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?

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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.

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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

Interview With An Inventor, Part II

On this fair Monday morning, let’s continue our Interview with an Inventor, started last week here with Part I.  My goal in these questions was to divine how much time this particular inventor put into actually trying to get his product out there and if litigation was part of the strategy from the outset, if at all, or if it was something that ended up being a necessity because of the 400 lb gorilla companies that are (theoretically) preventing new entrants into the marketplace.

In this part, we’ll cover the next three question in the 10-question series:

3.  How have you approached the “big players” in your industry to attempt to get them to license your patent? What resistance were you met with, and how have you overcome it?

4.  What is the biggest barrier for small inventors to overcome when trying to approach the “big players” in their market?

5.  For you and your product/patent specifically, what is the single most troublesome thing about current patent reform legislation?

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3.  How have you approached the “big players” in your industry to attempt to get them to license your patent? What resistance were you met with, and how have you overcome it?

I have had extensive engagements with big companies, about a number of my patents, most of it negative unfortunately. Despite the fact that I have extensive technical educational background (a BS in EE from Caltech) and industry experience (I worked at IBM and two startups) one still universally gets the NIH response from companies.  

Let me give you an example.  In one instance a friend of mine knew the founder of the company.  He got us in touch with inhouse counsel, who proceeded to tell us he did not want to see any due diligence or evidence materials that would explain the utility of the patents, either by way of their current or future business.  This was rather amazing to me, since I asked them how I was going to demonstrate the value of the patents if they were not going to consider what materials we had prepared to show …exactly that.  This is an example of the corporate “blinders” I mentioned before.  Inhouse attorneys are taught to avoid looking at anything, or commenting on anything that relates to third party patents. This pretty much means there is no opportunity for a reasoned discussion.

Finally we reached a compromise where we agreed we would at least TALK to outside counsel on the phone to explain the relevance of the patents.  This of course was rather inefficient, awkward, etc., and prevented any meaningful assessment on their part.  We also agreed not to initiate any lawsuit during a limited grace period, all of which was fine by us.  

Despite all these handicaps this company did in fact make an offer on my portfolio. For reasons that are too numerous to list here (but I posted about it online) negotiations broke down.  Sometime after the grace period expired, I sent them a polite letter explaining to them in detail now why the patents had value – an opportunity they prevented me from doing before.  They then proceeded to try and kill my patent filings in the PTO as some kind of preemptive strike or payback.  Unbelievably they “manufactured” prior art to make it look to the PTO that they had already come up with my idea before me.  This was pointed out to the PTO after I discovered it but it was not until years later that they admitted the charade. The whole affair was just appalling to me to see what lengths they would go to not only denigrate my work.

Since that time I have had an occasion to send a number of other companies what I consider fairly friendly letters inviting them to take licenses on technologies I have invented.   In almost every instance they don’t even bother to acknowledge your letter.

This is why so many small inventors seek other channels, such as through brokers, to help monetize their assets. They have neither the connections nor the muscle to get the attention of large players, who can simply ignore you until you find someone willing to represent you in a lawsuit.

4.  What is the biggest barrier for small inventors to overcome when trying to approach the “big players” in their market?

Access.  It is almost impossible, unless you know someone in the company with authority directly, to get any attention whatsoever.  If you send them a letter inviting discussions it will be ignored 99% of the time.  To some extent this behavior is a legacy of older, now defunct case law which made it prohibitive to talk to inventors, because that could expose the company potentially to a charge of “wilfull” infringement later. This created a corporate mindset that pretty much shut down any exposure to third  party ideas, no matter how useful they might be, out of fear of being called out later for having “infected” the company with an outside “virus” if you will.  Engineers in fact were routinely told (in earlier days at least) NOT to read patents of any kind, again out of fear of being “contaminated” with third party ideas.

