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08.22.13

Easy Litigation With Patents and Broad Patent Scope the Ammunition of Patent Trolls, Parasitical Firms

Posted in Patents at 9:24 am by Dr. Roy Schestowitz

Gentle or covert parasitical behaviour

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Summary: Discussion about patent news with focus on what’s required to end retardation of competition

Everyone in the public arena (e.g. politicians) speaks of patent reform as though it’s an enigma, a mystery. The public generally knows what’s required, but lawyers (which is what most politicians are) and business leaders have a different agenda in mind. Protectionism to them (protecting from the public) is a business.

Law Professor Mark Lemley says that patent trials can be made shorter, which would basically make more entities eager to sue over patents and for parties not to settle out of court. Not a smart move. It is the wrong solution, but he does not advocate it, he just frames his paper like this. Right now we can observe this gross case where software patents are used to starve practising companies:

A Virginia federal judge on Friday found Lawson Software Inc. in contempt of an injunction in a suit over online sales patents, ordering the company to pay roughly $18 million because it didn’t make substantial changes to software infringing patents owned by ePlus Inc.

Here is another new story. Only lawyers win.

In October 2008, MPS filed a declaratory judgment (DJ) action against O2 Micro – asking the district court to issue declarations of noninfringement and invalidity with respect to four O2 Micro patents. U.S. Patent Nos. 6,856,519, 6,809,938, 6,900,993, and 7,120,035. O2 Micro’s attorneys had been monitoring case-filing information and, when the company learned that it had been sued, it quickly filed its own complaint regarding the same patents in the USITC (even before MPS was able to serve notice on O2 Micro).

The above shows that not only patent trolls are the problem, they are a symptom. Forget about blaming just trolls, who are distracting from bigger issues. This is not the route towards reform. Speaking of trolls, remember that they usually use software patents (like encryption). This new article shows the challenge of eliminating those patents in the US. “Like it or not, certain software is still eligible for patent protection,” writes a patent lawyer in a lawyers’ Web site. Another site reports on the “Lawsuit Industry in America”, noting that it is out of control. Troll Tracker reminds us why everyone with a scanner is under attack:

Maybe you have to have been a kid in the 70′s to know who Buford Pusser is, but suffice it to say that Lori Swanson, Minnesota’s Attorney General, took a page right smack out of his book when she went after the Scanner Dudes. You may know them as MPHJ, a company with as many shells as a South Padre Island beach, all of which were created to send shakedown notices to every Mom and Pop who owns a scanner and uses email. Like Vermont and Nebraska before, Minnesota has thrown down the gauntlet against these guys and others of their ilk.

There is at least some backlash against it, but it’s not enough. It is still a growing industry. The BBC has this new programme about it and an accompanying article with loaded language from Rory Cellan-Jones (he says “invention owners”).

Now that the White House ponders taking reactionary action to appease large corporations (not the public) we see some more lobbying from trolling giants. Intellectual Ventures, which is lobbying with Bill Gates as we reported some years ago (it came from a radio show about the policy pressure groups for trolls) is up to it again:

Intellectual Ventures Management, which its critics consider one of the largest U.S. “patent trolls,” has deployed its first in-house lobbyist in Washington, D.C.

The Bellevue, Wash.-based patent holding company has sent its chief policy counsel, Russell Merbeth, to the capital to advocate on “[i]ssues related to patent reform, intellectual property rights, taxation of patent royalties, [and] corporate tax reform,” according to lobbying registration paperwork filed with Congress Thursday. In March, Merbeth came to Intellectual Ventures from Cricket Communications Inc., where he served as vice president of government affairs.

What we need to recognise is, people like Bill Gates, who try to pass off patents as ‘charity’ through the Gates Foundation, are the plutocrats who benefit the most from patents and they control our politicians (not just in the US, the same is true here). Reform won’t come from politics, it will come from brave action from the population. The pyramid scheme of Bill and Nathan, for example, is unlikely to be shut down by the government and neither person will be sent to prison for racketeering.

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