On August 10th, Congressional blog The Hill published a piece of writing by John Thorne, general counsel of the High Tech Inventors Alliance (HTIA), one of the newest institutions serving the efficient infringement lobby in Washington, D.C. The article was an advance critique of the US Inventors protest of the Patent Trial and Appeal Board (PTAB) scheduled for the following day; that event was considered successful as patent owners burnt their patents in full view of the U.S. Patent and Trademark Office as planned without any issues from law enforcement, despite the USPTO’s denial of a use permit application for the event.
“On Friday, a group claiming to represent the nation’s small inventors will demonstrate at the Patent and Trademark Office (PTO) building,” Thorne’s article begins, noting that the demonstrators are calling for an end to inter partes review (IPR) processes at the PTAB. “Some of the speakers will be genuine small inventors. But behind those little guys will be the big dollars of the biggest big-guy exploiters of the PTO’s missteps and mistakes.”
First of all, those in glass houses should not throw stones. Because, Mr. Thorne, who exactly are these nameless “biggest big-guy” exploiters who are supporting US Inventor’s agenda? Is it Google? Maybe Amazon.com? Or perhaps Intel, the tech company who first came up with the “patent troll” moniker back in the 1990s? Are there any bigger big guys than those tech giants? Interesting to note that those are just a few of the major tech companies making up the HTIA cabal, a group which continues to push for legislation which would further devein patent rights in ways which may prompt even more individual patent owners to burn their patents. It’s downright aggravating to see such brash talk from an efficient infringer lobby shill who’s getting paid by the tech ruling class in order to cast aspersions and further suppress the rights of individual inventors and patent owners.
But who is John Thorne? A bio of Thorne available via the U.S. Department of Justice’s website describes Thorne as senior vice president and deputy general counsel of Verizon Communications where he was “responsible for Verizon’s legal work in the areas of antitrust, intellectual property, and privacy, among other areas.” The DOJ bio notes that Thorne had previously been successful in representing Verizon and its predecessor companies in antitrust cases involving competitive video entry and at least one victory in a patent infringement case brought by Verizon against Vonage. According to Thorne’s LinkedIn profile, he served in his VP role for Verizon between 2000 and 2012.
That would mean that John Thorne was VP and deputy general counsel for Verizon during its legal battle against former American cable television company Cablevision where Verizon asserted a series of patents it owned. In March 2010, Verizon sued Cablevision in the District of Delaware, asserting eight patents owned by Verizon. That same month, Verizon took action with the U.S. International Trade Commission (ITC), filing a Section 337 patent infringement complaint with the agency against Cablevision. An initial determination finding no patent infringement committed by Cablevision was issued by the ITC in May 2011 and Thorne is listed as having appeared in the case to represent Verizon. As Verizon’s VP and deputy general counsel, it can be assumed that Thorne was very familiar with Verizon’s legal strategy for this dispute if he wasn’t intimately involved with crafting that strategy himself.
A closer look into the patents renders some interesting information about the patents Verizon asserted and the company’s legal strategy in the case. Two of the eight patents asserted by Verizon in the District of Delaware weren’t originally invented by Verizon, Bell Atlantic or other any other of Verizon’s predecessor companies; they were acquired from outside entities. According to data collected through Google Patents’ searchable database, U.S. Patent No. 6055077, titled Multimedia Distribution System Using Fiber Optic Lines, was published in April 2000 and issued to Nynex Science and Technology Inc. Nynex had merged with Bell Atlantic by 1997 but the patent was assigned to Verizon until January 2009, more than three years after Verizon was formed and a little more than a year before Verizon’s campaign against Cablevision. Then there is U.S. Patent No. 6381748, titled Apparatus and Methods for Network Access Using a Set Top Box and Television and issued to GTE Main Street Inc. in May 1997. The ‘748 patent remained with GTE Main Street, and then GTE Corporation, until it was assigned to Verizon in September 2009, months before Verizon began its campaign against Cablevision.
