Justice Antonin Scalia Said What From The SCOTUS Bench??

“Patent trolls”, that’s what he said.

Scalia Patent Troll

 

Saw this blurb the other day via a post from a colleague on LinkedIn, which is sadly where I get some of my news when I’m in a hurry.  In Commil USA LLC v. Cisco, Justice Scalia had this to say, right there on page 20 in his dissenting opinion:

I may add, however, that if the desirability of the rule we adopt were a proper consideration, it is by no means clear that the Court’s holding, which increases the in terrorem power of patent trolls, is preferable. The Court seemingly acknowledges that consequence in Part III of its opinion.

 

(Emphasis mine.) It’s a two-fer, folks!  Not only did Scalia acknowledge such a beast as a patent troll, but threw in my second-most favorite Latin phrase of all time, in terrorem which means “into or about fear”.

Spot on.  Fear is what patent trolls are all about.  They willfully, intentionally, and on purpose induce fear in demand letter recipients by requiring a payout in the form of a license or else they’ll sue you.  But it’s also about the trolls themselves being afraid…I’m involved behind the scenes right now in a bit of a situation with a company that is going after competitors with patents out of fear that their product isn’t quite as good as they think it is.  Don’t feel like competing on the open market?  Worried your invention might not actually be all that and a bag of chips?  Sue people for patent infringement and hope they go away!  It’s frightening and infuriating, especially if you’re the target.

I’m sorry I missed the Twittersphere back and forth on this one because seriously, I AM?  You’re going with the tired “…but did he define what ‘patent troll’ means? Did he?  Huh, huh??  Did he??” line?  There are not enough eye rolls for that stupid, tired line.

meryl streep

Give it a rest on that, folks.  Patent trolls are real.  You know it, I know it, and at least one of the Supreme Court Justices of the United States knows it.  #legitimacy

Finally, I thought this (from the dissenting opinion) was pretty funny:

Next, the Court says that “invalidity is not a defense to infringement, it is a defense to liability.” Ante, at 11. That is an assertion, not an argument. Again, to infringe a patent is to invade the patentee’s right of exclusivity. An invalid patent confers no such right. How is it possible to interfere with rights that do not exist?

If a patent is invalid, you can’t infringe, proving that even the US Supreme Court has its own “Well, duh!” moments.

It also led me down an entire evening’s worth of study on argument vs. assertion and I missed 1/2 of America’s Got Talent with that little time suck, so thanks for that, Justice Scalia.

JustSayin_small_New

IPTT

{Awesome Scalia image found here.  Meryl Streep eyeroll found here.}

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About Those Proposed Government Demand Letter Requirements

This is sort of old news, in that the original story came out last year after a series of Senate hearings on patent trolls.  The government has proposed a set of rules that they want patent holders and their legal counsel to follow when sending out demand letters.  I don’t think they can make those requirements stick legally, nor would I necessarily want them to.

You’re shocked, I can tell.

Here’s my reasoning.  Well, wait a sec….first of all, here’s a cut and paste of what new legislation would require, from the EFF write up about it:

  • Require that demand letters contain certain basic information, such as a description of the patent at issue, a description of the product or service that allegedly infringes it, the names and contact information for the patent’s owners, and disclosures of ongoing reexaminations or litigations involving that patent.
  • Define as an illegal unfair or deceptive practice certain egregious behaviors, such as sending letters threatening litigation without a real intent to file litigation or sending letters that lack a reasonable basis in the law.
  • Explicitly give state attorneys general the power to to target similar bad behavior in their own states.
  • Allow the Federal Trade Commision to enforce these rules by levying penalties of $16,000 per each violation.

You know what all that information that sounds like?  That sounds like a lawsuit filing to me.  Demand letters are not lawsuits, and they shouldn’t be treated as such.  Now, I think that it would be wise to force trolls to include the patent number, you got me there.

The issue for me is that patent trolls are bullies, plain and simple.  I just happen to feel, very much like Elie Mystal over at Above the Law, that bullies ought to be handled by the bully-ee (and his posse, as necessary) rather than by the authorities.

