Summary: Ambiguous message from the US government, which has so far failed to make progress on patent reform and even contributes to the problems
Some days ago we wrote about how MPEG-LA managed to extort even free codecs. As one site notes:
Last week, MPEG LA and Google announced that they entered into agreements granting Google a license to technologies that “may” be essential to VP8, the video codec fueling WebM. While this agreement may have little impact in the traditional streaming market, it could be very significant in other markets, particularly WebRTC. No financial terms of the agreement were announced, and MPEG LA declined to answer our questions.
These secret deals usually mean payment. Neither party wants the public to know about it as they collude against the public interest. It was only last Thursday that the Committee on the Judiciary in the US House of Representatives spoke about patent abuse. This comes from the US government:
Hearing on: Abusive Patent Litigation: The Impact on American Innovation & Jobs, and Potential Solutions
One notable victim, SAS, issued some feedback. The SAS statement
[PDF] says: “In none of the cases where SAS has been sued for patent infringement is the plaintiff an operating company that makes anything, sells anything, produces anything or employs anyone (other than a bunch of lawyers). All of these cases involve what I call “patent trolls” – which others more demurely call Non-Practicing Entities, or Patent Assertion Entities — as plaintiff. It is a problem that is only becoming worse for companies like SAS for one simple reason: it is a business model that is incredibly cheap to pursue, remarkably profitable to the pursuers, and disproportionately damaging to the victims.”
This statement was highlighted by Groklaw, which recently made some suggestions for the debate of the USPTO. Here is more of it:
Here’s Groklaw’s response to the USPTO’s request for suggested topics for discussion in the future by the Software Partnership. We just sent it to the USPTO today.
We are also publishing here on Groklaw a more detailed supplement on those four topics, explaining in depth why we propose them, with references, on the theme, “Using Semiotics to Identify Patent-Eligible Software”. The supplement is referenced in the document sent, if they wish to read more in-depth arguments, based on interest level.
Groklaw shows how, based on the report “Top U.S. lawyer to high court focuses on antitrust, patent cases”, further action is expected to be taken. Lastly, the troll InterDigital [1, 2] is mentioned by patent lawyers. No signs of trolls being impeded by government action just yet. Lots of rhetoric and promises, no actions at all.
Here is a former US prosecutor turning into a troll:
High-profile former U.S. federal prosecutor Andrew Stolper said Tuesday he had teamed up with an ex-FBI agent to form a private equity firm specializing in litigation finance, a growing business in the legal industry.
Stolper, whose career included the ill-fated Broadcom case in 2009, said Crux Capital launched on Monday. He resigned last week from his position with the U.S. Attorney’s office in Santa Ana, where he had worked for 10 years.
The litigation finance boutique, based in Irvine, Calif., will specialize in plaintiff’s commercial litigation and eventually staff up to about five people.
A spokesman for the U.S. Attorney’s office declined to comment about Stolper’s move into private practice.
A U.S. District Court judge singled out Stolper for criticism when he dismissed criminal stock fraud charges against Broadcom Corp co-founder Henry T. Nicholas III in 2009, citing a “shameful” prosecution campaign to intimidate witnesses.
And now, having had a career as a ‘servant’, this man simply becomes a patent troll. The government seems to manufacture more trolls than it ever stops (zero). What ever happened to the antitrust complaint against MPEG-LA? Despite Promises™ and Hope® (when it comes to patent policy), President Obama is no better than his predecessors when it comes to tackling patent mess. █
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Summary: More arguments over the issue which is software patenting and who’s behind it
A longtime booster of Microsoft gives a platform to software patents proponents, in this case the first person to acquire a software patents, or at least the most vocal such person (what constitutes a software patent is subjective):
Guest post written by Martin Goetz
The author, Martin Goetz, opposes lawyer Eric Goldman, whose position we wrote about before. “Unfortunately,” Goetz says in an ad hominem fashion, “Goldman is not only wrong on most of his statements which he presents as “facts,” he is viewing this controversy from his vantage point only as an IP lawyer and teacher. Had he worked in the software industry, he might have had a much different viewpoint. I say this after having spent over 35 years directly in the software industry and another 20 years as a software consultant and investor in software start-ups.”