A further look into Verizon’s filings with the U.S. Securities and Exchange Commission (SEC) shows that Verizon was asserting patents against Cablevision covering technologies that Verizon didn’t appear to be practicing, especially as pertains to the ‘748 patent. A Form 8-K filed by Verizon with the SEC in March 2010 makes no mention of cable set top boxes as a business activity; any mention would have indicated that Verizon was working to practice the technology covered by the ‘748 patent. Verizon’s business description in that Form 8-K mentions local exchange business, network access service, enhanced voice and data services, consumer and small business switched long distance services, as well as dial-up or fiber-to-the-premises Internet service provision. There is mention of broadband video provision which potentially could have included the use of set-top boxes to receive broadband video data, but those activities were limited to Indiana, Oregon and Washington.
Reports on the ITC’s May 2011 ruling in the case indicate that the ITC found that Cablevision infringed on the ‘748 patent but the ‘748 patent was invalidated by a ruling from around the same time coming out of the Eastern District of Virginia. Interestingly, a statement released by Verizon at the time of the ITC ruling indicates that Verizon’s legal action on patent infringement claims was instigated in part by Cablevision refusing “to deal with us respecting their own intellectual property (HD sports in New York) on any terms.”
Even if Verizon was using set-top boxes for its broadband video activities, those business operations were well outside of New York. Verizon acquired a patent on set-top boxes to assert against a company and seems as though it did so in order to force a licensing agreement on Cablevision’s HD sports channel properties in New York, not to seek damages on infringement of a technology which Verizon was itself practicing. These activities are the hallmarks of what makes people consider an entity to be a non-practicing entity (NPE), a patent assertion entity (PAE) or a “patent troll.” And John Thorne was VP and deputy general counsel for Verizon during the whole ITC action and even actively represented Verizon in the case.
And haven’t we been told by the likes of Unified Patents that non-practicing entities are synonymous with patent trolls? (see here, here and here, for just a few examples) One would have to assume if Unified is being logically consistent they would have extraordinary problems with Verizon’s activities where the patents used to sue Cablevision were acquired and not the subject of in-house innovation (a telltale patent troll characteristic), and they were not being used by Verizon, thereby meaning Verizon was not practicing the innovation for which they were seeking to exclude Cablevision (i.e., they were a non-practicing entity).
Clearly, anything that John Thorne says about the U.S. patent system and the community of patent owners and inventors in this country needs to be taken with at least a few grains of salt, seeing as he himself seems to be a patent troll, at least by the definition of those he seems to be philosophically aligned with.
UPDATED Thursday, August 24, 2017 at 10:30am.
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9 comments so far.
Chris MulkeyAugust 28, 2017 10:56 pm
I believe you mischaracterize the content, and especially the scope, of my post. Perhaps this is my fault for attempting to provide a more neutral definition of “troll”, but then mistakenly (and, I admit, confusingly) referring to this precise TYPE of NPE as NPE, generally, which is clearly not the case.
I realize there are various forms of non-practicing entities, and per my definition of “trolls”, not all NPEs are trolls.
“Chris, You seem to argue that the NPE’s are bad when you say ”sole purpose is profit”… “forced licensing”… “provide no technological advancement”, etc. And you contrast NPE business models with the “perfectly legitimate and long-standing strategies of practicing entities”. I will make a wildly unrealistic assumption that you are not biased and that you are reasonable in how you obtain and interpret information.”
You quote me out of context, and additionally MISQUOTE me (“sole purpose is [to] profit”). The purpose of my post was to disagree that trolls are a myth, suggest that the proper definition of troll is much narrower than what much of the media has perpetuated, and finally via MY definition, show that they do, in fact, exist.
“And you contrast NPE business models…”
I don’t, actually. Nowhere do I indicate I am comparing/contrasting the two, nor did I intend to. My statement regarding the strategies of purchasing patent assets, and then not using them, is merely a statement illustrating that there are legitimate reasons for such, the statement being in furtherance of a point you made in a previous point.
The irony of your response is that you expanded my definition, then proceeded to argue against correctness of my statements by providing examples which only fit YOUR expanded definition. In essence, you are not arguing the content of my post, because much of what you claim I say, I did not actually say; rather, you are arguing against what you believe my opinion is. I assure you that your thoughts on my non-provided opinion are not accurate. My purpose of providing a definition of trolls such that they can exist separate and distinct from many other types of NPEs, seems to be something you would welcome, based on the tone and content of your response. Yet you fall into the very same mistake of perpetuating the broader definition of troll, and then chastise me for equating all NPEs with trolls, based on your broader definition!
So, since this appears to not have been clear from my previous post, let me clear it up unequivocally here:
– “Trolls” (again, per my definition) exist, but are merely a subset of NPEs.
