Still unleashing trolls like Intellectual Ventures at competitors that are actually successful at selling products
Summary: Like a swarm of blood-sucking bats, patent trolls prey on affluent companies that derive their wealth from GNU/Linux and freedom-respecting software (Free/libre software)
PATENT trolls are not just a nuisance. Sometimes they are intermediaries. For instance, Ericsson used a patent troll in order to sue in London and it won earlier this month. Microsoft does something similar and they both go after devices that run Linux, albeit they attack these not directly. They want the ‘protection’ money without all the negative publicity this entails (brand erosion).
“They want the ‘protection’ money without all the negative publicity this entails (brand erosion).”IAM has published this blog post about “Intellectual Discovery” [sic; twice even, for both words], revealing that it feeds trolls that litigate in the Eastern District of Texas. To quote: “Document Security Systems (DSS) has filed lawsuits in the Eastern District of Texas alleging infringement of LED-related patents acquired from Intellectual Discovery. The assertion campaign – and its eventual outcome – could represent a major test not just for the embattled publicly traded IP company (PIPCO) model, but also for sovereign patent funds (SPFs) and third-party IP litigation funding at a time when pure-play patent monetisation has become riskier than ever before.”
Not too long ago we wrote that “Bascom Research is a wholly owned subsidiary of Lexington Technology Group, which announced its merger with Document Security Systems…”
“Microsoft would be too hypocritical to join Apple in complaints about Qualcomm (which does similar things to Microsoft on the patent front), so its meddling in complaints appear to have adopted a very familiar intermediary.”Bascom became better known for a CAFC case involving software patents (in their favour) — the very thing that CAFC usually bins straight away.
Microsoft would be too hypocritical to join Apple in complaints about Qualcomm (which does similar things to Microsoft on the patent front), so its meddling in complaints appear to have adopted a very familiar intermediary. William New covered this at IP Watch and Florian Müller had beaten him to it with this post based on a quick tipoff. To quote: “I just received–and wanted to immediately share–an open letter addressed by major automotive and information and communications technology companies to President Donald J. Trump, urging him to shield the Federal Trade Commission (FTC) from political interference that could derail the ongoing antitrust litigation in the Northern District of California against Qualcomm (this post continues below the document)…”
“Nokia is commercially if not medically/clinically dead, but Microsoft ended up scattering the company’s patents into the hands of patent trolls that Microsoft is able to control.”Worth noting are the non-corporate entities in there. Notice that Microsoft’s AstroTurfing front ACT is in there too. This is a bunch of patent thugs who now devise patent trolls as a weapon against GNU/Linux and Free/libre software, as we explained this month and last month [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13]. They have, for example, passed Nokia‘s patents to patent trolls like MOSAID (renamed since, after a lot of negative publicity) and today we learn that the Acacia lawsuit which we mentioned here the other day (Friday) utilises a bunch of patents from Nokia in fact! As Joe Mullin put it, the Microsoft-connected Acacia “uses ex-Nokia patents to sue Apple, phone carriers…” (that’s the headline).
The largest publicly traded patent-assertion company, Acacia Research, has launched a new lawsuit (PDF) against Apple and all the major cell phone carriers.
Cellular Communications Equipment, LLC, a unit of Acacia, has sued Apple, Verizon, AT&T, Sprint, and T-Mobile. The company says that the five industry giants infringe four patents related to basic cell phone technologies. All four patents originated at Nokia, which has been sharing its patents in so-called “patent privateering” arrangements for some years now.
Another company using Nokia patents, MobileMedia Ideas, won a $3 million jury verdict last year. Nokia did a major deal with another patent-licensing company, Pendrell, in 2013.
Just witness the degree of corruption and recall what Microsoft entryism inside Nokia has caused (we have a lot more to say about it in the future). Nokia is commercially if not medically/clinically dead, but Microsoft ended up scattering the company’s patents into the hands of patent trolls that Microsoft is able to control. Quite a clever strategy… if you want to be evil. █
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With hundreds of thousands of patents (around the world) on mobile technology, including SEPs, one is unable to operate without being sued ad infinitum
Reference: Patent thicket
Summary: The war against commoditisation of mobile computing has turned a potentially thriving market with fast innovation rates into a war zone full of patent trolls (sometimes suing at the behest of large companies that hand them patents for this purpose)
THE MOBILE market (as in mobile phones, connections etc.) is a sordid mess when it comes to patents. It’s so saturated with patent thickets that one is unable to operate without being sued (or simply overtaxed) from every single direction. Simple devices now cost more than a sophisticated personal computer (where patents are expired or barely enforced anymore).
“Simple devices now cost more than a sophisticated personal computer (where patents are expired or barely enforced anymore).”As mentioned in this older post of ours, Samsung now need to pay a lot of money to Rembrandt Wireless (Rembrandt Wireless Technologies LP), which is a patent troll that relied on a jury in Texas (the capital of patent trolling). Here is one new article about it:
The US Court of Appeals for the Federal Circuit remanded part of a patent suit earlier this week, meaning that Samsung may not have to pay the full $15.7 million in damages to Rembrandt Wireless.
Handed down on Monday, April 17, the Federal Circuit’s ruling disagreed with the district court’s denial of Samsung’s motion based on the marking statute, so it remanded the issue.
Samsung is not even an American company, it is Korean.
“Will we finally see the demise of Qualcomm, which is a relic that has been reduced to just patent aggression?”To make matters worse, a ‘supertroll’, Qualcomm [1, 2], has been grabbing a lot of money (possibly billions) from Samsung and only a decade too late Judge Lucy Haeran Koh, an American judge of Korean descent, decides to look into the case. As Florian Müller put it the other day: “After last week’s joint case management statement in FTC v. Qualcomm (Northern District of California), Qualcomm filed a revised proposed schedule on Monday. Judge Koh had denied a stay of discovery and asked Qualcomm to revise its proposed schedule accordingly. Now Judge Koh has set a schedule that is materially consistent with the FTC’s proposal and a lot more ambitious than Qualcomm’s revised schedule (this post continues below the document)…”
Will we finally see the demise of Qualcomm, which is a relic that has been reduced to just patent aggression? IAM, the voice of patent trolls, says this week that “Qualcomm reveals $150 million dispute with licensee as it provides more detail on Apple lawsuit” and here is the key part:
There was plenty to discuss yesterday on Qualcomm’s call with analysts concerning the company’s latest quarterly results. On the positive side the company is in the final stages of its acquisition of NXP Semiconductors and reported that it is seeing strong sales in China, a market where it has had some well-publicised problems.
But throughout the call there was an Apple sized cloud hanging over the discussions as the company updated its position in its high-profile dispute with the iPhone manufacturer. It also revealed an additional dispute, unconnected with the Apple case, with an additional, unnamed licensee, which has resulted in an underpayment in royalties of more than $150 million.
That’s a lot of money. Apple is challenging this and we hope that Apple wins because it would also help Android OEMs if Apple got its way.
Meanwhile, as per Apple advocacy sites, patent troll Acacia is at it again. It is a patent troll with Microsoft connections and according to Apple Insider, “Apple and a handful of partner cellular carriers are the target of a new lawsuit leveled by Acacia Research subsidiary Cellular Communications Equipment, which alleges the iPhone maker infringed and continues to infringe on four patents developed by Nokia covering messaging, emergency alerts and other key cellular technologies.”
“Apple is challenging this and we hope that Apple wins because it would also help Android OEMs if Apple got its way.”A day earlier Apple Insider wrote that “Apple settles Unwired Planet patent suit for undisclosed amount” (via). Unwired Planet is a patent troll that now operates in Europe, too (it does for Ericsson what MOSAID/Conversant does for Microsoft through Nokia). It recently got its way in London and Germany is already attracting lots of patent lawsuits (many of which are initiated by trolls now), from companies that are not even German. Whose system is this? Here is a new press release titled “Motorola Solutions Files Patent Infringement Complaints in Germany Against Hytera Communications and Hytera Mobilfunk” (another case involving mobile).
Regarding the troll lawsuit in London, which we covered here very recently, this new guest post by Prof. Mark Patterson from Fordham Law (patent maximalists) covers it by promoting FRAND patent thickets. It’s mostly FRAND advocacy but it is supporting a notorious patent troll in the process. Here is the outline: “Last week Professor Jorge Contreras provided here an excellent summary of the April 5 decision of Mr. Justice Birss of the UK’s High Court of Justice in Unwired Planet International Ltd. v Huawei Technologies Co. Ltd.,  EWHC 711. The case addresses the problems that arise in determining FRAND (fair, reasonable, and non-discriminatory) licensing terms. Professor Contreras highlighted several novel aspects of the decision.”
“In China right now there is not a thicket but smog of low-quality patents.”What we have here is a disturbing passage of trolling venues into Europe (for which the EPO can be partly blamed). The same thing is happening in China, which the EPO seems to be imitating. In China right now there is not a thicket but smog of low-quality patents. SIPO’s quality control is a joke, resulting in protectionism for massive corporations that create a patent thicket in China. Here is Huawei, a government-connected company, having a go against Korea’s government-connected company and getting its way in Chinese courts. To quote government-connected Chinese press: “Huawei Technologies Co Ltd scored another point in its patent fight with its rival Samsung Electronics Co Ltd in China, which may weigh down on the South Korean company’s business in the world’s largest smartphone arena.” As IAM admitted yesterday, patent lawsuits in China skyrocket due to SIPO’s policy (patent microcosm profits at the expense of real workers). IAM says that “civil patent litigation cases increased by 20% compared to last year.” It also says “we’ll be getting a lot of statistical insight into China’s relatively closed court system in the coming days as the Supreme People’s Court releases white papers summing up how many IP case were filed and by whom in 2016.”