Gérald Sédrati-Dinet, an opponent of the unitary patent in the EU, weighs in by saying:
@SCUHTLI I also disagree, @ericgoldman miss the point for #swpats, this is what is important: http://www.groklaw.net/article.php?story=20130310164408906 …
He links to the very good Groklaw article.
The placement from the Microsoft booster has been providing ammunition for patent boosters such as IAM Magazine (patent lawyers), to whom responses went like this (from the same person):
@ksnhlaw @IAM_magazine actually @ericgoldman ‘s critics were already bad and not shared by opponent to #swpats
Yes, Goldman is a lawyer and we do not agree with his proposed solution.
Meanwhile, points out another person, Europe gets flooded by US patents, including software patents (more on that in the next post). To quote this one tweet:
And the Unitary Patent will favor EU SMEs… really? RT @AchimMuellers: US No. 1 Country in Patent Filings with EPO http://www.marketwatch.com/story/european-patent-office-epo-2012-annual-results-us-are-no-1-country-in-patent-filings-with-european-patent-office-2013-03-06#.UTdQ1zB0jnY.twitter …
We need more people to get involved and stop software patenting in Europe. The unitary patents was merely the first step and it helps import patents from the US.
Daniel Ravicher, interestingly enough, is still doing fantastic work by suing for fraud over Herbalife:
My first thought upon reading a new shareholder derivative complaint accusing directors and officers of JPMorgan Chase, Wells Fargo and Bank of America of facilitating a pyramid scheme by extending a total of $1.2 billion in credit to the controversial nutrition company Herbalife was that it was an interesting new development in the weird hedge-fund showdown between Herbalife short-seller William Ackman of Pershing Square and Herbalife investor Carl Icahn. My second thought, when I noticed that the pro se plaintiff was a lawyer named Daniel Ravicher, was, “Wait. That can’t be Dan Ravicher of the Public Patent Foundation.”
But it is. The well-known IP public interest lawyer, who’s co-counsel with the American Civil Liberties Union in the Myriad gene patent case now before the U.S. Supreme Court, is moonlighting as a private lawyer in the Herbalife derivative suit and in a companion fraud complaint against Icahn, also filed Wednesday in federal court in Manhattan. In a phone interview Ravicher told me that he’s stepping out of the realm of intellectual property because he’s convinced Herbalife is taking advantage of unwary, unsophisticated consumers. His girlfriend, he said, knows someone who became an Herbalife distributor and nearly became one herself. “This struck a chord with me personally,” he said. “Herbalife is hurting people.”
It is sad to lose one like him to a different (but important) cause. This leaves fewer people to fight for patent reform in the US (the USPTO is a disease) and prevention of software patents in Europe. There is a lobbying war going on and if developers don’t participate in this debate, the lawyers and the monopolists which pay them will win. █
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Smartphones a key area where patents clearly harm innovation and oppress customers
Summary: The USPTO is urged to limit the scope of patents while China follows the USPTO doctrine by broadening scope to realms of the absurd
THE institutional core which facilitates a lot of distortion by the likes of Microsoft and Apple is the USPTO, an indirectly corporate-run body which distributes monopolies on different sections of the industry. IBM’s cronyism inside the USPTO may be ending, but the institutional corruption is guaranteed to live on. As we have shown in recent weeks, USPTO discussions are rigged by design. They are tailored for corporate interests and many issues or views are totally off the table and outside the panel.
Groklaw has brainstormed and come up with 4 suggestions for the USPTO to be talking about. These are summarised as follows:
Suggested topic 1:
Is computer software properly patentable subject matter?
Suggested topic 2:
Are software patents helping or hurting the US innovation and hence the economy?
Suggested topic 3:
How can software developers help the USPTO understand how computers actually work, so issued patents match technical realities, avoiding patents on functions that are obvious to those skilled in the art, as well as avoiding duplication of prior art?
Suggested topic 4:
What is an abstract idea in software and how do expressions of ideas differ from applications of ideas?
