06.14.16

Rights Groups, Media, Developers and Others Are Rising Up Against Patent Trolls, But the Problem is Always Software Patents

Posted in America, Patents at 10:54 am by Dr. Roy Schestowitz

The problem is the tactic or the weapon, not the size of the plaintiff…

Matryoshka doll

Summary: A roundup of news about software patents-wielding patent trolls, including some of the latest publicity about (and against) them

THE LENIENCE at the USPTO has given rise to patent trolls, which barely exist in Europe because software patents are not legal here (loopholes aside). Here is a new article about Europe and patent trolls:

Does Europe Have Patent Trolls?

They study all patent suits filed from 2000-2008 in Germany’s three busiest courts and most cases filed from 2000-2013 in the UK. They find that PAEs (including failed product companies) account for about 9% of these suits and that NPEs (PAEs plus universities, pre-product startups, individuals, industry consortiums, and IP subsidiaries of product companies) account for about 19%. These are small numbers by U.S. standards, but still significant. Most European PAE suits involve computer and telecom technologies. Compared with the United States, more PAE suits are initiated by the alleged infringer, fewer suits involve validity challenges, fewer suits settle, and more suits involve patentee wins.

In the previous post we reminded readers that software patents are a dying business (or dying breed) in the US, no matter what patent lawyers say. However, when patent trolls target small entities, will the patents go to court at all and get invalidated there? The process can be hugely expensive, time-consuming, and there is no absolute assurance of invalidation.

When patent lawyers say the truth about patents and what they have become we learn quite a lot right from the horse’s mouth. “Former patent lawyer speaks out against trolls,” explains this one person about Ira Blumberg (writing at AOL), who “explains why Congress must fix patents” (they mean stop trolls).

Read the following article from start to end. Here are some highlights:

Why patent trolls won’t give up

Luckily for me, this didn’t apply to the patent world. I spent seven years on the “dark side” working for patent trolls before coming back to the light. Patent trolls are companies that derive all or almost all of their revenue by asserting patents against other companies.

My experiences while on the “dark side” profoundly shaped my view on the role that Patent Assertion Entities (PAEs), or patent trolls, play in the tech industry. The struggle between PAEs and companies that produce and sell products is not as stark or binary as “light and dark,” or “good and evil,” but the fact remains that PAE litigation does more harm than good.

The tech industry is fertile ground for PAE litigation, with its many patents, plentiful companies and an increasing global reliance on technology. PAEs have no incentive to stop unless we in tech work together to stand up against them.

[...]

Lenovo believes strongly in protecting innovation, and having seen the real threats that trolls can pose, I pushed to join LOT Network, a non-profit community of companies that work together to minimize their exposure to patents owned by trolls. With fellow members like Red Hat, Canon, Logitech and Subaru, we’re making a real dent in the pool of patents that would be useful to PAEs. At last count, nearly half a million patent assets were protected from being used as weapons in PAE litigation against members of LOT Network.

As someone who has spent time on both sides, I feel a call to speak out against frivolous and overpriced patent litigation. The work I did for both PAEs and corporations was certainly legal, but not the same: While I was always on the right side of the law, I prefer being on the right side of innovation.

Companies want to create technologies that matter five years from now and beyond, so patents continue to matter. Frivolous lawsuits and those demanding damages far in excess of the value of the allegedly infringed patent detract from our ability to push innovation and better products forward. I hope that many more voices in tech will join mine in decrying the harmful effects of needless patent litigation — our future depends on it.

