Dear Michelle Lee: I Hope You Win, Plus A Couple Of Things

Dear Michelle,

Happy Monday!  I listened with rapt attention to your interview at the Brookings Institution last Thursday the way some people listen to Taylor Swift.  I wrote quite a few things down, because I never read a book or listen to an interview without a pen and paper handy lest I forget something important, and plus my 9th grade English teacher Ms. Fritchey (oh, you betcha we had fun with that name and also? Sorry Ms. Fritchey) would kill me if I didn’t.  The first thing I wrote down was this:

Deputy Commissioner for Patent Quality coming from the ? Step in the right direction…

I wrote that down on paper and on Twitter because I think it’s such a great idea.  When I interviewed a patent examiner (Part I, Part II, and Part II), s/he said

While I was employed at the USPTO, there were two search systems, called East and West.  Examiners would choose which one they wanted to use.   These systems searched only the patent database.  Now days, most examiners use Google Patent Search, but again that searches only the universe of existing patents.

Prior art search then is 99% patent literature.  So that is a huge lesson learned after leaving…technical manuals and publications need to be searched too.

charlie_brown_thumb[3]

“Oh, brother!” is right.

Emphasis mine, and it speaks to the issue of patent quality directly because good googely woogely, how on earth can you know if an idea is unique if you don’t search in more than one place?  To say nothing of the fact that some people couldn’t come up with decent search terms if their very life depended on it.  I may know one or five of those people, who can’t even find an address for the nearest pizza shop because they search The Googles for something like “italian pie” or “round thing college kids like to eat” and may I suggest you don’t google that second one from a government computer?  I have my reasons.

Quality is a real issue, is what I’m saying, and only partly because the examiners themselves don’t have the tools to do the job.  While there are market solutions to this problem, like the studs at Article One Partners, don’t you think it’s time the USPTO upped its game a little on that front?  Clearly you do, which is why you suggested a Patent Quality Czar.  You can totally steal that title because between you and me, it’s way cooler than “Deputy Commissioner for Patent Quality”.

Not to belabor the point even though I’m totally going to, have you seen this?  Where Exxon has patented selling energy, because that’s never been done before and is a completely non-obvious idea?  This is exactly the sort of crap the PQC has to stop letting through.  His or her first job out to be to check out the flaws in SAWS:

Sensitive Application Warning System (SAWS) that is supposed to flag applications that if issued could be controversial and subject the USPTO to undesired calumny and scorn,

It is highly unlikely that the USPTO wishes to bring calumny and scorn upon itself, that first one especially, now that I looked it up and know what it means.  SAWS should have have flagged this application from the get go but it didn’t and someone needs to understand why.

If one of your goals is to reduce nuisance patent litigation, even if you don’t want to call out patent trolls by name, then I think requiring that patent examiners be attorneys is a good first step.  Maybe not all of them, but somewhere along the path to a patent there should be a step where an attorney for the USPTO goes head to head with the attorney for the inventor.  You need to two people who speak the same language talking before the patent is ever issued.  Lawyers for inventors have only one goal:  GET THE PATENT.  Maybe it’s a good goal and maybe the invention is awesome and patent-worthy.  Or?  Maybe the lawyer’s just a wordsmith and out-maneuvers the examiner with legalese and wears them down with all.the.words far too often.  Just a thought.

Finally, I heard you mention that there might be an event of some kind in the near future, maybe something akin to the Patent Stakeholders Meeting almost a year ago?   Having attended that event, might I make a suggestion or two?  Like, maybe bring in some hors d’oeuvres?  Cheese plate?  Cash bar?  On that last one, I’d like to heartily recommend the bartenders from Lincoln because can they make a 1931 Mai Tai or what?  

mai_tai

It’s 5 o’clock somewhere…

 

All kidding aside, it sounds like a great step forward to bring some stakeholders back in and reprint the road map.  The way to find out what people want and need, in this and any arena, is to actually talk to them.

I wish you the best of luck in the confirmation process, and hope that you’re able to accomplish all that you set out do!