The USPTO has been expanding the scope of patents as means of pretending that innovation is on the rise. There is a need for constant growth or inflation in terms of USPTO business, just as the arms industry seeks areas of expansion by artificially creating some conflicts. The abundance of patents is a side effect of subsidies from those who play a numbers game, seeking to artificially saturate the market for vanity purposes and national agenda, not just protectionism. Based on this post from Patentology, China too is now following the same trajectory as the US, just as it did in the Olympics (training and sponsoring people to acquire medals for national pride). The outcome is something like this:
A Chinese government scheme providing financial incentives for small and medium sized enterprises, public institutions or scientific research institutions appears to be resulting in abuse of the Australian patent system, and the ‘dumping’ of numerous low-quality innovation patents on the Australian Register.
These ‘junk’ patents are not being examined or certified. They therefore represent no more than potential enforceable rights. Even so, they generate costs to companies operating legitimately in Australia, which may need to obtain advice on the likely scope and validity of these patents in order to avoid possible infringement. In extreme cases, the existence of junk patents could result in an Australian business choosing not to take the risk of bringing a new product to market, even though the Chinese owner of a patent is not itself offering any products or services in this country.
We must come to universally recognise that patents are nothing more than government-granted monopolies which sometimes the government itself incentivises for selfish purposes that in no way benefit the public. It’s partly a PR exercise. The solution is to limit the scope of patenting, restoring a sane threshold and constraining patents based on economic grounds, not idealogical ones. In much of the world software patents are not legal, but those who go down the slippery slope of patent maximalism strive to change that. █
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Innovation and jobs move away from software patents haven
Summary: Official confirmation that the US market is avoided due to patent mess it has become notorious for; lawmakers take action against patent trolls, but not against the root cause, software parents, which US citizens certainly oppose; patent law changes/amendments are said to be under way
MEEGO, a versatile Linux-based operating system, survives through Jolla, which plans to take on Android. But “Due to crazy US #patent system innovative startups will not enter the US market. Proof: #jolla case. Keep enjoying your iphone 5…”
Yes, here is an article about it:
At TechCrunch, Jolla’s CEO Marc Dillon explains why his company will focus on China, Finland, and the rest of Europe first, ignoring the US.
US citizens should work hard to abolish software patents. They’re losing a lot from these ridiculous monopolies and software patents are mostly void in the rest of the world, so US residents would be in good company by ending software patents. Ars Technica provides yet another new story about patent trolls being addressed by some politicians:
This morning, Representatives Peter DeFazio (D-OR) and Jason Chaffetz (R-UT) introduced the SHIELD Act, which would create a “loser pays” system for some types of patent litigants. The bill is meant to stymie companies that do nothing more than file patent lawsuits.
Ars spoke with DeFazio at CES 2013 in January, when this bill was still in the formative stages, to get some background about how the bill developed, and the problems the Oregon representative hopes it will solve.
DeFazio has been in Congress since 1987, and represents Oregon’s 4th District, which covers a wide swath of Western Oregon. It includes Eugene, the state’s second largest city and home to the University of Oregon.
President Obama recently got involved in this debate; changes are afoot:
Companies interested in protecting their inventions should be aware of major changes that are coming to U.S. patent law. The Leahy-Smith America Invents Act, signed into law by President Obama in September 2011, represents the biggest changes to U.S. patent law in more than 50 years. Although it was enacted in 2011, its most sweeping changes come into force beginning in March 2013.
Change you can hardly see even with a microscope. Change like that we are accustomed to seeing whenever a so-called ‘reform’ in the USPTO is announced. Let’s hope this time it will be different. They speak about trolls, but not quite about the broader problem, which is patents on algorithms and vague concepts.
Ars Technica, which employs a trolls expert, has another good report about trolls:
When a couple (we’ll call them the Smiths) received a letter from their ISP—one saying they were being threatened with a copyright lawsuit—they were scared. The middle-aged immigrant couple moved to the United States from Eastern Europe more than a decade ago. Both have advanced degrees, but they knew very little about the US legal system. They denied (and still do deny) the plaintiff’s accusation that they downloaded a pornographic film on BitTorrent, but the Smiths were still worried about the consequences of being sued.
“We never were involved in the legal process,” Mr. Smith told us in a phone interview. “I didn’t know the difference between criminal cases and civil cases. I was totally ignorant.”
The Smiths’ predicament has become increasingly common. So-called “copyright trolls”—often law firms representing third-tier pornography producers—have threatened tens of thousands of users with lawsuits for allegedly sharing copyrighted pornography on peer-to-peer networks. A key part of the troll business model is that the cost and embarrassment of a public lawsuit involving pornography can be enough to intimidate even some innocent users into paying the trolls’ ransom.
And now, patent progress is also suggested by the post titled “patent trolls stifle innovation”. It says:
Over the last several months, we have been vocal in our calls for software patent reform to put an end to the threat of lawsuits on behalf of patent assertion entities (PAEs), more commonly known as patent trolls. Why? Because at Rackspace it has become our most pressing legal issue. Since 2010, our spending to combat patent trolls has increased by 500 percent.
Patent trolling has become big business. It hurts the economy – a Boston University study conducted last year found that patent trolls cost the U.S. economy about $29 billion in 2011, up from $7 billion in 2005.
No one is immune – this is an issue that affects businesses of all sizes, but small business owners and software developers are hit the hardest. At Rackspace, we are especially concerned with the impact patent trolls suits can have on open source software projects, which are important innovation centers. To us, open source gives our country the ability to increase our share of global technology innovation.
Another noteworthy new article says that software patents are evil:
Software Patents Are Evil
I was planning to write about software patent trolls and was entering “software patents” in my search engine when it offered the suggestion “are evil” to complete the phrase. I’ll buy that. So to encourage more traffic here, that is the title of this post. Yes. I have been blogging for quite some time.
How about this new piece about software patents?
On Tuesday Feb 12th, the US Patent Office is holding a roundtable in Silicon Valley to discuss issues surrounding the patenting of software, and I have an opportunity to get a seat at the table.
I’ll attend if I get some opinions from other entrepreneurs on the topic.
Do you have an stance on patenting software that you want to be heard? If so, leave it in the comments below and I’ll represent the opinions I get below in person.
“Patents are for people who don’t want to do the real work and use the legal system to tax those that do,” Michael Robertson wrote in Twitter.
A pro-FRAND blog talks about Apple and the recent case which involves Sony, showing perhaps like other sites that are run by lawyers that the USPTO has nothing to do with innovation but with everything against it. Its site harbours opinions/papers from patent lawyers (www.uspto.gov/patents/init_events/software_ak_cc_sw.pdf), but rarely from those who practice a real field. The issue is, the former class, the group of lawyers, is still one that controls the government. It’s hard to defeat these special interests, but we certainly must try. It’s a global issue with universal effects. █
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Summary: Signers of a petition against software patents finally receive a promising response from the White House (amidst other interesting developments such as government-funded research becoming Open Access)
So-called ‘IP’ sites do not like Obama’s promise to reform the patent system after public pressure. Here is a transcript of what he said. “Apparently I am on a mailing list from one of the petitions,” wrote one of our readers. “Below is the message they sent out.”
-------- Original Message --------
Subject: A Bit About Software Patents
Date: Thu, 21 Feb 2013 13:27:19 -0600
From: The White House [firstname.lastname@example.org]
The White House
A Bit About Software Patents
Last week President Obama answered questions during an online video
chat, and he spoke a little about an issue you've expressed interest
] through We the People.
*Here's what he had to say about software patents: [
Watch President Obama speak about software patents [
Thank you for your involvement in We the People.
Stay connected to the White House by signing up for periodic email
updates from President Obama and other senior administration officials
facebook [ http://www.facebook.com/WhiteHouse ] Facebook [
http://www.facebook.com/WhiteHouse ] twitter [
http://twitter.com/whitehouse ] Twitter [
http://twitter.com/whitehouse ] youtube [
http://www.youtube.com/whitehouse ] YouTube [
http://www.youtube.com/whitehouse ] flickr [
http://www.flickr.com/photos/whitehouse ] Flickr [
http://www.flickr.com/photos/whitehouse ] google+ [
https://plus.google.com/105479712798762608629 ] Google+ [
This email was sent to xxxxx
Sign Up for Updates from the White House [
Please do not reply to this email. Contact the White House [
The White House ? 1600 Pennsylvania Ave NW ? Washington, DC 20500 ?
