Trolls Set Their Beady Little Eyes On A Couple Of New Targets

Tech patents have been the trolls’ bailiwick for a long time now and don’t you think they’re getting a little sick of the same ol’, same ol’?  I mean, even trolls get bored sometimes and need to spice things up. Plus, the tech industry fights itself often enough that the trolls don’t really need to stoke that fire anymore.  (Hello, smart phone patent wars spaghetti graph.)

What’s the next ambulance to chase?  Meghana Keshavan  and Jay Nuttall seems to think that it’s Big Pharma, and I agree.  They actually say “life sciences”, which includes more than just pharmaceutical companies, but I think pharma will be part of the crowd.  So who’s doing the hitting?  You’ll see a lot of familiar faces on this list:

The recent Steptoe paper, titled “The Patent Trolls Are Coming… To Medtech,” outlines what it views the most egregiously trollish NPEs in the life sciences space. These include Acacia Research Corp., WiLan Inc., Intellectual Ventures Inc., IPNav, My Health Inc. and DE Partners Golden Rule LLC.

Do you mean to tell me that the life sciences industry sees Intellectual Ventures and IPNav as patent trolls?  Will wonders never cease.

The article upon which Mehgana Keshavan based her write-up is found here, and it should be required reading for a number of reasons:

1. The side-bar box on Page four provides a list of secret weapons used by trolls.  The first one is key: “Trolls don’t care what you think.”  Some of them even encourage you to think of them as thugs.  Not that I’m talking about anyone specifically like Erich Spangenberg because I’m totally not even though I linked to his article and posted his picture.  Make no association between those two things.

spangenberg_thug

 2.  He correctly points out on page 3 that trolls follow the money.  That’s why they went with tech first.  Once that’s played out, they’ll head to the next big thing: biomedical devices and pharmaceuticals. Then I think they’ll head to oil, but we’ll get to that.

3.  Jay says on page 4 that one way to anti-troll yourself is to be a strong defendant.  How do you be a strong defendant?  He has his ways, but I say one way is to know how the trolls have asserted their patents in the past.  You can get that information by looking it up on PACER, or paying the likes of Lex Machina or RPX to provide it for you.  That will tell you where they’ve already litigated.  Or, you can encourage demand letter recipients to enter them in That Patent Tool.  The sooner we start tracking pre-litigation movement on these guys, the bigger our advantage will be!

It’s great to see a law firm partner willing to step out, similar to the way Goodwin | Procter did with their Guide to NPE Litigation.  Steptoe & Johnson LLP is throwing their hat in the ring with this paper, and they hit the mark.  We’ve also had Intellectual Ventures threatened with getting the Jones Day-lights beaten out of them.  I think it’s cool that firms are taking the problem on rather than just playing to the side that will pay them the most.  It’s a start, considering that lawyers, after all, always the win no matter what.

imalawyer

No shame in my game. I {heart} TMZ.

There are lots of reasons why biomedical and other life sciences companies will be patent troll targets, no question. But I think now, like I did then, that oil companies will have a target on their back as well.  Why?  Let’s spell it out:

  • When the price of oil goes lower, companies invest fewer resources in trying to get it out of the ground because their profit margins are directly related.  So they turn more to technology to help, rather than roughneck boots on the ground, which are more expensive.  This technology results in patents, and patents make them vulnerable to trolls.
  • Big Oil is increasingly driven by software.  They use it to analyze their tool usage and get equipment out of the ground before it hits the MTBF (Mean Time Between Failures) hour mark, they use it to price jobs, they use it to predict where the next big find will be, they use it create specialty invoicing systems…lots of things.  The Alice decision hurt the trolls’ ability to beat people up with software patents, but the decision wasn’t the “kill all software patents forever” edict some hoped it would be.  Since trolls seem to think they can apply spurious patents to software of all kinds, this is a hole they could worm through.
  • Seeing the way other industries have been hit, they have started buying up patents, possibly as a defensive move as I pointed out in the Q4 2013 Quarterly Troll Review.

oil-gas-industry_target

It’s hard to fully predict where the trolls will go.  Did anyone see patent litigation as the next big thing, once actual ambulance chasing went out of vogue, and then tort reform killed the dust docket?  Problably not.  But there’s one thing we can predict with 100% accuracy:

Trolls will go somewhere.  They always do.

JustSayin_small_New

IPTT

{Harvey Levin image found here. Erich’s picture courtesy of #thuglife. Cool silhouette image of oil wells found here.}

 

If Patent Trolls Don’t Exist, Why Do We Need A Playbook To Defend Against Them?

I know, I know.  The Goodwin Proctor tome explicitly states that it’s a Tactical Guide to NPE litigation, be we all know they mean patent trolls.  Otherwise, they’d have just called it “Patent Litigation:  A Tactical Guide for Practitioners”.

Alas, they did not.  I know because I signed up for my copy of said book which arrived by Federal Express and nearly scared me to death because the dude rang my doorbell at 5:00 on an afternoon that I couldn’t remember having ordered anything.  First thing I noticed?  Y’all, this thing is huge.  Like, really big.  It’s about four inches thick and GBC-bound and could double as a kettle ball if I were at all interested in doing anything exercise-related right now.  I dove right into it because nothing says “Happy Hour!” like a Cuba Libre and a book on how to defend against the dark arts of patent trolls.  Am I right?  Of course, yes.

The fun begins on page one, as fun is wont to do, with the Alliteration Award for this sentence:

NPE Litigation is a controversial subject shrouded by shrill, simplistic sound-bites.

Ah, I love me some word-smithing.

The Guide, as it shall heretofore and thereafter be referred to as, starts with a definition of NPE that takes up about four pages.   Man, that’s a lot of words.   They talk on page two about R&D firms, which would include, in my opinion and as a result of technology transfer programs, Universities.  My notes in the margin read something to the effect of “it’s really who companies go after and how that helps define a patent troll, and it matters because the point of being an NPE is that you avoid the risk of counter-suits since you’re not actually manufacturing anything.”  I’m not sure they made that point anywhere and it’s a salient one.  There’s a reason some entities that hold patents are non-practicing, and the lack of counter-suit risk is it.  That’s a big thing and how come y’all didn’t harp on it like I’m doing?

Anyway, by the time we get to the section on Licensing/Litigation Techniques The Guide has started using the watered-down “patent troll” term known as the PAE, or Patent Assertion Entity because calling companies what they do is somehow…bad?  I dunno, but people who aren’t me don’t like to do it so they call them PAE’s.  I suppose if you’re going to do that, I’d like to see the middle word changed to Aggressive, rather than Assertion because trolls are aggressive.  They don’t pop out from under the bridge and say “I’d like some money, please, for my nefariously bogus patent over here if you don’t mind, please.”

No, they instead start out with a threatening letter (which you should totally track here if you get one!) and when that doesn’t work they get aggressive and sue you.  See?  PAE should equal Patent Aggressive Entity.  You’re welcome.

The Guide talks about how, when PAE suits are tried on the merits, our little aggressive friends have a pretty low win rate.  In my head when I read that I’m all “Merits?  What are those to a troll?”  They don’t care about the merits, because they don’t really ever intend to get to court.  They try their demand latter tactics first and when those don’t work they sue, all the while knowing that the likelihood of actually going to trial is slim because lawyers are risk-averse and would rather just pay up.  Merits?  Phpppppppft.

Uncle Eddie Phhhht

“And YOU…you’re going to jail!”
“Phpppppppft!”

One point The Guide made that I hadn’t really written about or explored in depth is the timing of troll/PAE lawsuits.  Typically, they wait until the technology (supposedly) covered by their (loosely constructed) patent is in full use and they can go after a lot of people, or a few big-named people for big money.  The Guide contrasts this with producing/practicing firms who tent to sue early in the patent term.  Great point!

On page four we get into something that really sticks in my craw, shell companies.  Dude, if you have to bury your acts deep in paperwork and incorporate in weird places and plan at any time in your future to use the phrase “I have no knowledge of that subsidiary’s actions” then listen up:  You’re doing something wrong.  If you’re not, why hide?  Don’t give me that malarkey about “tax advantages”.  Not buying it.  It’s to hide what you’re doing.  That’s why companies like Ericsson sell off patents to trolls.  When litigation hits the fan, the general populous isn’t likely to dig up the information on who really owns a patent. Ericsson maintains its reputation while still monetizing its patents.  It’s all kinds of slim shady and I don’t like it.

RealSlimShady

The Guide makes a really good point about shell companies which is this:  Because a shell company doesn’t bear the more recognizable name of its parent, by design, it may be assumed when you receive a demand letter (that you immediately go and enter into That Patent Tool) from one of these nobodies that there’s no teeth to it.  Well, there isn’t in a sense because a demand latter does not require any action at all.  DEMAND LETTERS ARE NOT EQUIVALENT TO LAWSUITS.  Nevertheless,

 If you receive a complaint from a company you have never heard of, or for which there is little public information, do not assume it does not have the resources required for patent litigation.

By ‘complaint’ they may mean an actual lawsuit, in which case yep.  That’s exactly right and a fantastic point.

As previously mentioned, The  Guide is a four-incher and therefore may engender more than one post…I haven’t even read the whole thing yet though in fairness to me, the last five sections are texts of the bills brought before Congress and/or Congressional record transcriptions so, you know, yawn.  But I bring it up now for three reasons:

  1. Goodwin Proctor seems to be going the way of Jones Day, who advertised that they can handle IV in patent litigation. The Guide is a marketing tool for Goodwin Proctor, and I think they’re smart to distribute it.
  2. There’s a great chart on page 16 about legislative initiatives. Concisely done.
  3. I’m not 100% sure I’m on board with their final definition of NPE by tying it to percentage of revenue earned. I don’t care how much revenue you earn from asserting your patents.  I care how and when and upon whom you assert because that’s what matters when defining trollish behavior.

When well respected and large firms start putting together playbooks like they’re NFL teams and advertise that they can beat IV at their own patent game, its further proof that patent trolling is a problem.  Frankly, I like that law firms are coming out with this kind of thing because as private entities, I think this is exactly where the problem needs to be solved.

And yes, I do see the irony that lawyers are saying they can solve a problem that they themselves started.  Not lost on me, folks.

JustSayin_small_New

IPTT

{Uncle Eddie phhtt found hereEminem pic found here.}