Summary: A lot of patent news from the past few days

QUITE A LOT has happened since the last Patents Roundup and plenty of news relates to Microsoft as a threat to Free software.

An article from Law.com has rejuvenated [1, 2] interest in the real purpose of the world's largest patent troll, headed by Microsoft's former chief, Nahtan Myhrvold. Mike Masnick calls this troll, Intellectual Ventures (IV), a "pyramid scheme". He explains why:

Intellectual Ventures, of course, is the Nathan Myhrvold company that has been building up a huge portfolio of patents with which to get big tech companies to pay many millions of dollars to not get sued -- and, according to many, to get a cut of future deals as well, making the whole thing sound suspiciously like a pyramid scheme.

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But, a year ago, we noted that the company appeared to be getting antsy. While it was bringing in some hefty fees from a small group of companies who bought into the equity pyramid (which neatly lets the world outside be confused over what's "investment" and what's "revenue"), there was concern that investors were getting impatient. Pouring billions of dollars into a company that isn't doing much can make some investors a little anxious. And while we still don't know of any direct lawsuits, Zusha Elinson has noticed that Intellectual Ventures' former patents are starting to show up in court, often involving some of the most well known names normally associated with "patent trolling."

One reader of ours calls it "Mafia blues", explaining that Intellectual Ventures "Make[s] the dirt job by others." It's an arsenal for hire. They use attack dogs to do their dirty deeds and friends/investors are 'protected' from this. Who are those friends/investors? Good question. Facebook seems like one that's a recent addition.

Bill Gates himself is an investor in Intellectual Ventures (private investment), which got Intellectual Ventures about $5 billion to get the ball rolling, i.e. harvesting patents. Microsoft itself turns out to be an investor and so is Apple (which occasionally uses patents against Linux contenders), according to this bit of information found in the corner of the article mentioned some days ago.

Both Apple and Microsoft have been reported to be IV investors.

It is interesting to find Apple investing in such "pyramid schemes" of patents. When it comes to patents, Apple and Microsoft enjoy a special peace (if not affinity). They cross-license. And as we pointed out some days ago, Google contributes its own share of problems, but at least it is a member of the OIN.

Another part of this problem is IBM, whose policy on software patents is unfriendly to Free software not because it's suing but because it allows others to do so, to an extent. An IBM person currently runs the USPTO, so this is important. IBM's view of the patent system impacts the policy on technology patents.There are finally some Slashdot comments about it (this has made the front page) and also an updated summary.

In its Amicus Brief to the US Supreme Court on the Bilski case, IBM is arguing that "patent protection has promoted the free sharing of source code [...] which has fueled the explosive growth of open source software development."

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Read also page 42 of the IBM letter:

In addition, disclosure of software inventions promotes collaboration among software developers (such as open source development)

Insane.

IBM tends to be seen as an eternal friend of Free software because of its pledges and sincere contributions, but by choosing to continue to accumulate software patents, IBM opens the door for others like Microsoft to pose a real threat. Another company which tends to be associated with Linux is TiVo , but as we regularly show, TiVo is a patent aggressor as well. Watch how one company is forced to pay TiVo $200 million just for patents.

Dish Network and its sister company EchoStar must cough up an extra $200 million to TiVo for continuing to offer DVR functionality in their set-top boxes after being slapped with a court injunction.

A few days ago we also saw the BBC spreading patent propaganda where criminalisation of patent infringement gets justified as a severe action. In relation to that article (one among two) from the BBC, Pamela Jones from Groklaw writes: "Hmm. Let's see. Could we put Steve Ballmer in jail, then, for the i4i patent? Wait. Uh oh. Look at the picture of Mr. Baylis. I think he might be combing his hair in violation of patent No. 4,022,227, Method of Concealing Partial Baldness. Officers, put Mr. Baylis in the clink while we sort this out, will you? And since the CATO Institute recently announced that most companies infringe patents, I believe we could shut down the entire world economy in no time flat by following Mr. Baylis' suggestion."

Glyn Moody had this to say:

Which is the old confusion between theft and infringement. Indeed, it's probably impossible to nick a patent, since it's a government-granted monopoly, and they're pretty hard to steal.

And it's foolish on a practical level: imagine the current insanity of patent law cases turned into even higher-stake criminal cases, and the burden they would imposed on an already stretched legal system.

So, Trevor, do stick to inventing clever things, and leave stupid intellectual monopolies alone.