– Not all NPEs are “trolls”.
– I am not commenting on the merits of “trolls”.
– I am not commenting on the merits of any other type of NPEs.
“”Chris, You seem to argue that the NPE’s are bad when you say ”sole purpose is profit””
–> (1) In no way whatsoever do I say that NPEs are bad. In fact, I very specifically said: “…nor am I providing opinion on the merit of such entities.” I did not provide an opinion then, nor am I now, nor will I later.
–> (2) I am providing a definition of “trolls”, which I define as an entity whose sole purpose is [to] profit from the acquisition and enforcement…. This is my own definition. You seem to argue that there are NPEs whose sole purpose is NOT merely profit. Well, I suppose they wouldn’t fit my definition of troll then would they? So who are you arguing with?
“I will make a wildly unrealistic assumption that you are not biased and that you are reasonable in how you obtain and interpret information.”
–> Your “wildly unrealistic assumption” is actually quite accurate. I won’t claim I have no bias – that would be foolish. But in terms of the bias you accuse me of…you are incorrect. I have no “dog in the fight” as they say, when it comes to profiting or being harmed by trolls. Again, I am merely offering my input as to how we, collectively, should define that term.
“One answer is that you believe that the owner of the patent must practice the invention for it to bring technological advancement.”
–> I say no such thing anywhere, nor do I believe it. In fact, quite the opposite. The patent IS ITSELF the technological advancement, by the very definition of a patent!!! It is a disclosure of an invention and/or technical knowledge, incentivized into existence by the offer of a temporary monopoly to the inventor. The inventor provides the technical advancement, through invention, and the grant of the patent provides, in theory, the protection of his hard labor and imagination in exchange for telling the world about it. What happens to the patent afterward, is completely irrelevant to the power of the advancement itself. Obviously, utilization of non-troll NPEs to disseminate, distribute a product/idea may more thoroughly disseminate that technical knowledge, but it does not and cannot alter the fact that the advancement has been disclosed already.
“That leaves the inventor with the sole option of selling the patents to an NPE. (well there is the option of doing nothing)”
–> I think you miss one glaring option – selling to a competitor of the infringer, namely a practicing entity with a vested interest in gaining a market advantage over the infringer, a desire that likely pre-exists the infringement in the first place. In fact, this would be one of the most logical strategies – why approach an NPE, with no vested interest in the technology, when you can approach a PE WITH vested interest? The latter, I suspect, would be many times more likely to have natural interest in the patent, added to the fact that (assuming the market consists of more than two players) the latter also has the knowledge that the patent owner could approach any of the other players in the market with the same offer.
“This brings about the big question and I need your answer. If the inventor sells the patent to an NPE, does the patent then lose the technological advancement that it brought when the inventor owned it? Perhaps it lost its technological advancement before that – when the inventor owned it and could not commercialize it because huge multinational corporations stole it and flooded the market.”
–> My answer is a resounding NO. Again, the chain of ownership of the patent is irrelevant. The advancement IS the patent (or more precisely, the inventive steps disclosed within the patent), regardless of who owns it. Once that patent publishes (app or grant, doesn’t matter), it’s out there. There’s no taking that back. Ever.
I believe you conflate the technical value of a patent with its commercial value. They are not the same, though they can, and often do, correlate. No empirical evidence of their correlation will convince me that they are one and the same. One can drastically advance a technology that virtually nobody cares about, and thus, advances a technology with no commercial value. (and, please, let’s not dive into the rabbit hole of defining what constitutes “advancement” here).
“If you have found a logical explanation for the first question (how a patent that is infringed has no technological advancement) then please explain at what stage did the invention lose its technological advancement? Was it at the point of infringement? At the point the inventor could not get money to commercialize it? At the stage it was sold to someone with the money and experience to defend it? Or is it at the point that the infringer gets sued for infringement?”
–> I think my last answer should make clear what my answer is here also. Infringement has nothing to do with the advancement. Once the “advancement” occurs, whether by invention alone, or publication of the invention, that’s it. End of story. Advancement occurred, the cat’s “out of the bag”, and no trajectory of that patent as an asset has anything directly to do with the trajectory of the advancement of knowledge. Sure, their trajectory may be correlated, but the advancement cannot disappear.