JustSayin_small_New

IPTT

{Charlie Brown image found here, delicious Monday morning mai tai found here, complete with recipe.  You’re welcome.}

 

Interview With An Inventor, Part IV

When last we left our inventor hero, he had answered all but two of my original 10 questions.  Question nine is really the heart of the matter to me in some ways.  As we all know, there’s not a definitive way to decide if a company is a patent troll, just like there’s no one right way to decide if an inventor is just out to stick it to the big guy or wants his just desserts for a lot of hard work.  This question helps with that.

And finally, I wanted to address all this governmental ballyhoo associated with patent troll legislation.  Not.a.fan.  But let’s see what our inventor says, shall we?

Here are the final two questions:

9.  How much time and effort do you put in to determining if infringement actually has taken place prior to filing suit/sending a demand letter? What resources do you use, meaning do you try and reverse-engineer products or technologies to see if competitors are infringing?  What’s your due diligence process, in other words?

10.  What are your feelings about the recent failure of the Senate to pass a patent reform bill? What would you like to see in a bill?

*******************************************

9.  How much time and effort do you put in to determining if infringement actually has taken place prior to filing suit/sending a demand letter? What resources do you use, meaning do you try and reverse-engineer products or technologies to see if competitors are infringing?  What’s your due diligence process, in other words?

The standard for sending someone a letter vs starting a lawsuit against them is quite different.  In both instances however I make it a mission to make sure that I am extremely confident that the target is using the patent in question.  I think it kills your credibility when you make accusations that are not substantiated, or your proof looks very thin or unreliable. 

Furthermore I can tell you from extensive interactions that no reputable litigation attorney on the planet is going to help you with a case on contingency unless they are 100% sold in their own mind on the merits.  Patent cases are just too expensive to make mistakes so counsel (that I deal with anyway) tend to be very discriminating.  Again I’m sure there are people out there gaming the system but I think they are outliers and can be dealt with conventional bad faith rules/tools.

The cost of ascertaining may be simple in some cases where my patent covers something that I can readily buy and assess without too much effort. In some instances I cannot get access to a real product because it is only distributed through specific channels, or infringement is impossible to determine without “insider” information because the product is relatively opaque. So we have to rely on indirect information such as user guides, instruction manuals, and similar technical literature from the company.  Generally speaking though we try to directly analyze, test the item in question.  In some instances we have had to resort to an expert to fill in some gap in data that we can’t seem to solve in some other way.

Even when we do this, sometimes innocent mistakes do occur. We find that someone has stopped selling the product for example, or that the literature does not correctly describe their product/service.

IPTT Comments:  Your point about lack of reliable proof is a good one, and that’s one of the problems with demand letters v. actual suits.  Agree completely that the standards are different, and that’s what allows the trolls to troll.  Sending a demand letter, you’re not legally bound (currently) to provide much more than idle threats.  But what so many people don’t realize, and the trolls count on, is that you are not obligated to respond to a demand letter.  Instead, you should go look on That Patent Tool and see if anyone else has received a similar letter on the same or a similar patent and get in touch with them.  Shameless self-promotion, I HAZ IT.

10.  What are your feelings about the recent failure of the Senate to pass a patent reform bill? What would you like to see in a bill?

As you can imagine I am not terribly upset that the bill failed because I think it was overly partisan and biased heavily against small inventors.  What I would like to see is a return to the prior “rational” environment where technical and business persons would exchange information freely about patents, products, licensing demands, etc., over the course of several months without automatically triggering a lawsuit.    The worst decision – in terms of its impact in the the patent world – was the Medimmune decision, which handed a victory to large patent defense firms, because it meant that they were now able to file a lawsuit against the patent owner pretty much anytime the latter sent a letter that requested a serious discussion about taking a license.  This opinion absolutely destroyed all the typical pre-lawsuit discussions that used to occur between parties. Patent lawsuits were rare because the interested parties had all the time in the world to discuss/argue the merits of the patents, and only when that process failed did a lawsuit (sometimes) occur.

Nowadays patent owners know there is no point in sending a letter to a company, because some underemployed large firm attorney looking for another payday will immediately initiate a lawsuit in some remote region against that patent owner to try and gain an advantage.  As a result of course now patent owners simply file their own lawsuits first to preempt the defendants’ filings.  The patent world has become a sue first negotiate later atmosphere.  The Medimmune decision is effectively the patent litigators perpetual employment act.

Imagine what would happen now if they had passed the “patent owner pays” provision!  It would be like throwing gasoline on a fire because defense counsel would know not only can they start their own lawsuits, they are guaranteed payment at the end.

IMO any new bill should include a provision that substantially tightens the requirements for initiating and filing a declaratory judgement against the patent owner and thus eliminates the incentive to engage in lawsuits to settle disputes.  There should be a real and verifiable threat from the patent owner to imminently sue the company on a specific patent, product, etc. – in other words, use the same standard that is being proposed to be imposed on patent owners initiating an infringement lawsuit.  This is why I say the majority of the provisions are one-sided and do not account for protecting patent owner rights.

Court rooms, judges and jurors are inefficient mechanisms for resolving the merits of a dispute. They should literally be the forum of last resort and restoring the prior balance would eliminate 50% or more of all lawsuits.  You can compare the number of patent filings in 2005-2007 and then compare 2008-2010 and see readily what effect the Medimmune decision had on the patent world. It blew up everything.

*************************************

The patent world has become a sue first negotiate later atmosphere.  

and

The Medimmune decision is effectively the patent litigators perpetual employment act.

Those are gold quotes, my friend.  And both destined to become blog topics at some point.

Thank you a million times over to my favorite inventor for taking the time to answer these questions and provide insight into “the other side”.  I like getting a different perspective now and then, even if, and especially if, I don’t agree with all of it.   That’s how one grows and learns, by seeking out the opposite of what they think is true.

Man, I better think of something snarky and off-color here, that sentence up there was almost like I’m…human or something.  Blerg.

This concludes this series.  Next up will be Interview With a Patent Attorney, one from both sides.  I had hoped that we’d get a fisticuffs going when Article One Partners did something similar on a webinar a summer ago but alas, it didn’t come to fruition.  Maybe this time?  One can hope…

JustSayin_small_New

IPTT

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.}

 

Washington, DC Makes You Pay For Bags, Even If You Go To A White House Event

I would have written this post sooner, but I was too busy being traumatized by my “bag experiences” on the trip to DC.   Texas doesn’t charge for bags, y’all, because how are you supposed to get four vitamin waters and the latest ELLE magazine and possibly three Twix bars from the counter in CVS to your car without one?  It’s silly on the face of it, you Yankees.

Last Thursday was the White House Patent Stakeholder Meeting, the purpose of which was to update interested parties on the status of government efforts to curb the ill effects of patent trolling.  I don’t know that I’d call myself a government hater because hello? NSA drones! I’m not really into hating.  But I am of the opinion that there’s not a whole lot we really want the Feds doing to fix this problem…free market capitalism is capable of handling the bullies at the bike rack.

Nevertheless, here’s what the Feds have proposed (apologies for the poor scan):

WhiteHouseHandOut2

Of the ideas that they have put forth, one stuck out mostly because it was something that the patent examiner that I interviewed (here, here, and here) talked about.  Patent examiners need more education on fast-moving technological targets, as well as an education on the legal system and how the patents that they grant or don’t grant may possible be used.   Attacking the problem at the source is fundamental, and they seem to grasp that.

Also on the list was “crowdsourcing prior art” which was odd, given that there’s Article One Partners who’re already doing it and can the government really do it better than the private sector?  Methinks not.  It just didn’t strike me as an innovative idea, unless they’re talking about giving this option to the patent examiner pre-grant.  That would be cool.  Allow the examiners to post up claims from applications and see if the crowd can identify a precursor!

The White House continues to call for demand letter transparency, which was a subset of item #1 on their handout.  This of course struck me as the most useful of potential solutions, given that it provides exposure to the troll’s tactics and, you know, I built a tool to collect them. The whole point is to expose as many data points as possible surrounding these letters so that we can draw conclusions, figure out the big picture, and react accordingly.

