s not but 67,000 people in the whole darn county.  My freshman English class at UT had that many,  (OK, not really.  It had 350 which is pretty much exactly the same.)  and probably only about 1/4 of those are even eligible for service.  How do we know that the same people aren’t being dragged into the courtroom every two weeks for another stint?

We don’t, but it doesn’t matter.  They would still have made the wrong decision in this case.

I’m glad Newegg’s going to appeal and I hope that they win and it’s not just because that’ll mean a loss for IP Nav/Erich Spangenberg/TQP Development.

Actually?  It’s totally because of that.

JustSayin_small_New

IPTT

{Charlie Brown image found here. I’ll cop to the (super simple) photoshopping.}

FTC Asks, Intellectual Ventures Answers (Hint: Probably A Satirical Post)

Just like a Wendy interview, the FTC is about to get all up in the patent trolls’ business.  The full list of questions can be found on the FTC site and boy do they get specific.   Like, seven appendices worth of specificity, which on the official Specificity Scale is pretty much an F5.  So, seriously specific.

SpecificityGraph

Thankfully, they’ve posted a summary of the types of answers they’re after as well, and this is much easier to digest:

  • How do PAEs organize their corporate legal structure, including parent and subsidiary entities? (Request B)
  • What types of patents do PAEs hold, and how do they organize their holdings? (Request C & D)
  • How do PAEs acquire patents, and how do they compensate prior patent owners?  (Request E)
  • How do PAEs engage in assertion activity (i.e. demand, litigation, and licensing behavior)? (Request F)
  • What does assertion activity cost PAEs? (Request G); and
  • What do PAEs earn through assertion activity? (Request H)

Intellectual Ventures has likely received their personalized FTC Troll Expose’ Kit and are busy cutting and pasting their standard PR rhetoric preparing their answers.  Don’t tell anyone, but what follows is an advanced copy of their reply.  Remember, shhhh.  You didn’t get this from me, OK?

*********** SUPER SECRET INTERNAL RESPONSE TO FTC QUESTIONS ***************

1.  How do PAEs organize their corporate legal structure, including parent and subsidiary entities?

We’re a private company.  We take money from investors and on occasion, actually pay them back.  That’s not going so well for us right now, though.  What’s a subsidiary?  We don’t have any, and Lodsys certainly isn’t one of them, whatever they are.  From a legal structure perspective yes, we have lawyers.  Is that what you’re asking?

2.  What types of patents do PAEs hold, and how do they organize their holdings?

The kind that we can extort money for, of course.  My cooking lessons aren’t going to pay for themselves, you know!  We organize our holdings into file folders by patent number.  ??  Geez, what a stupid question.

3.  How do PAEs acquire patents, and how do they compensate prior patent owners?

Well, sometimes we go through brokers.  Other times, we send our henchmen to all those nifty little incubator meet ups and convince first-time inventors to let us help them file and obtain a patent for whatever they’re doing that could be even remotely similar to something that we can sue people for infringing on.   As far as compensation goes, we spring for dinner at the local taco wagon after we have their signatures.  Because seriously, nothing says “We value your contribution to our monolithic patent coffers” like some ground beef and beans wrapped in a week-old tortilla.  Yeah, baby!

4.  How do PAEs engage in assertion activity (i.e. demand, litigation, and licensing behavior)?

“Yes” to the first two, “Aggressive” to the third.

5.  What does assertion activity cost PAEs?

Money.  Wampum went out of style when all the beaches on the Atlantic seaboard eroded.

6.  What do PAEs earn through assertion activity?

Money.  While I’d like to be paid in solid gold bars, it just never seems to work out that way, you know? Besides which, we also earn a reputation that we’re not to be messed with which is actually worth way more than money.  You pick on enough of the people enough of the time, and word gets around.  All of a sudden, it only takes one or two meetings to get the signature you need.  Holla!

*********** END OF SUPER SECRET INTERNAL RESPONSE TO FTC QUESTIONS ***************

Right now, this is all just a bad dream for the trolls, who have 60 days to send in comments about this proposal that questions their livelihood.  They’ll not go down quietly, so we should all be on the lookout for complaints from all the usual suspects.  From the FTC’s site:

If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c).6 Your comment will be kept confidential only if  the FTC General Counsel grants your request in accordance with the law and the public interest.

Considering how far under the hood they’re willing to dig, I’d be surprised if any of the responses were actually kept confidential.

In a way, I’m sad to see the gov’t having to get so involved in this problem because I remain of the opinion that if we let the market ferret these guys out by doing things like tracking the demand letters they send (at That Patent Tool, come on and join in the fight!!) we can solve this issue on our own.  It always worries me when law-makers set out to bring down one rogue section of an industry because the effects are almost always more far-reaching than initially thought.  The “Law of Unintended Consequences”, and all that.

That said, I get a fiendish delight thinking of how much these trolls are squirming right now, just reading the list of questions.

JustSayin_small

IPTT