“This is anything but desirable and it’s antithetical to the patent system as it was perceived at the time of inception.”What it all boils down to is more patents and a lot more patent lawsuits over mobile devices; each such lawsuit will ultimately artificially elevate the price of phones and money will typically end up in the pockets of lawyers, not technologists. At the same time phones will have featured removed from them (intentionally hobbled), meaning inferior products available in the market. This is anything but desirable and it’s antithetical to the patent system as it was perceived at the time of inception. █
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…Hardware (chipsets) and software alike, with dubious software patents that accompany them, have made phones incredibly expensive
Summary: By tackling the practices of Qualcomm and by dragging companies to court over ridiculous design patents (potential of blanket ban by the Supreme Court) Apple weakens the very business model it will need to rely on as its market diminishes, leaving it with nothing but patents
THE mobile market is worth a lot of money these days. The exact numbers depend on how it’s measured and what exactly gets included in the measure. But no doubt more and more people now turn to mobility. Many sales are made in it, both of devices and software (licensing). Apple’s sales are declining and many of the headlines we come across (when it comes to Apple at least) are about new patents and patent applications from Apple. Perhaps that’s just Apple’s vision/foresight of its future. It want to prey on OEMs that are actually shipping a lot of phones (Huawei for example). This is why Microsoft, for example, attacked Samsung in the courts — using software patents of course — and then virtually forced Samsung to become its vassal. It’s a strategy of coercion. A lot of patent battles are now focused/centered around the mobile market (connections, interfaces, touch-enabled devices, navigation and so on) as many companies try to turn a pile of patents into revenue without actually creating anything. Qualcomm is a good example of this.
“It’s a strategy of coercion.”Qualcomm's management seems growingly nervous about the antitrust action in various places as well as the lawsuits/complaints [1, 2], notably Apple‘s. The $815m BlackBerry arbitration, which was mentioned here the other day, gets a mention in patent maximalists’ sites and Florian Müller took note of it after we had sent him some links related to it. It seems possible, albeit it’s subjected to the Supreme Court’s instincts, that another Apple case against Android will reach the Supreme Court (SCOTUS). As Müller put it just before Easter (taking special note of the role of CCIA):
One organization that has previously supported Samsung against Apple, the Computer & Communications Industry Association (CCIA), appears to have decided not to get active again at this stage. But in case certiorari is granted, I wouldn’t be surprised to see CCIA get involved again. With respect to design patent damages, CCIA’s work was really great. But even CCIA may at some point experience such a thing as litigation fatigue: the Apple v. Samsung dispute is now six years old.
Samsung’s design patents-related petition was exceptional. It had tremendous support and, since it raised sort of a once-in-a-century type of issue, it was a slam dunk (to the extent that a cert petition can be a slam dunk at all, given overall stats). The fact that certain amici who supported Samsung on design patents aren’t on board this time doesn’t mean that the three issues raised last months aren’t also certworthy in their own ways and their own right.
We wrote about this case many times before and if it reaches SCOTUS, then we definitely expect the patents to be challenged and quite likely invalidated, as per the pattern of recent SCOTUS decisions on patents. If that happens, what will Apple be left with? Apple is the next Qualcomm. █
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A company stuck in the past with nothing but a pile of patents (like Nokia)
Summary: The days of Qualcomm’s cash cow (a bunch of standard essential patents) may be numbered, as US, EU and Korean authorities belatedly look at the company’s practices and Qualcomm already caves
Qualcomm’s de facto monopoly (in the patents sense), as we’ve covered here before [1, 2], means that people pay Qualcomm a lot of money even when they buy nothing from Qualcomm. In some sense, Qualcomm does in chipsets what Microsoft does in software. It demands ‘protection’ money from just about everyone and it also has patent trolls to help punish for ‘noncompliance’ with unreasonable demands.