The idea of demand letter transparency is gaining traction and I really hope that government attention will drive folks to add their information in.   There’s no risk, no exposure with That Patent Tool:  users are free to redact whatever fields they feel may be detrimental for other members to know.  It’s been suggested that as soon as a victim admits s/he’s been hit by a troll, there’s the potential that other trolls will also come calling.  But I have believed for a long time that even if we don’t know who a demand letter was sent to, there is tremendous value in getting whatever information we can about the sender and the actual demands being made.  This provides bargaining power for other victims and puts them more in control of their own fate.  There’s also a way to anonymously contribute to online discussions with other recipients…collaboration is good!

I have to say, I was pretty geeked out to participate in the event, and so was everyone else there.  It’s not often that people who deal with the subject of patents and litigation get invited to the prom. I caught more than one or two people snapping pics of the podium (you know who you are!) and generally fangirl/fanboy-ing around the room.  I may or may not have joined them.  Good times.

WhiteHousePodium

Front row, baby!

 

You know what they could’ve used at the meeting though?  Snacks.

JustSayin_small_New

IPTT

What Made The Trolls Trolls, Anyway?

I know what it was…they were mistreated as children.  Their Mommies wouldn’t let them eat ice cream for breakfast, and made them make their beds and bring their laundry down each morning.  When the Look of Death failed to frighten her into submission, they packed up their marbles and went in search of better living accommodations where they soon realized that they actually couldn’t do much better out on their own and maybe, just maybe, Mom knew what she was talking about but out of spite, settled under bridges and scared passersby into paying them a toll to cross over to the other side.

Actual Look of Death from my actual child.
Be afraid. Be very afraid.

 

But if we’re talking about patent trolls, the road to perdition is a little less clear.  There are lots of different reasons, the way I see it, that the problem has  gotten out of hand.  Here’s a list of where I think things went wrong.  These are just my opinions, of course.

Lack of Court Competition – It’s been posited to me on Twitter that perhaps it isn’t the Federal Circuit, as this article by Timothy B. Lee suggests, that has been a factor.  I disagree.  I think that whenever there’s a lack of competition for something, be it a consumer product or justice, that’s not good and it breeds advantage-taking.  From the article:

 The Federal Circuit Court of Appeals enjoys a monopoly over patent appeals, and it has used that power to shift patent law in a direction more favorable to patent holders, including trolls. Taking away the Federal Circuit’s monopoly over patent law would be a big step toward bringing balance back to the patent system.

Now, maybe they didn’t use their power to shift patent law to favor patent holders.  Patents themselves favor the holder!  But when there’s no check or balance built in, this is a risk you run. That’s an issue, and something that trolls are wont to take advantage of because that’s how trolls roll.

Further, there’s the idea of “pay to play”:

They don’t just hear patent lawyers’ arguments in their courtrooms, they also mingle with them at conferences and social events.

This is what Gene Quinn at IP Watchdog was getting at when he talked about the big corporations rubbing elbows with lawmakers, and about how they didn’t really care about patent trolls so much as they were in bed out playing golf with them.  Timothy Lee makes a similar argument, only with troll lawyers and judges.  If there’s only one circuit of appeals (Supreme Court notwithstanding because we all know very little makes it that far) and those judges are hobnobbing with the lawyers who appear before them, then how impartial are they, really?  This is why I think the Federal Circuit is a part of the problem.

The Death of the ‘Dust Docket’ – Whether it was a result of tort reform or people having had enough of the huge judgments against companies as a result of shady personal injury trial lawyers, the dockets for things like asbestos poisoning began to dry up.  So where’s a sneaky lawyer to go?  Hmmm…patents.

The barriers to entry to file a patent infringement suit, or better yet, simply send out a bagillion demand letters, are low.  All it takes is an attorney with some free time and pretty (or not) letterhead, and there you go.  Some patent attorneys are complicit in the problem, is my point, and I’ve written about that.

Bad Patents – Patent quality matters.  When patents that are overly broad and cover obvious claims are issued by the USPTO, it creates the perfect scenario for troll tactics.  Article One Partners chose an excellent tag line, and they’re going after the problem at the very lowest common denominator.  You have a host of patents related to business methods and software that should never have been issued.  But now that the genie is out of the bottle, how do you put it back in?

