Interview With An Inventor, Part III

Slight delay in publication of Parts III and IV, which is why I try never to set a public schedule for these things.  The minute I do?  The universe says, “Nope.  Not happening.”  *sigh*

But here we go, Part III of my Q&A with an inventor will cover these three questions:

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?

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6.  Do you acknowledge the existence of Patent Trolls? If so, which company would you name as an example?

What I do acknowledge is that like a lot of different businesses, there are a small number of folks who operate on the margins and try to exploit small businesses by confusing them as to their coverage of the patent, don’t do any real due diligence to see if the company is using the technology, make unrealistic royalty demands, etc., with no real intention of ever enforcing the patent because it would be economically unproductive.  The only company that I know of that *might* fit that bill is MPHJ, but even there I am not sure what option they have to try and monetize their invention other than mass mailing, because there are so many potential infringers of their system(s).   The reality is that sometimes the nature of your invention is such that the value lies in its use by small users; if there are a million small users, how do you go about collecting a $1 from each?  When you embark on that campaign it causes a visceral reaction because you are targeting the little guy, and you are perceived worse than if you had asked for $1m from one large company.

IPTT Comments:  This is not quite the Yes or No that I was going for here.  It seems a bit hedge-y to me, like it’s not possible at all that there are bad guys out there.  It doesn’t make you one of them, or weaken your own patent, to say that there are companies acting totally beyond the pale.  I understand that it’s difficult to take a completely consistent line on this.  Not with companies like MPHJ or Intellectual Ventures though, for example.  They are trolls, and to call them anything else is just….wrong.

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.

The most recent “improvements” to the USPTO site, again, are very one-dimensional and biased. It is full of “helpful” information on how to respond to patent owners who ask to be compensated for use of their inventions.  Yet there is nothing there that helps patent owners find out how to see if their invention is being used in the first place.  Again there is no balance in the current IP rights environment: everything is being rigged in a way to make it easier and easier for big companies to take inventions.

At the same time I think patent attorneys *could* do a lot more to educate the public and especially young people on the nature and merits of patents.  When I was a big firm years ago we did exactly that: I would visit high schools and give short talks on IP rights, and help kids see that their ideas could be valuable and protectable.

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?

There is no question that a “loser-pays” system would intimidate most small inventors.  Under their proposal if Google the company loses a patent lawsuit, their maximum downside is they pay the inventor a small royalty, amounting to a fraction of a fraction of a percent of their daily revenues. But if the little guy loses, and is forced to pay their big firm attorney fees, that person may lose their house!  This is the type of stifling scare tactic the big companies want in place, and forms part of the multipronged attack I mentioned earlier: 1) don’t let small inventors get patents by making the PTO process difficult; 2) even if they do get a patent, make it easy to kill that patent at the PTAB with an IPR challenge; 3) even if the inventor succeeds on all of this, make it impossible to enforce the patent because few would be willing to take that kind of risk.

IPTT Comments:  I’m with you on this one.  The theory behind it is that companies will think twice before suing if they might have to pay the full costs.  The problem is that litigation is always always always a risk.  You can have the most air-tight case in the world and you then you go and get some dufus on your jury who skews the whole thing.  To make anyone bear the full burden of Joey Bag-o-donuts being on the jury is completely unfair.  And here’s where I get email from all the Europeans who remind me that they’ve had this provision since Queen Elizabeth was knee-high to a grasshopper and then I have to respond with things like “Yeah, but there’s no way to count the cost of lost revenue for people who had a great invention and a solid patent but not the bankroll to try to enforce and and also?  We wrote a really badass Declaration of Independence and I’m reminded of that every time each of my kids has to memorize the first two paragraphs of it so you can just take your stupid little loser-pays rule and stuff it in your musket.”

Or something like that.

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Part IV goes up later this week…y’all come back now!

JustSayin_small_New

IPTT

Statistically Speaking, Here’s Where We Stand On Demand Letters

I should look up the last time I posted conclusions about the demand letters entered at That Patent Tool but I’m busy burning dinner working on a new release so you’ll just have to trust me that we’ve done this before.

(Kidding, here’s the prior post.)

Numbers aren’t normally my thing because math.  But I thought it might be fun to run some stats on what’s been entered so far.   What’s so interesting is that even with partial information, you can still see patterns emerging.  By partial, I mean that sometimes we get the full name of the company the letter was sent to, along with the demand amount and the names of counsel, what products are specifically accused of infringing and why, etc.   Other times (most, in fact) all we get is the name of the asserter and the potentially infringing product, which is to say not much information at all.  Nevertheless, when you aggregate, here’s what you get:

Percentage of times the demand amount was entered (v. redacted or not provided):  29%

Avg demand amount across all letters:  $8063.63

Avg demand amount by category:

Scanning:  $1120.00

In-app purchasing:  $5000.00

Transportation*:  $150,000.00

*This is the Arrival Star v. TARTA assertion, the only one in this category.