IPTT Comments:  So this is very interesting to me. I do understand the idea of not wanting to talk to inventors because what if someone at your company actually had the same idea?  What if that idea was just a slight tweak and Mr. Big Company had actually filed a similar patent that was still pending…you don’t want to open yourself up to trouble in the form of treble damages for willful infringement if you talk to a sole inventor.  So this makes sense.  But as our inventor acknowledged and as I mentioned in my backgrounder , agent or broker companies exist to help the smaller player get in the door.  I wonder if inventors don’t want to take that route because they lose a percentage to the brokerage firm?  Does it give an inventor less street cred if they have to use a broker vs. get in the door on their own?  Not judging, just asking.

Which, by the way, I realize those brokerage firms are NPEs.  Yeah, I get it.  But let’s keep it real here:  a company that can knock on Mr. Big Company’s doors and help you get in is not the same as an Intellectual Ventures or IP Navigation who actively seek out nebulous patents and set about suing the world over them.  No, there are decent NPEs out there who serve just the type of purpose our inventor would need them for.  Like the patent Shark Tank, if you will.

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5.  For you and your product/patent specifically, what is the single most troublesome thing about current patent reform legislation?

As I see current legislative efforts, they are mostly driven by an anti-patent rights bias, and therefore are almost exclusively are directed to reducing inventor/patent owner rights.  There is not a single provision in any of the proposals that makes even an attempt at balancing interests.  [In my opinion], the current (now tabled) legislation was crafted and sponsored almost entirely by large corporate interests who simply don’t want to respect or compensate small inventors for their technical contributions.  Consequently every provision is intended either to make it harder for the small guy to get a patent, to make it easier to kill that patent even if it is granted, or to make it impossible for that person to enforce it. Every aspect of the bill is engineered to facilitate what I would call “economic infringement” meaning, rigging the game to make it easier for big companies to simply take/infringe patents with the knowledge that their maximum downside is less than the economic advantage they derive from using the invention.

IPTT Comments:  I’m on record many, many times agreeing that legislation is not the way to curb patent trolling.  It’s right there in the name of the offender: “troll”.  It may slow them down temporarily, but overall, anyone called a “troll” is going to come back swinging a few months or years later with a whole new set of workarounds.  It’s impossible to stay fully head of them with laws.

That said, I don’t agree that the current legislative attempts were crafted solely to keep Big Companies from paying small inventors.  I think, rather, that they are attempts by politicians to seem relevant because patent trolling all of a sudden came into vogue.  Cool people like me have been following the problem for many, many years.  So, nice try crashing the party, Congresspeople.

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Because that’s a lot of words already I think we’ll stop here and pick up next time.  Look for the remaining parts Wednesday and Friday of this week!

JustSayin_small

IPTT

{Cool shot of Congress found here.}

 

Interview With An Inventor, Part I

I don’t often get in fights on Twitter, but when I do, it’s with IP Watchdog because he’s a bully (only sometimes, but still) or with inventors who feel that any attempt at curbing patent trolls will adversely affect them and their ability to sue people who infringe on their ideas.  OK, so maybe I exaggerate a little (or a lot because I am never prone to that) and they don’t think that any attempt is a dig at them, but it feels close sometimes.

I happen to “internet know” a couple of inventors, and one of them graciously agreed to answer some questions for me.  It’s not an attempt to appear fair and balanced because that is not something I strive for here.  It’s pretty clear where I stand because hello?  THE NAME OF THE BLOG.  But I’m not completely devoid of  a conscience and am aware that there are often other interpretations of the patent landscape that cause people not to see things my way.   Hard to believe that someone would disagree with me, I know.

