The Great Escape: Efficient Infringers Increasingly Seek to Abuse Antitrust Law

“The antitrust laws are being used in ways that are not intended in order to create leverage in what should be arms-length negotiations between sophisticated parties.” week the United States Court of Appeals for the Federal Circuit issued an important decision that might be easy to overlook. In Intellectual Ventures I LLC v. Capital One Financial Corporation, the Federal Circuit dodged the antitrust question presented by finding that a prior ruling had collateral estoppel effect. Still, the arguments raised by Capital One against Intellectual Ventures are part of a disturbing trend. Unwilling licensees who engage in a scheme of efficient infringement to avoid paying for patent licenses are increasingly looking to creative antitrust theories to escape liability for their actions.

What is Efficient Infringement?

Efficient infringement is a cold-hearted business calculation whereby businesses decide it will be cheaper to use patented technology without paying than to license it and pay a fair royalty to the patent owner. This calculus is made on the part of large entities who realize there are a certain number of patent owners that are just simply not going to assert their patents for one reason or another, frequently because they don’t have the money to do so. Then there is another group of those that will assert their patents but will not win. The calculation progresses to realize that there is a small group of those who are likely to both assert patents and prevail, thanks to all the hurdles put in place (i.e., patent eligibility challenges, the Patent Trial and Appeal Board, etc.). The calculation further recognizes that even if a patent owner prevails, a permanent injunction is virtually impossible to obtain as the result of the Supreme Court’s decision in eBay v. MercExchange, and damages are likely to be minimal thanks to a continual judicial erosion in damages available to victorious patent owners.

This cold-hearted business approach to using intellectual property without paying has gone on for decades, but with the weakened state of the U.S. patent system since 2006, it has grown progressively worse.

What Intellectual Ventures has done is acquire thousands of patents that related to technology that banks use every day. Intellectual Ventures has purchased this technology from innovators, small businesses and startups who were unable to negotiate with the banks. Why would the banks negotiate with small entities when they can simply take what they want for free? Indeed, any patent attorney or licensing attorney who has been to any program with attorneys from the big banks or top tech companies speaking over the last decade will attest to the fact that they openly admit to throwing away – or “circular filing” – licensing inquiries they receive. At one event several years ago, one attorney boasted that he threw away 10 deals a day!

When Intellectual Ventures acquires those thousands of patents that relate to technology the banks use, they do have the assets and financial ability to purse litigation against the infringers. Unlike the small entities that the efficient infringers are able to ignore, Intellectual Ventures does not go away. They do threaten litigation, and they deliver on those threats when licenses are not taken.

Is This an Antitrust Violation?

Thankfully, what Intellectual Ventures is doing has not been found to be an antitrust violation— at least not yet. But there is a great irony at play. If acquiring thousands of assets, threatening to sue and suing those who refuse to negotiate and take a license is possibly an antitrust violation, according to Capital One’s arguments, why then isn’t the openly admitted refusal to deal by big tech companies and banks—as in the case of Apple’s refusal to deal with Qualcomm—an antitrust violation? Frankly, it seems the admitted refusal to deal is far more anticompetitive than a patent owner wanting to be paid.

Troubling Aspects

This case is troubling for several reasons, even though the Federal Circuit seems to have settled on the correct result. First, these issues were litigated in federal district court in Virginia prior to being litigated in Maryland, and the case was still allowed to proceed through an interlocutory appeal to summary judgment and up to another appeal to the Federal Circuit.

In addition to holding out and refusing to deal, efficient infringers fight a war of attrition against patent owners. One must wonder whether a big part of what Capital One is upset about has to do with the fact that they are unable to win fighting a war of attrition against the likes of Intellectual Ventures.

The second aspect of the case that is troubling is the fact that the Federal Circuit did not reach the Noerr-Pennington doctrine, which protects private parties from antitrust liability even if they bring ultimately unsuccessful litigation to enforce laws that have potentially anti-competitive effects. The antitrust laws are being used in ways that are not intended in order to create leverage in what should be arms-length negotiations between sophisticated parties.