Perhaps if I had used the phrase “technical knowledge” instead of “technical advancement” you wouldn’t have felt the need to respond. My guess is that you or your company has been accused of being a patent troll at some point, and that brings up some sensitivities, as the tone of your response is quite defensive, and needlessly so. I make no such accusation here or in my previous post.
So, pose the question to you – why do you feel that patent trolls are a myth? Again, here is my modified definition of troll: An entity whose sole activity is to acquire patent assets, and whose sole purpose is to profit from the enforcement of said acquired patents.
I would posit that an organization who assists solo inventors in either protecting an asset (by defending against infringement, or by assisting in manufacture, licensing, etc of said technology under the protection of a patent) necessarily has a purpose BEYOND my definition above, and would not be considered a troll. Further, an inventor may very well be a non-practicing entity, but one could hardly say that his sole purpose would be to profit, as evidenced by the fact that he invented in the first place. Perhaps profit was his end goal, but invention is a purpose in and of itself (a supremely noble one), which again, removes the solo inventor from the narrow umbrella of my definition.
angry dudeAugust 28, 2017 10:07 am
Chris Mulkey @6
“…They (NPEs) provide no technological advancement”
Dude, I can punch anyone in the face for this outrageous lie
I am NPE (independent inventor but used to be small LLC before those a$$holes ruined US patent system) and I singlehandedly solved some technical problem they (multi-billion dollar corporations) could not solve for 40 (yeah ,that’s FORTY) years
And then they took my patent-“protected” solution for free
What did I get for that ?
exatly nothing, zero, zilch, nada, 0
Is this the spirit of US patent system ???
jees.. some commentators here make my blood pressure go up
Paul MorinvilleAugust 27, 2017 07:01 pm
Chris, You seem to argue that the NPE’s are bad when you say ”sole purpose is profit”… “forced licensing”… “provide no technological advancement”, etc. And you contrast NPE business models with the “perfectly legitimate and long-standing strategies of practicing entities”. I will make a wildly unrealistic assumption that you are not biased and that you are reasonable in how you obtain and interpret information.
So, let’s start with your most direct assertion: You say NPE’s “provide no technological advancement.” One obvious question is how does a patent that becomes commercially valuable (valuable enough for professionals to view its validity and infringement models favorably and to risk millions of dollars to defend it in court) provides no technological advancement?
One answer is that you believe that the owner of the patent must practice the invention for it to bring technological advancement. So I have a very common scenario that must be addressed: What if an inventor invents something that radically advances an industry (technological advancement), perhaps turning a dozen years of R&D that went nowhere around, and what if those big companies (who were going the wrong way in their own R&D) just took the patented invention and using their deep pockets and massive customer bases, flooded the market with infringing products? Did that new patented technology still bring technological advancement?
I assume your answer is yes, because, well, how could it be no? So let’s assume a very likely the reality: the inventor wants to defend his patent rights, the inventor does not have a few million dollars laying around, and the inventor would rather go on inventing new stuff or working on other inventions than spending the next seven years in litigation. What choices does the inventor have?
One might be contingent fee attorneys. But there are virtually none left. The effects of the PTAB, Alice and eBay have gutted that business model. That means the inventor needs an investor to pay for legal help. But, that business model is gone for the same reasons. Even if these business models were still available, the inventor would still be mired in litigation for the next seven or so years.
That leaves the inventor with the sole option of selling the patents to an NPE. (well there is the option of doing nothing) This NPE business model is nearly gone for the same reasons contingent fee attorneys and investors are gone. NPEs are mostly interested in purchasing very large portfolios of patents… unfortunately most inventors only have a few patents. However, there are a few NPE’s willing to purchase small patent portfolios to bundle into a larger portfolio. This of course pays the inventor pennies on the dollar, but it returns some of the investment and allows the inventor to continue with other business. I know of a few NPEs who are still willing to evaluate small patent portfolios for enforcement on their own.
This brings about the big question and I need your answer. If the inventor sells the patent to an NPE, does the patent then lose the technological advancement that it brought when the inventor owned it? Perhaps it lost its technological advancement before that – when the inventor owned it and could not commercialize it because huge multinational corporations stole it and flooded the market.