Nevertheless, I put together this list of questions for some random dude my friend guy-I-internet-know my inventor:

  1. How long did it take you to get a patent on your idea, from the time you originally thought up the idea, to when your patent was issued?
  2. What items have you commercially produced using your patented invention?  If your invention is technology-based rather than product-based, what products have you brought to market using your patented technology?
  3. How have you approached the “big players” in your industry to attempt to get them to license your patent? What resistance were you met with, and how have you overcome it?
  4. What is the biggest barrier for small inventors to overcome when trying to approach the “big players” in their market?
  5. For you and your product/patent specifically, what is the single most troublesome thing about current patent reform legislation?
  6. Do you acknowledge the existence of Patent Trolls? If so, which company would you name as an example?
  7. Outside of legislation, what do you think can be done to update the patent system so that it is more inventor-friendly? This can include adjustments at the Federal level to do with the USPTO, or things at the local level, like educational events for kids.
  8. Do you think that “loser pays”-type litigation rules will hurt the small inventor? If such rules were universally adopted in the US, do you think it would make you less likely to sue a potential infringer?
  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?

This will be a multi-part series because that is a lot of words up there in those questions!  We’ll start with just the first two here to sort of set the stage.

So without further ado, I present to you an Interview With An Inventor, Part I:

DocFromBackToTheFuture

Note: This is not the inventor I interviewed, as far as you know.

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1. How long did it take you to get a patent on your idea, from the time you originally thought up the idea, to when your patent was issued?

I have quite a few patents, but I will give an example of just one, namely US Patent No. 6,782,510 which deals with content filtering, a feature which is found in many corporate email systems.  It has been cited 85 times by the PTO so I am fairly proud of it.  The invention allows an administrator to control what kind of content can be distributed, on a recipient basis, so that different policies can be used for different audiences.

I thought of the idea in late 1997, and filed January 1998. It took more than 6 years to get it issued, which is not atypical unfortunately in this business.  There is a serious problem with the PTO not performing their review fairly and timely, which costs inventors because by the time you get your patent, the technology may now be obsolete, or the market may have changed.  A perfect example is US Patent No. 8700538, which deals with letting members in a community exchange playable media, such as DVDs.  I filed for this in 2004, yet the patent took 10+ years to issue. There were a number of companies that came and went in this interval that I could have licensed and helped improve their offerings to make them more commercially viable.  The PTO delays pretty much killed the entire economic opportunity there.

2. What items have you commercially produced using your patented invention?  If your invention is technology-based rather than product-based, what products have you brought to market using your patented technology?

I do not try to commercialize all my inventions because sometimes it is just a matter of economics, meaning I don’t have access to capital that can help me hire a developer or market it in an effective/competitive way against established large companies. Even if I had a perfect email filtering program for example, there is no way I could compete against a Symantec, McAfee, Google, etc.

In other instances I *have* invested gigantic sums of my own money to commercialize inventions where the big companies are not yet present.  If you look under the company name “Patent Savant” for example you will see a number of filings made by us covering patent data acquisition systems. We spent several man-years and $$ trying to bring this to fruition but have had limited success because the law changed (which reduced the value of the product) and the market became very crowded just as we were entering.  We still have all the underlying code, tools, etc., however, and may pivot to implement a different variant in the near future.

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Stay tuned for Part II!

JustSayin_small_New

IPTT

{Image of Doc from Back To The Future 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!}

You Only Need A Defense If Someone’s After You

“Patent trolls” are feeling the heat in Washington — and they’re taking steps to defend themselves in D.C.

Long pilloried in Silicon Valley as a drain on innovation, such companies have seen their troubles mount with regulators and lawmakers.

First, “long pilloried”, as used in the quoted article, is one of my favorite phrases ever, right after “Behold, I have found the stash of chocolate!”

Second, Nathan Mhyrvold’s being sent to DC to “make the case that patents benefit inventors” isn’t being 100% truthful because Intellectual Venture’s isn’t known for it’s ability to tell the truth they’re a troll.  He’s being sent there because all of the bills before congress are about to put the hurt on his business model.   It looks like the Goodlatte bill is really stuck in his craw.  They’re not saying that, of course, they’re generalizing the problem in an effort to dilute their affect on it:

The current debate about patent trolls “seems to create uncertainty around patents generally,” said Russ Merbeth, chief policy counsel at Intellectual Ventures. “From our perspective, that’s going to have a long-term negative impact on American competitiveness.

