03.13.16

Microsoft Accused of “Patent Trolling” While the United States Moves Closer to Restricting Patent Trolls

Posted in America, Microsoft, Patents at 7:37 pm by Dr. Roy Schestowitz

“The Commission cannot unilaterally take away a fundamental right of defense.”

–Horacio Gutierrez, Microsoft hypocrite who collects ‘protection money’ from companies that use/distribute Linux

Summary: Patent aggressors like Microsoft and non-producing firms that take software patents to the Eastern District of Texas in order to extract money from producing companies have attracted unwanted attention from people who can put a stop to it

The recent articles about Microsoft’s patent aggression (4 articles about it [1, 2, 3, 4]) have attracted a lot of traffic (our cache server got 22,986,674 hits in the past 4 weeks) and this led to a lot of articles in all sorts of media, including non-English media. This thread titled “Microsoft Linux patent trolling might be extending into the blockchain with microsoft Azure”, for instance, links to this article which in turn cites us and says:

Microsoft has launched another anti-open source software campaign in the last few weeks, targeting prominent Linux and free software companies. They’re attempting to limit open-source development with buy-outs, patent trolling, and charging royalties for products that use Linux. Their recent efforts have them grabbing up patents for open source technology including software developed by Canonical, publishers of the most popular Linux distribution, Ubuntu.

[...]

This isn’t the first time Microsoft has used this methodology to try and hamper innovation in the open source community. They used similar techniques in 2006 by entering a patent agreement with Novell software concerning the sale of enterprise Linux products. They’ve done the same thing recently by applying for patents on their Continuum technology, (a similar software, called Convergence, had been in development at Canonical in the years prior) and Signing a patent deal with Rakuten Inc. that covers Android and Linux devices. Microsoft Uses these agreements to go after open-source software that hurts their margins, attempting to cripple innovation by circumventing the protections provided from open-source licensing. They use these cases as precedent to establish that Linux and other open source software is their Intellectual Property. These cases are typically covered by mainstream media outlets with considerable bias, painting Microsoft as protecting against infringement, when in reality the opposite is true.

[...]

In today’s legal and software development environments, open source licensing is no longer enough to protect projects that companies have an interest in kneecapping, as we’ve discussed in a previous article. Microsoft has done this in the past, so what’s stopping them from doing it again with the blockchain and cryptocurrencies? Not a whole lot at present. All it takes is a patent agreement with a smaller company that can’t afford a legal battle to start the process in the blockchain ecosystem to get Microsoft’s ball rolling again.

Microsoft is not a classic patent troll because it still has its own products in the mobile domain. But how long for?

“Microsoft is not a classic patent troll because it still has its own products in the mobile domain.”According to this article from MIP, “TC Heartland will be heard today March 11 [that's days ago]. The case seeks to overturn the 1990 Federal Circuit case VE Holding v Johnson Gas Appliance, which gave patent owners more options on where to sue” (usually Eastern District of Texas [1, 2, 3]).

“A few months ago,” wrote another author, “I was at the Eastern District of Texas Bench and Bar Conference, and I started talking to a federal district judge about her views of the then-imminent demise of Form 18, the form that essentially made it sufficient for a complaint alleging direct infringement to include only barebones allegations of the facts. Her response was, “it’s going to be Rule 12 hell.””

The same author later asked (in the headline): “What Would Happen to Patent Cases if They Couldn’t all be Filed in Texas?”

“Wadhwa is not a patent troll but more of an academic and entrepreneur. Contrast his views with those of Neil Wilkof (IP Kat), who earlier today was softening the image of patent trolls and downplaying the issues associated with trolls.”“So,” he said, “where does this leave us? Many cases would have to move, and not just those filed by NPEs [trolls]. Even so, a decent number of cases could have stayed in the same location. That Delaware and Northern California would be the most popular is unsurprising given how many defendants are incorporated in Delaware or headquartered in Silicon Valley. Perhaps more surprising is that Eastern Texas remains third on the list, albeit with a much smaller percent of cases. These cases would likely be filed against retailers selling patented goods from stores located in that district, though there were some defendants in our sample that were headquartered there.”

