Posts Tagged: "Patent Trolls"

The SEC has landed on a definition which includes both permissioned distributed ledgers and permissionless distributed ledgers in the term “blockchain.” This is not surprising, nor is it necessarily the result of a misinformed view. There are lots of market opportunities and reasons for enterprise permissioned distributed ledgers, as there was always market appetite for permissioned systems in general. These ventures use the term “permissioned blockchain” intentionally and purposefully. After all, the transactions are batched in blocks that are linked to each other. So, there is a chain of blocks, and some kind of consensus protocol. But is that sufficient for a blockchain, really? And what ‘blockchain’ is the SEC referring to when it references “the blockchain”?

Based on this Unified Patents definition of an NPE, any patent owner that seeks to enforce a patent, whether through licensing or litigation, is a patent troll. Therefore, according to Unified Patents and Shawn Ambwani, any patent owner that seeks a licensing fee, seeks to resolve ongoing infringement, or resorts to the judicial process to seek redress for those who are violating rights granted by the federal government are patent trolls. In other words, all patent owners are patent trolls in the view of Unified Patents and Shawn Ambwani. Only those patent owners that go through the extraordinary time and expense of inventing and obtaining a patent and then do absolutely nothing are legitimate patent owners — everyone else is a patent troll. Talk about completely and utterly asinine! But I suppose that is how they come up with the ridiculous and obviously phony “statistics” about more than 95% of patent infringement cases being filed by patent trolls. The only way that is possible is because to Unified Patents all patent owners are patent trolls!

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… 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… And haven’t we been told by the likes of Unified Patents that all patent owners who enforce their patents are patent trolls? One would have to assume if Unified is being logically consistent they would have extraordinary problems with Verizon’s activities particularly here where the patents used to sue Cablevision were acquired and not the subject of in-house innovation.

In a New Hampshire State Superior Court, this so-called ‘patent troll’ has decided to fight back. Automated Transactions and Dave Barcelou have filed a defamation complaint against the crème de la crème of those deemed “too big to fail” and who many might consider to be too big to defeat… The minute Barcelou was able to enforce his patented technologies in court, winning a sizable settlement from the biggest bank in his hometown of Buffalo, NY, a veritable “Who’s Who” of the financial services leaders joined forces to destroy both Barcelou and his company economically. Besides encouraging one another to ignore Automated Transaction’s demand letters, false and misleading statements started to appear in prominent business publications, which went so far as to say the company had purchased its patents, or alternatively, that the patents were invalid. Over time a unified battle cry arose from the ‘poor little community banks’ he allegedly targeted; “He’s nothing but a patent troll.”

Patent trolls – as well as calls for changes to the law to prevent them – date back to at least the 1800’s. A look at their history suggests that they have more to do with fluidity in the definition of patentable subject matter than any unique feature of a particular class of inventions… A change in a fundamental definition of what comprised patentable subject matter, and that change brought a major building block of commerce into the ambit of the patent system. In the age of the sharks, the farm remained the core of the U.S. economy, driving a gold rush of new patents covering every element of the farming process. Such a rush also encourages the formation of patent thickets, as speculators scramble for any potentially protectable chunk of the market. The same phenomenon drove the development of modern tech and software patents. In the aftermath of State Street, once again the market found that the machinery that undergirded the economy was suddenly open to being patented, leading to a similar gold rush.

The HuffPost recently published a piece authored by Massachusetts State Senator Eric P. Lesser (D), which is titled Patent Trolls Are Trolling Startups In Massachusetts – And We Need To Change That. The piece attempts to engage readers by taking a situation from the HBO sitcom Silicon Valley and apply it to real world business activities currently ongoing within the state of Massachusetts. However, critical analysis of Lesser’s article indicates glaring flaws with his logic in a way that makes it look like Lesser is more interested in following a false narrative in service to patent infringing interests than he is in supporting Constitutionally-protected property rights.

On July 28th, 2017, China’s State Intellectual Property Office (SIPO) announced a new set of regulations which are intended to streamline the examination of patent applications in certain burgeoning fields of technology. The new policy, which comes in response to “the central government’s call for an improved business environment, streamlined procedures for administrative approval, and the booming market,” will allow for the examination of both utility model and industrial design patent applications; SIPO guidelines issued as recently as five years ago only covered a single patent application designation, invention patents.