The Antitrust Concern

The district court explained that “it is hard to deny that there is something concerning from an antitrust perspective about the way in which IV engages in its licensing business.” And that statement is probably perfectly fair and accurate. Notwithstanding, Judge Grimm held that there were two dispositive legal issues, independent of the merits of Capital One’s antitrust theories, that required the court to grant IV’s summary judgment motion. Those issues were: (1) the immunity from antitrust liability provided by the so-called Noerr-Pennington doctrine; and (2) the collateral estoppel effect of the decision of the Virginia district court with respect to the antitrust issues raised by Capital One in the Maryland case. Ultimately, the Federal Circuit affirmed on the second issue and found it unnecessary to address the first.

The problem Intellectual Ventures has with the perception of its actions was ironically also the problem Capital One had with respect to its antitrust theory. Capital One argued that Intellectual Ventures was monopolizing the market, but no bank has taken a license on the portfolio and IV hasn’t prevailed in a single litigation.

This, of course, caused Capital One to yell “sham litigation”, but sham litigation is virtually impossible to prove, and with the portfolio relating to banks and financial services that means it is full of patent eligibility issues and plagued by the wrath that Alice hath wrought. But if you’ve been paying attention to the state of 35 U.S.C. 101 since January 2019, you know that nothing is certain, stable or predictable.

The United States Patent and Trademark Office came out with Revised Guidance in January 2019, which the Federal Circuit has ignored. Wireless garage doors are not patent eligible, no amount of physicality in a claim saves it from being an abstract idea, and even if the claim is novel and nonobvious it can still lack sufficiently more to be innovative under Alice Step 2B. So, what this all means is nothing in the 101 space could possibly rise to the level of sham litigation with the mess the Federal Circuit has created and how panel-dependent appeals have become.

Time to Strike Back

Patent owners need to pay attention to the arguments being made against Intellectual Ventures and Qualcomm. Being a large patent owner that continues to pursue efficient infringers will get you labeled as an antitrust scofflaw. Perhaps it is time for patent owners to strike back. There are plenty of theories available.

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Join the Discussion

27 comments so far.

  • [Avatar for angry dude]
    angry dude
    September 26, 2019 04:41 pm

    Ternary @25

    Dude, if you can hide some “computer-implemented” invention in compiled binary code then filing for a patent with full explanation how it works is like shooting yourself in the foot – companies will scream “Oh great ! Another sucker out there !!!”
    Hide it if you can – let them try to reverse engineer your methods and algorithms from binary alone
    It is very very difficult (in my case at least) and will most certainly cost them more than licensing (or even buying) your patent
    Let them be suckers, not us
    Hide whatever you can for as long as you can
    Trade secrets, non-publication etc.

  • [Avatar for Anon]
    September 26, 2019 01:37 pm

    Thanks Ternary,

    I hear you and appreciate your views.

  • [Avatar for Ternary]
    September 26, 2019 11:36 am

    Anon @23, I agree with you on that giving up filings by independent inventors will achieve the goals of the anti-patent crowd. The issue, especially in computer implemented inventions by independent inventors, is that they are generally found trivial by companies. That is, if they had had the chance to do the invention, they would have/could have done so, they believe. This is not only the opinion of management, but also of engineers and software developers, who are often the worst hindsight critics. Of course, they find their own inventions as being “deserving.” (Yeah, I could have done that.” A sentiment that is also expressed sometimes in posts on IPWatchDog and on the other blog. Even by people who clearly are unable to write executable code).

    Furthermore, companies really do not have a good answer to patented inventions by independent inventors. They cannot counter-sue. Paying even a modest license fee, appears to be unacceptable. So, the current situation is almost ideal for them. They spend a limited amount of money on IPRs to invalidate and warn-off potential accusers of infringement. Independent inventors giving up filings would be the cherry on top.