What’s a “chief policy counsel”, anyway?  When I think of company policy, I think of things like deciding whether or not to put a note on the fridge that all leftovers will be tossed by Friday noon, or setting the precedent that, though it does frequently reach 500 degrees with 1000% humidity in the summer in the armpit of the US Houston, no, you cannot wear a tank top, capris, and flip flops to the office.  I suppose in this case, the chief policy officer’s job is to deflect the real issue and talk about how these bills will hurt American  competitiveness which IV is doing , what, exactly, to help?

{crickets}

Intellectual Ventures executives have taken to the company’s corporate blog to question the “myth of patent troll litigation” and have touted the company’s role in helping startups, including Nest, the “learning” thermostat maker that has access to nearly 40,000 IV patents.

Uh, guess not.  Nest came to you so they could fight off Honeywell in much the same way that Ditto went to IP Nav to fight off 1-800-Contacts.  Nice try.

Look, you don’t file paperwork and spend $165,000 to fight something you’re not worried about.  The fact that IV and others who are part of the Innovation Alliance are worried tells you you’re close to home.

As always, I’ll add my standard disclaimer that I think the market system can solve this problem quicker than the feds can (insert shameless plug for That Patent Tool here).  But I think there are some good things in the Goodlatte bill, and I know this because they’ve got IV on the run.

JustSayin_small_New

IPTT

That New Schumer Law Proposal: How Does Anyone Think This Is A Good Idea?

I know this article about Charles Schumer’s new law came out a few days ago but I have shoe shopping to do a new product coming out so I haven’t had time to comment on it.  But may I be so bold as to comment with a giant WTH?

What’s interesting is that the bill proposes a new process by which all patent cases will get vetted by the USPTO — not just the “extortion” (his word) brought by trolls.

You’re kidding, right?  You want all patent cases to be vetted by the USPTO, who evidently hires patent examiners who “[drink] scotch and whiskey with a side of crack cocaine”, if the Angry Lawyer is to believed?  You want this same entity reviewing all patent cases?

I suppose on the one hand this is good news…all those software patents people don’t want issued?  Well, they’ll languish forever now with the patent office reviewing cases for a living.  It’s kind of like when Congress gets deadlocked: that’s a good thing because if they can’t agree?  They can’t make more stupid laws.

To quote Schumer:

“This will apple to all patent cases, but if you have a legitimate case it will go forward in a month. It just eliminates all the frivolous suits. We think it’s the best solution.”

Typo of the year goes to?  The author of the article, Ingrid Lunden, for the hilariously Freudian “apple” vs. “apply”.

But to the quote, cases will go forward in a month.  Huh?  How is that even remotely possible?  The government can’t get anything done in a month.

I’m not a fan of solving these problems through litigation, one reason for which will be readily apparent soon enough.  The problem is that you can’t out-smart these trolls with mere legality.  Whatever law you put in place, they’ll find the loophole.  It’s what trolls do.

Throwing crazy-stupid legislation together so that you can tell your corporate constituents that you are trying to solve their problem?  That’s what politicians do.  Right Chuck?

schumer

Sell your crazy somewhere else, pal.
We’re all full up here.

Just sayin’,

IPTT

Hold the Phone, Someone Put Out Bad Numbers?

It was bound to happen, and it finally did.  Someone is disputing the claim that patent trolls cost companies $29 Billion in damages.  I’ve used the claim myself so that makes me part of the spread of bad information.  I can see The Internets shaking it’s collective finger at me now, using it’s best “for shaaaaame!” voice. Adam Mossoff has done a pretty good job of ripping gigantic holes in the numerical claim, the people who helped create the number, their methodological failures, and, just to beat the dead horse a little harder, the SHIELD act.  It’s like he dropped a daisy cutter bomb on the whole party.  Ouch. Edit, 12:15 PM CDT:  Adam pointed out that the study of the numbers, linked here, was done by David Schwartz and Jay Kesan.  The article to which I linked is his analysis of it, and I’m glad to have the opportunity to add the link in to their original work.  Also, Adam?  I can one-up you on the geek-o-meter by saying that not only are trolls a hot-button issue now, some of us actually read this stuff for fun.  True story.  You may send my “Geek Goddess of All Time T-Shirt” to me at  505 E Travis St, Marshall, TX 75670.  (Kidding, that’s a Rick-Roll.) Totally with him on the SHIELD act, as we all know.  My reasons differ from his, but whatever, we’re on the same side of that particular battlefield. To the quotes:

The entire U.S. court system is an inefficient cost imposed on everyone who uses it.  Really?  That’s an assumption that reduces itself to absurdity—it’s a self-imposed reductio ad absurdum!

{Clutches pearls and looks around nervously.} ZOMG, did he just use a Harry Potter spell on the Internets?  My Latin is rusty but I think what he means is that we’re all going to get dizzy again trying to follow the logic that the people who drew the $29 Billion conclusion have a vested interest in the number being as high as it is.  Point: Mossoff. Next:

There are several reasons why the extremely broad definition of “NPE” or “patent troll” in the study is unusual even compared to uses of this term in other commentary or studies. First, and most absurdly, this definition, by necessity, includes every universityin the world that sues someone for infringing one of its patents, as universities don’t manufacture goods.  Second, it includes every individual and start-up company who plans to manufacture a patented invention, but is forced to sue an infringer-competitor who thwarted these business plans by its infringing sales in the marketplace.

To the first point in this quote, I’m baffled.  Do we not know the names of the Universities in the US, and can we not exclude them from the study?  I’m not going to do it because, well, it would just be showing off but my guess is that in three clicks or less someone could generate a list that would pretty much handle 90% of the institutions you’d want to exclude from a study like this.  You take this list, match it to the data you have, do a really delete quick query and voila!  They’re disappeared.  I’d love to know the logic behind not excluding them, if that’s in fact what happened. To his second point though, that’s a whole lot harder to quantify.  How do you really know what a company’s intentions are?  And further, what if those intentions change?  A company can, for all the world, “plan to manufacture” all sorts of things that they never get around to for reasons that are anywhere on the scale from Completely Troll-ish to Not At All Trollish.  So excluding companies like that may actually hurt you, if you can even get the names of them at all. Finally,

There are many other methodological flaws in the $29 billion cost study, such as its explicit assumption that patent litigation costs are “too high” without providing any comparative baseline for this conclusion.  What are the costs in other areas of litigation, such as standard commercial litigation, tort claims, or disputes over complex regulations?  We are not told.  What are the historical costs of patent litigation?  We are not told.  On what basis then can we conclude that $29 billion is “too high” or even “too low”?  We’re supposed to be impressed by a number that exists in a vacuum and that lacks any empirical context by which to evaluate it.

Some people, and I may or may not be one of them, contend that any litigation in this particular arena is bad.  That’s an over-simplification and one I freely admit, but I can see why the study labels costs “too high” regardless of the actual number. The question I have though, is does it matter?  Does it matter how much money the trolls have cost companies?  Is there even really a fair and methodologically unquestionable way to get at that information?  Pre-litigation settlement terms and even post-litigation terms are not always discoverable so really, any number that people throw out is going to be questioned, and rightly so. But just because this particular number can be proven to be falsely contrived doesn’t make the whole conclusion that patent trolls are a nuisance without merit.  They clearly are, even if, and especially if, all they cost companies is time.  Time to battle these guys, time to respond to nastygrams, time to consult with counsel, all of those things take resources away from a company’s core business.  Time is the one thing you cannot ever get back.  You can always earn more money…how many times has The Donald gone bankrupt?  And where is he now, besides firing people on Celebrity Apprentice (which, by the way Big D, Bret Michaels totally did not deserve that)?  That’s right: not bankrupt. My point, and I do have one, is that yeah we want all the numbers to be factually correct and all the research to be on the up and up with no bias and no flaws but it doesn’t really matter.  It does not take a genius or a flawless study to tell us what we already know:  trolls are bad for American business.  Full stop. Just sayin’, IPTT

