EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

11.21.12

Regulators Target Patent Trolls But Lose Sight of Patent Cartels

Posted in Law, Patents at 3:30 pm by Dr. Roy Schestowitz

Hammer

Summary: Action is finally being taken against patent abuse, even though it does not go far enough

TECHRIGHTS has gathered a lot of information on Intellectual Ventures and so did a paper from early in the year, which states accurately: [via Stefano Zacchiroli, the Debian Project Leader]

The new mass aggregator, however, is an entirely different beast. To begin with, funding sources for mass aggregators include some very successful and respectable organizations, including manufacturing companies such as Apple, eBay, Google, Intel, Microsoft, Nokia, and Sony, as well as academic institutions such as the University of Pennsylvania and Notre Dame, and other entities such as the World Bank and the William and Flora Hewlett Foundation. Nations such as China, France, South Korea, and Taiwan even have their own mass aggregators to varying degrees.

Moreover, the acquisition appetites and patent supply sources are quite interesting. Mass aggregators may have portfolios that range across vastly different areas of innovation from computers to telecommunications to biomedicine to nanotechnology. In some of the acquisition activity, mass aggregators purchase large chunks, and even the majority, of an operating company’s patents and patent applications. They typically pay cash up front, as well as a share of any future profits generated from asserting the patents against anyone other than the selling manufacturer. Mass aggregators have engaged in other unusual acquisition approaches as well, including purportedly purchasing the rights to all future inventions by researchers at universities in developing countries. Other acquisition approaches purportedly include targeted purchases of patents that are of particular interest to the mass aggregators’ investors.

The types of returns promised to investors and the types of benefits offered to participants are also quite different from garden-variety non-practicing entities, as are some of the tactics used in organizing the entities and in asserting the patents. Finally, the scale itself is simply mind-boggling. Mass aggregators operate on a scale and at a level of sophistication and complexity that would have been unimaginable a decade ago. They have taken the prototype strategies pioneered by a prior generation of non-practicing entities and changed them into some of the cleverest strategies yet seen in the intellectual property rights field.

The goal of this article is to shed some light on mass aggregators. We hope to provide some understanding of the nature of the change, to analyze its economics and implications, and to offer some normative considerations. In the descriptive section, we focus on the oldest and largest of the mass aggregators, Intellectual Ventures, which has gone to great lengths to maintain secrecy. Working from public sources and investing thousands of hours of research, we offer a detailed picture of the entity, tracing through approximately 1300 shell companies and thousands of patents. The section also describes in brief form several other mass aggregators, including ones that are public companies.

These are cartels and they should be made illegal. They inflate prices and deflate innovation. We dealt with the subject before.

There is an article in the BBC titled “Phone patents: An absurd battle“. iophk says it proposes patent trolls as a solution and adds: “I am surprised that Intellectual Ventures was not promoted. That’s one of the biggest if not the biggest” (it is).

I cannot read this article in the UK. Neither can Glyn Moody, who wrote: “wow, this is fun: the #BBC won’t let me access the bbc.com site ‘cos I’m in UK – http://bit.ly/Q5SK2Q ironic much?”

Good ol’ BBC is still serving plutocrats, not taxpayers who fund it obligatorily.

Here is what Groklaw quotes from this article: “One reason boils down to the nature of mobile devices like smartphones and tablets, according to Daniel O’Connor, a self-styled anti-trust and internet policy wonk as well as senior director of public policy at the Computer and Communications Industry Association. He says that software is a particularly active area for patents, especially anything to do with telecommunications, semiconductors and 4G data networks. Software patents are also particularly broad and vague, and that makes infringement difficult to avoid. “That creates the conditions for a kind of patent perfect storm,” O’Connor says….

“[M]ost of these patents don’t just make a single claim to a particular intellectual property right – on average each patent makes more like 20 such claims. That means that this collection of 250,000 patents actually describes about five million restrictions on what mobile device makers can do while they design a new model. Realistically an individual may be able to keep five, 10 or maybe 20 restrictions in mind when designing a new feature for a mobile device, but probably not 50 or 500. And five million? Not a chance.”

The solution should be to rethink patents, not create cartels with them. Innovative Automation (IA), a company named in a comical way like IV, shows that even cartel members are not safe. Apple got sued while still assembling a new part of the patent cartel:

Back on September tenth we posted a report revealing the fact that Apple had acquired 434 LTE centric patents. One of the original sources of our report stated that Rockstar Bidco, a company that Apple holds the majority stake in, acquired 116 LTE patents from Nortel, giving them a total of 434 LTE patents. It’s now been revealed that Apple had been acquiring even more patents over the summer and the list is extensive.

In a report filed yesterday, Business Insider listed a link to the US Patent Office which linked to a series of patent assignments between Nortel, Rockstar Bidco and Apple. The list totaled up to 1375 patents originating from Nortel, with the vast majority of them being assigned to Apple. Some of the listed patents have yet to be assigned to Apple as shown here and here.

