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03.25.16

Patents Roundup: Patent Trolls Groomed by IAM, Reform Strives to Tackle Trolls, NewEgg and LOTNet Explore Alternate Solutions

Posted in America, Patents at 4:18 am by Dr. Roy Schestowitz

The debate about patent trolls keeps the debate about software patents rather elusive

A keyboard

Summary: A look at recent news involving or implicating patent trolls in the United States

IAM Shows Love for Patent Trolls

The EPO‘s media friend/ally, IAM (which has a ‘magazine’ and now events too), was paid by MOSAID (renamed Conversant after all the negative press), which is essentially a Microsoft-Nokia patent troll. IAM wasn’t selective enough and it tactlessly associates itself with notorious actors. It’s now relaying the views of someone who came from there, along with the views of people who now work for trolls of other companies like Ericsson. As IAM put it: “On the opening panel of the day, four NPE CEOs – Jim Skippen of WiLAN, Anthony Hayes of Spherix, Network1’s Corey Horowitz and Alexander Poltorak of General Patent Corporation – discussed how they were coping in the current climate. Skippen who was at Mossaid (now Conversant) before taking over as WiLAN’s head in 2006, is arguably as well placed as anyone to assess what has been a profound shift in the operating environment.”

They didn’t even spell MOSAID correctly (it’s referred to as “Mossaid”). This event from IAM is just about patent trolls (referred to by euphemisms); it should also cover big extortion firms like Microsoft (which have their in-house ‘PAEs’, like “Microsoft Licensing”).

Tackle Trolls by So-called ‘Reform’

Some continue to miss the point by saying things like “#Patent trolls relentlessly extort US small biz and must be stopped at all levels, including @TradeGov: http://bit.ly/1pyMbJR #FixPatents”

They should focus on software patents, not just actors that are small (patent trolls are assumed to be small). The accompanying press release from CTA talks not about the giants, though it rightly lays some of the blame on the ITC for facilitating their embargoes (or threats of embargoes, for leverage purposes).

The following statement is attributed to Gary Shapiro, president and CEO, Consumer Technology Association (CTA)™, formerly Consumer Electronics Association (CEA)®, regarding the reintroduction of The Trade Protection Not Troll Protection Act by Reps. Tony Cardenas (D-CA) and Blake Farenthold (R-TX):

“Patent trolls will go to any length to extort American small businesses. Not only are they exploiting our court system but they are also abusing the International Trade Commission (ITC) – clogging the system with frivolous patent infringement claims. If Congress wants to give small- and medium-sized businesses a fighting chance against trolls, it must require that patent trolls who file an ITC suit demonstrate they license their patents to companies who make actual products. Otherwise, patent trolls will continue to drain $1.5 billion a week from the economy and waste the time of the ITC, similar to what they have done with our court system.

The thing about large corporations that use patents against their competition, it’s them who lobby most to change the law to suit their agenda. Rightly or wrongly, Watchdog dot org has just stated that “Patent law changes could stack the deck for big business”. Here is the relevant portion:

Intellectual property law changes pursued in the name of fighting “patent trolls” could make it easier for large companies to steamroll small inventors.

Separation Design Group, a research lab with eight employees in Waynesburg, Pennsylvania, worries that’s exactly what will happen if reforms supported by President Barack Obama and tech giants like Google are implemented.

“People are saying litigation stifles big business. In our case, it’s pretty much the opposite,” SDGroup CEO Doug Galbraith told Watchdog.org. “If people are talking about tightening up the rules about how you litigate those situations, what’s the alternative for a company like ours?”

NewEgg’s Good Fight Against Patent Trolls

“The solution to patent trolling is to be aggressive,” wrote Julian this week. “Never, ever settle with a patent troll.” NewEgg has followed this mantra for a number of years now [1, 2, 3, 4] and this new article shows that NewEgg follows the tradition. “Newegg will donate more than $10,000,” says a trolls expert about money “it has made from selling anti-patent-troll T-shirts to Jordan Gwyther, who owns Larping.org, a hub for the live action role-play (LARP) community. Gwyther was sued last year by Global Archery. Global Archery founder John Jackson said he’s ticked off that Gwyther has tried to sell foam arrows to the camps, churches, and resorts that make up the bulk of Jackson’s customers.”

The LARPing story was covered here several times before [1, 2, 3] and this new article from TechDirt also provides some context as follows: “What entirely too many of these patent trolls rely on in order to get monetary settlements is the size of their targets. If a business is small enough, say a tiny site used primarily by roleplaying enthusiasts, that site may not have the resources necessary to fend off a legal claim from a patent troll. Instead, that business will typically accept whatever settlement demands the troll has requested.”

This is a sort of ‘protection money’ and there is a blackmail/extortion dimension to it, which makes Microsoft almost indistinguishable from patent trolls.

LOTNet as Anti-Troll Mechanism?

“LOTNet was launched,” said IAM this week, “in January 2014, with the aim of countering so-called ‘troll’ behaviour by gradually restricting the supply of patents to PAEs. LOTNet defines a PAE as any “entity and its affiliates” which derive “more than half of their total revenue… from patent assertion in a 12-month period, or if it has a plan approved by senior management to do so”. [...] A month later, Lenovo acquired over 3,800 mobile device-related patent families from NEC. It has also obtained a number of patents from IBM over the years, at least some of which can presumably be accounted for by its 2014 acquisition of the US company’s server business. In the same year, Lenovo was assigned around 2,000 patents as part of its $2.9 billion purchase of Motorola Mobility from fellow LOTNet member Google.”

The article is really about Lenovo, which bought some business from IBM, now a patent aggressor that goes after much smaller rivals.

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