“It demands ‘protection’ money from just about everyone and it also has patent trolls to help punish for ‘noncompliance’ with unreasonable demands.”Not too long ago Qualcomm came under fire from Apple, even though it had abused many other companies. Florian Müller had a peek at the latest documents and found Qualcomm claiming “credit for enabling Pokémon GO,” which is of course nonsense. To quote Müller:
As the number of pages (the original complaint was approx. 100 pages, now the answer and the counterclaims fill 140 pages) shows, this is a huge commercial litigation and threatens to turn into a battle of materiel. Both parties have enlisted multiple major law firms. The first surprise here is that Quinn Emanuel is among the three firms representing Qualcomm, given that Qualcomm’s filing (in paragraph 192 of the counterclaims part) accuses Samsung–another company QE is defending against Apple–of sharing (with Apple) “a common interest in diminishing Qualcomm’s ability to obtain fair value for its innovations” and trying “to avoid paying fair value for Qualcomm’s intellectual property and to impede Qualcomm’s licensing program.” I wonder how Samsung feels about its own lawyers not distancing themselves from such allegations…
Is Qualcomm trying to suck up to the Japanese and Korean regulators with this “Pokémon GO” fairy tale? As one Android-centric site put it, Qualcomm has “Big Trouble in Little Korea” and an Apple-centric site said that “[i]n a 134-page filing with the U.S. District Court for the Southern District of California, Qualcomm provides a point-by-point rundown of Apple’s January lawsuit, denying a total of 389 allegations.”
“Is Qualcomm trying to suck up to the Japanese and Korean regulators with this “Pokémon GO” fairy tale?”What we have here are two patent bullies fighting one another and it’s clear that only law firms are guaranteed to win, as usual (parasites can’t lose).
Qualcomm to Pay BlackBerry
Meanwhile, as emerged in the news last night [1, 2, 3], Qualcomm will need to shell out a lot of money. BlackBerry, which has itself become akin to a patent troll (both directly and indirectly), expects to receive nearly a billion dollars from Qualcomm. “BlackBerry awarded $815 million in arbitration case against Qualcomm,” says a headline one reader sent to us about it. Might Qualcomm need to refund even greater amounts of money to other firms?
Florian Müller published another article earlier today, having watched this case rather closely. “Qualcomm does not want European and Korean antitrust proceedings to impact its FTC litigation,” says the headline. Like Intel and Microsoft, Qualcomm has come under incredible scrutiny in several continents and the effect can be devastating to a company that depends so much on patents rather than actual products. To quote Müller:
Qualcomm, which would have us believe we couldn’t even play Pokémon GO if not for its wireless technologies, is fighting a global, multi-front war against regulators, industry players and consumers (who are piggybacking on the FTC case in Northern California).
On one of those fronts, BlackBerry just won an arbitration award over $815 million. Unfortunately, arbitration is opaque, so the legal basis for this is unclear, other than BlackBerry having claimed to have paid too much in license fees during an unspecified past period. The kind of wrongdoing here is totally unclear, and we also don’t know what an appeals court would have decided. Still, the $815 million award, which is final and binding, has made BlackBerry’s share price soar by 12%. For the Canadian company, it’s a huge amount of money. For Qualcomm, it’s also a very significant amount, but the bigger problem is that every independent finding of Qualcomm having overcharged someone makes it harder for Qualcomm to convince the courts of law and the court of public opinion that it’s just being bullied by the likes of Apple and Samsung and that all those antitrust enforcers have all just been misled by sore losers in the marketplace and by evil companies denying Qualcomm a fair compensation for its innovations.
This concern is real. A joint case management statement filed yesterday by the FTC and Qualcomm–”joint” in terms of being a single document despite virtually zero convergence on substantive questions–in the Northern District of California shows that Qualcomm is indeed concerned about how the various parallel proceedings could influence each other.
The above already mentions the news about BlackBerry, which is important. Is Qualcomm on the run from regulators?
Unfair and Unreasonable
“Apple’s challenge to Qualcomm is already having a positive impact, which is why we said we would support Apple right from the start (in this case alone).”So-called standard essential patents (SEPs) or RAND or FRAND are a subject we’ve covered here many times before. Last night IP Kat said that “It ha[d] been a busy couple of weeks for standard essential patents (SEPs)… and now we have the European Commission’s roadmap on SEPs.”
“FRAND is already in DSM,” Benjamin Henrion explained, “don´t know what is the status of this directive…”
Well, if SEPs like Qualcomm’s lose their legitimacy, the effects would be enormous and also impact software companies. In China, based on what IAM said earlier today, the subject of SEPs and patent trolls that wield them (like Ericsson in Europe) is being brought up and scrutinised. To quote:
We’ve seen a major patent pool introduce a new royalty rate structure aimed at enticing more developing-market implementers to get involved, the first foreign NPE officially enter China through a joint venture agreement, and Apple directly challenging the licensing terms Qualcomm agreed on with Chinese regulators. And, of course, the Beijing IP Court issued the country’s first SEP-based injunction against Sony.
Apple’s challenge to Qualcomm is already having a positive impact, which is why we said we would support Apple right from the start (in this case alone). Companies like Qualcomm offer far too little to society but more importantly, they set a dangerous precedent to be exploited by all sorts of other companies and harm productive companies. █
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Background reading: “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.” –Steve Jobs
“The term “just war” contains an internal contradiction. War is inherently unjust, and the great challenge of our time is how to deal with evil, tyranny, and oppression without killing huge numbers of people.”