The notable thing here is that over a year later President Obama did respond — at the very least with lip service — to petition signers (of 2011). Credit is deserved for that, but we shall see if real action gets taken. █
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Summary: The bureaucracy facilitated by corporations causes tremendous damage to the economy, still
The other day at The Register, Matt Asay, whose writing skills are rich, published an article about intellectual monopolies and it said something insightful while citing John Lennon:
While I’ve never thought John Lennon’s Imagine offered a particularly useful prescription for peace, I am starting to wonder if it might not suggest something better than free and open-source software.
When Lennon sings that if we can just “imagine no possessions” we’ll end up with “all the people sharing all the world,” he’s almost certainly wrong, humankind being humankind. Maybe he never read Animal Farm. But given the outsized success free and open-source software have had, perhaps it’s time to take them a step further.
What we found antithetical to sharing was the USPTO, which is the institutional source of so many problems. We will increasingly target this institution, which is run by large companies for these companies.The USPTO was run by an IBM veteran, to whom software patents are acceptable. And as covered here many times before, OIN, a creation of an IBM veteran, has no way to defend against trolls. It makes it anything but ideal, but patents are passed from the cartel of IBM to companies like Google and HTC which defend Android from litigation. Here is a new report about the OIN:
The expanding reach of the IBM-supported Open Invention Network reflects the pervasiveness of the Linux operating system.
Open Invention Network is not the solution. It does nothing to stop patent trolls.
A troll which we recently covered is getting some new coverage also amid racketeering charges:
Innovatio IP Ventures is one of the most controversial patent trolls to emerge in the past few years. Like the oft-condemned Lodsys, Innovatio is asking for relatively small payouts from a large number of targets. But Innovatio’s campaign is even broader than other hated trolls like Lodsys: the company claims nothing less than a patent claim on using Wi-Fi.
In 2011, Innovatio started suing chain hotels and even local coffee shops, saying they infringed 17 patents that cover the use of Wi-Fi. Innovatio sued hundreds of businesses and has reportedly sent out more than 8,000 letters demanding license fees, generally ranging from $2,300 to $5,000. Instead of going after companies that make routers like Cisco, Innovatio targeted small businesses that simply use Wi-Fi, an increasingly common pattern.
Microsoft Facebook is being sued by a troll again. The British press says: “The claim for unspecified royalties, issued in federal court in Virginia by a holding company called Rembrandt Social Media, alleges that Facebook used technology developed by Jos Van Der Meer over a decade ago.” The MSBBC covered it too
The EFF, which wants to end software patents, wrote about a troll which pretends to be a real company in this post:
Patent trolls — companies that assert patents as a business model instead of creating products — have been in the news lately. This is hardly surprising, given that troll lawsuits now make up the majority of new patent cases. And the litigation is only the tip of the iceberg: patent trolls send out hundreds of demand letters for each suit filed in court. At EFF, we have been following this issue closely and are working hard to bring reform to fix the patent mess.
The recent news is not all bad. Just last month, for instance, online retailer Newegg won a long and hard-fought battle against a particularly egregious troll. To its credit, Newegg has a policy of never settling with patent trolls. So, after Soverain Software LLC, a company that sells no products but claims to own online “shopping cart” technology filed suit, Newegg took the case all the way to trial in the Eastern District of Texas. It lost that trial — but it lost for a strange reason: the judge refused to let Newegg argue to the jury that the patent was obvious (if a party can prove that a patent was obvious at the time it was granted, a court should invalidate the patent).
All those trolls are a sure way to drive innovation out of the country. Let’s hope that US politicians will recognise this and take progressive action. █
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“Patent monopolies are believed to drive innovation but they actually impede the pace of science and innovation, Stiglitz said. The current “patent thicket,” in which anyone who writes a successful software programme is sued for alleged patent infringement, highlights the current IP system’s failure to encourage innovation, he said.”