With all of this money, it seems the efficient infringer lobby has managed to find an unlikely ally in Congress — someone who made his money as an innovator who defended his patents as a patent plaintiff, which apparently makes him a patent troll. At the end of the day, it may not be entirely fair to characterize Congressman Darrell Issa as a patent troll. Instead, he seems more of a swamp creature of the type that President Trump campaigned against. An individual who has fed from those who are actively trying to muck up the U.S. patent system in favor of large, entrenched entities and to the disadvantage of small, innovative patent owners who have previously always been the driving force of innovation and job creation in America.

Today, most Americans don’t realize how vital the patent system is to their standard of living. But the founding fathers certainly did. That’s why they very consciously set out to construct the world’s first DEMOCRATIZED patent system that would do what no other patent system in the world had done before; stimulate the inventive genius of the common man… I would call for patience, because I believe history has shown that the system self-corrects and will likely do so again. But in our zeal for the perfect system, remember, the perfect is the enemy of the good. So be careful what you wish for.

Why does U.S. policy with respect to patent owners and patent licensing seem to be in direct opposition to U.S. antitrust policy relating to vertical mergers? If vertical mergers are anticompetitive and particularly bad when dealing with a monopolist then why are patent owners, who we are told over and over again are in possession of a limited monopoly, encouraged (if not demanded) to vertically integrate in order to escape characterization as a patent troll?

House IP subcommittee chair Rep. Darrell Issa (R-CA) led off the hearing by discussing the large number of interests who are often on Capitol Hill to discuss their issues with “patent trolls,” including the “genius ones” which have only been developed in recent years. Despite the intent of the America Invents Act (AIA) of 2011 to weed bad patents out of the system, “patent trolls” remain active. Issa felt there were a few reasons for this, including the fact that such entities make money and that good patents could still be used to assert unreasonable claims. “Why innovate when it’s far easier and more profitable to simply purchase a patent, acquire one, acquire the rights to a patent, perhaps one that has never been licensed, bully businesses into writing a check, go away without ever seriously litigating,” Issa said. He said that 80 percent of “patent troll” litigation focuses on small business. “Simply put, we should not confuse ‘Making America Great Again’ with ‘Making American Patent Trolls Richer Again,’” Issa said. Although Issa was pleased with the U.S. Supreme Court’s recent decision on patent venue in TC Heartland v. Kraft Foods Group Brands, he recoiled at what he felt was an “overreach” by Judge Rodney Gilstrap from the Eastern District of Texas (E.D. Tex.); Issa felt that Gilstrap misinterpreted the Supreme Court’s decision in TC Heartland by denying a motion to transfer venue from E.D. Tex. in Raytheon v. Cray. “It is, in fact, an act that I find reprehensible by that judge,” Issa said.

Only $128,000 collected from a combined 13 cases? That is less than $10,000 per case, which doesn’t even approach the nuisance value the truly bad actors, the true patent trolls that Issa himself and so many others rail against as extortion artists seek to collect. Indeed, the FTC report on Patent Assertion Entities from October 2016 suggested that settlements of less than $300,000 suggested malicious and malevolent behavior that should raise suspicions of patent trolling. If that is true, what does this say about the ongoing enforcement campaign of Issa’s own patents? It would certainly seem that there are all the indicia of patent trolling that Issa so frequently enjoys pontificating about when he witnesses the behavior displayed by others.

When it comes to television shows, it not always clear what is “copyrightable.” Sometimes, filmmakers and screen writers can get into serious trouble if they don’t follow specific television copyright laws accordingly. Austin-based filmmaker Lex Lybrand watched the June 4th episode of the hit HBO series “Silicon Valley” to shockingly find strong similarities between the episode “The Patent Troll” and his own film “The Trolls.” Jed Wakefield of Fenwick & West recently sat down with IPWatchdog to discuss Lybrand’s case and the impact of copyright infringement when it comes to movie scripts.

“I can tell you, every day Congress is in session there are lobbyists here trying to weaken the patent system,” Massie explained. In Massie’s words, those companies that come to Capitol Hill and lobby to weaken the patent system want to get into new fields, but the problem is they didn’t invent in those fields, so they face problems. Patent problems. A lot of those companies want to become automobile manufacturers, or cell phone manufacturers, or they want to write software for operating systems, but they didn’t invent in those areas and they don’t own the patents that have historically been the touchstone of innovation ownership. “They’d love to just come in and start playing in those fields and start using their size and scale as an advantage, and to them, patents look like a hindrance,” Massie explained. “They are here in Congress looking to weaken patents and they are not just interested in weakening patents issued in the future, they are looking to weaken all patents.”