–Howard Zinn, Terrorism and War (2002)
Summary: Putting in perspective the latest high-profile (in the press at least) lawsuits filed by a notorious troll, which this time around chose as its targets two patent aggressors that deserve no sympathy because of their own actions
WE occasionally hear about Apple patents at the EPO but cannot say much due to source protection needs. At the USPTO, by contrast, Apple patents have already attracted much criticism, and courts are invalidating some of these (sometimes it happens in Europe as well). The point of the matter is, Apple likes to collect a lot of patents and later it uses these to go after Android OEMs (actual lawsuits), having started with sabre-rattling against Palm prior to that.
Writing in his blog last week, Florian Müller said that the US Supreme Court may soon proceed to challenging yet another Apple case against the largest Android OEM (at least at the time the case was initiated). To quote:
Timing is often an interesting indication of a party’s priorities. Over these past seven years of Apple v. Android lawsuits (it all started with HTC in March 2010), Android companies–HTC more than anyone else–have often shown the behavior of stallers, at least when they were (as Samsung is here) on the defending end of a litigation (obviously not when they were asserting standard-essential patents themselves). Even parties that don’t intend to stall in the slightest (such as Oracle when enforcing its copyrights against Google) typically wait until the end of a filing deadline. It provides them with an opportunity to wait for further relevant developments (case law, public statements by key persons and entities, etc.). So I really am surprised here. Further remedies-related proceedings in that case are ongoing in district court, and a case management conference has just been postponed to next month. With a view to that conference, the Supreme Court is unlikely to make any decision either way in the meantime.
We certainly hope that Apple will decide to compete based on technical merits rather than patents and lawyers. We are not too optimistic about it, as this is essentially a sworn sort of legacy of Steve Jobs and it’s the only thing Apple has left because its market share is diminishing every year (ignore Apple’s “alternative facts” to that effect, focusing only in particular demographies).
“We certainly hope that Apple will decide to compete based on technical merits rather than patents and lawyers.”Apple-aligned Web sites, in the mean time, have the audacity to complain about patent aggression because the patent troll known as "Soverain" (we wrote about it quite frequently in the distant past) is back with vengeance and it is suing Apple. This patent troll isn’t as dead as some Apple fans thoughts/hoped, which is why they’re all complaining [1, 2, 3] in their ‘news’ sites (more like Apple advocacy sites). One of them said that “Soverain Software, a non-practicing entity that gained media attention for suing Newegg and other online retailers over “shopping cart” patents, on Thursday filed a complaint against Apple for alleged infringement of IP relating to internet-based services.”
Curious is the fact that Microsoft too is being sued by this patent troll, and moreover it uses a Microsoft case (Enfish v Microsoft) to justify its case, based on this coverage from IAM. To quote the relevant bits:
With the Supreme Court’s decision not to grant cert to Soverain’s appeal in early 2014, that appeared to be that for the company and its assertion campaign. Except this week Soverain’s patents were back in court as a new, Texas-based entity called Soverain IP filed suit against Microsoft and Apple, alleging that the Windows giant infringes on six patents while the iPhone creator infringes on four.
One of the patents — no. 5,708,780 — which was granted in 1998, has been litigated before and appears to be one of the online shopping-related grants that led to Soverain securing a $40 million settlement from Amazon in 2005. Notably, in its court filings this week, Soverain cites Enfish v Microsoft, one of several 2016 Federal Circuit decisions which are seen as providing key guidelines over the patentability of software, to back up its claim that the patent does not cover an abstract idea and is therefore valid.
We’re now faced with a hard choice; who to support, so to speak? The ugly patent troll or the two patent aggressors which have been attacking GNU/Linux using patents? Well, as the informal proverb/saying goes, in some wars both sides are evil. The only sure thing is, lawyers will profit from this. They always do, irrespective of who ‘wins’; to them, every lawsuit is a ‘win’ and they lobby their government accordingly.
“The only sure thing is, lawyers will profit from this.”Speaking of patent trolls such as the above, there is an ongoing EFF campaign against universities hoarding and then selling patents, i.e. taxpayers wasting money on patents that are handed to trolls who then attack these same taxpayers. Here is the EFF’s latest update on this:
Last year, EFF, along with our partner organizations, launched Reclaim Invention, a campaign to encourage universities across the country to commit to adopting patent policies that advance the public good. Reclaim Invention asks universities to focus on by bringing their inventions to the public, rather than selling or licensing them to patent assertion entities whose sole business model is threatening other innovators with patent lawsuits.
Now, thanks to Maryland State Delegate Jeff Waldstreicher, the project is taking a step forward. In February, Delegate Waldstreicher introduced H.B. 1357, a bill modeled on Reclaim Invention’s draft legislation, the Reclaim Invention Act.