Very expensively.  You either file an IPR, fight full-on in court, seek declaratory judgement…whatever you do is going to cost you something.  And that’s just what the trolls are counting on when they seek to buy up these rogue patents and throw them around like daggers.

The issue of bad patents is partially a result of patent examiner practices, which you can read about here, here, and here.  It’s a related problem, and it helps feed the trolls.

Lack of Desire to Fight– Not all companies that are hit with a demand letter or an infringement suit are going to fight.  They have their reasons that they don’t want to be on the Patent Troll Fighter Heros Gallery, and that’s OK.  (It’s not, really, it’s very hurtful to me personally but I recognize that it’s not about me even though it totally should be.)  But every time someone rolls over, it makes the trolls stronger.  It reinforces their business model and they learn that if they just keep trolling, the money will keep rolling in.

Sometimes, victims of troll-ish tactics actually approach another troll for help.  This makes zero sense to me, but I’m not trying to save my company so I try hard not to put on my Judgy McJudgesteron pants.  Although it is very difficult.

It may not be so much a lack of desire to fight as it is a lack of funds to fight.  I do recognize that.  And then there are the companies that just don’t give a rat’s.  They have the money to fight but it’s not really a big deal to them.  If they can pay a license fee, even if it’s higher than it should be because trolls are greedy and awful, then so be it.  It keeps their in-house counsel focused on other issues more germane to the bottom line, so they cut the check and move on.  I hate it when that happens, because it sends exactly the wrong message to the trolls, which is that trolling works.

patent-troll-graphic-final

Image by Alan Schoenbaum.
Awesome.

 

Just like there’s not a single, reliable litmus test for who’s a troll and who’s not, there’s not just one reason that patent trolls troll.  I think these are the most obvious ones, and what started me off on this topic was the push back on Twitter regarding Timothy’s article about the Federal Circuit.

I wasn’t able to articulate my response in Twitter’s 140 characters because, and you may have noticed this, I tend towards verbosity.

No really, it’s true.

JustSayin_small_New

IPTT

{Image of Michael, now age 11 and still scowling like a madman, by me.  Troll drawing by Alan Schoenbaum of Rackspace.}

Panasonic Pulls An Ericsson, Sells Out To (Hybrid) Troll

Panasonic is going the way of Ericsson and possibly (but we can hope not) Amazon** by selling off some patents to a PAE.  What, wait?  It must be Christmastime because I don’t usually use any euphemisms for “patent troll”.

Panasonic has recently snuggled up in bed with WiLAN, who’s a troll but are they really? Well, let’s see now, they own these guys who are about to get Ninja STAR-ed all to hell so yeah, they’re at minimum a hybrid-troll.  And by that I mean they outsource their trolling efforts to subsidiaries to make it harder for people to figure out what’s really going on.  You can run, but you can’t hid forever, WiLAN.

You have to wonder why companies do this.  I checked their stock history (Panasonic is traded in Japan) and it doesn’t appear to have gone down significantly recently; in fact, the opposite is true.  So it can’t be a panic-driven sale based on revenue, can it?  Disclaimer:  All I know about the stock market I learned from reading The Westing Game in fourth grade and watching the movie Wall Street, so my “qualifications” in this area approach zero.  But normally, you see this sort of patent asset monetization effort when companies are otherwise going down.  This doesn’t appear to be the case here, unless, again, I’m all sorts of wrong about their stock price.

CharlieSheenWallStreet

Nothing to see here, folks.
She doesn’t know squat about stocks.

So why else?  From the linked WSJ article above:

 … Panasonic will assign [900 semiconductor patents and applications] to Collabo Innovations Inc., a new WiLAN subsidiary, certain patents from Panasonic Automotive & Industrial Systems Co., one of Panasonic’s internal companies.

