Posts Tagged: "patent troll"

Words can have profound impact. The term “patent troll,” coined by an Intel litigator, has done incalculable damage. First use is attributed to Peter Detkin, who is said to have deployed it in 2001 to belittle plaintiffs in a patent case involving the chipmaker. Shortly after its appearance, Detkin emerged as what some in the tech world would consider a bad actor. He co-founded Intellectual Ventures, a company that raised $5.5 billion to acquire more than 40,000 patents and applications for sale, license or enforcement. The IP community needs to be more vigilant about preventing parties of interest and the media from controlling the IP narrative.

January 17 marks the first day in the tenure of the U.S. Patent and Trademark Office’s (USPTO’s) new Commissioner for Patents, Vaishali Udupa. Udupa, whose appointment was announced in December, comes to the USPTO after serving the last seven years as the head of litigation for Hewlett Packard Enterprise, where she was responsible for heading HPE’s intellectual property litigation and formulating case strategies. She replaces Acting Commissioner for Patents Andrew Faile, who served in that role since January 2021 and who will be retiring from the agency after 33 years upon Udupa’s installation as commissioner. Well-known within the patent community as an advocate for diversity and representation issues, Udupa joins the USPTO as a relative outsider. She comes in as the first full Commissioner for Patents since the retirement of Drew Hirshfeld, who served with the agency for two decades before he was first appointed to Commissioner in 2015. Those familiar with recent Patent Office history will recall that Commissioners immediately preceding Hirshfeld included Bob Stoll, Peggy Focarino, John Doll and Nick Godici. Stoll, Focarino, Doll and Godici each served in various capacities at the Office, including in high-level policy and regulatory positions, for more than a generation prior to becoming Commissioner.

The chaotic state of the world today makes it increasingly difficult for American companies to compete. Russian hostility has the democratic world on edge, U.S. inflation is at a 40-year high and hitting consumers hard, and China continues its aggressive push for economic and technological dominance.  To stay on top, the United States must out-innovate our competitors. America needs to lead the world in cutting-edge products and new technologies, and those are made possible by policies that support the innovation economy. The Ukraine crisis makes it clear that energy and cyber policy is crucial. Recently, the U.S. Trade Representative told Congress that supporting and protecting the full range of our innovators from China’s distortive practices is critical to our nation’s future.

On March 4, the U.S. Court of Appeals for the Eighth Circuit issued a ruling in Tumey v. Mycroft AI, Inc. in which the appellate court overturned the Western District of Missouri’s grant of injunctive relief to Tumey, a patent attorney representing a plaintiff asserting patent claims against Mycroft. The Eighth Circuit found that Tumey had not met the requisite standard of proof to show that Mycroft had engaged in cyber attacks and harassing phone calls targeting Tumey and his family to support injunctive relief. The appellate court also remanded the case with instructions to reassign the case to a different district court judge.

Big Tech’s patent troll narrative is really just the great Big Tech smash and grab. Jean Ann Booth explains in the Waco Tribune what patent trolls are by taking Big Tech’s cartoonish characterization as her own: Patent trolls are rich investors who buy up patents from failed startups just so they can sue companies commercializing the invention in order to extort their money. Extortion – that’s what patent trolls do. And they are wrecking U.S. innovation to boot. They sure sound scary. Patent trolls are indeed frightening. Flush with big bucks, Big Tech lobbyists pushed the patent troll narrative on Congress, the administration, and the courts, demanding that we gut U.S. patent law (the same U.S. patent law that drove over 200 years of American innovation) if we are to save American innovation. Government bureaucrats and politicians complied by smashing the U.S patent system. Now Big Tech can grab whatever technology they want.

Meanwhile, all patents— good, bad, revolutionary, and stupid— have eroded to the point where continued use of the U.S. patent system must be questioned. Despite the statute saying that patents are to be treated as property rights, the Supreme Court has ruled that patents are merely government franchises that can be stripped at any point in time during the life of the patent regardless of how much time or money has been invested by the patent owner. It simply cannot make any sense for all patents to become increasingly worthless simply because of the victimization of large multinational corporations who are incapable of crafting a strategy that solves the nuisance litigation problem that does not destroy the entire system.

An Administrative Law Judge (ALJ) at the International Trade Commission (ITC) recently determined that Samsung Phones violate key patents on magnetic emulator technology for contactless payment systems from Pittsburgh’s Dynamics, Inc. We have been collaborating for years in the academic and public sectors on issues raised in that case, and are consulting consult with Dynamics because we think these issues are vital to our innovation ecosystem, our national economy, and our commitments to international partners. It is especially illustrative of the serious risks facing these vital public interests that far too frequently when there has been a full and fair adjudication determining that there has been infringement of multiple patents and that those patents are neither invalid nor unenforceable, the headline more than suggests that the infringer has been cleared of responsibility.

The movements of IP-centric business have never been easy to appreciate. With technology patent and licensing values slowly returning to higher levels, it is a good time to revisit a business model which has been a lightning rod for criticism: the public intellectual property company or PIPCO. PIPCO is a term coined by this Intangible Investor columnist in 2013, when there were 30 or more publicly held patent licensing companies with a collective market capitalization of about $9 billion. That may sound like a lot to some, but when you look at the largest patent licensing company, Qualcomm, whose market cap is currently $136 billion, you realize almost everyone else in this group is or was relatively small, typically a micro-cap, with a market value under $1 billion. These companies’ lack of size, unpredictable quarterly revenue and attractive but unpredictable assets positioned them below the radar of most institutional investors. When it comes to weathering financial storms, like ocean-going vessels, sizes matters.

