Posts Tagged: "npe"

”They just walked away,” said Patrick M. Byrne, Overstock.com chairman and CEO. ”Patent trolls find us unappetizing. While we have the highest respect for intellectual property rights, we don’t settle abusive patent suits—we fight.” Byrne added, ”You can’t fork over your lunch money today, and expect a bully to leave you alone tomorrow. Patent trolls understand a bloody nose and in the long run, it’s the asymmetrical response that pays off.” [ ] So the question remains, will other tech companies see the light, or will they keep settling frivolous patent lawsuits brought by patent trolls?

And the game goes on, with sophisticated tactics and subterfuges. Some patent holders obfuscate their patent ownerships behind shell companies, including some large technology companies who find it useful to play the part of the NPE to harass competitors. Others use negotiations as fishing expeditions with the intent to prepare stronger cases in the court room – making escalations go even faster. Complaints are prepared before a first contact is made. Even those who would prefer to negotiate rather than sue are forced to sue to capture the attention of the accused infringer, many of whom simply refuse to discuss licensing or settlement unless they are sued. The IP game becomes a race to the courtroom. There are no obvious winners (except for the attorneys representing the parties) as legal fees keep escalating. Litigation could be avoided in many circumstances, but the IP game fosters a power struggle in which each party assumes the worst from the other and defends itself, at high legal expenses, against imaginary threats. Both sides, the users and owners of patented technologies, are antagonized.

By keeping an eye on stealth and dangerous patents managing the future risk presented is much easier. By proactively monitoring the landscape of published applications and granted patents you may be able to engage in design work-arounds to avoid the most dangerous patents. You may also be able to actively identify patents and pending patent application that are ripe for licensing or acquisition at an early stage, perhaps before the patent even issues or before the patent works its way into the hands of a litigious patent owner. Even if you cannot acquire rights through licensing or acquire all dangerous patents, if you have a meaningful patent footprint that gives you the right to do a variety of things you may well be able to defend based upon having broad based rights to engage in what it is that you are accused of doing.

It is almost incomprehensible that the Patent Office would put together a litigation resource that ignores the reality that many companies, both large and small, trample on the rights of innovators who have spent large amounts of time, money and energy receive a patent and disclosing their innovation to the world. . . the Patent Office only offers a one-sided help section that gives advice to infringers and sets a tone that comes across as anti-patent and anti-patent owner. This strikes me as fundamentally misguided and clearly demonstrates the anti-patent bias of the Obama Administration. . . I would expect the federal government — the Patent Office that is charged with an important Constitutional duty — to be even handed and empathetic to innovators and patent owners as well.

At this time of year we often see many prognostications of what the future holds. From the prospective of the small entity patentee we see big changes in store particularly as some in Congress seem hell-bent on amending the patent statutes once more. These changes are being pushed through without any real consideration for the impact of the changes on patents held by universities, research institutes, small and medium sized companies, emerging companies, independent inventors and new entrepreneurs.

The major beneficiaries are not the patent trolls- but the thousands of single patent owners and small high tech start ups who for the first time ever-are able to monetize the enormous investments in time, money and ingenuity that they have made in their inventions. The fact is- today, small patent owner and small tech start ups have real options to liquidate their intellectual property assets that they didn’t have before Intellectual Ventures and Acacia Research Group entered the market in the mid-2000s. If patent trolls sue big companies- then the owners of these patents were able to liquidate their investments. When the multinationals have to worry about these entities suing them it is good for the owners of the patents.

The Federal Trade Commission has extended the deadline for public comments on its proposed study of patent assertion entities (PAEs), which it announced on September 27. To provide additional time for interested parties to submit comments on the proposed study, the deadline has been extended throughDecember 16, 2013. The Commission will not consider requests for further extension. Comments can be submitted electronically.

Other important positive externalities of patent enforcement, including by NPEs, may be realized when competitors are encouraged to design-around the asserted patent. Incentives to design around patents usually materialize only upon patent enforcement lawsuits, but when design-arounds are commercially successful, they may result in substantial increases in social welfare: design-around patents have been documented to spur new manufacturers’ entry to the market, unleash fierce price competition, and reduce deadweight losses of the patentee’s monopoly pricing. From a dynamic efficiency perspective, the greatest potential social welfare enhancement due to the designs-around appears downstream over many years even in areas other than the patented technology.

Professor Feldman has found striking new data on patent trolling and the effects of the America Invents Act, which to me suggests that the AIA has clearly been successful in its intended goal of reducing the number of defendants in a single patent infringement litigation. Professor Feldman’s new analysis was developed by breaking down the massive data set she collected into a month-by-month analysis of patent infringement lawsuits. The data examines all patent lawsuits over four key years, which represents approximately 15,000 patent infringement lawsuits and 30,000 patents asserted. Not surprisingly to those of us who have closely followed the America Invents Act, but there was an enormous spike in litigation leading up to the implementation of the AIA in September 2011.

The App Developers Alliance is joining with law schools nationwide to help startups battle patent trolls. The Law School Patent Troll Defense Network is a consortium of law school clinics that will provide free legal representation to small app developers and other entrepreneurs that have been threatened or sued by patent trolls. Clinics participating in the Network may also represent the Alliance in major patent cases affecting developers and the app community.

I recently received an e-mail from a colleague who is embarking on an interesting research project. This colleague, who would like to remain publicly anonymous for the time being so as to be able to conduct the underlying research privately and without influence. The researcher is seeking to interview a number of different industry participants for a research study on patent assertion entities.

Last week ZDNet ran an article about how Kaspersky Lab took on and prevailed against Lodsys, one of the more notorious patent trolls operating presently. Lodsys first appeared on the scene several months ago when it started chasing Apple App Developers and demanding that they take a license to the Lodsys patent portfolio, and then later going after Google Developers who provide Apps for the Android operating system. Essentially, the model followed by Lodsys is to sue everyone, big and small and everywhere in between. Lodsys purchased its patents from Intellectual Ventures, who as they were amassing a giant patent portfolio lead the industry to believe it was for the benevolent purpose of taking patents out of the hands of patent trolls, thereby insulating them from such lawsuits. IV has at times found it easier to sell patents to willing patent trolls or has used various shell companies, but also now files lawsuits of their own.

When the question “What is the future of BlackBerry?” was entered into the virtual Magic 8 Ball the response was: “Don’t count on it.” Hardly scientific, only mildly amusing, but as far as predictions it is certainly within the envelope of possibilities. Still, the company continues amassing a portfolio of US patents. But this all begs the question about the direction the company will follow with new private ownership. Will they morph into a licensing juggernaut? Might they give up being a manufacturing company altogether and turn their considerable portfolio on the industry? Will the patent portfolio be auctioned off to the highest bidder?

With the FTC taking this step now I don’t know how Congress can move forward with patent reform legislation that purports to address the so-called patent troll problem. Perhaps they will move forward, but at a time when the Congress has so many issues to deal with is patent reform prior to yet another in-depth government report really where times should be spent? As of the writing of this article we do not have a budget for FY 2014, or even a continuing resolution and the debt ceiling debate looms in the backdrop. Perhaps Congress and the FTC should be spending time fixing other problems rather than tinkering with an issue the GAO says doesn’t need to be fixed.