According to my friends at Patent Buddy, Panasonic’s parent company holds over 14,000 patents.  There are about 20 or so different subsidiaries listed as patent holders as well so the grand total is more than that.  To assign only 900 of them is not a huge percentage (less than 10).  So maybe this isn’t the harbinger of either bad news or of a wholesale change in operational strategy for them.  Maybe it’s just that they don’t want to be in the semiconductor industry anymore?  Could it be that simple?

If that’s the  case, then someone within the company just missed out on a new job title.  Chief Patent Monetization Officer.  CPMO.  You’re welcome, C-level employee naming convention people.  It could be kind of like in-house legal counsel position.  Sure, there may be times when you have to outsource your legal issues to the Big Guns, but in the case of patents, especially with the whole trolling issue getting national attention these days, why would you want to team up publicly with a company that many see as behaving badly in the patent landscape? Why not hire some awesome patent expert and pay them to help you monetize your assets all by your lonesome?  In addition to not contributing to the patent troll problem, you’ll save money.  As the idea of a CPMO is fairly new, I don’t know that we have any salary data but I feel like it’s safe to say that whatever that position may pay, it’s less than the fees someone like Collabo Innovations Inc./WiLAN is going to suck from your bottom line.

At the end of the day, this may be a case of privateering by Panasonic, plain and simple.  Companies are of course free to do that, though I stick by what I said:

Call me old fashioned, but what happened to hard work and ingenuity to “oust [your] competitors”?  Must we play dirty just because everyone else is?  Is it naive to think you have to join this type of ne’er-do-well strategy to remain relevant and profitable in today’s technology world?

I didn’t think so then and I don’t think so now.

JustSayin_small_New

IPTT

{Charlie Sheen image from the movie Wall Street found at IMDB.}

**Though I really hope it doesn’t happen, if you think Amazon won’t sell off their patents at some point, on account of not even being profitable yet, then think again. I’m just imagining that the whole drone delivery system is fraught with patents, right?  I don’t think they think that will ever work (see subsequent paragraph), so this is probably just a ploy to get people to want to license their patents surrounding the process, is what I’m saying.

Which, by the way, drone package delivery is an idea my almost 11 and 13 yr old sons have been looking at closely in terms of what gauge shotgun they’ll need to shoot one of those suckers smooth out of the sky, and how they might dismantle it, should their aim not be true and it actually manage to land anywhere in their vicinity. I cannot image who thought those flying delivery helicopters might be considered anything other than target practice for the world’s preteen boys.

How To Hire A Ninja, Patent Edition

You know there’s something wrong with the US patent system when you have to go all ninja on it.  But that’s exactly what the folks over at Article One Partners are doing with their latest offering called Operation Ninja STAR.

I’ve written about these guys lots of times before because I believe so strongly in their business model.  They are attacking the patent troll problem at the root, which is the very best way to get rid of the weeds that are choking out good businesses.  Increasingly, as has been written about pretty much all over the internet and you can find that out by searching for “start ups + patent trolls” (see how I hook you up like that, all giving you the search terms and everything?), the trolls are going after the little guy.

Used to, patent trolls would get all up in the business of the big guys, the Deep Pockets.  Those are the folks who just want to swat the little gnats away and have the money to do it so they pay the ridiculous extortion licensing fees and go on about their merry way.  But when the big kids on the block got sick of it and started saying “Um, no”, the trolls decided they’d hit up Mom and Pop and gamer/app dudes and see how that played out.  Less licensing fees up front because it’s not like you can get blood out of turnip or anything, but they make it up on volume because there’s lots of little guys.  Not a bad business strategy and one that’s been working.

It’s this little guy who finds him or herself in the crosshairs with no idea how they got there or how to get out.  So who ya gonna call?  Trollbusters.  Or a Ninja, as it were.

Ninja1

Imma get you, TROLLS.

The program is pretty straightforward in that the Advisory Board (check out who’s on the listholla!!) works together with the folks at Article One to select a patent that is particularly interesting to the trolls, or has already been used as a bat to beat the little guys with.  An Indiegogo campaign is set up and when the goal is reached, SHAZAAM!!  A repository of patent info goodness is created and anyone who is threatened using that patent can gain access to the whole pot ‘o honey.  Sweet.

