08.12.12

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When Patent Litigation Reaches Billions of Dollars in ‘Damages’ Per Case

Posted in Patents at 10:36 am by Dr. Roy Schestowitz

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Summary: How out-of-tune the patent system has become, based on some of the latest news

THERE is a real issue going on when producing companies like RIM face possible death due to patents on software. The pro-patents press named the issue some days ago [1, 2], but it lacked criticism.

One new article, titled “Software Patent Dispute Costs RIM $147 Million (NASDAQ: RIMM),” does decent work. To quote this article, “Research in Motion has been found liable for $147.2 million in damages for infringing patents held by Mformation Technologies. Mformation sued RIM in federal court in San Francisco in 2008, accusing it of infringement of two patents. Mformation is a maker of mobile-device management software. The software in question is called BlackBerry Enterprise Server.

“Mformation claimed that during licensing discussions, it had disclosed details of the technology to RIM. The company said in its complaint that after declining to take a license, the BlackBerry maker modified its software to include the patented systems. Jurors determined that RIM software that allows companies to manage their workers’ BlackBerry devices remotely infringed on Mformation’s patents. The verdict came after a trial that lasted three weeks.”

“This is lunacy and the amount of money is staggering.”The patent system is rotten to its core and it’s not just about software patents; patents on life are another notable example. Monsanto, for example, is grabbing billions by polluting fields and claiming a monopoly over altered life, as explained here: “We’ve had plenty of stories over the years of Monsanto’s incredibly aggressive stance when it comes to its “Roundup Ready” patents. The company has now been awarded $1 billion from Dupont for infringing on of these patents. Now, here’s a case where we’re talking about competing companies, so perhaps no big deal, right? Except there’s one tidbit here that makes this interesting: Dupont never brought the product in question to market. So the “damages” to Monsanto would seem to be minimal… except in a court of law apparently.”

Here are the lawyers covering this as though it’s acceptable. In another case, the one of Brocade (essentially killed by the same vulture who killed Novell), a victory is declared where vast amounts of money are involved. To quote: “Brocade Communications Systems Inc. was awarded $112 million in damages in its intellectual property trial against rival A10 Networks Inc. on claims that the latter infringed on patents related to server load balancing software and equipment.”

“What about the cost of unethical monopolists like Monsanto? The parasitical nature of the patent system goes beyond trolls.”This is lunacy and the amount of money is staggering. When penalties verge billions of dollars (see Oracle’s case against Android) real products have their liability compromised. Often this is done for the enrichment of mere parasites, such as patent trolls or dying companies which are unable to make or sell products. Take Nokia for example. We are going to deal with it in the next post.

Apple boosters are blaming trolls while ignoring Apple’s behaviour and NBC [1, 2] gives exposure to Bessen et al. with the figures on the cost of patent trolls. To quote: “Patent trolling got the academic treatment from the Boston University School of Law in a recent study. The sum total cost in 2005 was only $6.7 billion.”

What about the cost of unethical monopolists like Monsanto? The parasitical nature of the patent system goes beyond trolls. The system needs to be changed.

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