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?

*********************************************

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.

*********************************************

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

JustSayin_small_New

IPTT

On Patent Infringement Trials And Their Jurors

Newegg lost their lawsuit with TQP Development Erich Spangenberg before the Thanksgiving break.  How does such a bad decision come out of such a pretty courthouse, is what I want to know!

historic.courthouse1-640x302

from Joe Mullins’ Ars Technica post. Did you take that photo? Lovely!

And you know what?  I do know.  I know exactly how this stuff happens, and because I’m cool like that I’ll go ahead and share the love.

Follow me along the trail here, if you will:

  • The people who file patents, by and large, have law degrees.
  • The people who issue patents, examiners at the USPTO, have engineering degrees.
  • The people who send out demand letters threatening an infringement suit are lawyers or self-described thugs.
  • The people who argue patent infringement cases have law degrees.
  • Yet, inexplicably, the people who decide patent infringement cases are…butchers?  Bakers? Candlestick makers?

Does anyone else see a problem here?

This is why, as I wrote about well over a year ago, so many companies settle with patent trolls.  Not only do the not have the money to fight a lawsuit, they don’t want to take their chances with a jury if they do.  You could end up with Velvin Hogan as your foreman, for heaven’s sake!  This is what I said then, and it’s apropos now:

Then there is the problem of putting very technical arguments in front of the general public.  That’s not a slam on the general public, for I are one of them.   Patent infringement trials are fraught with all manner of industry-speak and jargon and terms that people have to look up in order to understand.  Or worse, they need the lawyers to explain it them and we all know how that is likely to end up.  (Hint:  lawyers are terribly partisan explainers, in that they explain only the part of the definition they want you to know, the part that will tip the verdict in their favor.)  Unless you just enjoy spending your time reading about the ins and outs of your newest gadget, all that stuff is going to fly over your head.  And if you buy into the rhetoric that corporations are E.V.I.L. and don’t deserve to make money, then you’re almost always going in with the attitude that Deep Pockets is wrong and the Patent Troll is right.  It’s an easy assumption that is difficult to overcome no matter how good your lawyer is.

It’s probably not fair for me to blame this verdict on the jury, when the blame squarely belongs on poor patents and companies that abuse them like IP Nav.  But good grief, Charlie Brown.  This is not a situation where a “jury of your peers” applies.  If I’ve been mugged or my neighbor’s septic tank has overflowed into my backyard and they refused to pay for the resulting damage (not that that happened to my family as a child and has forever scarred me and now I can’t live in homes where there’s a septic tank) or if I were to spill hot coffee on myself and try to get money out of McDonalds then things would be different.  In those cases?  I need my peers.  People like me who live similar lives, and who do and experience similar things that I do and experience.

good-grief-charlie-brown_edited

Patent infringement is so not a mainstream “thing” that any of my peers get.  You want to know how I know this?  Because when I tell people that I write about patents and patent trolls and lawsuits and such their eyes glaze over they respond with a head-tilt and a very polite “Well.  That’s…interesting.” And then they nod off to sleep and their heads bob forward and slam onto the table at the little cafe where we’re having lunch, the cafe that I will never get invited back to because I talk about boring things like patent trials.  That?  That’s how I know.

I don’t have a solution for who should determine verdicts in patent infringement cases.  I know that outside of the patent troll issue there is certainly plenty of legitimate disagreement over patents and those disagreements need to be heard and vetted by a group of someones.  I’m just not sure it should be a group of someones who live in Marshall, Texas.

Which, by the way, does anyone track juror service up there?  I mean, there’s not but 67,000 people in the whole darn county.  My freshman English class at UT had that many,  (OK, not really.  It had 350 which is pretty much exactly the same.)  and probably only about 1/4 of those are even eligible for service.  How do we know that the same people aren’t being dragged into the courtroom every two weeks for another stint?

We don’t, but it doesn’t matter.  They would still have made the wrong decision in this case.

I’m glad Newegg’s going to appeal and I hope that they win and it’s not just because that’ll mean a loss for IP Nav/Erich Spangenberg/TQP Development.

Actually?  It’s totally because of that.

JustSayin_small_New

IPTT

{Charlie Brown image found here. I’ll cop to the (super simple) photoshopping.}

Why Companies Settle With Patent Trolls

Subtitle:  Velvin Hogan, We’re Looking at You.

Probably there are many reasons that companies settle with patent trolls, but honestly I think the fear of a jury trial is at the top of the list.  Look what happened in the Samsung/Apple vendetta by Steve Jobs trial.  Turns out, the jury foreman would have been good friends with Steve, in that he too behaves out of spite.  You get one guy on there who doesn’t disclose his history in voir dire, and you’re sunk.  Which begs the question in my mind that, hey, isn’t that juror misconduct or contempt of court or something?  Can you really omit relevant facts before you serve on a jury?  I don’t think you can.  This specific problem with a juror is an anomaly, but it points to one potential issue avoided if you just settle out of court.

Then there is the problem of putting very technical arguments in front of the general public.  That’s not a slam on the general public, for I are one of them.   Patent infringement trials are fraught with all manner of industry-speak and jargon and terms that people have to look up in order to understand.  Or worse, they need the lawyers to explain it them and we all know how that is likely to end up.  (Hint:  lawyers are terribly partisan explainers, in that they explain only the part of the definition they want you to know, the part that will tip the verdict in their favor.)  Unless you just enjoy spending your time reading about the ins and outs of your newest gadget, all that stuff is going to fly over your head.  And if you buy into the rhetoric that corporations are E.V.I.L. and don’t deserve to make money, then you’re almost always going in with the attitude that Deep Pockets is wrong and the Patent Troll is right.  It’s an easy assumption that is difficult to overcome no matter how good your lawyer is.

The way you stay out of court, the solution the trolls are banking on, is that you’ll settle for their outrageous licensing fees.  Increasingly, we see companies go after invalidating the patent with prior art, which is a step in the right direction.  I still claim the best solution is coming back at the trolls with all the firepower you can amass via collaborative defense.  There is a whole slew of people being sued in Central California by Digitech:

IP Lawsuits

** data via PriorSmart, email them to sign up.

Every single one of those companies ought to pool their resources and fight them.  Get in bed with the enemy long enough to defeat the bigger enemy, and see what happens.  I’m telling you, you stop bullies by punching them in the nose.  Time to take a swing, folks.  Or, go to court and hope you don’t end up with someone like Velvin Hogan on your panel.

Irwin M. Fletcher, you choose.  (I love that movie.)

Just sayin’,

IPTT