I realize that our esteemed {ahem} leaders are working on the problem with all their laws and proposed laws and passing of things like the Innovation Act.  That can be a good thing I suppose, and it shows that those of us who bang the drum are being heard.  But if you really want to stop the problem, you’ve gotta take to the streets…meet the bad guys at the patent where it all starts and give them the beat-down.

You know, like a Ninja.

JustSayin_small_New

IPTT

{Adorable Ninja image found here.}

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!}

Do You People Know Who You’re Dealing With?

Remember when Article One Partners hosted that Webinar series on NPE Risk Mitigation and Emerging Solutions?  And remember that the last in the series didn’t turn into a brawl between Mr. Sterne and Mr. Ostrow like I hoped thought it might?  Well, that got me to thinkin’…is it time to pick sides in the patent troll war?  Can one pick a side?

Robert Sterne of Sterne Kessler Goldstein & Fox is on record stating that his firm will handle transactions with companies who are known patent trolls because their money is green.  I’m sure it’s more complicated than that but honestly, is it ever?  Mr. Ostrow, on the other hand, has stated that his firm, Simpson Thatcher, will only represent operating companies and steer clear of trolls.  He’s made the decision that the principle of the thing is, in fact, principles and he has them and won’t sell out to companies who’ve made a business model of extortion and thuggery and running small businesses out of town.

What’s happened as a result of the trolls’ success, however, is that operating companies are becoming more and more trollish in their behavior because they’ve seen that it is profitable.  So either they become an actual troll and go after people for infringement over patents they’re not using, or a troll-by-proxy like  Ericsson, who sold off it’s patents to Unwired Planet to do the dirty work for them.  Does that make Ericsson, and the many others who’ve done the same thing but we just haven’t found out about it yet,  a troll or an operating company?  Muddy waters, you see.

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“I got the ‘who’s a troll?’ blues…”

Unified Patents, a new player in the NPE game, launched this past Spring with the idea of using micro-pools to “deploy a host of defensive and offensive strategies to deter NPEs from a protected technology”.  One of those strategies is IPR, or Inter Partes Review and Unified Patents just filed their first one on behalf of their cloud storage micro-pool.  The full text of the filing is in the link.

When you scroll down, you’ll see the firm they retained is Oblon Spivak.  If you read the line above that, you’ll see that the attorney is none other than one Michael L. Kiklis. Wait, was that guy The Commish?  No, hmm…Kiklis.  Why does that ring a bell?  Oh, yeah:  Michael Kiklis.  He was the attorney sued by SAS for breach of contract.  While working as an attorney for Akin Gump who was retained by SAS for IP work, or more specifically strategies to deal with patent litigation, Mr. Kiklis evidently also represented JuxtaComm who, SHAZAAM!, sued SAS for infringement.  (SAS won summary judgment in the infringement case just yesterday and the patent at issue was invalidated, so that’s a total win for SAS.  The suit against Akin/Kiklis is still pending.)

Who does that?  I mean, who does Mr. Kiklis think he is, Scott Harris?   Hello, Scott?  You cannot both own a patent and defend people for infringement of it, even if you’re seriously outstanding.  Duh.

Maybe the time has come to pick sides: If you say, as Mr. Ostrow has, that you’re not going to work with trolls then you have to find a way to mean that.   If you’re going to take a stand against trolls, you have to dig deep and figure out who you’re really dealing with.

And you thought  by the title that this was going to another Lodsys/Martha Stewart post, didn’t you?

JustSayin_small

IPTT

Muddy Waters image found here.

Interview With A Patent Examiner, Part III

Note:  This is the third and final in a series of posts about my interview with a former Patent Examiner, who worked for the USPTO from 2000-2008.  Read Part I here, and Part II here.

Despite suffering wicked withdrawals from a lack of black and whites, it’s good to be back home.  Texas and I are going to have to talk about this 95 degrees in September thing, however, now that I spent time again in a place that has all four seasons instead of just two (hot and hotter).  New York CIty?  I love your Fall!

Back to work we go…it’s time to finish up the series from my interview with a former USPTO Patent Examiner with the most timeliest topic we discussed: software patents.