It’s about information and education to me.  Teaching the general public how to handle these letters by a) collecting them in order to get research and report on the troll modus operandi and b) providing resources for companies when they do receive one.  The White House launched a website (complete with 1980’s clip art icons!) where people can go for resources when that happens.  That’s awesome and the appropriate response because it puts the power to decide if and how they will respond in the people’s hands where it belongs.

Let me tell a personal story here…my 5th grader was recently called a fata$$ on the playground.  It was during a pickup game of rugby (rugby?  wth??) wherein my guy landed on another guy during what all the witnesses say was a legitimate play.

rugbymud438

This is what the scene looked like in my head.

Well the guy he landed on didn’t think so and started with the hurling of insults.  My son, God love him, did not go running to the teacher.  He did not demand a hearing before a jury of his 11 yr old peers. He did not call me up from the nurse’s office in obvious emotional distress and demand that I sue the parents of the potty mouthed hooligan.  He did not start a petition to hang signs in the school yard, warning that trash-talk is illegal.  He simply stood up, said “WHAT’D YOU CALL ME??!!”, and proceeded to handle his business.  I’m not going to explain how because I don’t want a bunch of hate mail about how I taught my son to fight, even though it wasn’t really me so much as it was Peter Brady when he took out Buddy Hinton on behalf of Cindy.  Thanks, Brady Bunch reruns.

My point is, I think that the demand letters the trolls send are designed to be threatening and in many cases deceptive (and I do love that some of the states Attorneys General are going after the senders for it, because it’s after the letter’s been sent and completely appropriate).

I’m not as sure though, that the government ought to come in and tell people what they can and can’t put in a private letter to another company or individual.  Barring libelous statements, companies are within their rights to be a jerk and make threats.  And we, as citizens, are within our rights to build and deploy software solutions to combat those threats.  I don’t think that federal time and resources ought to  be spent on the problem at that stage of the game.

This post came out of a retweet by @GCToGo of a tweet by Cisco’s Mark Chandler (@ChandlerCisco).  Limiting myself to Twitter’s 144 characters is always at times painful for me, so this was one of those times it had to go to the blog.

Plus, what else is there to do on a cold, rainy Sunday but write about patent trolls?

That’s what I thought you’d say.

JustSayin_small_New

IPTT

{Fantastic rugby image found here.}

About That Hearing On Capital Hill Yesterday…

I learned something very valuable yesterday regarding this hearing:  I learned that if I have my cell phone on mute, I won’t hear calendar reminders.  Can you even believe that?? As a result I was only able to catch the last 10 or so minutes but thankfully, I have Twitter and a list of hashtags to peruse, courtesy of Ali Sternburg at Patent Progress.  (If you don’t want to take the jump, they’re #trollhearing, #patentreform, #fixpatents.)  For those of you who are likewise smart-phone impaired, or who didn’t know about it in advance, you can view the archived hearing here.

The point a lot of the panelist seemed to be making, save for poor Mr. Mossoff who seemed woefully alone in his defense of the Dark Arts, is that there must be some sort of government mandate surrounding the demand letters that patent trolls send out.  They should be required to contain certain information, and they should be entered into a national database so that others can see them.

JustABill_Nope

Negative, Ghost Rider.  The pattern is full.

The idea that there should be some sort of mandate on sharing the letters, either by forcing the assertion entity to register it or (worse) requiring the recipient to do so, is silly, not to mention unenforceable. It puts too big of a target on the backs of the smaller companies to admit when they got a letter because then they’re fair game for more trolls. The bigger companies don’t need to share because, unless they’re going to fight publicly, they just pay and it goes away.  Still, they have the same fear of transparency and becoming an even bigger target.  Besides which, as the letters are pre-lawsuit, they’re not now, and shouldn’t be in the future, public information.

The whole idea is that people should want to share, in whole or in part, redacted or not, so that it benefits the collective good. What companies get out of sharing is access to all the other collected information so that they can contact other recipients and collaborate on defense.  Or, at a bare minimum, get a read on the MO of the trolls in aggregate and figure out their own individual plan of counter-attack.  Also, there’s the idea that just simply seeing the demand amount offered to other victims gives any other recipient a little bit of leverage:  “Hello, Scanner Dudes?  You’re extorting $1500 from me but only asked for $500 from Victor Victim #2.  What the hell?”

