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09.09.18

On Virnetx, Intellectual Ventures, Interval Licensing and Other Microsoft-Connected Patent Trolls That Microsoft Leverages to Attack Its Competition

Posted in Apple, Microsoft, Patents at 11:04 am by Dr. Roy Schestowitz

Chess board

Summary: Microsoft’s biggest patent troll Intellectual Ventures, as well as smaller patent trolls that it created or has funded, faces a hard time in the higher patent courts; the chilling effect, however, can be exploited by Microsoft to market Azure ‘IP’ ‘Advantage’

THE firm known as Virnetx (or VirnetX) generally produces just lawsuits. Many sites characterise it as a patent troll and it matches the definition. It’s nowadays known for little more than its lawsuit/battle against Apple, which relies on controversial jury trials in Texas.

“Our view is that Virnetx is a patent troll which was emboldened by payments from Microsoft and then targeted Apple.”There has been plenty of coverage about this case's latest twist (because it’s about Apple). Our view is that Virnetx is a patent troll which was emboldened by payments from Microsoft and then targeted Apple. We wrote about the actions against Microsoft in about a dozen past articles.

The shares of Virnetx soared after a recent ruling. “This case will certainly be appealed,” Patently-O asserts, concurring or overlapping our analysis from the time of the ruling. With new standards/bars, as well as SCOTUS precedents, we expect the Federal Circuit (CAFC) to squash the underlying patents. Here is what Patently-O wrote, being a patent maximalist: (there were perhaps hundreds of English articles about that, but not from specialist sites)

The Virnetx v. Apple patent battle has been running since 2010. Virnetx won its first verdict against Apple in 2012. The court in that case required two more jury trials — but Virtnetx won all three and the $300 million damage award is pending appeal before the Federal Circuit.

Apple redesigned its FaceTime and VPNOnDemand products back in 2012. Rather than adding the redesigns to the original case, Virnetx filed a new lawsuit (2012). In April 2018, a jury awarded an additional $500 million in damages and found that Apple’s infringement was willful.

The whole purpose of this firm is lawsuits such as this. It is a patent troll. The payments from Microsoft certainly helped fuel it, just like Microsoft’s payments to Intellectual Ventures helped propel this much bigger troll (connected very closely to Microsoft) to “top legal nuisance” status. In Intellectual Ventures I LLC v T-Mobile USA, Inc. (according to this new analysis from Patently-O) there’s a reference to Interval Licensing (Paul Allen, Microsoft’s co-founder). This troll’s history includes attacks on Android. Microsoft’s patent trolls are, in general, helping Microsoft market its ‘protection’ racket [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20]. In this particular CAFC case the troll fortunately lost its patent (as it typically does at CAFC):

The district court found the claimed function indefinite. In particular, the court noted that specification’s description of QoS as “subjective” according to a user’s “individual preferences” and that description lacked “adequate guidance as to the meaning of ‘optimize.’”

On appeal, the Federal Circuit presumably performed a de novo review, but affirmed — particular zeroing in on its precedent requiring “objective boundaries.” Interval Licensing LLC v. AOL, Inc., 766 F.3d 1364, 1371 (Fed. Cir. 2014) (“The claims, when read in light of the specification and the prosecution history, must provide objective boundaries for those of skill in the art.”). Here, the court interpreted “optimizing QoS” as akin to the invalid “aesthetically pleasing” limitation of Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342 (Fed. Cir. 2005). According to the court, both elements are “purely subjective” and depend wholly upon each user’s personal opinions.

[...]

Invalidity Affirmed.

Microsoft still loves and lobbies for patents. It still defends trolls and sells ‘defense’ from trolls (for a fee), presumably in an effort to market Azure as the “safe” option (over AWS).

“Microsoft still loves and lobbies for patents. It still defends trolls and sells ‘defense’ from trolls (for a fee), presumably in an effort to market Azure as the “safe” option (over AWS).”The Bill Gates-funded Seattle Times (which understandably does reputation laundering for Bill Gates and Paul Allen), has just published this article titled “Amazon has patented a system that would put workers in a cage, on top of a robot”. This isn’t the first oppressive (towards Amazon’s workers) patent and Amazon is said to be a top litigation target. Microsoft would want to make it more so (e.g. lawsuits against AWS clients, too) in an effort to sell Azure as a form of ‘protection’ from trolls (which Microsoft itself is controlling). Is this even legal?

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