The above has already attracted some high-profile support that we have come across in sites like Twitter.
This is (almost) the first time we hear about the “Reclaim Invention Act”, except when the EFF mentioned it at the end of last year. Other such “Acts” have not been heard from in a while (in effect they got abandoned); The Leahy-Smith America Invents Act did a lot of good; the above would too (if it ever materialises). █
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How long and how much more will it take for the Supreme Court to realise there is a profound issue in Texas?
Summary: The lack of justice in the American patent system, where trolls receive favourable treatment from particular judges and one bogus patent (now invalid) can earn a person over $45 million in ‘protection’ money, necessitates firm and decisive intervention from the US Supreme Court
Federal Circuit Once Again Overrules Mistakes by the Kangaroo Patent Court of Rodney Gilstrap in the Eastern District of Texas
Kangaroo courts are not monopolised by the EPO and the USPTO hasn’t a monopoly on bad patents, either (thankfully, the USPTO is actually improving and lowering the incentive for trolls). The US Supreme Court, together with CAFC below it, already do a fine job, further aided by PTAB (the appeals board) for quicker and cheaper determinations against bad patents.
When Apple celebrates the death of bad patents we too are happy, even if we are far from friends of Apple (we used to call for boycotts). Apple has just defeated Smartflash and there are a lot of articles about this, especially or initially in pro-Apple sites. Headlines include “Apple has $533m verdict against iTunes software patents thrown”, “Apple won’t have to pay $533 million to an iTunes patent troll”, “U.S. appeals court tosses patent verdict against Apple”, and “Apple tastes victory against Smartflash at Federal Circuit”.
“When Apple celebrates the death of bad patents we too are happy, even if we are far from friends of Apple (we used to call for boycotts).”“This ruling isn’t surprising,” one of the above articles states, “as US District Judge Rodney Gilstrap ordered a damages retrial, saying the jury’s view of Apple’s infringement might have been confused by his instructions on how properly to calculate royalties.”
But the pro-trolls Judge Rodney Gilstrap did not in fact dispute a liability. To him, it was just a matter of how much money would be paid. First to cover the news, as far as we were able to see, was Michael Loney of MIP. He wrote about it as early as yesterday, noting that CAFC had found yet another ruling from the notorious Eastern District of Texas to be bunk. “The Federal Circuit has found invalid three Smartflash patents,” he wrote, “reversing the Eastern District of Texas.”
Eolas Driven Out of the Eastern District of Texas
There is another important development down in Texas and Joe Mullin probably wrote the best report about it (Mullin is quite the expert in this domain). To quote Mullin:
Eolas Technologies, which has been called a “patent troll,” has continued to file against big companies, even after losing a landmark 2012 trial. But following an appeals court order (PDF) last week, Eolas will have to pursue its lawsuits in California—not its preferred patent hotspot of East Texas.
As of Friday, Eolas’ lawsuits against Google has been transferred to the Northern District of California. The move could reduce Eolas’ chances of winning a settlement or verdict since East Texas courts have been viewed by some as favoring patent holders. Similar lawsuits against Amazon and Wal-Mart remain in East Texas, for now.
Michael Loney wrote about it too, noting that CAFC is potentially moving trolls out of that notorious Eastern District of Texas (even before the Supreme Court rules on TC Heartland LLC v Kraft Foods Group Brands LLC). To quote:
Google’s request for a writ of mandamus to transfer a case brought by Eolas Technologies to the Northern District of California from the Eastern District of Texas has been granted, with the Federal Circuit citing “a clear abuse of discretion”
Eolas was mentioned here as far back as one decade ago and many more times since. It’s definitely a patent troll, but Mullin put the word “troll” (in the headline) and “patent troll” (in the body) within scare quotes, perhaps fearing legal action against the publisher (his employer).
Software patents, as in the above case, are bunk, but it’s very expensive (usually too expensive) going to court to show it (especially if there are appeals). This means that most defendants will silently fold and pay the Mafia (or troll) ‘protection’ money. Insistent and persistent aggressors or trolls, some of whom are well-funded, will just file more and more motions until the defendant — even if repeatedly deemed innocent — decides that it’s simply cheaper to settle. It means that wealth trumps justice and it can be exploited time after time, by simply choosing vulnerable litigation targets which are almost certainly going to buckle.
“Software patents, as in the above case, are bunk, but it’s very expensive (usually too expensive) going to court to show it (especially if there are appeals).”Speaking of software patents, this tweet says that “Salesforce tries to patent Records Management……quick take” (in an image).
Erich Spangenberg Turns Out to be a Patent ‘Fraud’
In the above cases we see deep-pocketed companies like Google and Apple fighting back, again and again, simply because they can afford it. So can smaller (but still very large companies) such as Newegg, which already spent millions of dollars on very few patent cases — and that’s just in legal fees!