In early October, social networking firm KinectUs LLC filed a lawsuit in the Western District of Texas alleging claims of patent infringement by Bumble Trading, LLC, the operator of the popular Bumble dating app. In the suit, KinectUs accused Bumble of infringing upon claims of six patents that protect systems and methods for connecting mobile device users via a collaboration system that enables users to connect with other users based on search parameters like common interests or location data. KinectUs’ infringement allegations focus on Bumble’s platform, which allows mobile device users to connect with others based on similar parameters. While the actual analysis of whether Bumble’s user matching system infringes claims of the ‘428 patent would normally require at least a Markman hearing and some discovery, certain members of the U.S. patent community would prefer to harness the power of crowdsourcing to make this determination. IP litigation risk management firm Unified Patents is hosting a Patroll contest seeking prior art to invalidate the ‘428 patent owned by KinectUs. U

The IP Tech Summit, researched and produced by Premier Cercle, took place virtually this year, on December 3-4, and focused on new intellectual property strategies for open innovation and digital transformation. As part of the summit, IPWatchdog Founder and CEO Gene Quinn conducted a Fireside Chat with Cloudflare Co-Founder and COO, Michelle Zatlyn, who said that we are presently in a critical phase of the internet’s development and have an opportunity to redefine it to make it work. But—if we act too quickly—we could potentially go backwards.

Joe Mullin, a policy analyst at the the Electronic Frontier Foundation (EFF), recently penned a misleading article about the Inventor Rights Act  (H.R. 5478). He says it will promote and protect patent trolls. To unravel what he really means, it is first necessary to understand early stage investment, and from there, to define what a “patent troll” truly is. Through organizations like EFF and their companion organization, Engine, Big Tech often writes scary stories about how patent trolls hide under bridges for no other reason than to utterly destroy innovation. Very scary stuff. Scary because this fantasy has misled the courts, Congress, and multiple administrations, convincing them to change the law in ways that destroyed America’s startup engine. Scary because early stage investment is fleeing to China at the expense of American startups. Scary because it has created perpetual Big Tech monopolies with no allegiance to the United States that are immune to American competition and taxes. These forces now control what we read and say, how we vote, and even what we believe to be true.

Unfortunately, some simply cannot help themselves but to use every opportunity – real or imagined – to take a cheap shot at a patent owner for having the audacity to seek to enforce patent rights, so it should come as no surprise that false and misleading reports would surface in the life sciences world relating to the latest coronavirus (named SARS-CoV-2) and the disease it causes (named “coronavirus disease 2019” abbreviated COVID-19). It was only a matter of time. The true story begins in 2018, when Fortress Investment Group acquired the patent assets of Theranos Inc. Fast forward to March 9, 2020, when Labrador Diagnostics LLC filed a patent infringement lawsuit against BioFire Diagnostics, LLC and bioMerieux S.A., asserting U.S. Patent No. 8,283,155 and U.S. Patent No. 10,533,994, patent assets acquired by Fortress Investment Group from Theranos. This patent infringement lawsuit was not directed to testing for COVID-19, and instead focuses on activities by the defendants over the past six years that are not in any way related to COVID-19 testing.

Subsequently, two days after being sued for infringing the ‘155 patent and the ‘994 patent, on March 11, 2020, bioMerieux announced the forthcoming launch of three different tests “to address the COVID-19 epidemic and to meet the different needs of physicians and health authorities in the fight against this emerging infectious disease.”

Since the Supreme Court’s Alice decision in 2014, the Judiciary’s development of 101 law has caused such an upheaval, Congress may need to intervene. In a July 2018 joint position paper entitled “Congress Must Remedy Uncertainty in 35 U.S.C. §101 and Return Balance to the U.S. Patent System,” the American Bar Association’s IP Law section, the IP Owner’s Association, and the American Intellectual Property Law Association contended the “Supreme Court’s jurisprudence has injected significant ambiguity into the eligibility determination . . . .” and there is now “[u]ncertainty about what types of inventions qualify at the most basic level for patenting.” This ambiguity, however, may be a blessing in disguise. By creating demand for Congress’ intervention, we have an opportunity to change course from the patent policy that has resulted in this mess. But to turn a corner, Congress needs to first understand the shortcomings of its and the Judiciary’s fundamental assumptions that have created this situation. For more than a decade, both Congress and the Judiciary have approached patent policy from a foundational presumption: the inherent problem with our patent system stems from a bad actor.Under a single-minded bad actor presumption, the Judiciary and Congress have framed our patent policy to increase roadblocks for this bad actor, to prevent it from taking advantage of the system. But this presumption has spawned a policy that is contrary to economic principles, and it has systematically weakened and undermined the U.S. patent system. Even if Congress manages to fix 101 law, if it fails to correct its and the Judiciary’s foundational shortcomings regarding patent policy for the past decade+, we’re doomed to repeat mistakes of the past. If, on the other hand, we switch our patent policy principles to a rational actor model, we can begin to understand our patent system from a foundation rooted in economics. More importantly, we can use economic principles to improve our patent system.