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04.22.15

The Dying Debate Over Patent Scope (Including Software Patents) Replaced by ‘Trolls’ (But Not the Biggest Ones)

Posted in Apple, GNU/Linux, Google, Patents, Samsung at 5:31 am by Dr. Roy Schestowitz

“In a world where there are $500 million dollar patent infringement lawsuits imposed on OS companies (although this is not completely settled yet), how would somebody like Red Hat compete when 6 months ago they only had $80-$90 million in cash? At that point they could not even afford to settle a fraction of a single judgment without devastating their shareholders. I suspect Microsoft may have 50 or more of these lawsuits in the queue. All of them are not asking for hundreds of millions, but most would be large enough to ruin anything but the largest companies. Red Hat did recently raise several hundred million which certainly gives them more staying power. Ultimately, I do not think any company except a few of the largest companies can offer any reasonable insulation to their customers from these types of judgments. You would need a market cap of more than a couple billion to just survive in the OS space.”

SCO’s Strategic Consultant Mike Anderer

Summary: The corporate media and Web sites or people who are funded by large corporations have essentially suppressed any debate about issues in the patent granting process, thereby guarding software patents and preventing criticism of large corporations’ power grab

WE are deeply disturbed to see the already-elusive debate about patent scope getting lost in the noise, essentially drifting further away. This long post will put forth observations spanning almost 2 months in the English-speaking media.

Apple, which is patenting a lot software, even image editing software (according to Apple propaganda sites), “ramps up patent portfolio to take on Samsung,” to quote the ToryGraph (UK). Samsung is a backer of Android (albeit one that leans towards Microsoft) and it sells the most mobile phones, which run Linux at their core. So, Apple’s anti-Android (using software patents) agenda is very much relevant to the Free/Open Source software community. We have covered this for 5 years (Apple’s attacks on Android using software patents go back to 2010).

“Why does the corporate media not dedicate much space to cover the inherent issues which cause billions in damages to the technology sector?”Is Apple a patent troll? Well, it often behaves like one, but the media reserves the term “trolls” to small entities/actors. We are supposed to believe that Apple is some kind of heroic titan full of innovation, magic, sparkles and wonder, even though manufacturing for Apple is often done by other companies, including the underlying innovations (Samsung, other Korean/Japanese giants, and many Chinese companies make the components of ‘i’ devices).

Why does the corporate media not dedicate much space to cover the inherent issues which cause billions in damages to the technology sector? Why are corporate shakedowns by large corporations not newsworthy (or hardly worth covering)? These should be legitimate questions. Lies by omission are, by all means, lies.

The recent “John Oliver [segment] on patents [is] mostly just a critique of trivial patents and patent trolls but entertaining,” wrote one person among many who saw the HBO coverage. “I didn’t think it was all that funny anyway or maybe I don’t agree with the focus on trolls instead of patent scope,” wrote another person in response to my post. Even TechDirt said that John Oliver chose to focus on “Patent Trolls”. Since when is the patent issue simply reducible to “trolls”? What happened to the fierce debates over patent scope, as those which were of daily recurrence less than a decade ago? The problem of scope has not been addressed. It’s definitely not resolved.

One article that we found some time ago (a week back) portrayed the issue as “poorly written software patents”. To quote in full: “Congress is expected to take up legislation this year that would make it tougher to claim patent infringement.

“The bill has become a top lobbying priority this year for the tech industry, which says it repeatedly fends off frivolous lawsuits because of poorly written software patents and laws that favor patent holders.”

“There oughtn’t be patents on software in the first place.”The problem is software patents, not “poorly written software patents”. There oughtn’t be patents on software in the first place. They cost a lot of money and their toll on society would probably weigh at hundreds of billions of dollars (aggregated over the years worldwide).

Referring to the US-centric ITC, the British media recently shifted focus to patent trolls yet again. “US trade watchdog ITC needs reform to end $bn blackmail,” it said. What about software patents? Are they off topic now?

Consider press releases such as this one about how the USPTO “will grant RES Software two patents for its technological innovations Dynamic Rule Management and Taskbar Affinity.”

This is a couple of software patents. The USPTO is still granting those, despite changes following a SCOTUS ruling.

What was probably most frustrating this month would have to be Associated Press. It unleashed a lot of biased or narrow articles which lay virtually all blame on “trolls”. Consider this article [1, 2, 3]. The Associated Press (AP) set the tone for some widely-spreading AP reports [1, 2, 3] put only “Patent trolls” in the headlines. See for example the article “This year’s fight for the tech industry: Patent trolls”.

The Associated Press helped spread this kind of assumption under different headlines around the world [1, 2, 3, 4, 5, 6, 7] and so did PBS/NPR (Bill Gates-funded), among other large news networks.

“What are politicians going to think? It’s like they are being lobbied by large corporations through the corporate media (often owned directly by those corporations).”Where is the focus on patent scope? What are politicians going to think? It’s like they are being lobbied by large corporations through the corporate media (often owned directly by those corporations).