    Doing inventions is not the same as doing R&D. Inventions, in order to lead to a patent, must be beyond an idea, as Gene has explained numerous times. To do all this work to get a patent without any compensation has become extremely discouraging. I currently have new ideas in machine cryptography that require an in-depth study of novel methods like Learning-with-Errors (LWE) and Pairing. I mention this, because these are fields where the conceptual ideas are actually easier than developing executable computer programs. So, when I follow on-line presentations on these subjects and I read published articles, it is fairly easy to understand on a high level what is being done. However, working out real-life problems on a computer is a true pain in the neck. Let alone creating realizable novel cryptography. And I get this severe “invention fatigue” that AD and Eric are referring to. Why do it, when you already understand the basics, but you most likely will not get any money or compensation for a patent on the invention that requires so much work? And when you get a patent, most likely its value is nill or negative.

    Then again, I also get this feeling of regret, when it becomes clear that my lack of enthusiasm is caused by this anti-patent crowd, not because of lack of interest in the subject. One gets this feeling of all efforts being futile, which of course is not true, but is the intention of the anti-patent crowd. On the other hand, continuing to file under the current conditions also seems stupid. As a result I am trying to slowly unwind or temper my patent activities.

    I will not stop filing and I will not stop inventing, entirely. But all my applications now have a non-publication indication on the ADS. So, that is a first boycott-type action that independent inventors can take (unless you file internationally). Secondly, I try to file provisionals as much as possible and gauge the market for potential interest, before moving to a non-provisional. In certain cases I will let the provisional expire and refile to keep an invention alive when no prior art can be found. A third action is to delay obtaining a patent. In some cases with a Notice of Allowance I will file a continuation or even a CIP to include the matter of my provisional, but not pay the issue fee and mark the ADS to not publish. Furthermore, I am now registering source code of core procedures and manuals of my inventions for Copyright, though effects of these may be limited. But it will require companies to spend money on assessing consequences of infringement.

    The fact of the matter for independent inventors is that without any patent filings, you really have very little protection. To stop entirely with filings at this stage seems irresponsible. The US patent system is clearly very sick, but it is not dead yet. Though its vital signs are very alarming and flat-lining is not as improbable as we thought.

  • [Avatar for Anon]
    September 25, 2019 12:29 pm

    TFCFM @22,

    More trash from you, persevering in your emotive-laden phrasing of “trivial” and your OWN wooden application of “precisely why a wooden rule ought not to be applied in patent (or any other) cases” for which I have supplied to you substantive points of equity (make the transgressed as whole as possible) and law (the nature of the right transgressed is NOT a positive ‘make’ item, but rather is a the negative exclusory aspect of the property right – the ability to exclude.

    The patent property is such that one may legitimately, equitably and in all manners merely sit on for the full length of term and deny any and all would be ‘makers.’

  • [Avatar for Anon]
    September 25, 2019 12:23 pm

    Eric and angry dude,

    I am compelled to (yet again) distinguish between a “just give up” message and ANY other type of message such as “Boycott” or “Burn my patent on the steps of Congress.”

    These things are NOT the same (Eric, I have previously provided reasoning that shows “who deserves credit for being the first to advocate loudly for a de facto boycott (at least, in so many words)” is NOT applicable.

    Bottom line, a “just give up” IS the desired takeaway of the Efficient Infringers. “Just give up” is NOT a boycott, de facto or otherwise.

    As your post continues to point out WHY a boycott is not the same, let me emphasize that ONLY “just giving up” is a victory for the Efficient Infringers who want anyone thinking about competing on innovation factors to just go away.

    As to the efficacy of that different thing of a Boycott, I would counsel as to thinking through any such Boycott plan. As you indicate, boycotts HAVE BEEN successful – but such success comes from BOTH a clear message (we are NOT just quitting) AND an effective target (the entity BEING boycotted had both a meaningful stake in the absence of the item being boycotted as well as a meaningful path forward that could come from a successful boycott.

    Ask yourself: do those wanting a “quit and just go away” condition going to be adversely affected by a boycott, or will they benefit from such an action?

    So do not be so quick to view the actions of MANY people that are supporters of innovation as “short-shrift” or dismissive. I applaud your post at 20 because YOU do more than just cry out “to the morgue.” Be aware of the differences and what HAS been mocked (and WHY the items mocked have been mocked).