But it can’t be forced. You have to show people the value, first for themselves and then for others, of sharing and shining a light on these trolls or they won’t do it.  You can’t coerce them with some scary new law that will undoubtedly have a horrible unforeseen side effect that you’ll then have to make yet another law to clean up.  We don’t need more laws, we have trouble enough enforcing the current ones, for heaven’s sake.

Just to give the dead horse one last beating, I am not a fan of the government stepping in, really at all on this issue. I admit to liking a lot of the Goodlatte bill, and surely there is something to be done about the glut of bad software patents (which, who are we kidding, really don’t need the “bad” qualifier) and that is a government area for sure. But beyond that, the Feds will only screw this up.

Having said that, I think the State Attorneys General position on this issue is exactly the correct use of the government. Hit them with consumer protection laws, which are already on the books!  And as part of the process, require that they disclose their letters in discovery.  That I can get behind, and it’s why all three states that are taking this approach made it into the Patent Troll Fighters Heroes Gallery.

I have a website called That Patent Tool that was set up to collect information about demand letters.  It also allows users to create a unique and un-identifying forum user name with which to post questions and ask for feedback in a secure forum.  The whole idea is to get people to put information in, as much or as little as they’re comfortable with, and then start digging into the data and see what we find.  I’ve posted twice now (here and here) about what’s been entered so far.

It’s not a huge data set yet, but I still believe that individuals and companies will become more comfortable with sharing information over time, particularly when they’re able to get with other recipients as a result and see how they can best attack the trolls.

It’s exciting that the dialog about patent trolls has reached such a fevered pitch that Capital Hill has noticed.  I’m just not convinced that making demands about demand letters isn’t too demanding of an approach.

JustSayin_small_New

IPTT

{Cute little Schoolhouse Rock bill image 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.}

How To Pronounce ‘Patent Troll’: It’s NYE-row, Not NEE-row

I don’t know whether to get on my hands and knees and thank Gene Quinn for giving me so much to write about or get on my hand and knees and beg him to quit giving people like Ray Niro a forum.  While I wait for my left brain to decide, I’ll let the right brain write.

In an exclusive interview given to Mr. Quinn, Ray points out that we shouldn’t require people to actually manufacture something in order for a patent to be valid, taking the Non-Practicing Entity synonym for “Patent Troll” to task:

But, [the Wright Brothers] didn’t have the resources and talent, maybe, to manufacture it. So a guy named Curtis came along and he started manufacturing the airplane using their ideas. Using their inventions and they brought patent suits for, I don’t know, eight or nine years before they ultimately prevailed. The Wright Brothers prevailed.

This is wholly different from what the troll-variety of NPE is doing, and you know it.  The Wright Brothers went after a company who was using their patented technology.  What they did not do is send threatening demand letters to every six year old boy who jumped off the backyard roof with a pillowcase tied around his neck as a cape, trying to fly like a Superhero.  Or, similar to our friends the Scanner Dudes, send a letter to every small business who’s ever bought a scanner and used it to email something.  THAT?  That’s troll behavior, that’s what we’re talking about.  You know that.  Nice smoke screen but we see right through it.

smokescreen_ray

Next, he says this:

We’re an idea-driven society, period. We don’t have the factories that we once had. We don’t have the businesses that we once had. What we have are ideas. And we better encourage innovation.

Ideas and innovation are not the same thing.  I personally hate this whole “idea-driven” society because it allows IP lawyers to line their pockets people to get lazy.  Having an idea is nice.  For example, the idea of reading a book is nice.  But actually reading the book and doing the report will get you the grade.  So which is the real innovation?  The idea of reading the book, or the report produced from reading it?  I argue the latter because that requires real work, and that is what I think should be rewarded, not just ideas.  Not that this is a conversation I have had recently about required summer reading assignments or anything…

That said, I get it, sometimes you have a great idea and you can’t make the product.  This is why they’re called “Post-It Notes” from 3M and not “Steph’s Stickies”.  True story.  (OK, not really, I  totally stole that from Romy & Michelle’s High School Reunion.)  But you can’t just stop with the idea and go around suing other people who also had the idea and then executed when you didn’t.  And especially you can’t do that when you didn’t even have the idea to begin with, but bought it on the open market for a whole lot less than you’re  going to sue others for.  THAT’s what trolls do.  And again, you know this.