Percentage of times the recipient was not named/redacted: 71%

Percentage of times the asserter was a six-letter company name:  56%

That last one is in there just for fun, because of course all of the six-letter asserters are really the Scanner Dudes, represented by Farney Daniels, PC.  You want to know something strange?  Most of the six-letter companies start with the letter F or I.  “F” I can kinda get behind because Farney Daniels.  But I?  What’s up with that?

The more data that comes in the more we can wrap our mitts around what the trolls are doing and who they’re going after.   If you’ve been hit by a troll or know someone who has, encourage them enter as much information as they can into That Patent Tool!!

And on a personal note, if you have any idea how to disable the touchpad on a Dell laptop running Windows 8, I would gladly pay you Tuesday for a hamburger today.

JustSayin_small

IPTT

Wherein The Fox Tells Us How To Guard The Hen House

I’m no chicken farmer, but I’ve watched enough Foghorn Leghorn to know that you don’t put the fox in charge of the hen house.  Nor, I submit, would it be wise to take advice on how to punish the real trolls from a real troll.

I must take a moment here and congratulation the author, Mr. Peter “I invented the troll term, y’all!!” Detkin on his vocabulary.  I love phrases like “feckless” and “assembly-line” when referring to lawsuits.  Looks like someone found his thesaurus over the weekend!

Among Peter’s advice on how to deal with “real” trolls is the following, with my comments in my favorite color blue following:

  • Look for companies that send dozens or even hundreds of identical, cut-and-paste “demand letters” at the same time.  Right there with ya, Pete.  That Patent Tool gets more and more of these every day.  But see, since this isn’t how you operate this piece of advice won’t affect you, now will it?  Great choice for a lock on the old coop door, there!  Strike One.
  • Look for companies that file lawsuits without attempting to enter into negotiations or doing any pre-filing analysis; Negotiations come in many forms.  There’s good faith negotiations where both sides have an interest in a mutually satisfying outcome, and then there’s what you guys do.  By virtue of the fact that you are Intellectual Ventures, funded heavily by your buddies at Microsoft, you’re the ultimate deep pockets.  Your negotiation can be tantamount to, oh, I dunno, showing up with the paperwork?  So once again, Mr. Fox, your attempts at protecting the  chickens falls flat.  Strike Two.
  • Look for companies that make big financial demands, without any attempt to justify the numbers. I‘m not sure how this is advice, because isn’t one of the problems with patent trolling the fact that they don’t disclose their settlement demands?  Many times, it’s not even in the threat demand letter…no, they use wording that’s much more generalized.  While we are trying to get that data, and actually do have a good chunk of it for those crazy Scanner Dudes, it’s not always available.  Besides which, justifications are like a**holes: everyone’s got one.  Trolls operate under the “ends justifies the means” most of the time, so no attempt or a stupid attempt to justify big demand numbers is irrelevant.  Strike three.

I’ll absolutely grant that the SHIELD Act is not going to do much good.  It’s rare that I agree with a troll, but I’m woman enough to admit it when it happens.  Kudos for recognizing that legislation isn’t the panacea (whose got a thesaurus now, huh?) we want it to be.

One thing I intensely dislike is when people use the “but the other guy is worse” excuse for their own poor behavior.  Bad behavior is rarely relative.  This is the approach IV is talking about here.  I believe it’s called “poor justification”…see third bullet point above:

Patent infringers can be as ruthless with frivolous litigation tactics as any alleged “trolls.” Some infringers even fire the first shot.

Just because the other guys are ruthless and use frivolous litigation tactics doesn’t mean it’s right.  That’s a lazy out, and I think you know it.

In life and in business, I tend to seek out advice from people who are honest and authentic.  People whose words match their actions.  Intellectual Ventures?  You fall into neither category.

When you are a company that owns tens of thousands of patents and portends to be a hotbed of innovation yet can’t bring a single innovative product to market, and when you are a company who has thousands of shell companies doing your dirty work for you, I don’t understand how you can write this stuff with a straight face.

foghorn_leghorn

What, I say WHAT are you tryin’ to pull, boy??

JustSayin_small

IPTT

{Foghorn Leghorn image courtesy of, and if this isn’t irony I don’t know what is, Looney Tunes.}

Welcome To Art Class: Time To Draw Some Conclusions

Since President Obama, who still has no regard for my schedule, decided to ramp up the rampage against patent trolls which forced me to put out That Patent Tool a smidge earlier than I’d planned to, there’s been a lot of activity on the site and I thought it high time we sit and visit about it, “visit” being a Southern way to say “We need to talk about our relationship.”  (You can send my prize for the longest opening sentence ever to:  Erich Spangenberg, 2515 McKinney Ave, Suite 1000, Dallas, TX 75201…I hear he needs the money.)

