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02.16.18

Patent Trolls Are Thwarted by Judges, But Patent Lawyers View Them as a ‘Business’ Opportunity

Posted in America, Patents at 4:29 am by Dr. Roy Schestowitz

Law firms in various states hope that the demise of the Eastern District of Texas will mean more lawsuits where they are

USA map

Summary: Patent lawyers are salivating over the idea that trolls may be coming to their state/s; owing to courts and the Patent Trial and Appeal Board (PTAB) other trolls’ software patents get invalidated

AS NOTED in the last post, patents granted by the USPTO are often passed to trolls sooner or later. The trolls would like to think of themselves as “monetisers”, but all they really do is tax the economy. That does not help innovation or creativity; it merely crushes both. TC Heartland, a Supreme Court decision from about 9 months ago, continues to worry firms that profit from patent trolls and aggressors. One of them, writing in lawyers’ media, expressed a common lawyers’ concern that patent litigation is declining (true story), then expressing optimism about trolls coming ‘home’ to Georgia:

Is patent litigation coming home to Georgia? Last year the U.S. Supreme Court holding in TC Heartland v. Kraft Foods Grp. Brands significantly affected the law of venue jurisdiction under 28 U.S.C. § 1400(b) for patent infringement cases. One result was to shift new patent complaint filings away from federal district courts that had been perceived to be plaintiff-friendly, such as the Eastern District of Texas, as I recently wrote in the Daily Report. TC Heartland only clarified one of the tests for patent venue in § 1400(b), holding that the provision “where the defendant resides” is limited to only the district where the defendant is incorporated.

[...]

The year 2018 will likely bring resolution to some of these issues – and more patent litigation to Georgia. I believe we can expect at least one, but perhaps two precedential Federal Circuit decisions further clarifying “where” a defendant committed an act of infringement, with one or both relating to software method and pharmaceutical patent infringement.

Watch their glee. They want lots and lots of lawsuits. That’s business to them. Never mind if the Eastern District of Texas was a cautionary tale and the Eastern District of Texas became synonymous with trolls, discouraging technical investment in the area (companies might think twice before opening a branch near there).

Georgia has some decent academic institutions (one very famous university, especially for its technical achievements), so we hope that Georgians will confront these legal opportunists.

Not too long ago in California Cloudflare spent a lot of time and money battling a patent troll. It took almost a year to win the case. SoylentNews mentioned that, as did TechDirt, writing about it with some background:

Last year, we wrote about how a relatively new patent trolling operation had pretty clearly picked the wrong target in suing internet infrastructure provider Cloudflare with a sketchy patent (US Patent 6,453,335 on “providing an internet third party data channel.”) Cloudflare decided not only to fight the case, but to fight all of Blackbird’s patents, crowdsourcing and funding searches into prior art on any patent held by Blackbird Technologies, and arguing that the company was engaging in questionable legal practices — acting both as a patent holding company and a law firm, while sometimes pretending not to be a law firm (despite employing mostly lawyers) to avoid some serious ethics questions.

We certainly hope that § 101 will carry on finishing off patent trolls. This was one such case. Ars Technica, which now lacks its main patent trolls expert (he moved to the EFF this month) wrote about it also. To quote:

A federal judge in San Francisco has unequivocally ruled against a non-practicing entity that had sued Cloudflare for patent infringement. The judicial order effectively ends the case that Blackbird—which Cloudflare had dubbed a “patent troll”—had brought against the well-known security firm and content delivery network.

“Abstract ideas are not patentable,” US District Judge Vincent Chhabria wrote in a Monday order.

Abstract ideas are a subject we’ll revisit this weekend.

Another patent troll which got mentioned the other day is Motivational Health Messaging. Unified Patents wrote about the status of the patent in question. The EFF’s role has been mentioned too:

Unified is pleased to announce the PATROLL crowdsourcing contest winners, Rohit Sood and Devarajan Govindaswamy, who split a cash prize of $2000 for their prior art submissions for U.S. Patent 9,069,648. The EFF previously named the ’648 patent as a ‘Stupid Patent of the Month’ noting that numerous small companies have been threatened with infringement allegations by Motivational Health Messaging, LLC (an NPE). To help the industry fight stupid patents, we have published the winning prior art below.

Another troll, Wordlogic, was mentioned by Unified Patents on the same day (lovers’ day). To quote:

On February 14, 2018, the Patent Trial and Appeal Board (PTAB) instituted trial on all challenged claims in an IPR filed by Unified against U.S. Patent 7,681,124 owned and asserted by Wordlogic Corporation, an NPE. The ’124 patent, directed to a user interface for predicting and presenting text completion candidates in response to a user’s partial text entry, has been asserted in multiple district court cases against such companies as Fleksy, Touchtype, Chicago Logic.