The topic moved to current legislation and how that will hurt innovators more than help them which is what we would expect someone on his side of the fence to say.  And it’s in this part of the conversation that the rubber met the road:

And, hopefully, we will tune out these special interest groups, like Cisco, et al., that are creating the hysteria. At least that’s my hope.

And there it is, folks.  Ray’s still fighting a 10 year old battle against Cisco because he and his ilk were called out on the original Troll Tracker blog.  Don’t remember that?  If memory serves, and I think it does, the final few posts involved the filing of an infringement lawsuit before the patent even issued.  Pssst…Mr. Albritton?  The cart goes after the horse.

cart and horse1

Anyway, Ray Niro offered up a bounty to find out who an anonymous blogger was because he’d been called out on his poor behavior.   Offered up a bounty.  On a blogger.  ??

Maybe it means something, maybe it doesn’t.  But what it isn’t is a surprise that Raymond Niro would be a staunch defender of the practice of patent trolling, and adverse to any legislation that may seek to curb such behavior.

JustSayin_small

IPTT

{smokescreen image found here: http://www.louimbriano.com/wp-content/uploads/2011/04/smokescreen.jpg}

{horse and cart image found here: http://hcrenewal.blogspot.com/2010/10/cart-before-horse-again-institute-of.html}

Patent Trolls To Everyone Else: “Sticks And Stones, People!”

Remember that little song and dance your Mother used to give you when you were a kid and the brat across the street told you to stick a rubber hose up your nose?  What, that never happened to you?  Anyway… “Sticks and stones may break your bones, but words can never hurt you” is how it went.  To this day, I’m unsure if she was telling me to suck it up, buttercup, or that I was about to be assaulted by a group of kids with baseball bats and rocks. I deserved both neither, I assure you.

There have been a fair amount of synonyms for “patent troll” bandied about in my day, and it seems the trolls have taken that little ditty to heart, for they do not appear in any way hurt by the insults hurled at them. (Unless you count one of the two five-gallon hat wearing guys down in EDTX.  Right, Ray?) Nevertheless, the Moms of patent trolls must’ve dug that lesson in deep because dayum, can they take it or what?

Topping my list of insults used to be Rackspace’s use of “the world’s most notorious patent troll” when referring to IP Nav.  Can anyone over the age of 19 get away with saying “BUUUURN!!“?  No?  Then I’ll just smile sweetly and say “Good one!”

I dare say it, but they have been outdone.  In a case against IWS, none other than Cisco Systems has filed for declaratory judgment and to add insult to injury, has said that they are part of “the most recently recurring plague on this country’s patent system”, according to a quote from a post on the Essential Patent Blog.  Let’s say it together one more time, shall we?  Just for giggles:

the most recently recurring plague on this country’s patent system

If I were IWS I’d be all “Did anyone get the license on that bus that just smooth ran us over?”  Someone call the WWE because that is one pretty hot smackdown.

Truth is, I love those words because they are perfectly descriptive of the problem.  Patent trolls stifle innovation and threaten start-ups and drain R&D money from corporations, all of those things are true to one degree or another.  But at the heart of the matter, they are indeed a plague on the country’s patent system, a slick workaround to the alternative of working hard and using patents to build rather than tear down.

It’s refreshing to see these companies coming out swinging, all “We’re mad as hell, and we’re not gonna take it anymore!”  It really does have to be an all out (or all in, as it were) approach with these guys.  The first time you roll over and let them pat your belly, you’re forever in the one-down position.  They may hit the tickle spot the first time, but before you know it they’ve collared you and are leading you around by your nose.  Hierarchy is very important to bullies so you have show them who’s boss each time, every time.

Both the Cisco motion (which I see that HP has copied)  and Rackspace’s against Parallel Iron are in the Western District of Texas but we might soon just call it the Wild Wild West(ern) District of Texas.