According to Mullin’s other new report, mega-troll Erich Spangenberg went after Newegg and finally (belatedly) lost. That’s another software patent dead and we can expect more to come; it’s expensive to prove the invalidity. The USPTO should clean up this (its own) mess. PTAB helps towards that. Mullin wrote:
Patent-holding company TQP Development made millions claiming that it owned a breakthrough in Web encryption, even though most encryption experts had never heard of the company until it started a massive campaign of lawsuits. Yesterday, the company’s litigation campaign was brought to an end when a panel of appeals judges refused (PDF) to give TQP a second chance to collect on a jury verdict against Newegg.
The TQP patent was invented by Michael Jones, whose company Telequip briefly sold a kind of encrypted modem. The company sold about 30 models before the modem business went bust. Famed patent enforcer Erich Spangenberg bought the TQP patent in 2008 and began filing lawsuits, saying that the Jones patent actually entitled him to royalties on a basic form of SSL Internet encryption. Spangenberg and Jones ultimately made more than $45 million from the patent.
Will Spangenberg now refund the extortion money (more than $45 million), plus legal expenses? Or will this be another case of an invalid patent costing a fortune to countless companies, even though they were innocent all along because this patent was bogus?
We certainly hope that the Supreme Court is watching all these cases and will take them into account later this year when TC Heartland can become the new “patent killer” (precedent). █
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GNU/Linux-powered devices are habitually being targeted by artsy design patents, but might this end soon?
Summary: A company which often takes pride in designers rather than developers (art, not technical merit) may lose that leverage over the competition if its questionable patents are taken away by the Supremes
THE SCOTUS, in its current composition at least (many nominations and appointments by Democrats — a trend that is now changing), has handed down some important decisions on patents over the past half a decade and most of them were favourable to patent reformers. Reformist scope-oriented measures such as restriction if not elimination of software patents are just the tip of the iceberg; a few months ago we wrote about the Lexmark case.
“This time around it’s about the second California Apple v. Samsung case (the one that went to trial in 2014, resulting in a $119 million verdict).”
–Florian MüllerFlorian Müller scooped an important story the other day. “I tried to find media reports on Samsung’s new Apple v. Samsung Supreme Court petition,” he wrote, “and couldn’t find any, so maybe I scooped’em all” with the blog post “Samsung is now taking the second Apple v. Samsung patent case to the Supreme Court”. To quote: “The first Apple v. Samsung case went all the way up to the Supreme Court and has meanwhile gone all the way back to the Northern District of California to take a new look at the question of design patent damages. But the steps to the Supreme Court are like a revolving door for this huge commercial dispute: a new petition for writ of certiorari (request for Supreme Court review) is already in the making! This time around it’s about the second California Apple v. Samsung case (the one that went to trial in 2014, resulting in a $119 million verdict).”
Someone disputed the number, saying that “it’ll actually be the third. They had another petition denied on a very technical issue.”
Müller insisted, however, that “by “second case” I meant the second case filed by Apple against Samsung in U.S. district court…”
“If this is all that Apple has left in its future plans (suing competitors), then it doesn’t look particularly bright; nor does it look innovative…”Techrights had been sceptical of Apple for a long time, even before Apple began attacking Android with patents (there was sabre-rattling even before that, e.g. against Palm). Apple and its nonsensical patents never end. Our sources at the EPO indicate that it’s not different in Europe, but we cannot publicly share any further details on that (in order to protect sources). Watch this article from CNN, published just 6 days ago. “Apple often patents interesting hardware or futuristic iPhone designs that may never see the light of day,” it says. “But in its latest patent granted on Tuesday, Apple (AAPL, Tech30) describes something a little less innovative, and already wildly popular.”
They’re ignoring prior art and also neglecting the fact that software patents are a dying breed. If this is all that Apple has left in its future plans (suing competitors), then it doesn’t look particularly bright; nor does it look innovative…
We look forward to that (potentially second) SCOTUS case which might, due to Apple, spell doom for design patents, which are often similar to software patents (in the GUI sense).
Life Technologies Corp. v Promega Corp.
“We look forward to that (potentially second) SCOTUS case which might, due to Apple, spell doom for design patents, which are often similar to software patents (in the GUI sense).”SCOTUS rulings on patents actually made a lot of headlines this past week, but this did not involve software patents or anything like that. Mayer Brown LLP, for example, wrote about Life Technologies Corp. v Promega Corp. (at SCOTUS) in lawyers’ media. “In an effort to curb efforts to circumvent patent protection,” they said, “the Patent Act imposes liability for infringement on anyone who supplies “all or a substantial portion” of a patented invention’s components from the United States for combination overseas. 35 U.S.C. s 271(f)(1). The Federal Circuit had held that a single component—in this case, of a five-component test kit—could be sufficiently important to a patented invention to constitute “a substantial portion.””