Three Reasons the SHIELD Act Will Not Derail the Troll Train

In stark contrast to a few people in Congress who shall remain nameless (translation: ALL OF THEM) who don’t typically, you know, read the bills they sign, I actually sat down this weekend and read all four pages of the SHIELD act. All.four.pages. Man, it took me almost 20 minutes!! Twenty minutes, I might add, that could have been spent watching The Pioneer Woman make brisket because everyone knows that there is nothing on earth quite like coming home to the smell of a roast in the oven. But no, I sacrificed that time learning to better myself in the kitchen so that I could read the SHIELD act. You’re welcome.

Without further ado, here are the most obvious three flaws:

1. It came from the government. Beyond building decent roads and providing for the common defense (un-maned drones aimed at law-abiding citizens notwithstanding), is there really anything the government does well? Mind you, I’m not drinking the haterade but let’s be honest here. The realest solutions to the biggest problems in any industry tend to come from the industry itself. Lawyers on capital hill know what special interests tell them. Patents and the patent arena can be a complicated business, which as I’ve said before is why you don’t want anything going to a jury trial. It’s not that people can’t understand, it’s that they fall asleep midway through the explanation. Like Penny does when Sheldon talks. So although most capital hill-ers are very smart lawyers, that doesn’t mean they’re smart about this. I don’t think they are, and I think the government is the last place you want to go for this sort of thing, unless you change patent law to “use it or lose it”. That would be helpful and something real and tangible that the government can do to help remedy the situation that the trolls have put us in.  Which is probably why they’ll never do it, but I digress.

2. It doesn’t make the immoral behavior illegal. I can’t find the post where I said it, but someone talked about “leaving the morality of the issue aside”, something I find hard to do. What the trolls are doing is grossly aberrant to the spirit of patent law. Trolls are exploitative and opportunistic. While those are bad character traits it is not, in and of itself, illegal to be those things. This law doesn’t fix that. Which leads me to my last point, which is what the law *does* do…

3. This law fixes the problem after it has already occurred.  Holy Too Little Too Late, Batman!!  Once litigation starts the defendant has, for all intents and purposes, already lost. We’ve discussed that here on many occasions…once one of these cases goes to court the assert-ee is already a day late and a dollar (or three trillion) short. What? Too soon for sequester jokes? This law causes pain for the trolls only if they lose. What are the stats on that? Bueller? Anyone? How is that a preventative? When you are going after a ton of people all the time and exacting licensing fee after licensing fee *without* litigation, this law has only the smallest possibility of being consequential. And even at that, it’s “slap on the wrist” money when you consider that the trolls are a $29 Billion problem. Not helpful.

What we need to do is get trends on these guys at the earliest stage of the game, not wait until we’re in litigation, spend millions winning, and only then have the judge invoke the SHIELD law and slap the troll with a penalty.  Because if and when that ever happens, we’ll then sit and watch the money never come rolling in because there will be appeal after appeal, the trolls will cry bankruptcy or perform countless acts of ballyhoo and tomfoolery to avoid paying. What needs to happen is the good guys need to start tracking the trolls and calling them out, being able to predict where and when they’ll strike next, promoting a common defense (hmmm, interesting reuse of phraseology there)…this is the sort of thing that will make an impact.

When I was a about 9 or 10, I listened to 30,000 Pounds of Bananas by Harry Chapin probably 50 times a week using my parent’s Samsung hi-fi stereo. It was a live recording and towards the end of the song, he turns to his brothers for input on one of three proposed endings. They deftly steered him away from a particularly poor option with one simple phrase, that I can’t help but repeat here:

“Harry? It sucks.”

About this proposed law and the potential to derail the Troll Train?

“US lawmakers? The SHIELD law sucks.”

Just sayin’,

IPTT