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

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

bootbling

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

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

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

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

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

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

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

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

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

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

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

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

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

JustSayin_small_New

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

And that’s how patent reform ended last week:

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

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

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

fat-lady-sings

 

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

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

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

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

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

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

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

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

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

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

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

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

I’ll let them decide what that is.

JustSayin_small_New

IPTT

{Opera singer image found here.}

 

 

Demand Letters And The Entry (Or Not) Of Such Into A Repository

Almost a year ago, because President Obama has no regard for my schedule, I launched an online patent assertion/demand letter repository called That Patent Tool.  It’s been well received, and lots of people, really really cool people to boot, have signed up.  There’s data in the system, and for that I am most humbly grateful!

I had a discussion with Julie Samuels just before she left EFF.  I have to admit that I was kind of upset when I saw that they came out with trollingeffects.org because, like the Highlander, I was thinking “There can be only one.”  THE WORLD CANNOT HANDLE TWO DEMAND LETTER REPOSITORIES, PEOPLE!!  I think I may have even given the folks at the Application Developer’s Alliance some {ahem} feedback for throwing their weight behind Trolling Effects rather than behind me.  Ah, the insecurity foibles of youth.  Sorry, ADA!!

therecanbeonlyone

 

Only Julie’s point, which she made ever so calmly and with much less drama than I myself am prone to, was “Um, no I don’t think so.  If people are willing to put the information in one repository, that almost makes them more likely to put it in another.”  Well Bob’s your uncle, I never thought of it that way.

But you know what?  People are not flocking to enter demand letter information at nearly the rate either of us expected.  I mean, the President himself said we needed a Demand Letter Registry.  Right there out in the open, he said that.   The President said you should do it and yet hordes of people have consistently not done it which means someone’s getting sent to bed without supper tonight.

As serendipity would have it, this article by Megan M. La Belle was posted on Twitter by @PatentWire  It includes a lot of things I personally hadn’t thought about in terms of the effects of settlement (either through the use of demand letters or settlements after a lawsuit has been filed) on the patent industry in general.  While the entire article is worth a full and focused read, I think the very best summary of the issue is right at the beginning:

Not only are patent settlements frequently coerced, they also come at the expense of judicial precedent, which is particularly valuable in the patent context since an invalidity judgment estops the patentee from ever asserting that patent again.18 A related concern is that patent settlements may achieve peace between the parties, but not justice. When patent litigants settle, the accused infringer usually agrees to pay the patent owner, stipulates to the patent’s validity, and promises not to challenge the patent in the future.19 Even assuming such an agreement is in the best interests of the parties, it may undermine the public·s interest by allowing a potentially invalid patent to remain intact.20

Note:  footnotes are left in the quote, but you’ll need to refer to the original article, linked above, to view them.

Let’s pull out a quote from a quote: “A related concern is that patent settlements may achieve peace between the parties, but not justice.”  Peace is what demand letters are designed to achieve, if only for the asserter and through a very Reagan-esque “through strength” approach.  The trolls don’t want justice, they want money, they want their toll.  They know that going to trial is not only expensive for them as well as the defendant, but it means the potential for loss, either on invalidity or non-infringement.   By exposing what they are asking for and who they’re asking it of, other recipients can get a lock on how to respond.  This is the primary goal of collecting the letters: exposure.

What the article seems to indicate is that in some cases, going to trial (or “adjudicating”, because that’s a much fancier word) is better for the public good because it will remove bad patents from the system, the data indicating that when patent suits go to trial, invalidity is a very likely outcome.  I won’t go into all the details of which cases the author feels are better going to trial vs. settling because that would be plagiarism.

What I’d like to touch on is that those companies in the Patent Troll Fighter Heroes Gallery believe in this mantra, that it is better to fight (litigate) than settle with the trolls.  To me and to them, it is about the moral issue and how you should never not ever let the bully win.  According to the article, there is empirical data to back that approach up, suggesting that not settling is the better way to both justice and more effective patents.  With all the talk about “bad patents” out there, and there are many (hint: mostly software), I wonder if part of the reason is that so few patent cases actually get litigated?

Here’s another issue with demand letters and settlements:

Another reason scholars have denounced settlement is because it is shrouded in secrecy.73 Unlike adjudication, the outcome of which is available to the general public, settlements are usually confidential, so that only the parties know the terms of the agreement.74

And again, this is why I and others have created an online demand letter repository.  It’s a way to de-shroud settlement requests, which is what a demand letter is, if we are wanting to use the most euphemistic term possible.  I do realize that, in order to avoid declaratory judgment or venue issues, many trolls no longer put all the information into a demand letter that they used to.  But a surprising amount of trolls still do, as you can tell by both my data and EFF’s data.

donotfeedthetrolls

I’m working on a post about why recipients are reticent to upload letters, because I’ve spoken with a lot of people about their fears which are frequently summed up in two words:  “outside counsel”.  As in, my outside counsel won’t let me.  We’ll get to that faulty lawyer logic in due time.  The most common response people give so far is the age-old “What’s in it for me?”

I’ve been looking since the beginning for ways to incentivize or entice or coerce or somehow get people to provide this data.  Recognizing that settlement may not always  be in the public’s best interest in patent litigation, when it comes to dealing with trolls I think that exposure of those “settlement” demand letters actually is in the public’s best interest.

Now all I have to do is convince the rest of you…

 

JustSayin_small_New

IPTT

{Meme found here. Incredibly awesome troll sign found here.}

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.}

Hodgepodge And Sundry Developments

Lots of doings in the patent arena last week.  I’m not a “weekly recap” kind of gal because I’m way too lazy other people do it so much better than me, but there are a lot of little things going on that I can’t drag out into a full blog post, even as verbose as I am, so I figured I’d just hit them all in one post and call it a hodgepodge.  Plus, I get to use the word hodgepodge and delight the over-70 crowd so win-win!

  • GO NEWEGG.  These guys are already in the Patent Troll Fighter Heroes gallery, and this just proves why.  They are all over the troll take-down M.O. and it’s awesome.  The supreme court said “No, thankyouverymuch” to Soverain, which means their no longer sovereign over the online shopping cart world.  Obviousness, thou art quite the slayer.  Lee Cheng is a National Treasure, to be sure.
  • Next up, we’ve got PTAB (Patent Trial and Appeals Board) news. It seems IP Nav is not happy ever with Polly Patent Owner not getting her (ill-gotten) infringement award in due time because someone that she didn’t sue found prior art.  If your patent is as solid as you claim it is, then shouldn’t it hold up under any and all scrutiny?  That’s kind of how I look at this.
  • The Scanner Dudes have completely jumped the shark and are now suing (are you ready for it?) The Government.  Wait, what?  Oh yes, yes they did.  And by “they” we mean Jay Mac Rust, who is behind the entire company and all of it’s 101 six-letter named subsidiaries.  This one actually deserves its own write up and it will get one as soon as I clear some other work off the desk.
mac-rust_mustang

Just one man. All those companies and it’s just one guy.

  • From the “that’ll learn ya, dern ya!” files we have Nintendo who, in addition to sucking more money from me than I care to admit and turning my kids into consummate gamers, has won the ultimate victory over a troll in that they bought it’s patent portfolio after squashing them in court.  Well, uh, played, Nintendo.  They got the patents at a fire sale, held because Nintendo was awarded legal fees to be paid by IA LAbs only Shazaam!  IA Labs couldn’t pay.  Which is interesting because a judge decided, all on his/her own, to make the loser pay.  So, really, as an aside to this bullet point, do we need a new federal law mandating this?  If the judges can decide on a case-by-case basis to do this anyway, what’s all the huffing and puffing about it being an official law?  And besides which, this case illustrates how that really won’t work anyway because in the end, the loser didn’t so much pay as the winner.  At the auction.  To buy the trolls’ patents.

There you have it:  hodgepodge and sundry developments because that’s just how we roll.  And be “we” I mean “I”.  Hey, if Jac Mac Rust can pretend to be a lot of people, why can’t I?

JustSayin_small_New

IPTT

{Jay Mac Rust image via Ars Technica.}