It’s fascinating what you can determine based on a set of data surrounding a patent troll.  Let’s take the MPHJ group, also known as the Scanner Dudes.  These are the folks Joe Mullin over at Ars wrote about in April, and a little over 30 of their letters have been entered into the system.  Here’s what we know:

  • There are at least three different demand amounts being requested
  • Not all demand letters from these guys even contain a requested amount
  • January and February were busy months for letter-sending
  • Of their crazy named subsidiaries/shell companies, the ones that begin with “F” seem to be the most prolific

Now, what can we learn from this? Here are my thoughts:

  • Demand amounts depend on the recipient of the letter.  Most trolls are smart enough not to ask Mr. and Mrs. John Doe, purveyors of fine goods at Uncle John’s Corner Store in Deluth, MN for a gigantic fee because guess what?  Mom and Pop stores aren’t as profitable as major corporations.  But they can ask for something and get it because John is not fond of lawyers and just wants the problem to go away.
  • Timing is everything…what makes one month more desirable than another?  Is it tax-related somehow?  Related to shopping seasons?  Like, you send more demand letters in Jan/Feb to people who bought scanners for Christmas, because nothing says “I love you” like “Honey, will you scan and email this for me?”
  • There’s something going on alphabetically with these MPHJ guys.  It would be fascinating to take all the six-letter combinations they come up with and feed them into IBM’s Watson as a Service and see what they spell.  My guess is something like “Patent Infringers Are The Devil” or “We Own You, Beotchez”.

All of which is the point behind gathering the data to begin with.  When you see it in black and white, certain patterns emerge.  Any one who’s been hit by these guys can take a look at what’s been sent  before and use that to fight back with.  That’s collaboration, folks.  That’s taking what we know and building a community around it to solve the problem ourselves.

The more data we get, the more patterns will emerge and the more we can use those patterns to form a proper line of defense against the Dark Arts patent trolls.  That Patent Tool was meant to be just what the name implies:  A tool for tracking trolls and taking them down.

As more and more letters come in, the tool becomes more and more useful, so if you’ve got ’em share ’em!

JustSayin_small

IPTT

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}

Vermont’s AG Is The Patent World’s Luke Skywalker

And the cast of characters grows.

So by now we’ve all heard about the this story, wherein the Attorney General of the great state of Vermont has gone after the scanner dudes:

MPHJ and its principals may have gone too far. They’re now the subject of a government lawsuit targeting patent trolling—the first ever such case. Vermont Attorney General William Sorrell has filed suit in his home state, saying that MPHJ is violating Vermont consumer-protection laws.

William Sorrell, lightsaber in hand (and how ironic is that because lightsabers use light and scanners use light so it’s pretty much exactly the same thing, is what I’m saying), has gone on a troll hunt.

Luke Skywalker, Star Wars Hero

I didn’t take this picture.
Disney now owns it.
George Lucas? I hope you didn’t make a big mistake.

In just the same way that our farm boy hero jumped on the rebellion bandwagon to try and take down Lord Darth Vader, that empty shell of a man machine who was nothing more than a puppet for Emperor Palpatine,  Mr. Sorrell has lept into the patent fray to try and take down the other “most notorious troll” in the  game.  And boy, did he pick a winner.  The cast of characters in this party?  Don’t that beat all.

mac-rust

Jay Mac Rust, from 2006 magazine cover of Super Lawyers Texas “Rising Stars.”

There’s a saying in Texas that I think best suits this image:  “All hat, no cattle.”  Ahem.  Read all about them folks here in the Arstechnica write up by Joe Mullin.

I don’t know what’s in the water in Vermont, but evidently they grow some serious investigative skills up there:

But Vermont investigators were able to get additional information not available to defense lawyers (or journalists). For instance, they discovered that there were forty different shell companies sending out the letters, all under the control of MPHJ.

Giddyup.  Forty different shell companies?  What’re you trying to do, MPHJ, compete with Intellectual Ventures?  You’ve got a long, long, long, long, long  way to go, but I admire your efforts so far.

The thing is, the actual merits of the case (they’re going for violation of consumer protection laws) don’t really matter.  What really matters is that Vermont is bringing the party to the trolls, going on the offense.   And they’re doing it on two fronts:  this lawsuit as well as a new bill that, if made law, will allow for penalties for “bad faith” lawsuits.  Like that doesn’t cover 99.9% of all patent litigation, am I right?

Joining the ranks of the Braveheart guy, Vermont is tackling this issue head on.  Which of course makes them a de facto Patent Superhero:

Superheroes

This one I can claim. Totally photoshopped this bad boy.

Awwwww  yeah, baby!!!

Just sayin’,

IPTT