EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

08.03.17

High Cost of Erroneous Patent Grants

Posted in America, Europe, Patents at 2:26 am by Dr. Roy Schestowitz

Patents granted in the absence of economic rationale/basis can be a heavy burden on society

On patent externality

Summary: An in-depth look, courtesy of the Computer and Communications Industry Association, into the cost of invalid patents being granted, then used extrajudicially against small companies that cannot afford a challenge or have little financial incentive to do so

THE migration/emergence of patent trolls to/in Europe is real. We have pointed this out many times (I also heard stories like that, e.g. over the telephone). It will never make it into the press because extortion rackets rely on silence; a lot of this is due to reckless patent offices that grant bogus patents, not realising how much pain these patents may cause to many people. Battistelli's latest lies and distraction from decreased patent quality symbolises the sort of sycophancy which endangers the EPO.

But this post is not about the EPO. It’a actually about this long new article from the CCIA (Computer and Communications Industry Association) and it focuses on the USPTO, whose low-quality patent grants cost the American economy a lot of money. Here are some portions from this article:

The Cost Of Bad Patents: It’s Not Just The Lawsuit

The cost of bad patents is not just the cost of lawsuits.

This may seem obvious, but apparently it isn’t. I’ve recently noticed a trend from the anti-reform lobby: someone testifies in front of Congress about patent reform, they complain that “they’ve only been sued once or twice, why are they being asked to testify, what would they know?” They base their dismissal of the witnesses’ experience purely on the number of times that they’ve been sued. If you haven’t been sued enough times, in the mind of the anti-reform lobby, then you don’t know anything.

But any patent attorney with any experience knows that just isn’t true.

Most Assertion Activity Doesn’t Show Up In Court

At the DOJ/FTC hearing on Patent Assertion Entities back in 2012, Colleen Chien provided two estimates of the number of times a company will see a demand based on a patent compared to the number of times they see a lawsuit. A general estimate, provided by a sell-side patent broker (i.e., someone who sells patents for a living) is that there are between 25 and 50 patent demands made for each lawsuit actually filed. Another, based on the behavior of a real NPE, noted that the NPE sent out more than 8,000 demand letters, but only filed 26 lawsuits. That’s 307 demand letters for each filed lawsuit.

These demand letters are essentially invisible—they don’t show up in court and companies rarely publicize them. In other words, there’s a lot more than just lawsuits. You can face trolls any number of times without ever actually having a suit filed against you.

And it’ll cost you a meaningful amount of money every single time.

[...]

Even if you’re successful in convincing the other side that they don’t have a case, you’re still out the money and the time. You’ve still paid for the privilege of not having a lawsuit filed against you, and you’ve still learned about how trolls (and the Eastern District of Texas) operate.

None of which will ever show up in a lawsuit—or in the news.

The above mentions, notably, Conversant (MOSAID), which is particularly malicious. It pays IAM and receives puff pieces from IAM, but in reality it’s a litigation machine lubricated in part by Microsoft and Nokia.

We must always remember that for each lawsuit we publicly see/hear about there may be lots of shakedowns (in the above example, there’s one lawsuit per 307 demand letters). It’s good for the patent microcosm, which wants to then jump to the ‘rescue’ (from the mess it contributed to). Problem-solution business model.

Here is an article from yesterday that’s titled “What to do if you’re accused of patent infringement”; law firms keep selling their services (Katherine A. Hamer and Nathan E. Whitlock in this case) and for each of these demand letters they can make a lot of money at both ends (accuser/sender and accused/recipient). The patent microcosm makes money not just from the party suing/threatening but also the recipient of the threats/defendant. It’s obscene.

In the US, being merely accused of patent infringement can cost one dearly (anyone can accuse anyone else and it’s now done extensively by copyright trolls too). It’s a ruinous thing and it should not be tolerated. As the promotional article from yesterday puts it:

Just as you are looking forward to the weekend, you receive a cease-and-desist letter accusing your company of patent infringement. Or, worse, you receive a summons and complaint. You have been sued. There goes the weekend.

As CEO, CTO or in-house lawyer, you may have only cursory experience with patents. It never occurred to you that what you sell could have been patented by others. And, until now, you had never heard of the company that owns the patent. What do you do?

Basically, pay some law firm. That’s the advice of law firms. And as CCIA points out, the whole thing can end up costing thousands of dollars if not tens of thousands of dollars even without it reaching a court.

Patent grants come at a high cost — a societal and collective cost. Patent offices and examiners hopefully realise the nature of this externality.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. “US Inventor” is a “Bucket of Deplorables” Not Worthy of Media Coverage

    Jan Wolfe of Reuters treats a fringe group called “US Inventor” as though it's a conservative voice rather than a bunch of patent extremists pretending to be inventors



  2. Team Battistelli's Attacks on the EPO Boards of Appeal Predate the Illegal Sanctions Against a Judge

    A walk back along memory lane reveals that Battistelli has, all along, suppressed and marginalised DG3 members, in order to cement total control over the entire Organisation, not just the Office



  3. PTAB is Safe, the Patent Extremists Just Try to Scandalise It Out of Sheer Desperation

    The Leahy-Smith America Invents Act (AIA), which gave powers to the Patent Trial and Appeal Board (PTAB) through inter partes reviews (IPRs), has no imminent threats, not potent ones anyway



  4. Update on the EPO's Crackdown on the Boards of Appeal

    Demand of 35% increases from the boards serves to show that Battistelli now does to the 'independent' judges what he already did to examiners at the Office



  5. The Lobbyists Are Trying to Subvert US Law in Favour of Patent Predators

    Mingorance, Kappos, Underweiser and other lobbyists for the software patents agenda (paid by firms like Microsoft and IBM) keep trying to undo progress, notably the bans on software patents