Google’s talking points from the patents team focus on trolls rather than the cartel as their problem. They are focusing on trolls instead of the system as a whole because the want Google to become part of the cartel, hence part of the problem. That’s how patent lawyers think. Regulators are said to be taking a look at this problem:

U.S. antitrust authorities are examining whether specialized patent-holding firms—or “trolls” to their detractors—are disrupting competition in high-tech markets, opening a new front in a long-standing Silicon Valley battle.

“There’s a possibility of competitive harm here,” said Joseph Wayland, who served as the Justice Department’s acting antitrust chief until last week, when he stepped down to return to private practice. Mr. Wayland said officials are devoting “huge energy, particularly at a senior level” to this and other antitrust issues surrounding patents.

Other reports like this one from Reuters say that the US-leaning ITC is also taking a look:

The US International Trade Commission will review a judge’s decision which found that Apple did not violate patents owned by Samsung in making the iPod touch, iPhone and iPad.

An administrative law judge at the ITC had said in a preliminary ruling in September that Apple was innocent of violating the patents. The ITC, which could have opted to simply uphold the judge’s decision, said that it would take up the matter. A final decision is expected in January.

The FTC focuses on patent trolls and not cartels:

US antitrust enforcers are getting mighty interested in patent trolls. The Federal Trade Commission has even taken to calling these lawsuit-happy companies “patent assertion entities,” or PAEs.

“There’s a possibility of competitive harm here,” said Joseph Wayland, who was the head of antitrust enforcement at the Justice Department until last week. Wayland just left the government for private practice, and he told the Wall Street Journal there is “huge energy, particularly at a senior level” being spent on scrutinizing the intersection of patents and antitrust.

The FTC and the Department of Justice announced today they will host a public forum on December 10 to study the issue more closely. The speakers include IP lawyers, law professors specializing in these so-called PAEs, and even officers of high-profile patent trolls like Intellectual Ventures and Round Rock Research LLC. Executives from companies that have been critical of patent-holding companies, such as Cisco and Rackspace, will also be featured.

Here is more:

The US Department of Justice (DoJ) and US Federal Trade Commission (FTC) are opening informal hearings next month which will look into the question of whether specialised patent-holding firms, also known as “patent trolls” to many, are disrupting competition in technology markets. Concerns that non-practising entities (NPEs) – companies that hold patents but do not make use of them – cause problems in the market have existed for some time. The traditional “troll”, a small company holding a handful of patents, has in recent years been joined by the huge patent-holding corporations who buy up hundreds of patents. The aim of the NPEs is to get licence revenue from companies who they claim are infringing the patents they hold.

They ought to look at the cartels, not just trolls. We’ll make this point again at the end of the night (addressing the USPTO as a whole, not just the ITC). The patent system is as inherently corrupt as the political system, which corporations control at people’s expense and to people’s detriment.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. EPO Critics Threatened by Self-Censorship, Comment Censorship, and a Growing Threat to Anonymity

    Putting in perspective the campaign for justice at the EPO, which to a large degree relies on whistleblowers and thus depends a great deal on freedom of the press, freedom of speech, and anonymity



  2. Links 25/3/2017: Maru OS 0.4, C++17 Complete

    Links for the day



  3. Judge and Justice Bashing in the United States, EPC Bashing at the EPO

    Enforcement of the law based on constitutional grounds and based on the European Patent Convention (EPC) in an age of retribution and insults -- sometimes even libel -- against judges



  4. Looking for EPO Nepotism? Forget About Jouve and Look Closely at Europatis Instead.

    Debates about the contract of Jouve with the EPO overlook the elephants in the room, which include companies that are established and run by former EPO chiefs and enjoy a relationship with the EPO



  5. Depressing EPO News: Attacks on Staff, Attacks on Life, Brain Drain, Patents on Life, Patent Trolls Come to Germany, and Spain Being Misled

    A roundup of the latest developments at the EPO combined with feedback from insiders, who are not tolerating their misguided and increasingly abusive management



  6. It Certainly Looks Like Microsoft is Already Siccing Its Patent Trolls, Including Intellectual Ventures, on Companies That Use Linux (Until They Pay 'Protection' Money)

    News about Intellectual Ventures and Finjan Holdings (Microsoft-funded patent trolls) reinforces our allegations -- not mere suspicions anymore -- that Microsoft would 'punish' companies that are not paying subscription fees (hosting) or royalties (patent tax) to Microsoft and are thus in some sense 'indebted' to Microsoft



  7. Links 24/3/2017: Microsoft Aggression, Eudyptula Challenge Status Report

    Links for the day



  8. Bernhard Rapkay, Former MEP and Rapporteur on Unitary Patent, Shoots Down UPC Hopes While UPC Hopefuls Recognise That Spain Isn't Interested Either

    Germany, the UK and Spain remain massive barriers to the UPC -- all this in spite of misleading reports and fake news which attempted to make politicians believe otherwise (for political leverage, by means of dirty lobbying contingent upon misinformation)



  9. Links 23/3/2017: Qt 5.9 Beta, Gluster Storage 3.2

    Links for the day



  10. The Administrative Council of the European Patent Organisation Has Just Buried an Innocent Judge That Battistelli Does Not Like