Regarding Microsoft's call for harmonisation of patent systems across the world, Moody wrote:

Riiight: "bold" as in "infect the rest of the world with the insanity that is the US patent system" bold, I imagine - not forgetting software as "patentable subject matter" while we're at it.

Danke, aber nein, danke, Horacio.

Pamela Jones wrote this: "Microsoft suggests an international patent system. That way, it can kill off its competition, most particularly FOSS, everywhere at once. If you are reckless, you'll go along with them."

Peter Glaskowsky at CNET calls it a "premature patent proposal," further arguing:

I really have no problem with harmonization if it is properly done, but I think it would be tremendously difficult to achieve good results. The reality of patent protection is radically different from that of copyrights because patents are allowed based on the merits of the application; someone has to make a judgment call.

In other news that we mentioned before (regarding the i4i case [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11]), here are some articles about the latest development:

• Microsoft on Word sales ban delayed



• The i4i v. Microsoft Order Staying the Injunction



• Microsoft granted stay of Word injunction



• Court Grants Microsoft Stay In Word Injunction



• U.S. appeals court stays Microsoft Word injunction



• The Morning’s News: Word Up! Microsoft Wins a Stay, More

Here is a very interesting insight about this case.

As reported by the Wall Street Journal, i4i’s chairman, Loudon Owen called Microsoft’s brief an "extraordinary document" that "captures the hostile attitude of Microsoft toward inventors who dare to enforce patents against them." But with friends like Dell and Hewlett-Packard each filing amicus curiae briefs in support of Microsoft’s motion to stay the injunction, i4i is looking to have to fight more software and computer giants than just Microsoft. The AmeriKat predicts that with the addition of Dell and Hewlett-Packard’s briefs and in applying the third and fourth factors in the test for an injunction as set out in eBay Inc v MercExchange she would be surprised if the Court of Appeals does not lift or in someway amend the injunction given the far-reaching effect on third parties like Dell and HP.

Isn't it enlightening that Microsoft and its allies pretend that the sky will be falling if Word gets banned? As PC World rightly points out, many alternatives to Word exist and they are a lot cheaper (or free).

First, there are plenty of alternative word processors out there, most of which read Word files perfectly well. Sure, there might be a few formatting glitches, but that’s to be expected during any file conversion. Microsoft Office users, particularly those who rely heavily on the well-honed integration between Excel, Word, Outlook, and PowerPoint, would experience the most problems. But, again, the ban would affect new sales of Word, not existing copies. So users would have time to develop workarounds.

Plus, there’d be one big silver lining to a Microsoft Word ban: A true universal document format could take hold, one that replaces today’s defacto standard -- Microsoft’s doc/docx -- that’s tied too closely to the whims of one software vendor.

Word ban? Sure, why not?

GCN has a similar new article, but the list of proposed alternatives is very limited and disputable.

In other interesting news, Microsoft has quietly settled yet another patent lawsuit where the scale of damages claimed was hundreds of millions of dollars. Only one publication (that we could find) actually covered it, twice even:

i. Microsoft settles Tucson firm's patent lawsuit on imaging technology

Microsoft Corp., the world's biggest software maker, settled a patent-infringement lawsuit filed by Tucson-based Research Corporation Technologies Inc. that sought hundreds of millions of dollars over a process to improve images on computer screens.

ii. Microsoft settles with local company

Microsoft Corp. reached a settlement with a Tucson firm that accused the software giant of infringing on patented digital-imaging technology, heading off a jury trial.

Check out this rant about the USPTO. It comes from a reputable source.

The U.S. patent office gets nearly 500,000 applications every year. Figuring out who owns what, typically in court, has morphed into a business worth $10-billion (U.S.) a year in the United States, where the global patent war is mainly being waged.

The ITC is revisiting bans in an important case where patent laws are seemingly being violated. So, there is at least a new sign that recognition of the problem remains poor and another embargo may be on its way.

The U.S. International Trade Commission has voted to investigate technology-related patent complaints brought by two companies, with the vendors asking the agency to ban the import of a wide range of products using flash memory.

In one case, Samsung Electronics of South Korea filed a complaint, and in the second, Samsung is among the targets in the investigation. The two cases involve different types of flash memory.

A Samsung representative didn't immediately return a phone call seeking comment on the two cases.

If this is what "innovation" is all about, then perhaps we need less of it. ⬆