  6. Patent Trolls Based in East Texas Are Affected Very Critically by TC Heartland

    The latest situation in Texas (United States District Court for the Eastern District of Texas in particular), which according to new analyses is the target of legal scrutiny for the 'loopholes' it provided to patent trolls in search of easy legal battles



  7. Alice Remains a Strong Precedential Decision and the Media Has Turned Against Software Patents

    The momentum against the scourge of software patents and the desperation among patent 'professionals' (people who don't create/develop/invent) is growing



  8. Harm Still Caused by Granted Software Patents

    A roundup of recent (past week's) announcements, including legal actions, contingent upon software patents in an age when software patents bear no real legitimacy



  9. Links 18/11/2017: Raspberry Digital Signage 10, New Nano

    Links for the day



  10. 23,000 Posts

    23,000 blog posts milestone reached in 11 years



  11. BlackBerry Cannot Sell Phones and Apple Looks Like the Next BlackBerry (a Pile of Patents)

    The lifecycle of mobile giants seems to typically end in patent shakedown, as Apple loses its business to Android just like Nokia and BlackBerry lost it to Apple



  12. EFF and CCIA Use Docket Navigator and Lex Machina to Identify 'Stupid Patents' (Usually Software Patents That Are Not Valid)

    In spite of threats and lawsuits from bogus 'inventors' whom they criticise, EFF staff continues the battle against patents that should never have been granted at all



  13. The Australian Productivity Commission Shows the Correct Approach to Setting Patent Laws and Scope

    Australia views patents on software as undesirable and acts accordingly, making nobody angry except a bunch of law firms that profited from litigation and patent maximalism



  14. EPO 'Business' From the United States Has Nosedived and UPC is on Its Death Throes

    Benoît Battistelli and Elodie Bergot further accelerate the ultimate demise of the EPO (getting rid of experienced and thus 'expensive' staff), for which there is no replacement because there is a monopoly (which means Europe will suffer severely)



  15. Links 17/11/2017: KDE Applications 17.12, Akademy 2018 Plans

    Links for the day



  16. Today's EPO and Team UPC Do Not Work for Europe But Actively Work Against Europe

    The tough reality that some Europeans actively work to undermine science and technology in Europe because they personally profit from it and how this relates to the Unitary Patent (UPC), which is still aggressively lobbied for, sometimes by bribing/manipulating the media, academia, and public servants



  17. Links 16/11/2017: WordPress 4.9 and GhostBSD 11.1 Released

    Links for the day



  18. The Staff Union of the EPO (SUEPO) is Rightly Upset If Not Shocked at What Battistelli and Bergot Are Doing to the Office

    The EPO's dictatorial management is destroying everything that's left (of value) at the Office while corrupting academia and censoring discussion by threatening those who publish comments (gagging its own staff even when that staff posts anonymously)



  19. EPO Continues to Disobey the Law on Software Patents in Europe

    Using the same old euphemisms, e.g. "computer-implemented inventions" (or "CII"), the EPO continues to grant patents which are clearly and strictly out of scope



  20. Links 16/11/2017: Tails 3.3, Deepin 15.5 Beta

    Links for the day



  21. Benoît Battistelli and Elodie Bergot Have Just Ensured That EPO Will Get Even More Corrupt

    Revolving door-type tactics will become more widespread at the EPO now that the management (Battistelli and his cronies) hires for low cost rather than skills/quality and minimises staff retention; this is yet another reason to dread anything like the UPC, which prioritises litigation over examination



  22. Australia is Banning Software Patents and Shelston IP is Complaining as Usual

    The Australian Productivity Commission, which defies copyright and patent bullies, is finally having policies put in place that better serve the interests of Australians, but the legal 'industry' is unhappy (as expected)



  23. Patent Trial and Appeal Board (PTAB) Defended by Technology Giants, by Small Companies, by US Congress and by Judges, So Why Does USPTO Make It Less Accessible?

    In spite of the popularity of PTAB and the growing need/demand for it, the US patent system is apparently determined to help it discriminate against poor petitioners (who probably need PTAB the most)



  24. Declines in Patent Quality at the EPO and 'Independent' Judges Can No Longer Say a Thing

    The EPO's troubling race to the bottom (of patent quality) concerns the staff examiners and the judges, but they cannot speak about it without facing rather severe consequences



  25. The EPO is Now Corrupting Academia, Wasting Stakeholders' Money Lying to Stakeholders About the Unitary Patent (UPC)

    The Unified Patent Court/Unitary Patent (UPC) is a dying project and the EPO, seeing that it is going nowhere fast, has resorted to new tactics and these tactics cost a lot of money (at the expense of those who are being lied to)



  26. Links 15/11/2017: Fedora 27 Released, Linux Mint Has New Betas

    Links for the day



  27. Patents Roundup: Packet Intelligence, B.E. Technology, Violin, and Square

    The latest stories and warnings about software patents in the United States



  28. Decline of Skills Level of Staff Like Examiners and Impartiality (Independence) of Judges at the EPO Should Cause Concern, Alarm

    Access to justice is severely compromised at the EPO as staff is led to rely on deficient tools for determining novelty while judges are kept out of the way or ill-chosen for an agenda other than justice



  29. Links 14/11/2017: GNU/Linux at Samsung, Firefox 57 Quantum

    Links for the day



  30. Microsoft: Sheltering Oneself From Patent Litigation While Passing Patents for Trolls to Attack GNU/Linux

    Another closer look at Provenance Asset Holdings and what exactly it is (connection to AST, part of the cartel Microsoft subsidises to shield itself)


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts