This troll's market value already crashed by about 75% in the past 5 years

Phil Hartstein, CEO of Finjan (Photo credit: Courtesy), via Times of Israel

Summary: Patent trolls are struggling in their use of software patents; few (if any) of their patents are upheld as valid and those that miraculously remain in tact become the subject of fascination if not obsession among trolls' advocates

THE USPTO's lenient attitude towards software patents prior to Alice is causing great difficulties and trouble to software developers in the US. Patent trolls absolutely love such patents for various reasons including the number of potential defendants (victims). In particular sectors, particular types of patents can only be used against very few companies and these companies tend to have deep pockets; not so with software...

Karina Tiwana, the general counsel at Alcatel-Lucent Enterprise, wrote about the LOT Network and the Open Innovation Network (OIN) yesterday. She did not wind up refraining from using the "T" word, both in the headline and the body, for example:

Patent trolls, more formally known as Patent Assertion Entities (PAEs), are entities that acquire patents for the sole purpose of suing companies in order to monetize them. They also happen to make a habit of piling on a tremendous amount of added work, expense, and stress onto legitimate operating companies.

Preparing for possible litigation has become a standard “cost of doing business” over the years. As the General Counsel of Alcatel-Lucent Enterprise (ALE USA, Inc.), I’ve spent the last few years engaging in battles with patent trolls, at a cost to my company and colleagues. Meanwhile, the PAEs themselves faced few ramifications.

Alcatel-Lucent has itself targeted quite a few companies with patents. We wrote many articles about that.

More curious, however, was recent coverage about Finjan, whose business is virtually nonexistent because it's all about patents and litigation. Among recent financial coverage [1, 2] we see an "Increase in Shorts", which may suggest an imminent collapse. "The company has market cap of $62.06 million. The firm owns a portfolio of patents related to software," says the article. But many of these patents are now being challenged and this troll has nothing but patents. Many, except perhaps one, are being invalidated. 2 days ago Watchtroll used this Microsoft-connected troll to prop up the perception of software patents doing well, obviously relying on just one patent that endured scrutiny and ignoring all the rest. Another patent maximalist did the same thing, again obsessing over the use of a Microsoft case (Enfish) to defend one single software patent. To quote:

One distinguishing feature is its procedural posture: Blue Coat did not present an Alice challenge at the pleadings stage or in a summary judgment motion as have most Alice cases. Rather, it affirmed a district court’s post-trial denial of a JMOL motion. The standard of review was still de novo, but the Federal Circuit was faced with a fully litigated patent case, including claim constructions that significantly added to the few, very broad, very general terms used in the patent claims, where a jury had made a damages finding. And Finjan, the patentee, is a practicing entity [sic] that pioneered the patented technology. Although unspoken, these distinctions are relevant in the real world: the Court had the full benefit of claim construction and a contrary result would have overturned a completed trial and judgment won by a practicing entity. Nevertheless, such factors are likely not enough, singly or in combination, to explain the outcome.

The real news here, as we noted before (e.g. a week ago), is that Finjan is unable to extract as much in 'protection' money as it once hoped. Alice squashes many of its patents and with imminent cases/decisions there's expectation of this troll's collapse. ⬆