A new article by Vivek Wadhwa, whom we habitually cite here, wishes to put an end to all this costly and spurious/frivolous litigation. In AOL he wrote the other day: “What’s best for innovation is a thriving ecosystem in which companies build on each other’s ideas and constantly reinvent themselves—instead of trying to slow each other down in the courts.

“It’s bad enough when big companies with deep pockets battle each other, but for young companies, lawsuits can be fatal.

“Fledgling innovators have to live in constant fear of a big player or patent troll pulling out a big gun and bankrupting them. For startups, this is a greater concern than someone stealing their ideas.”

Wadhwa is not a patent troll but more of an academic and entrepreneur. Contrast his views with those of Neil Wilkof (IP Kat), who earlier today was softening the image of patent trolls and downplaying the issues associated with trolls. He wrote: “In November 2013, as this Kat previously reported, over 60 intellectual property professors sent a letter to the United States Congress, setting out their critique of the patent system and suggestions for reform. Inter alia, the letter discussed the negative aggregate effect of patent trolls on innovation…”

Which everyone seems to be well aware of. It’s hardly deniable.

“Interestingly, as this Kat has suggested elsewhere, the poster child for the risks (or opportunities) in the potential for scaling-up patent trolling, namely Intellectual Ventures, seems to have a significantly lowered public presence.”
      –Neil Wilkof“In a word,” Wilkof added, “there simply seems to be less buzz about the subject. Interestingly, as this Kat has suggested elsewhere, the poster child for the risks (or opportunities) in the potential for scaling-up patent trolling, namely Intellectual Ventures, seems to have a significantly lowered public presence. Whether a cause or effect of the more general decline of the patent troll is an interesting question. Moreover, this Kat wonders whether the difficulty in defining what is meant by a patent troll has also contributed to this decline.”

Intellectual Ventures is a massive Microsoft-connected patent troll (one of several) and it indeed suffered layoffs. Nevertheless, there are also thousands of satellites around Intellectual Ventures, so it’s hard to tell if it’s shrinking, growing, or just morphing.

Among people who defend patent trolls (and sometimes get funded by them, e.g. IAM ‘magazine’) it’s common to see claims that “troll” is undefined and the word hardly gets mentioned at all. Look at this comment on Wilkof’s article, which says: “the Sea Change at the courts, effectively reversing State Street and finding (over and over again) ineligible the claimed subject matter that is being asserted by the NPE. After all, most of the claims asserted by the NPE’s are business methods with a contribution to the useful arts that we can summarise as “do it on the internet”. Investors have rumbled that such claims simply don’t cut the mustard any more.”

What he/she/they mean to say is, these are “over the Internet” software patents; that’s one of the most popular weapons of patent trolls.

“We wrote a great deal about both the PATENT Act and Innovation Act and explained repeatedly that these are designed to help big corporations at the expense of patent trolls, rather than help society as a whole at the expense of patent trolls.”Now that patent trolls are back on the agenda in the US (first time since last summer’s recess at Congress), some writers pretend that we need trolls for “innovation”. This one example says: “Our future economy is based on innovation, like the many life science and biotechnology companies being developed in Kentucky. Not only is our industry helping to tackle some of the world’s greatest health threats, but we are doing so while creating the next generation of jobs.”

This guy thinks that innovation cannot happen without patents in every single domain? Or that combating patent trolls is someone bad for small businesses? Pretending that curbing the wave of patent trolls can actually harm small businesses (which trolls usually extort until they’re bankrupt) is misleading at best. Here is another new example from the news. “S 1137 (the PATENT Act) and HR 9 (the Innovation Act),” says this person, “would change the way patent lawsuits are handled. The new process would create a complex and expensive legal patchwork that would make it nearly impossible for small and medium-sized businesses and inventors to defend their patents. While large corporations and their teams of high-priced attorneys will be impacted little by the changes in these bills, those without the resources to defend their patents will be devastated.”

We wrote a great deal about both the PATENT Act and Innovation Act and explained repeatedly that these are designed to help big corporations at the expense of patent trolls, rather than help society as a whole at the expense of patent trolls. It does not, however, mean that these so-called ‘reforms’ are undesirable or detrimental to small businesses which actually produce things (i.e. not patent trolls). █

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