The political debate has already been perturbed. Watch what Chuck Grassley says. We can see politicians only ever speaking about “trolls” (or “Abusive Patent Litigation” to use Grassley’s term). Consider this report titled “Dem senator looking to slow ‘patent troll’ debate”. To quote: “Sen. Chris Coons (D-Del.) is trying to end the rush to get a bill through Congress to rein in “patent trolls.”

“Judging by the speedy approval of the Innovation Act in the House last Congress, Coons said many members might not be in tune with the debate.”

They call it “Innovation Act”, but all it does is target trolls. It does nothing to or about innovation. It just helps large corporations push aside patent trolls, except themselves.

“Regarding the Innovation Act”, another article about this misleadingly-named bill, says: “As a student at the University of Minnesota, one of the top research universities in the nation, I am greatly concerned with the proposed legislation dealing with patent reform. I agree there is a need to cut down on abusive patent practices under the current law by so-called “patent trolls.” However, current legislation in Congress is too broad in addressing this problem. The unintended consequences of the Innovation Act are too great to ignore.”

Well, that is not the issue. The analysis above, courtesy of a student, is too shallow and does little to actually show what’s wrong with the so-called ‘Innovation Act’. the “Innovation Act” as they call it is just a wishlist of large corporations. That’s not to say that patent trolls are not a problem at all; they’re mostly a symptom of a much larger problem. What the “Innovation Act” would do is tackle only some actors while leaving large corporations exempt from reform. Rather than call it “Innovation Act” we should call it “The Large Corporations’ Act”.

“532,900,000 Reasons Why We Need Patent Reform Now” is the headline from TechDirt in which a ruling about software patents (or relating to software patents) gets mentioned. TechDirt writes: “Over the last year, there’s been plenty of good news in the fight against the abuse of patents to stifle innovation. A bunch of court rulings have gone the right way, with the biggest being the Supreme Court’s ruling in the Alice v. CLS Bank case, that has resulted in many courts invalidating patents, the US Patent Office suddenly rejecting more patents and a rapid decline in patent lawsuits.”

“A real reform would tackle the patents, not the actors who use them.”A real reform would tackle the patents, not the actors who use them. Many of these actors are parasites, but one can generalise the means, not the ends.

“Conservatives and Patent Reform,” an article by Gary Shapiro, alludes to the above and says: “A serious case can be made that they should reconsider their opposition.”

With or without a bogus bill that does little or nothing to tackle the core issue we will all remain between a rock and a hard place. The problem of “trolls” is being overly exaggerated (not dealing with the patents they so often use) in stories like ““Shopping cart” patent troll shamelessly keeps litigating, and losing”. Corporate media pundits like Bill Snyder also play a role in the misdirection, with articles like “Patent trolls are on the run, but not vanquished yet” or “Why Congress must ensure ‘game over’ for patent trolls” (from The Hill).

It sure looks like the corporations hijacked the debate, it’s all about “trolls” now. Debate over patents must focus on patent scope, yet all the large corporations want us to obsess over trolls (smaller trolls than them). “The FTC should release an interim report to help patent reform,” said this other headline from The Hill and on the third of April we learned from this site that “Conservatives wrong to oppose patent reform” (the bogus reform, not the reform that is actually needed).

In the Web sites of patent lawyers we learn of “Two signs that patent reform momentum may be slowing” and get told the typical myth of “Startups and Patents”. Patents are protectionism for large corporations and only a waste of time and money for startups, which can usually not sue large corporations because it would get them sued back, using a much larger heap of patents from these large corporations.

A recent article by Glyn Moody was titled “Does Patent Licensing by Patent Trolls – Or Anyone – Serve A Useful Purpose?”

Moody alludes to a “paper [which] also provides yet more evidence that the 1980 Bayh-Dole Act, designed to encourage the commercialization of research results through licensing, actually turns universities into patent trolls — something that Techdirt has discussed before. Although the authors suggest that further research is needed to confirm their results, it already seems pretty clear that both patent trolls and Bayh-Dole need to go.”

“When some nonsense like “Innovation Act” says it targets “trolls” what it actually means to say is that it targets small entities with no real products. These are a nuisance to large corporations because the corporations cannot sue back (there are no products to sue over).”Yes, universities too can act like patent trolls, not just large corporations do. When some nonsense like “Innovation Act” says it targets “trolls” what it actually means to say is that it targets small entities with no real products. These are a nuisance to large corporations because the corporations cannot sue back (there are no products to sue over).

There was recently some discussion about the case of Life360, including the ‘Dear Piece of Shit’ letter. “Fresh off his patent win against a company called AGIS,” said one trolls expert, “Life360 CEO Chris Hulls has published an op-ed advising other companies on how to respond to similar patent threats.” Here is more from the same expert: “In May 2014, Life360 CEO Chris Hulls received an aggressive patent demand letter. The letter, from lawyers representing a company called Advanced Ground Information Systems (AGIS), told him he needed to pay for a “royalty-bearing license” to its four patents, or Life360 and its customers would have to “cease and desist” from infringement.

“In other words: pay up, or shut down your company.”