PTAB is great and we have plenty to write about it this weekend.

Microsoft’s Patent Moves: Dominion Harbor, Intellectual Ventures, Intellectual Discovery, NEC and Uber

Posted in Microsoft, Patents at 3:55 am by Dr. Roy Schestowitz

Trolls' harbour

Summary: A look at some of the latest moves and twists, as patents change hands and there are still signs of Microsoft’s ‘hidden hand’

THE theme of “patent trolls” — entities that do nothing but lawsuits and threats of lawsuits — is still a ‘thing’. Yes, the USPTO is aware of the problem and even the US Supreme Court uses the term “trolls”. Here in Europe the press rarely mentions the problem, which is being exacerbated by the EPO. Patent trolls are on the rise in Germany and London too has become a “hot destination” for trolls. Most vulnerable to these are SMEs, which are less capable of affording justice (legal process) and have less money to shell out for ‘protection’.

“Patent trolls are on the rise in Germany and London too has become a “hot destination” for trolls.”Thankfully, some of the trolling ‘sector’ is drifting eastwards to China. It’s not a good thing for China, but it seems to be a side effect of a misguided patent policy which attracted low-quality patents in large numbers. When one has low-quality patents in large numbers one can simply use the sheer amount of them — irrespective of underlying quality — to threaten ruinous litigation and thus extort money for settlements. This seems to be the business model of Dominion Harbor, which is a malicious patent troll that strongly dislikes me, worships other trolls, and associates with rather unpleasant people. IAM wrote the other day that “[a]fter purchase of 4,000 former Kodak patents from IV last year, Dominion is building quite a portfolio.”

IV is Intellectual Ventures, the world’s largest patent troll, which came from Microsoft. “Proud to announce our latest acquisition,” the troll said. “Dominion Harbor Acquires Leading NEC LCD Portfolio with more than 1,200 assets…”

“Patent ‘aggregators’ such as these are of no worth unless they become trolls or pass their so-called ‘assets’ to trolls. That’s how Intellectual Ventures came into existence (buying lots of patents from universities and failed companies).”One can expect them to shake down companies using these patents. They’re just a patent troll, like Intellectual Ventures that they’re connected to. One can guess where they are based. Intellectual Discovery (ID) in the meantime — not to be mistaken for IV — has been a miserable failure so far. It’s a total waste of South Korea’s money and although it is not a troll itself, industry insiders worry that it may feed patent trolls sooner or later, causing damage to the South Korean economy. According to IAM, ID is in somewhat of a disarray (symptoms include leadership shuffles like in RPX, which might be sold to a troll). There are analogous entities and worries in India right now. Patent ‘aggregators’ such as these are of no worth unless they become trolls or pass their so-called ‘assets’ to trolls. That’s how Intellectual Ventures came into existence (buying lots of patents from universities and failed companies).

Speaking of NEC patents (which the above troll just bought), a former IAM writer said: “There may be a Foxconn link to this. NEC transferred a whole bunch of mostly display-related patents to Gold Charm in 2012… [] Foxconn subsidiary Gold Charm bought the patents for $122m. Later asserted some against Funai, Mitsubishi, & Toshiba. Not heard much about them since…”

“Historically, many entities Microsoft passes patents to turn out to be attacking GNU/Linux.”As a bonus, mind this new report from the Microsoft-connected patent troll Acacia. It’s now resorting to buybacks, which is never a good sign. Are shareholders walking away? IV too has suffered a lot (lost many software patents, lawsuits and managers, not to mention the massive rounds of layoffs). Based on yesterday’s blog post from IAM, Microsoft now passes patents to Uber (just like it passes them to patent trolls quite a lot), which is itself suffering record losses. To quote the relevant paragraphs:

According to the USPTO assignment database, Uber has most recently picked up a package of 17 assets from Microsoft. That follows a 2015 deal between the two companies which saw Uber pick up some IP as part of a broader business agreement.

The acquisition from Microsoft followed another deal between Uber and AT&T for 13 assets – the third significant acquisition that the ride-sharing giant has made from the telecoms giant with the company picking up well over 100 assets.

Although as the 2015 Microsoft deal shows that Uber’s IP head John Mulgrew has been focused on bolstering the company’s patent position for a while, the focus on building up its portfolio in the secondary market has intensified since the hire of former Google and Motorola IP executive Kurt Brasch in September 2016. Mulgrew is understood to have led on the most recent deal with Microsoft along with Uber IP lawyer Rakesh Michael.

We are going to keep an eye on what happens next. Historically, many entities Microsoft passes patents to turn out to be attacking GNU/Linux. It’s shallow enough for us to notice, yet the corporate media altogether ignores this and carries on with PR (like “Microsoft loves Linux”).

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