“The Supreme Court has reversed the Federal Circuit in Life Tech v Promega, ruling that manufacture and exportation of a single component of a patented invention assembled in another country is not enough for infringement in the US. However, as a concurring opinion and observers note, the Supreme Court did not indicate how much more than one is enough,” MIP wrote.
“IAM is basically ranting about this ruling because SCOTUS didn’t rule for patent maximalists.”IAM, the lobby of the patent maximalists (disguised as press whilst lobbying/preaching), wrote: “Yet again #SCOTUS left #patent community in the dark on a key part of its latest ruling” (misinformation).
Well, by “patent community” they mean something like “hedge funds of the patent world”, not a community per se. And nobody is really left “in the the dark”; it’s just a dark day for patent maximalists.
IAM is basically ranting about this ruling because SCOTUS didn’t rule for patent maximalists. To quote their blog post about it:
Seven US Supreme Court justices issued their latest patent ruling yesterday in a case that may not have been awaited with the same level of expectancy as next month’s oral arguments in the venue selection case TC Heartland, but which nonetheless showed them sticking to form. As ever with this court it was a case of what wasn’t said as much as what was outlined in the decision.
The case in question, Life Technologies Corp v Promega Corp, involved the supply of a single infringing component manufactured in the US by Life Technologies but then shipped to the UK for assembly. Promega sued citing the Patent Act’s prohibition of the supply from the US of “all or a substantial portion of the components of a patent invention” for combination abroad.
As for Patently-O, it said about Life Technologies Corp. v Promega Corp. that “[i]n a largely-unanimous opinion, the Supreme Court has ruled that the “supply of a single component of a multicomponent invention for manufacture abroad does not give rise to §271(f)(1) liability.””
“Patent maximalism is good for nobody except those who make a living from nothing other than patents (no actual invention, production and so on).”“Writing for the court,” Patently-O added, “Justice Sotomayor found that the “substantial portion” should be seen as a quantitative requirement and that a single component is not sufficient.”
The very fact that sites like IAM are upset about it should say quite clearly that it’s a good and positive development. Patent maximalism is good for nobody except those who make a living from nothing other than patents (no actual invention, production and so on). █
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Apple has still not managed to convert its patents into a cash cow and a barrier to Android takeover
Summary: Apple and Samsung are still losing money in court (lawyers are paid ad infinitum) and the only firm that gets away with a lot of money is Qualcomm, Microsoft’s patent trolling notwithstanding
PATENTS in the area of mobile technology have become a hefty tax that raises the price of phones to incredible levels. Some of these patents — but not all — are software patents and many are standard-essential (SEPs), so they cannot be worked around. We recently wrote about this in the context of Qualcomm. “Apple may have paid Qualcomm approx. $40 per iPhone,” Florian Müller wrote the other day, and it “accounted for third of Qualcomm’s revenues…”
“If you consider some of it speculative, that’s fine, but someone has to do the job of trying to infer and deduce information even in the early stages of a dispute.”
–Florian MüllerThis became a blog post of his (after he had ranted on the subject)), in which he stated: “At the end of my previous post on Qualcomm’s business model I wrote I would follow up with an analysis of the economic magnitude of the various antitrust investigations and civil complaints concerning Qualcomm’s two mutually-reinforcing business areas, baseband processor chipsets and wireless standard-essential patent licensing. While it will probably take a while before a publicly-accessible court filing by either Qualcomm or Apple makes reference to a particular damages claim or royalty rate, some information is already available and I’ll take the liberty of connecting some dots. If you consider some of it speculative, that’s fine, but someone has to do the job of trying to infer and deduce information even in the early stages of a dispute.”
A separate post of his deals with Apple’s case against Samsung getting “back to where things started” — an issue that Professor Dennis Crouch too has covered as follows:
In a non-precedential decision, the Federal Circuit has remanded this design patent damages dispute back to the district court reconsideration. The basic question is whether the patented “article of manufacture” (which serves as the basis for profit disgorgment) should be the entire article sold to consumers or some component of that whole. A patentee would obviously prefer the whole-article basis because it would result in a greater total-profit award. In Samsung Elecs. Co. v. Apple Inc., 137 S. Ct. 429 (2016), the Supreme Court held that the statute is broad enough to encompass either the entire-article or simply a component. However, the Court refused to provide any guidance as to how to determine the appropriate basis in any particular case (including this case involving Apple’s iPhone design patents).
There have been some reports about this in the press. It shows that half a decade later Apple is still not making much progress in its patent war against Android (only the lawyers are winning). Apple is now relying on fake news to keep up appearances and give an illusion of growth. █
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