    There is nothing wrong with passion, and I do not fault angry dude for his passion. But as I have also made clear: acting in passion alone without reason may be counter-productive, and it has been the counter-productive aspects of “just quit” that have always been in my cross-hairs.

  • [Avatar for TFCFM]
    September 25, 2019 10:50 am

    @#14: “Apple could still negotiate a licensing deal for what the button was worth to them or go back to using the old button. Why would the judge impose an injunction if Apple said “My Bad” here is a reasonable offer as to what the button reaped in additional sales?
    This button does not put Apple out of business nor would a licensing deal for the isolated improvement bankrupt Apple.

    In the context of a patent litigation matter, Apple’s offer would be a settlement offer and not admissible evidence. If “every patentee who proves infringement gets an injunction” were the rule (as some mistakenly believed it to be prior to eBay), then the button-inventor COULD shut down Apple, until its product (and product-in-stores and -in-transit) could be redesigned to avoid the utterly trivial invention.

    That is not a just use of a court’s equitable power to issue an injunction and, as the Supreme Court recognized in eBay, precisely why a wooden rule ought not to be applied in patent (or any other) cases.

  • [Avatar for angry dude]
    angry dude
    September 24, 2019 11:11 pm

    Eric @20

    Dude, thanks a bunch for remembering me and finally praising my efforts to educate the sheep starting as early as shortly after EBay (as far as I remember..)

    Not to put a blame on you or Gene or “curious” or “concerned” or “PTO-Indentured” and the rest of the crowd here:
    I just grew up in a different society where you should ALWAYS expect the worst from your own government – and I am not talking about taking your hard-earned money and basic necessities like food and hot water, but sending you to a civil or some other war to die for nothing every once in while… quite a few times in last (and even this) century alone…
    You simply had a good run in this country without any domestic wars – the last one ended in 1865

  • [Avatar for Eric]
    September 24, 2019 03:46 pm

    I warned you, my fellow inventors. I warned all of you, over two years ago.

    When enemies turns economic considerations into martial ones, then it is time to recognize that no civil response will suffice – except embargo.

    It’s known as a boycott. Last year, approximately some eighteen months ago, I reached out to leaders on the inventor ‘side’ of the patent space who have fought this good fight for years – only to be snubbed. Apparently, having studied military history and warmaking, allows me some insight into the true nature of this struggle; whereas presumptions unknowingly specious, guided the said choices of said compatriots heretofore, to not even discuss the matter.

    This was (and still is) not merely a quip or stray idea, but rather, a developed plan of strategic action with organizational, economic and technological elements. It shouldn’t be that difficult to at least reply an email message with a simple ‘thanks but no-thanks’. The august leaders of this ‘movement’, could not even show me that simple courtesy.

    Recall, that boycotts gave the non-violent arm of the civil rights movement in the U.S.A., its true ‘teeth’ – economic clout to go along with the manifest evidence of social change found in the more famous marches and rallies of the 1960’s.

    Now, look: ‘PTO-Indentured’, ‘Curious’, ‘Concerned’, etc., etc. have finally arrived at where ‘angry dude’ has been from the beginning of this destroy-the-inventors farce; and where I now have been for at least the past four years – ‘angry dude’, who was discredited and even mocked for his stance in this venue, and who deserves credit for being the first to advocate loudly for a de facto boycott (at least, in so many words).

    The opportunity still lies before us, it needs only for good organizing to take up this advocacy. It is highly likely that any meaningful restoration of patent protection for inventors in the U.S. in any conventional or historic sense, will take years, if not decades. In the meantime, do you, as an inventor, dare subject the hard earned and won works of your genius, to the current sharkfest?

    They’ll steal it anyway: why not develop and withhold along with fellow inventors, said fruits of our genius labors and build up a trove of great technological potential, to become an increasingly valuable prize or benefit to the nation and its economy, as the determination of inventors with little other choice, is learned by the powers-that-be?

    Again: inventors have little left to lose, here in the U.S. – and potentially, everything to gain and re-gain. Can we not, as a ‘community’, undertake to at the least, seriously explore and engage this strategy?

    Yes, I am calling you out on this: Paul, Josh, Gene and the rest who’ve been on the front lines for years. If you will never even fully consider such a strategy, dismissing it out of hand, then; you now stand fair to lose the faith of a large cohort of the inventors who have followed your earnest efforts, thus far. If you truly do wish to see “inventors keep inventing”, then I suggest, with all due respect, that you think about this proposition clearly and more extensively, much more seriously than with the disdain implied by your short-shrift treatment here, up to this time.

  • [Avatar for angry dude]
    angry dude
    September 23, 2019 08:30 pm

    “trivial patent”

    Dude, are you a lawyer or what ?
    I can see that you have zero technical background

    There is no such thing as “trivial” patent (legally or otherwise)

    But there are tons of not new or obvious or not fully enabled patents of very low quality out there – mostly coming from Big Tech infringers themselves
    Did they teach it to you in law school ???

    But a good example of a “trivial patent” in your definition would be RSA algorithm patent for public key cryptography – just a couple of VERY simple formulas – very “trivial” indeed
    But companies like Ebay and Amazon, forget companies … entire industries would not have emerged without using that “trivial” patent

    But how do you assign a fair and proportional to contribution damages value for infringement of RSA patent if it’s implemented in less then 20 lines of code (actually can be done in one(!) long line of Perl code) compared to hundreds of millions of lines of code behind Ebay or Amazon e-commerce marketplaces ???
    Without those 20 lines of RSA algo code the rest of Amazon or Ebay codebase is absolutely useless

    You have no clue, dude
    Just get lost cause you are really annoying

  • [Avatar for PTO-Indentured]
    September 23, 2019 12:34 pm

    A planned (connived) ‘U.S. Inventor Hate Crime’ — tantamount to nothing less than. Judge the tree by the fruit it bears squandered (plundered).

    May as well have promised: Get ‘U.S. patent (unenforceable) or 40 acres and a mule (with no follow on support / no U.S. market [efficient infringement infused), your choice!

    Disclaimer to put on the Warning Label to U.S. individual inventors: “Oh, and … in any ‘patent agreement’ we make with you, we can change the rules that previously made your claims stronger ones, at any time after you receive your patent, so that those once-stronger claims are then substantially weakened ones. Such new rules will be retroactively applicable (and not updateable) — to intentionally weaken ‘old-style’ claims. Then you will be provided little or no recourse to update claims e.g., to how PTO guidelines (ignored by the courts) say claims can (currently) be made stronger – despite your specification having provided ample teaching to support claims written in new PTO (court-ignored) described guideline(s).

    Trash U.S. inventors and their patents. Trash the U.S. patent system. Trash U.S. innovation. Get all of those patents free of use to all foreign countries…

    U.S. Patent Reform — ‘Mission Accomplished’

  • [Avatar for Concerned]
    September 21, 2019 08:26 am

    “Congress is slowly catching on. Patent piracy can and must end.”

    Like the sub prime mortgage scam that everyone knew was going on, even mom and pop on main street, the patent mess may not be resolved until it threatens the country’s best interest greater than the special interest money. And false narratives were/are used to further both scams to justify the end.

    It is obvious inventors are getting ripped off, it was obvious people with no financial means were buying owner occupied homes. Those gaming the mortgage and patent system were/are making big money.

    The mortgage scam only stopped when financial collapse was on the verge. The top bond market guy in the country could not even tell his wife if she could get $200 from the ATM that morning. Insufficient funds had new meaning: The customer was not insufficient, the whole financial system was insufficient. Then everyone was running around acting like there was a “new found” problem that needed addressed. Of course they could not run around too fast, their pockets were bulging from cash as some Congress members were incriminated as being linked.

    “Congress slowly catching on” is code that the tipping point gets closer, where action is mandatory regardless of who is gaming what.

    Are we close? Personally I doubt it. It may take a Paul Morinville example of China beaching one of our air craft carriers with IP that should have been developed here.

    However I take some consolation when my wife came home 4 nights ago and told me a common Joe at a community event randomly advises her that patents are a rip off. No apparent reason for the remark, just that patents are a rip off.

    Priceless. And no we did not rush off to the ATM.

  • [Avatar for anonymous]
    September 20, 2019 06:17 pm

    @12Jeff Timaker – “there are 1000’s of patent trolls sitting on the judges desks waiting to be cleared”
    This is not true. If so, list them. We’ll wait. This false narrative will not work any longer.

    Apple is a patent pirate. They won’t consider patents from individuals or small companies for any purpose. That is their policy and they don’t hide it. Let that sink in. The threat of treble damages does not deter their theft one bit. Hundreds of BILLIONS in cash and they can’t be bothered to negotiate a license like a prudent business would. Stealing technology to gain market share is piracy. There is no other way to put it. Funny how Apple gets an injunction against Samsung for swipe-to-unlock though, huh?

    Amazon is also a patent pirate. I can show you where Amazon tells the PTO one thing to get patents for themselves and the exact opposite to a court to try to hide and excuse their technology theft. It is patent piracy, using sheer size and power to gain even more market share in an anti-competitive way.

    Congress is slowly catching on. Patent piracy can and must end.

  • [Avatar for BP]
    September 20, 2019 03:32 pm

    @13 and 14, great comments Concerned in response to the hyperbole of TFCFM (“blackmail”). Last I heard, patents, which are of limited duration, have legal rights. So, where is the “blackmail”? Blackmail is a criminal offense. TFCFM has learned the language of the efficient infringers “trolls”, “blackmail”, . . . what next? “Trivial patents”? What a farce, I just don’t see that in the MPEP. Economics 101 says an injunction or threat thereof should bring the parties to the table. Get rid of the injunction and you have efficient infringement.

  • [Avatar for Concerned]
    September 20, 2019 11:32 am

    Apple could still negotiate a licensing deal for what the button was worth to them or go back to using the old button. Why would the judge impose an injunction if Apple said “My Bad” here is a reasonable offer as to what the button reaped in additional sales?

    This button does not put Apple out of business nor would a licensing deal for the isolated improvement bankrupt Apple.

    And the inventor has to weigh the situation also as to the offered settlement vs risk of further litigation costs, etc. The injunction is the only licensing leverage.

    From the experienced crowd on this forum, current injunctions are as rare as SCOTUS granting certiorari on the 101 mess. At a minimum, SCOTUS should grant TT’s cert, but probably will not.

  • [Avatar for TFCFM]
    September 20, 2019 10:58 am

    Responding to #11, consider Apple’s iPhone products and an invention related to the ‘on/off’ button.

    Imagine a ‘trivial’ patent (e.g., a design patent directed to the *precise* ratio of the flat sides of the button to the radius of curvature of the curved ends — or, if you don’t like design patents, a utility patent directed to the mechanism that makes the small ‘click’ when you press the button). By contrast, imagine a ‘non-trivial’ patent (e.g., a fundamental mechanism that permits cell phones to operate).

    If we were to implement a policy wherein EVERY infringed patent automatically yields an injunction (shutting down Apple’s iPhone business, and possibly requiring recall and retrofitting of all iPhones), then both the trivial and non-trivial patent have the same “blackmail” value: Approximately (i) the value to Apple of their iPhone business plus (ii) the cost of recalling and retrofitting phones minus (iii) one dollar.

    In the case of the non-trivial patent, such an injunction might be even arguably “fair,” since the phones can’t operate without it. In the case of the trivial button-shape or button-click technology, there’s no credible argument that this injunction would be “fair.”

    Far better, as prescribed by eBay v. MercExchange to analyze the balance of the hardships in each case. This yields the obviously-proper answer in this hypothetical.

    The ‘trivial’ patents have value, and the infringer should be required to pay it. That trivial value, however, is not the same value as the ‘non-trivial’ patent, and we should not adopt a patent law provision that blindly equates the two.

    That some trivial patents may have too little value to make their enforcement economically efficient does not change this analysis.

