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01.21.09

Patents Roundup: Acacia Extortion, European Lobby, and Failed Systems

Posted in America, Courtroom, Europe, Law, Microsoft, Patents at 9:23 am by Dr. Roy Schestowitz

“Plager said he regretted the unintended consequences of the decisions in State Street Bank and AT&T. Those rulings led to a flood of applications for software and business method patents, he noted. If we “rethink the breadth of patentable subject matter,” he said, we should ask whether these categories should be excluded from patent protection.” —US. Senior Judge S. Jay Plager, speaking at a symposium at George Mason University

Bad Software Patents

AMONG the many weird patents that are new we also find several from Acacia, which accommodates Microsoft employees and attacks GNU/Linux [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11].

Acacia does not make products or inventions. It’s relies on patent mercantile. Here is one of the latest purchases:

Acacia Subsidiary Acquires Patent for Online Promotion Technology

This patented technology generally relates to online promotion of consumer products and can be used to provide consumers with web access to discount coupons and rebate offers.

Acquisitions are followed by extortions (racketeering), such as this latest one:

Acacia (ACTG) Subsidiary Enters Patent License Agreement with Horizon Tech.

Acacia Research Corporation (Nasdaq: ACTG) announced today that its subsidiary, Telematics Corporation, has entered into a patent license agreement with Horizon Technologies, L.L.C. The Telematics technology generally relates to systems and methods for displaying mobile vehicle information on a map.

“Enters Patent License Agreement” means “Receives Protection Money”. Mind the generality of the patent above and behold the type of — shall we say — rubbish that becomes a patent in the United States:

Meanwhile, Experian and Visa offer BankruptcyPredict, a bankruptcy score that “uses patented technology and processes to create a more comprehensive view of consumers most likely to drive bankruptcy losses over the next 24 months,” according to its Web site. BankruptcyPredict scores range from 50 to 950, with a lower number indicating a higher risk of bankruptcy, Experian’s Wagner says.

The Bilski ruling is likely to have eliminated such a ridiculous patent, which should now be too frail to stand a chance in court [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14].

There is a lot of pro-software patents lobbying in Europe and Digistan asks the question, “Where does the pressure come from?”

Although it does not say this in Digistan, the answer is “Microsoft”, but it’s not alone.

Peter Jungen and the EEI wonder if openness rhetorics risks turning Europe into an innovation “dead zone”.

We wrote about Peter Jungen last month. He’s likely to be part of the cronies cartel.

As asserted rather explicitly in this post from About.com, software patents are a horrible idea. [via Digital Majority]

Software Patents are a means to extort money from companies who can’t afford to defend themselves in court. The typical cost is at least $1 million. This very recent example shows all that is wrong with software patents in the US.

Characteristics of a Failed System

Signs that a reform is desperately (and urgently) needed are all over the place. From the past few days alone we gather:

1. Brookings Conference on Software and Business Method Patents Highlights Need for Reform

Last week there was a conference of significant interest to the free and open source software community on the problem of software and business method patents at the Brookings Institution in Washington, D.C. I was pleased to find that Red Hat is by no means alone in its opposition to patents on abstract ideas. There were, to be sure, some proponents of the status quo, but respected voices are acknowledging the serious problems in the current system and laying the intellectual groundwork for reform.

The conference was co-sponsored by the Computer & Communications Industry Association (of which Red Hat is a member) and Duke University School of Law (our neighbor just down the road in Durham, N.C.). A list of the two dozen scholars, lawyers, and industry representatives who participated is here.

2. Patent Trolls Erode the Foundation of the U.S. Patent System

Climbing out of the deep economic recession the United States is facing will require multiple remedies, but there is no doubt that ongoing innovation will be critical to restoring the long-term economic health and prosperity of our country. Innovation is so key to our nation’s prosperity that our founders enshrined the general principle of intellectual property as an essential element of economic development in Article 1, Section 8 of our Constitution. The basis for this constitutional provision establishing a patent system was not the protection of individual rights to inventions per se, but rather the promotion of economic development in a young and ambitious country.

3. When All You Have Is A Patent Hammer, Every Software Task Looks Like A Nail

If I’m right that, as I argued on Friday, there’s a cultural gap between the patent bar and the technology industry on the subject of software patents, an interesting question is how we got them in the first place. After all, it wasn’t that long ago that software was widely believed to be unpatentable, and major technology firms were hardly clamoring for patent protection. Peter Mennell, a Berkeley law professor who spoke at last Wednesday’s Brookings patent conference had an interesting perspective on how this came about. He argues that the impetus for software patents came from patent attorneys within major software firms who spread the “gospel of patenting” within their companies. Not surprisingly, CEOs tend to delegate patent issues to their patent lawyers, and of course patent lawyers will tend to have more pro-patent views than their bosses. And so despite the fact that few technology executives were enthusiastic about patenting, the patent lawyers who worked for them pushed their firms in that direction. And of course, once some software firms started acquiring significant numbers of patents, it sparked the arms race that we’ve talked about here at Techdirt.

4. Firm Files Complaint for Patent Violation Against Nokia, RIM and Palm

Saxon Innovations of Tyler, a patent-holding company from Texas, is reported to have claimed that up to three patents it owned had been violated by six companies that import handsets into the United States, including Research in Motion, Palm and Nokia.

Saxon Innovations of Tyler is just a patent troll. Unlike other patent trolls, these litigators don’t even have a Web site. Their homepage currently states: “Saxon Innovations LLC website is currently under construction. Please visit us again soon.”

Mysteriously enough, contrary to last year’s findings from Patent TrollTracker (Rick Frenkel [1, 2, 3, 4]), intellectual monopoly litigation is said to be declining.

There’s a new report out that highlights that there were fewer IP related lawsuits in the US in 2008 than in 2007. The drop was about 10%: from 10,276 to 9,210. However, the reasoning given in the report for the decline is difficult to square with reality. It claims that: “The trend reflects the success of the recording industry in protecting its copyrights, leading the industry to bring fewer lawsuits in the past few years.

Could recessionary trends be the cause? Patent/IP litigation is an expensive gamble. SCO knows.

“I think that “innovation” is a four-letter word in the industry. It should never be used in polite company. It’s become a PR thing to sell new versions with.

“It was Edison who said “1% inspiration, 99% perspiration”. That may have been true a hundred years ago. These days it’s “0.01% inspiration, 99.99% perspiration”, and the inspiration is the easy part. As a project manager, I have never had trouble finding people with crazy ideas. I have trouble finding people who can execute. IOW, “innovation” is way oversold. And it sure as hell shouldn’t be applied to products like MS Word or Open office.”

Linus Torvalds

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A Single Comment

  1. Andre said,

    January 22, 2009 at 4:10 pm

    Gravatar

    “Although it does not say this in Digistan, the answer is “Microsoft”, but it’s not alone.”

    Actually quite the opposite. “Where does the pressure come from?” is a quote from the invitation. Pressure == the pressure for more openness.

    The invitation agenda quoted asks:
    “Where does this pressure come from? Does it really serve the interests of a European Union determined to compete in the global knowledge economy? Or does the warm-sounding populist rhetoric calling for “openness” risk turning Europe into an innovation “dead zone”?”

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