“Former Patent Troll Admits That Patent Trolls Are Bad For Business And Innovation” is how TechDirt summarised the above article, noting: “I’ve spoken to a few patent attorneys who have fought against patent trolls who have admitted to me that, at times, it’s quite tempting to give up and join the other side, since patent trolling is fairly easy and incredibly lucrative. You just have to sell your soul and give up the idea that you’re doing anything productive or good in the world, and instead become a pure bottom feeder. Someone who did exactly that is apparently Ira Blumberg, who is now speaking out about his experiences working on “the dark side” of patent trolling. Blumberg didn’t end up going to one of those tiny patent trolls, but rather left a job at Intel to go work for Rambus, a company not everyone considers to be a patent troll, but which certainly has a history of being an aggressive patent litigant. From Rambus, Blumberg then joined the world’s largest patent troll, Intellectual Ventures. He eventually left IV and is now at Lenovo. So he’s been actively on both sides of the patent troll situation — as an active participant in suing operating companies while working for companies that did nothing but license, and at companies that are relentlessly pursued by patent trolls.”

There are other new data points regarding patent trolls. As United for Patent Reform put it, “HarvardHBS study finds patent trolls prey on businesses with new cash flows” and here is the accompanying page which says: “The study, “Patent Trolls: Evidence from Targeted Firms,” examines the rise of patent lawsuits driven by nonpracticing entities (NPEs), or firms that hold on to patents for the sake of enforcing their IP rights rather than using them to innovate and produce products that benefit consumers. The authors — Lauren Cohen at Harvard Business School and the National Bureau of Economic Research, Umit G. Gurun at the University of Texas at Dallas, and Scott Duke Kominers at Harvard University — find that NPEs behave like “opportunistic patent trolls,” targeting vulnerable companies with frivolous lawsuits. They also conclude that these activities have a “real negative impact on innovation,” causing companies to reduce their innovative activity after coming in contact with NPEs — whether through settlements or after losing to one in court — and crowd out some companies that would otherwise create products that benefit society.”

“There are other new data points regarding patent trolls.”“Patent trolls are targeting developers & could potentially sue anyone who uses the Play Store or App Store,” United for Patent Reform added, linking to this article about a story that became very hot last week. Uniloc, a patent troll which we have written about for years, attacks Android developers right now. Here is some background: “Austin Meyer is the developer behind X-Plane. A few years ago, he uploaded the app to the Google Play Store and was very unexpectedly hit with a lawsuit from Uniloc in 2012. The firm claims it patented the idea behind the app market. That’s right, Uniloc isn’t going after the Meyer for making a flight simulator; it’s going after any company that uses Google Play. It’s already targeted a bunch of other popular apps, including Minecraft.”

Another article explained that “Austin Meyer is the developer behind X-Plane. A few years ago, he uploaded the app to the Google Play Store and was it with a lawsuit from Uniloc. Uniloc claims it patented the idea behind the app market and it wants a share of the profits. It has already targeted a bunch of other popular apps, including Minecraft.”

“The story told by Austin Meyer is similar to the story of many other developers.”Promoting VENUE Act as the solution, United for Patent Reform wrote: “This patent troll claims it invented mobile app market & is suing developers in EDTX courts” (Eastern District of Texas).

Here is the corresponding video. “The empty patent troll offices in Eastern District Texas,” Benjamin Henrion called it.

United for Patent Reform linked to this original video and said: “”I am being sued in East TX for using Google.” Austin Meyer speaks out against the patent trolls threatening his app” (Android app). To quote the video’s summary, it only says: “I am being sued for using the Google Play Store. Others have been sued for using WIFI and scanners. It takes years, and about THREE MILLION DOLLARS, to defend yourself…”

Here is the video embedded:

The story told by Austin Meyer is similar to the story of many other developers.

To make matters worse, as this one person put it, there is a “spoiler: plaintiff’s attorney is judge’s son” (not so unusual when it comes to the patent system in the US. There are more stories like this in the corrupt patent system in Texas and EPO with Bergot).

Sadly, patent trolls now overwhelm the US system. They are sometimes fed by large corporations. “Of 22 patent suits filed today,” United for Patent Reform wrote some days ago, “19 were filed by patent trolls — 86%. It’s time Congress took action to #fixpatents!”

“This patent troll targets companies that track packages,” United for Patent Reform writes about another high-profile patent troll. “If Your Company Ever Tracks Packages, Beware of Lawsuit from Alleged “Patent Troll”,” says the accompanying article, which also mentioned the EFF as follows: “No way would Cugle pay the $25,000. He refused and sought out help from the Electronic Frontier Foundation (EFF), which sued Shipping and Transit in the U.S. District Court for the Southern District of Florida on May 31 for filing a frivolous patent claim against Cugle.”

“Sadly, patent trolls now overwhelm the US system.”The EFF is doing some good work here and it also takes note of “the story of how one company has filed 91 lawsuits over a patent developed with government” (subsidies to help tax the public).

The story was covered by NPR, which had already done some good reports about the patent system. As NPR put it: “What makes this beef between bodybuilders stand out is where the patent comes from: a prestigious research university. A scientist was looking into whether arginine could help fight heart disease. He got a patent on what he found. But his research hit a dead end, and, through a complicated series of events, his noble patent got caught up in a fracas between two bodybuilders and their lawyers. Naturally, we dove in.”

What we have here is corporate welfare (money from government) being used to tax the public, which is of course outrageous. And speaking of welfare, mind this new article (behind paywall) titled “Patents Can Be Dangerous to Inventors’ Welfare”

“Many inventors have gone astray defending patent rights,” the summary says. “Elon Musk and Tesla blaze a different path.”

Actually, Musk is a famous example of someone who made a fortune from government subsidies. For Musk to give away patents should be seen as an obligation, not goodwill. “Innovation” is increasingly just a buzzword/byword for patents; it’s all about business (income) for patent lawyers and protectionism for large corporations that they work for. Small businesses need not apply; they’re left to suffer. Here is the latest example of mutual patent protection among giants in Asia. IAM says that “[i]t looks as though Nissan has become the latest member of the License On Transfer (LOT) Network.” This isn’t exactly useful for anyone other than giant companies like Toyota.

“”Innovation” is increasingly just a buzzword/byword for patents; it’s all about business (income) for patent lawyers and protectionism for large corporations that they work for.”Here is another new example of patents being used for protectionism rather than innovation. As a trolls expert put it the other week: “Global Archery, an Indiana company that licenses its own foam arrows for archery games, sued Gwyther back in October. Global Archery founder John Jackson said that the foam-tipped arrows sold by Gwyther violated a patent he owns, and that Gwyther’s marketing on search engines infringes his trademark rights.

“Earlier this year, Gwyther took his fight public with a fundraising campaign, and published a video in which he implored his customers and fans to “Save LARP Archery!” That led to Global Archery asking for a gag order to stop Gwyther from speaking about the case.”

TechDirt later added that: “Global Archery claims that those arrows infringed on a patent it owns and that LARPing.org’s use of Google Ad-Words infringed on its trademarks. While both of those charges seemed destined for loserdom, as the German company would be the patent infringers and the Google Ad-Words thing almost never works, the fact that Global Archery was relatively big and LARPing.org is tiny meant that perhaps that would be enough to tip the scales. With that in mind, Newegg’s Lee Cheng jumped into the fray, helping to back LARPing.org’s legal efforts in defending itself.”

“Newegg can afford to spend millions on dollars in the courts (and sometimes manage to convince the judges to provide legal costs reparations).”Newegg actually uses its fights against patent trolls for marketing, not that it necessarily makes these battles tasteless (just self-serving). Newegg can afford to spend millions on dollars in the courts (and sometimes manage to convince the judges to provide legal costs reparations). But where does that leave the rest of us, who haven’t the deep pockets or the coffers Newegg enjoys? Where does it leave people like Austin Meyer?

Sadly, in spite of media’s growing realisation that patent trolls are a problem, the real solution would come from invalidation of all software patents, rendering software developers about as free as they tend to be in Europe (as long as they don’t distribute software in the United States or fold too quickly [1, 2, 3]).

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