The sixth and tenth of my 10 questions were these:

6.  What is your opinion on software patents, and the mantra that “computers do math and math is not patentable”?

10.  Any general comments?

Software patents are all the rage now, or at least raging against them is.  Your friend and mine Gene Quinn recently had a conniption fit wrote a blog post about how “intellectually dishonest” we all are for thinking that software patents are a problem at all, which was kind of odd.  It was a fairly technical post and long about the time people start inserting pictures of computer guts, my attention span tends to fade.  Nevertheless, I’m certain he has valid points, I just don’t know what they are.

The majority of the patent blogosphere and Twittosphere (which is to say “Twitter”) has major issues with software patents, and my examiner was no different.  He laid the blame at the feet of patent claims, where he said

Software patents are for a processor with instructions and you can have the instructions to be anything.  Because the process is intangible you can write anything into the claims.  It becomes a word-smithing exercise.  It’s based upon elements which I don’t think should be patented.

It’s too difficult to ask an examiner, because of the limitations on them including that they only search the database and not, for example, technical manuals, to make that call.  It’s a lot harder for the claims to be examined.

The second paragraph goes back to his statement that the corpus of knowledge that patent examiners search for prior art is too limited. And that’s an issue…patents are slipping through the process because people aren’t looking in the right place for prior art, or because the filing attorneys have done such a good job with the wording of the claims that it’s just different enough to exiting patents that it will not get any direct hits when the patent database is searched.  That’s a problem that has solutions (hello, Article One Partners!)

As for the first part, I agree with him that it’s a word-smithing game.  When you look at some of the patents that are being litigated, the “auto-complete” patents, for example, how is that not obvious?  One of the points my examiner made was that something may be non-obvious based on the fact that it hasn’t been patented before, or based on the fact that the applicant’s high-dollar attorney is telling you it’s a novel idea and not obvious because that’s what he’s been hired to do, or because you just didn’t talk to the right people.

My point being that particularly in the case of software patents, one conversation with a programmer and you’ll learn that, seriously?  Auto-complete has been around in one form or another since 1991 because why?  It’s obviously a useful feature.  So how is it all of a sudden now a patent that anyone who writes websites has to have a license for or they’ll get thugged out of existence?

That’s just dumb.  Legal, but stupid.

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If you don’t know who Martin Goetz is, watch this.  What you’ll see is that the whole idea of software patents was born out of the fact that one company was giving away for free what another company wanted to charge for.  I’d love to tie this into Mike Masnick’s thoughts on industry disruption, and how companies that write software could have found other ways to monetize what they’re doing rather than sue IBM and cause a ripple effect that years later, would bring start ups to their knees.

With regard to the tenth and final question of the interview, my patent examiner’s comments were a recap:  give examiners access to a wider range of prior art search options to prevent bad patents from being issued, and find a way to draw attorneys into the job so that they can match wits and intellect with the applicants’ hired guns.  He suggested that putting together a database of the text of technical manuals would be a good use of increased funding, and mentioned that Google was working on a project like that, or so he’d heard.

There you have it, straight from the horse’s mouth.  The single biggest thing I learned is that Julie Andrews was right.

Let’s start at the very beginning, it’s a very good place to start.  When you read you begin with A-B-C.  When you sing you begin with Do-Re-Mi.

Issue good quality patents by having the right prior art search tools and the right mindset about what should be patentable and what shouldn’t (hint: not software), and you create an atmosphere where innovators can feel safe spending their years and their dollars dreaming up new products.  The patent system was set up to encourage people to create something new and give them a time frame to be successful without the fear of others piggy-backing off their hard work.

Somewhere along the way, we lost sight of this basic idea, and it became all about the money and the weaponry employed by modern companies as they seek to wipe out the competition using any means available.  I’m no kum-bye-ya (and hello? exactly how many ways are there to spell that??) hippie chick, I know that companies are not all going to just get along.  But if we can fix some of the things that are going wrong at the USPTO, we can at least force a little bit of disarmament, no?

JustSayin_small

IPTT