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Patent Trolls Thrive in the United States, Europe Can Keep Them Away

Posted in Patents at 9:45 am by Dr. Roy Schestowitz


Summary: Patent trolls in the news and some quick remarks about them

THE patent realists, those who actually produce something other than lawsuits, carry on talking about the issues.

Pieter Hintjens, the former president of the FFII, says that “[f]f you naively define “innovation” as “making better products, cheaper”, you’ve not grasped the first thing about patents.” Patents are about preventing features from being included and raising costs, too. He adds that “[t]o understand how patents “help innovation” it helps to redefine “innovation” as “making money from patent claims”.” Later he quotes himself as saying that “[p]atents [are] a legislative parasite that consumes the industrial base, and replaces it with cartels and trolls.” [original]

According to this new article, the trolls epidemic is very real in Texas. To quote the opening paragraph of the story: “The small town of Marshall (population: less than 25,000) in the east Texas part of the Piney Woods forest – famous for wild hog hunting – is the self-proclaimed “Pottery Capital of the World”. More recently, however, it has become best known for lawsuits brought by “patent trolls” – companies that apply for or buy up catch-all patents (often from companies forced to liquidate their assets), hunt down other companies with patents that may have a degree of crossover with theirs – and then sue.

“There are office blocks with hundreds of these firms registered in Marshall, home of the US district court for the eastern district of Texas, which has a particularly favourable regime for patent trolls.

“Previously, many personal injury litigation cases were brought in east Texas but a reform of Texas tort law in 2003 put an end to that, leading to the boom in intellectual property (IP) litigation – and the slogan bandied about by lawyers: “From PI to IP”.”

This has largely been facilitated by a broken system that permits racketeering from the likes of supertroll Intellectual Ventures and Interval (both with strong Microsoft connections), whose claims are routinely analysed here and elsewhere. Here is the latest about Interval:

The reexaminations of the four Interval Licensing patents continue to move forward with the USPTO examiner issuing a second Action Closing Prosecution, this one on the ’682 patent. In this instance the examiner has now confirmed the sole remaining challenged independent claim (two were confirmed at the time the Non-Final Action was issued) and all of the original 13 dependent claims that were challenged. In addition, the examiner has accepted 20 of the 24 dependent claims added by the patent holder during this reexamination. In other words, this reexamination looks like it will result in the complete affirmation of this patent.

According to the FFII’s president, things are not getting any better as “Ericsson to turn into a patent troll” as well.

“Any company or manufacturer will need an agreement with Ericsson,” to quote this new report which also says:

Ericsson AB, the world’s largest maker of mobile-phone networks, aims to increase revenue from its more than 27,000 patents as devices from toys to energy meters get wireless access, its chief executive officer said.

“By 2015 two thirds of all consumer electronics devices will have some sort of connectivity,” Hans Vestberg said in an interview at the company’s headquarters in Stockholm. “Any company or manufacturer that wants to get in there will need an agreement with Ericsson.”

Ericsson, which helped develop the global system for mobile communications that enables handsets to latch onto networks from London to Jakarta, holds the industry’s largest portfolio of wireless communication patents. Generating more revenue from rights would help smooth out fluctuations in network orders.

Here is another bit of news about patent trolls going after Yelp and Groupon:

On November 7, a little known company called Mobile Commerce Framework (MCF) sued both Groupon and Yelp for patent infringement. Groupon, of recent IPO fame, sells coupons for use at local shops, restaurants, even doctors’ offices. Yelp has become something of a democratized Zagat guide, providing information and reviews of local establishments across the U.S. MCF, a vague enterprise based in California, appears to be a patent troll, or in politically correct terms, a patent-holding entity that does not produce any products. MCF alleges in its respective Groupon and Yelp complaints that both of the young, internet-based companies infringed upon Patent Number 7,693,752, owned by MCF. While patent wars among technology developers is nothing new, what is of particular interest in these cases is the breadth of the patent itself and the mobile device industry at large.

This is of course happening in the US, where patent trolls are very commonplace. The FFII’s president warns that the same might happen in Europe if the multinationals and/or patent lawyers get their way. To quote:

EU patent is an example where adoption where EU shows it will do everything possible to boost growth of trolls

There is a formal document linked there. They usually prefer to say “boost the economy” or something along those lines.

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A Single Comment

  1. Michael said,

    November 19, 2011 at 9:31 pm



    Pieter Hintjens, the former president of the FFII, says that “[f]f you naively define “innovation” as “making better products, cheaper”, you’ve not grasped the first thing about patents.” Patents are about preventing features from being included and raising costs, too.

    Linux and Gnome and KDE and most things open source are also protected. I cannot use them as I wish – I must follow the guidelines they set up (or break the law).

    Are you OK with that?

    I am. I am also OK if Company X makes a software or creates an innovative method of solving a problem for them to protect that as they wish – with limits.

    You set limits. I set limits. These limits are, of course, somewhat arbitrary – and you pretend your view on it is the only one. It is absurd.

    With that said, if you can show a company actually misusing patents then do so. I certainly would not support that. But mostly you just whine.

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