  • [Avatar for Jeff Timaker]
    Jeff Timaker
    September 20, 2019 09:38 am

    The patent trolls are out of control. They clog up the courts and waste tax payers money. They even make entire companies out of it to scam the public. They use the OTC marketplaces and then pump it all on ihub, which is a cesspool website for scam companies. I’m not saying the system is perfect. However there is abuse on both sides, and the taxpayers lose. We have to allow for due process, but there are 1000’s of patent trolls sitting on the judges desks waiting to be cleared. This removes valuable resources from real cases.

  • [Avatar for Concerned]
    September 19, 2019 05:03 pm

    If the patent is so trivial, why is the infringer using such trivia and why would such infringer be shut down completely from such trivia unless the business is built substantially around such alleged trivia?

  • [Avatar for Anon]
    September 19, 2019 04:13 pm


    Your statement of:

    There is nothing remotely “fair” about granting to the assignee of the patent rights of an inventor of a trivial innovation the ability to shut down an infringer merely because rights in the trivial invention are being infringed. The “just rewards” owed to the inventor/assignee of a trivial invention are trivial royalties.

    is objectively false.

    Do you understand the nature of the patent right?

    (…and the spin of inserting your feelings of “trivial” should be left out of a discussion of granted patents)

  • [Avatar for Benny]
    September 19, 2019 03:36 pm

    TFCFM, I’m with you on that one, having been bitten by trivial and obvious patents in the past.

  • [Avatar for anonymous]
    September 19, 2019 02:50 pm

    I still like the term “patent pirate.” Naming the problem poorly can lose the debate. Using “patent pirate” more accurately describes how these companies are operating. They have bigger, more sophisticated ships, and they’ll take from the lesser vessels as they please because they have the power. Maybe they’ll shoot you with an IPR-cannon first, but they WILL run you down. If patent pirates get caught, maybe they’ll return a portion of the bounty they stole, but they’ll keep sailing the seas nevertheless. If it is an Apple/Google/Amazon/Facebook, they’ll have you believe they are an aircraft carrier that can never change course. If there are lesser vessels in their inalterable path, they just run them over.

    I’m 100% certain Apple is a patent pirate and that patent infringement is a purposeful part of its business plan. I’m not aware of Apple having ever voluntarily licensed one single patent from an individual inventor. Apple’s own legal department says that they don’t consider patents from individual inventors “for any purpose” and the policy has been in place for years. Prove me wrong, Pirate.

    Congress, are you listening? Who’s ship are you on?

  • [Avatar for Jam]
    September 19, 2019 01:09 pm

    “efficient infringement” – this term does not adequately convey to the average person the horror that is perpetuated by what is happening. In contrast, the term “patent troll” very clearly conveys a sense of dread to the average person.

    “Efficiency” is something good, thus, to the average person “efficient infringement” may be something that is good.

    Instead the term “infringement racket” should be used.

    Big tech: So you want to protect your idea with a patent you say? Why sure, go ahead, spend your time, money, and effort disclosing your idea. We’ll infringe your patent, make millions from –your– idea, and then sue –you– into bankruptcy with the money we made from your idea. So please, go right ahead, our shareholders can’t wait to see your ideas in our products.

  • [Avatar for TFCFM]
    September 19, 2019 12:16 pm

    This cold-hearted business approach to using intellectual property without paying has gone on for decades…

    It seems to me that patent owners can perform the identical calculations (in as “cold-hearted” manner as they wish) in order to determine the value of a patented technology — all the more so if they are in the business of acquiring bits of patent rights for the purpose of asserting them.

    There is nothing remotely “fair” about granting to the assignee of the patent rights of an inventor of a trivial innovation the ability to shut down an infringer merely because rights in the trivial invention are being infringed. The “just rewards” owed to the inventor/assignee of a trivial invention are trivial royalties. Similarly, the “just rewards” owed to the inventor/assignee of a meaningful invention are meaningful royalties (and possibly more, if the inventor’s/assignee’s actual business of producing products or services which embody the invention is impacted).

    A patent is not a license to blackmail. It is, instead, a tool to provide to inventors rewards — proportionate to their invention — sufficient to encourage progress in science and the useful arts.