If you have found a logical explanation for the first question (how a patent that is infringed has no technological advancement) then please explain at what stage did the invention lose its technological advancement? Was it at the point of infringement? At the point the inventor could not get money to commercialize it? At the stage it was sold to someone with the money and experience to defend it? Or is it at the point that the infringer gets sued for infringement?
Chris MulkeyAugust 27, 2017 01:46 pm
I agree with most of what you say, with one exception: that there is no such thing as a patent troll.
I am not (here) getting into the semantics of that term, which has obvious negative connotations; nor am I providing opinion on the merit of such entities.
But they exist whether the term is fair or not. And non-practicing entities is a much more descriptive, and perhaps neutral, moniker. HOWEVER, the term is being thrown around too loosely. My definition? An entity whose sole purpose is to profit from the acquisition and enforcement (or “forced” licensing) of said acquired patents.
Key word there is “sole”. There are perfectly legitimate and long-standing strategies of practicing entities (i.e. ones which make a product or provide a service as their primary purpose) for acquiring patents to enforce and/or protect their purposes. An NPE, however, does neither. Their financial strategy is defined by the metes and bounds of the patent system as is, rather than by utilizing the patent system to gain advantage in a market in which they actually participate. They provide no technological advancement, but are within the bounds of the system, though perhaps not within the “spirit” of it.
Happy to open dialogue on this, but I see a fundamental distinction between the two types of entities, which to me proves “trolls” are not a myth at all.
Paul MorinvilleAugust 25, 2017 05:24 pm
Damien, if I were entering a big market, I would aquire a patent and assert it too. (I have acquired many patents for the stuff I invented just for this purpose)
If i did not have a few million laying around, I may use a third party who does have the funds to assert my patent. So, small guys use patents like the big guys.
Its just that the big guys have the money on hand to assert their own, and importantly, flood the media with disparaging articles about little guys asserting their patents against them through third parties even though this is almost always the sole way to compete with experience, knowledge and funding to match huge corps and therefore bring about a fair license.
There is no such thing as a patent troll. It is a myth perpetrated by huge multinationals to steal property from the defenseless.
I find your argument to differentiate behavior based on size to be aligned with those immoral liars and thieves
Steve BrachmannAugust 24, 2017 04:09 pm
@Damien – Then what about the March 2010 SEC filing? Verizon was in broadband video at that time, but only in Indiana, Oregon and Washington. Verizon wasn’t operating broadband video in Delaware, where it sued Cablevision in district court, or in New York, which is where the HD sports properties Verizon wanted to license were located. Verizon could have said that the legal action was taken to enter the broadband video market in New York, but rather it choose to say that part of the reason they pursued legal action was because Cablevision refused to license those New York-based HD sports properties. Verizon looks like an entity which wasn’t interested in practicing a patented technology so much as to use the patent to get something valuable. In light of that, I don’t feel so ill-informed on the subject, unless you think there may be something else I’m not getting right here.
Gene QuinnAugust 24, 2017 02:33 pm
As I’ve stated in many articles and in many speaking engagements, the definition of a patent troll is absolutely ridiculous. This is just a perfect example of the grossly overbroad definition of a patent troll urged by critics of patents making no sense. If you follow the definition they give of what constitutes a patent troll then the inescapable conclusion is that Verizon was a patent troll. So we have a cake and eat it situation here. They cannot claim that the acquisition and enforcement of patents makes one a troll, and the enforcement of patents one is not using makes one a troll, and then have a company do both of those things and claim they are not a troll.
There are bad actors, but if the term “patent troll” has any relevance it has to be tied to the specific actions, not how ownership is achieved and not because a lawsuit is brought to vindicate rights.
Damien StolarzAugust 24, 2017 12:18 pm
Verizon entered the broadband video market. Calling them “non practicing” in the area of set top boxes seems ill-informed. If I was planning on entering a large market it would be completely ordinary of me to 1) acquire patents in the area I was going into 2) assert them. And Verizon certainly practices quite a number of other things. If you take NPE/troll to mean “anyone who uses a patent strategically” then the terms have lost all meaning. Then all major OpCos are trolls. Asserting patents that you (OpCo) don’t do but your (OpCo) competitor does do, is a standard approach may be something, but it’s not trolling.
angry dudeAugust 23, 2017 11:14 am
All animals are equal, but some animals are more equal than others
America has best legal system (and lawyers) in the world money can buy
Hypocrisy in action
Welcome to USA, year 2017