–IP Watch on Professor Joseph Stiglitz
Summary: Signs of massive backlash against the US patent system as patent trolls spread collective damage
TThe previous post spoke about the low standards of the USPTO. Something has got to change. Zach Carter has this amazing news, adding to Nobel celebrities (in economics [1, 2]) who slam the US patent system. He writes:
Patent Reform, System Should Be Abolished, Fed Economists Say
Two economists at the St. Louis Federal Reserve published a paper arguing to abolish the American patent system, saying there’s “no evidence” patents improve productivity and that they have a “negative” effect on “innovation.”
The research suggests that President Barack Obama’s 2011 patent reform legislation — one of only a handful of major bills to clear Congress with bipartisan support in recent years — was wrong-headed.
A popular political site berates the system for the trolls it harbours and money has just been granted for a law professor to study the subject. To quote: “Santa Clara Law’s Professor Colleen Chien has received a $35,000 research grant from the New America Foundation to expand her work relating to “Start-ups and Trolls”. This grant will fund an expanded survey to determine the impacts of Patent Assertion Entities (PAEs) on the operations, growth, and innovation of startups. This version of the survey will also explore trends in patent purchasing, strategies for responding, and the market for “troll solution” providers.”
Watch what RIM has had to say on the subject after its very existence was compromised by trolls.
‘$30B’ spent on patent battles
Heins also spoke on Tuesday at Toronto’s Empire Club, making a point to discuss how legal battles over patents, especially in the United States, have been detrimental to the mobile technology industry.
“This past year, our sector spent almost $30 billion in courtrooms — particularly in U.S. courtrooms — defending cases against non-practicing entities — or ‘patent trolls’ — who produce nothing,” he said in prepared remarks.
“Patent trolls hold genuine innovators hostage and patents have become weapons in an international technology arms race. This is crazy. We have to shift our resources from litigation back to innovation, investment and job creation.”
BlackBerry holds over 3,400 U.S. patents, making it one of the top patent-holders in the country.
RIM is actually not a patent aggressor. It’s more like Google in this regard and in a later post we will show that Google now seeks to abolish software patents. █
“IP is often compared to physical property rights but knowledge is fundamentally different.”
–IP Watch on Professor Joseph Stiglitz
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Summary: The latest new examples which show that the US patent system is not hinged on reality; a call for action
The US patent system, protected by the USPTO and SCOTUS as validator, coercing others through the courts and ITC, serves as protectionism for corporations at the expense of people and to the benefit of patent lawyers.
SCOTUS Blog bloggers talk about gene patenting, one of the most controversial types of patents. Rather then seek a ban, a symposium is organised and one can bet it will be stacked by lawyers. This system is rigged. Watch USPTO patent #8,370,951, granted February 5th, 2013. It is titled “Securing the U.S.A” and it is not a satire. A Seattle blog tells us that lending goods online is also a granted patent now, assigned to Amazon along with this ‘milkman’ patent. USPTO quickly becomes a source of comedy, but it’s not funny to those who get sued. There are some more new reports that show laughable patents and the EFF reportedly fights an infamous patent on podcasting:
The Electronic Frontier Foundation, a digital civil liberties group, is declaring war on a company claiming it made the podcast possible.
EFF said Tuesday it was organizing companies that face threats from patent trolls – a derogatory term for companies that earn most of their money from patent licensing or litigation.
The EFF no longer busts just one patent at a time. It now runs a well-funded campaign to eradicate software patents as a whole (in the US).
New Zealand is meanwhile resisting attempts to expand US patent law — a subject on which Dr. Glyn Moody had this to say:
Let’s hope Mr Foss listens, and New Zealand programmers can continue to focus on creating great software, rather than needing to look anxiously over their shoulders all the time for fear that they might accidentally infringe on a software patent that has been granted to some deep-pocketed software company or – even worse – a predatory patent troll.
We must destroy software patents in the US or else they might spread elsewhere, e.g. through trans-Atlantic and trans-Pacific ‘free’ ‘trade’ treaties. There is need for global action because US policy usually become universal or global policy, shows history. The clock is ticking and patent lawyers fight against developers’ interests. █
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