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12.16.12

Patent Trolls Face More Opposition as Their Share of Lawsuits Increases

Posted in America, Apple, Law, Patents at 6:16 am by Dr. Roy Schestowitz

TrollSummary: Action against patent trolling seems imminent, but the behaviour of companies like Apple is largely overlooked for now

Parasitical elements in a government-backed scheme are being tackled by the government, which is still investigating the matter. Apple has been suing Android, which it views as a top rival. The aim is to tax (make more expensive) or castrate Android. As one report put it last week:

At the end of August, Apple Inc seemed on top of the world. Fresh off a resounding $1.05 billion U.S. legal victory over arch-foe Samsung Electronics Co Ltd, the company was gearing up to launch the fifth iteration of its iconic iPhone. Just a week prior, its market value had surpassed Microsoft Corp’s and it became the most valuable technology company in history.

Things have gotten worse for Apple since then. Samsung phones easily outsells Apple ones and Apple’s public identity, that of somewhat of a troll, did its reputation a lot of damage. Trial misconduct [1, 2] does not help, either. As Groklaw put it:

Yet in a later media event at Gizmodo where anyone could ask him questions, Hogan was asked a question about whether he had considered if the patents should have issues, which he answered by contradicting the above instructions:

Demon-Xanth: Did you have the opportunity to ask “Is this something that should be patentable?” during the trial?

Velvin Hogan: @Demon-Xanth No, however it was not the function of this jury to ask that. We were bound to use the law as it is today. The patents were issued the judge instructed us not to second guess the current patent system.

Samsung said he was “deliberately dishonest”.

The Federal Trade Commission, which we wrote about in [1, 2], misses the point; it should know by now that the problem is not trolls, it’s the system. But addressing the problem by debating it would be a good start:

The Federal Trade Commission and Department of Justice will hold a joint public workshop on Dec. 10, 2012, to explore the impact of patent assertion entity (PAE) activities on innovation and competition and the implications for antitrust enforcement and policy.

“Professor Chien relates (at around 33:55) that in 2012, 61% of all new patent litigation was brought by trolls, that is by entities that don’t make anything,” remarks Pamela Jones. Here is a new article about the cost of patent trolls:

Patent trolls drain businesses of billions of dollars a year. And if you have a website–any website–you are a potential target. Here’s what you need to know if they come after your business.

Here is another article:

For the first time, individuals and companies that do not themselves make anything – commonly known as “patent trolls” – are bringing the majority of U.S. patent lawsuits, according to a study by a California law professor.

The Federal Circuit is said to have another chance to change course and do the right thing:

Federal Circuit Declines Chance to Eliminate Split Involving Standard of Review, Prompting Blistering Dissent

[...]

“Not surprisingly,” Judge Moore explained, “given the clear direction from the Supreme Court, the regional circuits are unanimous that the issue of objective reasonableness under Rule 11 is to be reviewed deferentially by the appellate courts.”

The software patents booster calls it a troll turning point:

On Friday, December 7, 2012, the United States Court of Appeals for the Federal Circuit issued a precedential opinion in Raylon v. Complus Data that gives hope to defendants everywhere who face objectively baseless patent infringement claims.

It seems like the FTC and some high courts still have an opportunity to change course. Let’s wait and see. The problem is, there are patent lawyers everywhere, at all levels. They try to guard the status quo and make things worse by assimilation, e.g. in Europe and New Zealand.

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