In the case of large corporations it would be “pay up, or we’ll block imports.” It can also be “pay up, reduce your revenue/increase running costs, pass costs to your customers”.

How is that different from what Apple is doing? How is that different from Microsoft’s patent extortion? It’s only semantics and labels (“trolls”), revolving around either scale or branding. The debate has been littered with propaganda, so a lot of people have been systematically incited against “trolls” while ignoring the broader picture.

Over a month ago there was a large online argument over trolls because “Patent trolls serve valuable role in innovation, Stanford expert says”. Defending patent trolls is not unthinkable, especially from universities where trolling has become a common practice (we have covered some examples over the years). Stanford staff, some allege, was probably paid to say that or has some conflict of interest. But we suspect the cause of this stance is different. This whole “Stanford” story (it was framed as a Stanford thing, despite involving just one person) led to some strong responses from ‘anti-trolls’ (and trolls only) sites [1, 2, 3], with one arguing that proof is required. To give some background to this (quoting the above): “So-called patent trolls may actually benefit inventors and the innovation economy, according to a Stanford intellectual property expert.

“Stephen Haber, a Stanford political science professor, suggests in new research that concerns about too much litigation involving patents is misguided.”

“There’s almost a refusal to return to talking about patent scope.”The obsession over patent trolls is what bothers us the most, not the stance — however dumb — of Stephen Haber. There’s almost a refusal to return to talking about patent scope. One site that focuses on trolls (“Patent Progress”) lobbies hard for the “Innovation Act”, stating in one of its headlines: “If the Innovation Act Is Bad For Patents, Why Do Large Patent Owners Support It?”

Those “Large Patent Owners” are large corporations, such as those which are funding “Patent Progress” (through CCIA). Watch the tone of recent posts. It’s like lobbying on behalf of large corporations. Another post says “Professor Stephen Haber of Stanford recently came out with a paper that, according to him, “suggests in new research that concerns about too much litigation involving patents is misguided.”

Well, the real issue is too much patent granting, not too much litigation, which usually is simply the result of too much patent granting. Tackle patent scope, not scale of plaintiffs.

Here is a recent “I.P. Scholars’ Letter to Congress re Patent Reform”. “This open letter to Congress,” says the abstract, “signed by 51 economics and legal scholars, responds to claims that there is little empirical evidence available to assess the performance of the American patent system. The letter explains that a large and increasing body of evidence indicates that the net effect of patent litigation is to raise the cost of innovation and inhibit technological progress. The letter also includes a bibliography of relevant empirical studies of patent litigation.”

Why focus on patent litigation and not the scope of patents foolishly being granted by the USPTO?

Covering patents have become frustrating in the sense that mega-corporations keep distracting from the real debate(s), lobbying for laws that instead protect only themselves. A lot of blogs that proclaim to be speaking for patent reform are actually tools of large corporations that fund them. Pseudo activism (lobbying) is when you’d be led to believe that you’re reading from real activists while in reality they’re tools of corporate power. The academics (non-’IP’ academics, i.e. not boosters of the parasitic elements) want software patents and other software patents to end, but corporations want to demolish only their own competition and rivals, thus they focus on ‘trolls’ and the corporate media helps them achieve this.

“Well, the real issue is too much patent granting, not too much litigation, which usually is simply the result of too much patent granting.”The EFF, a relatively independent (from corporations) activism group, now says it is “Fighting for Patent Reform in Washington, D.C.”. Having just tackled the infamous podcasting patent as part of a broader new action to take on software patents, the EFF receives a lot of positive publicity [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18]. Can real change come about this way? Is the EFF influential enough?

There is currently another piece of useless ‘reform’, but nothing is as bad as the America Invents Act, which we wrote about before. “Using the new Post Grant Review and Inter Partes Review procedures in the America Invents Act,” Steph writes, “hedge funds are extorting money from pharmaceutical companies by either filing or threatening to file for re-exam.”

When it comes to pharmaceutical patents, there is no lack of articles about “trolls”, including pro-trolls articles. There are anti-reform lawyers writing about it because to patent lawyers the trolling can be good business; their main concern is that it harms the legitimacy of the system through which they prey on real (producing) workers, acting more like parasites than scientists or even lawyers.

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A Single Comment

  1. saulgoode said,

    April 22, 2015 at 9:34 am

    Gravatar

    I firmly believe that the SCO consultant has it wrong. If you are a corporation with $50 billion annual revenue and by spending even $1 billion annually to defend against patent lawsuits, and thus maintain an environment that nearly ensures that there will be no upstart startups that threaten to dethrone you, you’d probably consider that a bargain.

    This is especially true within the software industry, where the tools of “research and development” can be had for literally no monetary outlay and the education and the only investment demanded for the training to use those tools is time and a willingness to learn.

    It is in the interests of these large corporations, especially in the software field, to have the significant litigation risks that “patent trolls” instill, even if it costs them a couple of percent of their annual revenue . The only reason for the pretense of their being opposed to “patent trolling” is so that they can control the shaping of any legislation purporting to eliminate it.

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