You can't see it from here, but that cowboy totally just tossed a patent troll off that cliff.  True story.

You can’t see it from here, but that cowboy totally just
tossed a patent troll off that cliff. True story.

I’m not not sure what’s in the water out there, but I want some of it shipped to my doorstep toot sweet.

Just sayin’,

IPTT

{note:  image above found at http://tripwow.tripadvisor.com/slideshow-photo/wild-wild-west-monument-valley-united-states.html?sid=10071272&fid=upload_12769675532-tpfil02aw-20674}

The Patent Bully Pulpit, James Dyson Need Not Apply

When last we left our hero, I had commented on an article by Charles Arthur (Hi Charles!) regarding the plethora of words required to explain the Smart Phone Patent Wars.  Charles volleyed with “DON’T FORGET JAMES DYSON, YOU BIG FAIL, YOU.  HE DOESN’T USE PATENTS AS A BULLY PULPIT!!”  and I returned fire with “Dude, I’m in America and I’m too tired to reply right now but James Dyson wasn’t who I was talking about.  So I’m going to ask that your “Fail” comment bounce off of me and stick onto you because I’m rubber and you’re glue.  And also I’m secretly a 10 yr old schoolyard bully.”

Short version reply:   Dyson doesn’t factor into the equation at all, as my comments and 17-word “Smart Phone Patent War manifesto” applied only to, as luck would have it, Smart Phone Patent Wars.  If you read that out loud, it doesn’t sound at all like “Bagless Cyclonic-action Vacuum Cleaner Wars”, even taking into account the differences between a British and a Texas accent.

But if we’re meant to take your comment in the spirit of the law rather than the letter, I do see your point that not everyone who sues over patent infringement is a) a troll and b) wrong to do so.  I have thus prepared a long version reply which commences starting…now!

Ah, James Dyson.  Can I be honest with you?  I mean, the vacuums suck really well, but the cord on the DC 24 is maddeningly too short.  Also?  The parts are made of “liquid steel”, which is to say “plastic”.  Not good for long-term use, in my home anyway.  Now, I will say that in comparison to the 24, DC 41 Animal is a different, ahem, animal.  I love that thing like I love my Dove chocolates.  But this isn’t really about vacuums, right?  I digress…

I took a moment to consult Dr. Google and came across a fair amount about Mr. Dyson.  First of all, does he give his brother a royalty on every Dyson Ball that he sells, since the idea to use a ball-shape was his, albeit for a different product?  I always find it interesting when people get all patent-y with their inventions but don’t talk about how much their ideas and “ah HA!” moments have borrowed from other people’s ideas.  Not a criticism necessarily, but it just doesn’t seem completely honest.

In that same spirit of honesty, I will admit to not having done a ton of research on who Mr.Dyson has sued and the validity of his patents.  What I did read led me to believe that he is a serial inventor and when he hit upon the Dyson Bagless Vacuum, it became his Holy Grail.  At that,  it took him a long time to go from the design of a vacuum that wouldn’t lose suction to a product that someone would actually manufacture.  Ten years, if his Wikipedia entry is to be believed.   I think Dyson vacuums are a slick product and I think that’s why people buy them.  They like the story that underdog Mr. Dyson was the first to bring this technology to market and all the other people who do anything remotely similar are charlatans who built off of his ideas (and didn’t! pay! him! for! the! privilege!).  Plus, let’s face it:  Pink.  Not Pink, but pink vacuums.  Sheer genius to the overworked Mom who just wants a little pretty in her domestic life, lol!

So whilst Dyson is indeed an example of maybe perhaps someone who might have grounds to sue over a particular technology and it’s practical application, again, he was not the target of my 17 words.  John Chambers actually put it a little better than I did, and used even fewer words:

He didn’t name names, but, speaking to the audience, he said for “his peers” in the room, “you shouldn’t be suing your peers.”

That’s six words, to my 17:  You shouldn’t be suing your peers.

So by my count we have serve, volley, return volley.  Your ball, Mr. Arthur!

Just sayin’,

IPTT