  • [Avatar for The Death of the Inventor!]
    The Death of the Inventor!
    September 19, 2019 11:27 am

    @Ternary Great post and very accurate. Apple has over $240BILLION sitting in its off shore accounts plus has about $250BILLION in their U.S. accounts a good percentage of that cash was generated from taking IPs from inventors and small Tech companies. This blatant theft needs to stop! Many inventors like my self do not see a reason to file for a Patent and open up a company in the Unites States as the Laws only favor Silicon Valley elites. Congress must refuse Silicon Valley dollars and act in the best interest of all its people, not just who is paying them the most bribes to keep the patent system weak for them to continue their robbery and horde all the revenues for them selves.

  • [Avatar for Ternary]
    September 18, 2019 11:11 pm

    Gene, for those patent owners who have been paying attention the last 5 years, it should be clear that an enormous concentration of market power in the software/devices industry has taken place. To get any form of reasonable traction for licensing one should get one of the top companies to engage in serious discussions about the IP.

    In my experience, the willingness of companies to seriously discuss licensing with an inventor has almost completely disappeared. There is absolutely no power behind asserting a patent. Not only not for independent inventors but also not for smaller companies. These smaller companies have thus no or little incentive to take a license on a new technology, because they are also powerless against the big guys. And so the whole system has come to a screeching halt. The effective monopoly of the large technology giants now weighs heavily on our innovation infrastructure.

    A solution seems not that difficult. However, the anti-patent crowd has an iron grip on Congress and combined with the current inaction at Congress, all discussions appear to be a mere rearranging of deckchairs on the Titanic. I believe there are serious people in Congress like Sen. Coons and Durban and Rep. Johnson, and Director Iancu, Judge Michel and Prof. Mossoff who want to affect change. Unfortunately, it is not enough. We are in an anti-patent era, like we have had in the past. Positive change, if it ever comes, will come at a glacial pace, it seems. I would love to be wrong, but I am afraid I am not. I am consequently trying to unwind my inventive/patent activities. I see no incentive at all to spend hours on reducing an idea (which I have plenty) to practice of a working invention. Effectively, the patent system has become an anti-innovation system.

  • [Avatar for Shame on America!!!]
    Shame on America!!!
    September 18, 2019 09:36 pm

    I’ve given up on Americas IP system. I will be filing for patent protection over seas. American politicians sold their souls to FAANG, and have killed any rights a patent holder one had. The AIA Act PTAB plus rulings like ALICE.EBAY.MAYO.TC HEARTLAN.OILS case has put a nail in the coffin for a small inventor to be able to have a fighting chance to go up against the likes of Amazon Apple that have efficiently infringed because they did not want to play for a license fee. We are seeing again how FAANG is killing off The STRONGER Patents Act. Politicians should be fighting for what’s right not fighting for big corporations to help them continue to rob patent holders and hord billions of dollars that should be going towards paying licensing fee so everyone can compete not just the elites

  • [Avatar for mike]
    September 18, 2019 07:32 pm

    “Frankly, it seems the admitted refusal to deal is far more anticompetitive than a patent owner wanting to be paid.”

    This is spot on. The reason companies like Intellectual Ventures even exist is because patent owners cannot obtain licenses from efficient infringers and therefore must resort to dealing with IV-type companies in order to recoup on their intellectual work product.

    If one believes companies like IV are a problem, simply look at the reason they exists, and address *that* problem — that problem being an infringer’s refusal to deal with or license from the patent owner.

  • [Avatar for BP]
    September 18, 2019 05:31 pm

    Excellent commentary, the illegal monopolies do all they can to weaken government agencies, in the US and abroad. They are trying to turn antitrust law on its head to weaken the protections inherent in the legal, time-limited monopolies of patent law that can pose legal threats to the illegal monopolies. Painfully, some of those illegal monopolies got their footholds through the patent system, which they have weakened through $$$ lobbying and infiltration, as evidenced by the changes in 35 USC 101 (and 35 USC 112). How many examiner training hours have been totally wasted. Those examiners are now behind the curve on training hours for 102 and 103, just what the illegal monopolies desired, a weaker the agency, one that becomes easier to manipulate. BTW, great 101 webinar! Stoll needs to be heard.

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