    An innocent judge (never proven guilty of anything, only publicly defamed with help from Team Battistelli and dubious 'intelligence' gathering) is one of the forgotten casualties of the latest meeting of the Administrative Council (AC), which has become growingly complicit rather than a mere bystander at a 'crime' scene



  11. Nepotism at the European Patent Office and Suspicious Absence of Tenders for Big Projects

    Carte blanche is a French term which now perfectly describes the symptoms encountered in the European Patent Office, more so once led by a lot of French people (Battistelli and his friends)



  12. “Terror” Patent Office Bemoans Terror, Spreads Lies

    Response to some of the latest utterances from the European Patent Office, where patently untruthful claims have rapidly become the norm



  13. China Seems to be Using Patents to Push Foreign Companies Out of China, in the Same Way It Infamously Uses Censorship

    Chinese patent policies are harming competition from abroad, e.g. Japan and the US, and US patent policy is being shaped by its higher courts, albeit not yet effectively combating the element that's destroying productive companies (besieged by patent trolls)



  14. 22,000 Blog Posts

    A special number is reached again, marking another milestone for the site



  15. The EPO is Lying to Its Own Staff About ILO and Endless (Over 2 Years) EPO Mistrials

    The creative writing skills of some spinners who work for Battistelli would have staff believe that all is fine and dandy at the EPO and ILO is dealing effectively with staff complaints about the EPO (even if several years too late)



  16. EPO’s Georg Weber Continues Horrifying Trend of EPO Promoting Software Patents in Defiance of Directive, EPC, and Common Sense

    The EPO's promotion of software patents, even out in the open, is an insult to the notion that the EPO is adhering to or is bound by the rules upon which it maintains its conditional monopoly



  17. Protectionism v Sharing: How the US Supreme Court Decides Patent Cases

    As the US Supreme Court (SCOTUS) starts delivering some decisions we take stock of what's to come regarding patents



  18. Links 22/3/2017: GNOME 3.24, Wine-Staging 2.4 Released

    Links for the day



  19. The Battistelli Regime, With Its Endless Scandals, Threatens to Crash the Unitary Patent (UPC), Stakeholders Concerned

    The disdain and the growing impatience have become a huge liability not just to Battistelli but to the European Patent Office (EPO) as a whole



  20. The Photos the EPO Absolutely Doesn't Want the Public to See: Battistelli is Building a Palace Using Stakeholders' Money

    The Office is scrambling to hide evidence of its out-of-control spendings, which will leave the EPO out of money when the backlog is eliminated by many erroneous grants (or rejections)



  21. In the US Patent System, Evolved Tricks for Bypassing Invalidations of Software Patents and Getting Them Granted by the USPTO

    A roundup of news about patents in the US and how the patent microcosm attempts to patent software in spite of Alice (high-impact SCOTUS decision from 2014)



  22. “Then They Came For Me—And There Was No One Left To Speak For Me.”

    The decreasing number of people who cover EPO scandals (partly due to fear, or Battistelli's notorious "reign of terror") and a cause for hope, as well as a call for help



  23. As Expected, the Patent Microcosm is Already Interfering, Lobbying and Influencing Supreme Court Justices

    The US Supreme Court (SCOTUS) is preparing to deliver some important decisions on cases with broad ramifications, e.g. for patent scope, and those who make money from patent feuds are attempting to alter the outcome (which would likely restrict patent scope even further, based on these Justices' track record)



  24. Intellectual Ventures -- Like Microsoft (Which It Came From) -- Spreads Patents to Manifest a Lot of Lawsuits

    That worrisome strategy which is passage of patents to active (legally-aggressive) trolls seems to be a commonality, seen across both Microsoft and its biggest ally among trolls, which Microsoft and Bill Gates helped create and still fund



  25. What the Patent Microcosm is Saying About the EPO and the UPC

    Response to 3 law firms and today's output from them, which serves to inform or misinform the European public at times of Big Lies and fog of (patent) war, revealing the true nature of 21st century asymmetric patent warfare and lobbying



  26. Tough Day for the EPO's Media/Press/PR Team, Trying 'Damage Control' After Important Techrights Publications

    In an effort to save face and regain a sense of legitimacy the EPO publishes various things belatedly, and only after Techrights made these things publicly known and widely discussed



  27. Links 21/3/2017: PyPy Releases, Radeon RX Vega, Eileen Evans at Linux Foundation

    Links for the day



  28. In IAM, Asian Courts That Deliver Justice Are “Unfriendly” and Asian Patent Trolls Are Desirable

    Rebuttal or response to the latest pieces from IAM, which keeps promoting a culture of litigation rather than sharing, collaboration, negotiation, and open innovation



  29. At EPO “I Have the Feeling That Lowering Quality is Part of a Concerted Plan.”

    Growing concern about patent quality at the EPO -- a subject which causes managers to get rather nervous -- is now an issue at the forefront



  30. EPO Reduces the World to Just Seven Nations to Bolster an Illusion of Growing 'Demand' for European Patents

    The unscientific -- if not antiscientific -- attitude of the European Patent Office (EPO) continues to show with the arrival of yet more misleading 'infographics' (disinfographics would be a more suitable term)


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts