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(The New York Times)   FTC to ban patent trolls from Total Patent Discussion, also known as the courtroom   (nytimes.com ) divider line
    More: Spiffy, Federal Trade Commission, non-practicing entity, Intellectual Ventures, Nathan Myhrvold, software designers, companies of Canada, plain, executive agencies  
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1489 clicks; posted to Business » on 20 Jun 2013 at 8:25 AM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



31 Comments     (+0 »)
 
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2013-06-20 07:26:38 AM  
FTFA:  The move comes after the issuance of several executive orders by President Obama directing executive agencies to take steps to "protect innovators from frivolous litigation."

Thanks, Obama.

No, really!  Thanks!

/patent trolls can all DIAF
 
2013-06-20 08:22:20 AM  

img.pandawhale.com

 
2013-06-20 08:44:52 AM  
They need to send the Feds a nuke to the Eastern District of Texas
 
2013-06-20 09:01:11 AM  
graphics8.nytimes.com

Lulz
 
2013-06-20 09:05:09 AM  
Can't the trolls just pay $5 a month?
 
2013-06-20 09:16:12 AM  
I don't believe that patent trolls are wrong, a company wanting to focus on its core business and not on asserting patent rights seems quite sane to me, so the other side that provides patent assertion for a fee is too. The main problem is with the patents that are not innovative or new, but also with a very expensive legal process and the high royalties demanded and granted in courts for use of patents that are a miniscule part of an end product.
 
2013-06-20 09:21:45 AM  

I know more than you: I don't believe that patent trolls are wrong, a company wanting to focus on its core business and not on asserting patent rights seems quite sane to me, so the other side that provides patent assertion for a fee is too. The main problem is with the patents that are not innovative or new, but also with a very expensive legal process and the high royalties demanded and granted in courts for use of patents that are a miniscule part of an end product.


Patent trolls have no core business other than accumulating patents by buying them up and then suing anyone they can.
 
2013-06-20 09:41:13 AM  
It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.

Maybe I'm being super ignorant, though.
 
2013-06-20 11:09:25 AM  

WhyteRaven74: I know more than you: I don't believe that patent trolls are wrong, a company wanting to focus on its core business and not on asserting patent rights seems quite sane to me, so the other side that provides patent assertion for a fee is too. The main problem is with the patents that are not innovative or new, but also with a very expensive legal process and the high royalties demanded and granted in courts for use of patents that are a miniscule part of an end product.

Patent trolls have no core business other than accumulating patents by buying them up and then suing anyone they can.


The problem is that that can also describe university licensing offices.

meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.
Maybe I'm being super ignorant, though.


Not ignorant, just not realizing the above point... Any solution that's targeted towards patent trolls must take into account research universities, because while taking out the douchetards who send demand letters to coffee shops is a good thing, you don't want to accidentally kill off MIT or Cornell's R&D budgets.
 
2013-06-20 11:22:13 AM  

WhyteRaven74: Patent trolls have no core business other than accumulating patents by buying them up and then suing anyone they can.


Frankly, I don't think banning this practice is good.  IE, I don't think there should be a law that says that to collect patent royalities a company has to use said patent in their own product, or even that that company makes any products at all.  Buying and licensing patents is a legitmate business, IMHO, and if other companies infringe them, suing said companies is also legitmate.

Now, this is assuming said patents are valid and apply in the case in question.  That is, the actual problem is twofold:

1. The government needs to scrutinize patents more closely when they issue them, so fewer invalid patents are issued.  This basically means giving the patent office more money so they can hire more people to do more thorough inspections of said patents before issuing them.

2. There needs to be some way to stop companies from overly broadly interpreting the patents they own and suing random people that haven't actually infringed said patents, possibily by some sort of cheap and easy court action that does a basic level of analysis of the validity of the patent.  Right now, a lot of patent trolls work on the "it'll cost you twenty grand to fight my order in court; I'll settle for ten grand" theory.

That is, it should be perfectly possible to be a "patent-assertion entity" (a company with no operations other than licensing patents) without being a "patent troll".
 
2013-06-20 11:54:03 AM  

Geotpf: 1. The government needs to scrutinize patents more closely when they issue them, so fewer invalid patents are issued.  This basically means giving the patent office more money so they can hire more people to do more thorough inspections of said patents before issuing them.


The patent office is actually self-funded through application and maintenance fees. But Congress always grabs some of those funds and diverts them to other shiat. Stopping that would be a good step forward.

Additionally, as an aside, there's a delay in the system that may not be immediately apparent: applications filed today may be examined in two or three years, issued in four or five, and valid for the following 15. And someone might not sue over one until, say, 2025.
Similarly, many of the patent suits now are over things that were patented in the mid to late 90s. One problem back then was that the USPTO didn't consider CS a valid degree, so they EE guys reviewing software patents - people who could list ten different ways to dope a semiconductor but had no idea how to write a sort algorithm. That changed in the early 2000s, but due to the delay, we're still looking at older patents. For example, the recent patent in the CLS Bank v. Alice Corp. case was filed in May 1993.

Basically, even if you implement sweeping reforms in legislation, or even if the Supreme Court makes new tests (such as the new test for obviousness in KSR v. Teleflex), they don't have immediate or retroactive effect, but propagate slowly through the system.

2. There needs to be some way to stop companies from overly broadly interpreting the patents they own and suing random people that haven't actually infringed said patents, possibily by some sort of cheap and easy court action that does a basic level of analysis of the validity of the patent.  Right now, a lot of patent trolls work on the "it'll cost you twenty grand to fight my order in court; I'll settle for ten grand" theory

They have that now - reexaminations before the USPTO check validity of the patent, but not infringement. But the problem is that you're off by an order or two of magnitude... a reexamination may cost between $25-50k. To actually fight in court over a patent, you're looking at between $250k-50  million. So, for a lot of businesses, a $10k license is actually really cheap and economically reasonable, even if you don't infringe.  But economically reasonable isn't always the fairest result.
 
2013-06-20 12:00:37 PM  

meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.


I'd say the original inventor should be free to license and enforce his patent without applying it himself.  The purpose of patents is to encourage and reward creators.  But a buyer of a patent should be required to produce something with it.  Don't buy a patent unless you have a plan to make it useful to society.

Or something. I'm sure there are plenty of things I've failed to consider.
 
2013-06-20 12:24:49 PM  

BarkingUnicorn: meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.

I'd say the original inventor should be free to license and enforce his patent without applying it himself.  The purpose of patents is to encourage and reward creators.  But a buyer of a patent should be required to produce something with it.  Don't buy a patent unless you have a plan to make it useful to society.


Here's a hypothetical, though... Say you're an inventor who comes up with way to drastically accelerate wireless communications. Say, 1Gbps via cell signals that can cover a hundred square miles. Awesome!  But, you're just one guy... You don't have nearly enough capital to form your own phone company or anything, and it's not even a business you want to get into. So, you'd like to sell the patent...

But to whom? Under your rule that the buyer is required to produce something, it seems you have to sell it to a cell provider, like AT&T orSprint  or Verizon... and each of them want it exclusively since they want to knock each other out of the market. Wouldn't it be better to sell it to a licensing organization who can license it to all three at a reasonable royalty, resulting in faster communications for  all consumers?

Sometimes, the objective licensing organization is better than giving a monopoly to one player. It's the concept behind FRAND-based patent pools, in fact.
 
2013-06-20 12:29:47 PM  
Theaetetus-Well, if everybody can acknowledge that lots of software patents issued in the early to mid 1990's weren't reviewed properly then due to the lack CS people to review them, then maybe there should be a one time governmental review of all of said patents to see if they are actually valid.  And, maybe there needs to be a fast track review of actual claims of infringement.  A patent may be perfectly valid but not apply in any particular case.
 
2013-06-20 12:32:31 PM  

BarkingUnicorn: meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.

I'd say the original inventor should be free to license and enforce his patent without applying it himself.  The purpose of patents is to encourage and reward creators.  But a buyer of a patent should be required to produce something with it.  Don't buy a patent unless you have a plan to make it useful to society.

Or something. I'm sure there are plenty of things I've failed to consider.


One of the ways to encourage and reward said creators is to keep the value of patents high.  If the number of people legally allowed to buy a patent is less, the value of the patent would drop by a lot.

A patent is a thing.  Restricting who is legally allowed to buy said thing makes it worth less.
 
2013-06-20 12:42:36 PM  

Geotpf: Theaetetus-Well, if everybody can acknowledge that lots of software patents issued in the early to mid 1990's weren't reviewed properly then due to the lack CS people to review them, then maybe there should be a one time governmental review of all of said patents to see if they are actually valid.  And, maybe there needs to be a fast track review of actual claims of infringement.  A patent may be perfectly valid but not apply in any particular case.


Agreed on both counts.

The problem with the latter, incidentally, is that first you have to figure out what the claim terms mean, and only then can you figure out whether someone infringes. And there is sort of a fast track review already - you do discovery, have a claim interpretation decision, and then move for summary judgement of noninfringement. But, if it's not a slam dunk, then you go on to trial and the jury decides.

Basically, aside from a few trolls that are the patent equivalent of Prenda Law, the vast majority of patent infringement cases aren't actually frivolous - the patent owner may have a reasonable argument that the jury happens to decide is wrong. Since it's civil, not criminal, the beyond a reasonable doubt standard doesn't apply, so if you think you've got a 70% chance of winning, you're not filing a frivolous suit, even if the jury comes down in the 30% side.

I'm not sure what would be a better fast track infringement review. Maybe something like we have here in Massachusetts for malpractice suits - before you can sue your doctor, you have to go to an independent panel of one lawyer, one doctor, and one judge, and they have to say that your claim is more likely than not to succeed. Currently, about 80% of those malpractice claims go forward, so the panel is having some effect. Maybe the same thing could work for patents, with a panel with a lawyer, an engineer or programmer or scientist in the industry, and a judge.
 
2013-06-20 12:56:10 PM  

Geotpf: Theaetetus-Well, if everybody can acknowledge that lots of software patents issued in the early to mid 1990's weren't reviewed properly then due to the lack CS people to review them, then maybe there should be a one time governmental review of all of said patents to see if they are actually valid.  And, maybe there needs to be a fast track review of actual claims of infringement.  A patent may be perfectly valid but not apply in any particular case.


THIS

and considering that I've got a graduate degree in CS and I'm unemployed, I think I should totally be hired to do that.
 
2013-06-20 01:18:37 PM  

BarkingUnicorn: meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.

I'd say the original inventor should be free to license and enforce his patent without applying it himself.   The purpose of patents is to encourage and reward creators. But a buyer of a patent should be required to produce something with it.  Don't buy a patent unless you have a plan to make it useful to society.

Or something. I'm sure there are plenty of things I've failed to consider.


I would argue that the purpose of patents is to "promote the progress of science and useful arts".  If we bottle up discoveries and don't use them, how is that promoting the progress of science?  Are we rewarding people for discovering something or are we rewarding people for bringing new science and products to the people?
 
2013-06-20 01:29:31 PM  

Theaetetus: WhyteRaven74: I know more than you: I don't believe that patent trolls are wrong, a company wanting to focus on its core business and not on asserting patent rights seems quite sane to me, so the other side that provides patent assertion for a fee is too. The main problem is with the patents that are not innovative or new, but also with a very expensive legal process and the high royalties demanded and granted in courts for use of patents that are a miniscule part of an end product.

Patent trolls have no core business other than accumulating patents by buying them up and then suing anyone they can.

The problem is that that can also describe university licensing offices.

meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.
Maybe I'm being super ignorant, though.

Not ignorant, just not realizing the above point... Any solution that's targeted towards patent trolls must take into account research universities, because while taking out the douchetards who send demand letters to coffee shops is a good thing, you don't want to accidentally kill off MIT or Cornell's R&D budgets.


I know we're ignoring eachother, but I can't help making this point.

The Baye-Dole enabled R&D offices turning a profit are a pipe dream for most universities. In many cases, the overhead and headache of dealing with the legalities aren't worth it. Unless you're MIT or Cornell, you're not going to make a profit. That aside, how do you argue for licensing of patents that had their core developed under publically funded grants? That seems like the very epitome of what should be Public Domain.

So, in short.

A) This problem is smaller than you believe and only applies to a very small subset of R&D heavy universities.
B) Publically funded grant R&D should not be patented in the first place. Published. Not patented.
C) Why not simply say "You can't be an NPE unless you're an accredited University under conditions X, Y, and Z.
 
2013-06-20 01:35:29 PM  

Geotpf: BarkingUnicorn: meanmutton: It seems that the issue would be resolved if a company is actually required to, in good faith, utilize their patents in order to keep them.

I'd say the original inventor should be free to license and enforce his patent without applying it himself.  The purpose of patents is to encourage and reward creators.  But a buyer of a patent should be required to produce something with it.  Don't buy a patent unless you have a plan to make it useful to society.

Or something. I'm sure there are plenty of things I've failed to consider.

One of the ways to encourage and reward said creators is to keep the value of patents high.  If the number of people legally allowed to buy a patent is less, the value of the patent would drop by a lot.

A patent is a thing.  Restricting who is legally allowed to buy said thing makes it worth less.


You're ignoring the cost of the patent on the economic system. If a patents cost is lowered, the licensing cost is also lowered, allowing more people to make things with the knowledge contained in the patent. Patents are inherently restrictive and are meant as a deal struck between the government and the creator. An ideal patent would provide the same amount of money to the creator as was aggregately saved by reducing the number of redundant man hours. Value a patent too high and you've paid too much for a cheap amount of man hours. Value a patent too low and the creator takes their ball and goes home in the form of trade secrets.
 
2013-06-20 01:42:00 PM  

Kinek: A) This problem is smaller than you believe and only applies to a very small subset of R&D heavy universities.


A) Which are very important universities. We should probably not just ignore the issue since it doesn't apply to West Hicksville Upstairs Engineering School and Diner.

B) Publically funded grant R&D should not be patented in the first place. Published. Not patented.

And since many of those universities are privately funded, this is irrelevant. But yes, publicly funded stuff should be under compulsory licensing, at a minimum, if not strictly public domain - but that's more an argument for the economists than the patent office.

C) Why not simply say "You can't be an NPE unless you're an accredited University under conditions X, Y, and Z.

Because now you're simply shifting one monopoly that has judicial and legislative oversight, the patent office, to another monopoly that doesn't, the various national, regional, and specialty accrediting boards. Furthermore, your solution is slapping an unrelated band-aid on the problem: accreditation has nothing whatsoever to do with patent trolling, so why use it as a determinative condition? It'd be like saying "You can't be an NPE unless you have more than six bathrooms in your offices" or "You can't be an NPE unless your carpets have blue or green as a dominant color."
 
2013-06-20 01:46:05 PM  
Theaetetus and  Kinek:

Just so you know, it is interesting and informative seeing your discussion.
 
2013-06-20 01:55:06 PM  

meanmutton: Theaetetus and  Kinek:

Just so you know, it is interesting and informative seeing your discussion.


Just notice, when it inevitably dissolves into a slap fight, Kinek will be the first one to resort to name calling and hair pulling.
 
2013-06-20 04:49:38 PM  

Theaetetus: Geotpf: Theaetetus-Well, if everybody can acknowledge that lots of software patents issued in the early to mid 1990's weren't reviewed properly then due to the lack CS people to review them, then maybe there should be a one time governmental review of all of said patents to see if they are actually valid.  And, maybe there needs to be a fast track review of actual claims of infringement.  A patent may be perfectly valid but not apply in any particular case.

Agreed on both counts.

The problem with the latter, incidentally, is that first you have to figure out what the claim terms mean, and only then can you figure out whether someone infringes. And there is sort of a fast track review already - you do discovery, have a claim interpretation decision, and then move for summary judgement of noninfringement. But, if it's not a slam dunk, then you go on to trial and the jury decides.

Basically, aside from a few trolls that are the patent equivalent of Prenda Law, the vast majority of patent infringement cases aren't actually frivolous - the patent owner may have a reasonable argument that the jury happens to decide is wrong. Since it's civil, not criminal, the beyond a reasonable doubt standard doesn't apply, so if you think you've got a 70% chance of winning, you're not filing a frivolous suit, even if the jury comes down in the 30% side.

I'm not sure what would be a better fast track infringement review. Maybe something like we have here in Massachusetts for malpractice suits - before you can sue your doctor, you have to go to an independent panel of one lawyer, one doctor, and one judge, and they have to say that your claim is more likely than not to succeed. Currently, about 80% of those malpractice claims go forward, so the panel is having some effect. Maybe the same thing could work for patents, with a panel with a lawyer, an engineer or programmer or scientist in the industry, and a judge.


I like the panel review idea.  If there's a 30% chance of winning, then the case would pass the fast track panel review and go to trial.  But if theres <10% chance of winning, it would fail right there.
 
2013-06-20 05:44:02 PM  

Geotpf: Frankly, I don't think banning this practice is good.


I don't think patents should be something you can buy period. Right now Nathan Myhrvold, better known as the father of a few MS products, has a company that has a shiat ton of patents. How many did it actually get by filing for them? Zero. They're all bought up  from various sources and then the company goes around suing people hoping to get a few bucks. Oh sure they do some licensing but better to throw their weight around with threats of lawsuits. Mind you this company makes nothing, has no plans on making anything ever, it's just accumulating patents for the purpose of pushing people around. Such an entity shouldn't be allowed to exist.
 
2013-06-20 06:53:29 PM  
Patents are awarded to individuals, not companies

Those individuals assign the patent to a company, usually their employer.

One way to slow down patent trolls, is make patents assignment non-transferable.  Meaning if Company A goes bankrupt, Company B can't purchase their patent portfolio.    Company B would have to go to the original inventor and make a deal with them as an individual.

/inventor
//US Patent # 5,212,540
 
2013-06-20 08:39:52 PM  
Theaetetus: Kinek: A) This problem is smaller than you believe and only applies to a very small subset of R&D heavy universities.

A) Which are very important universities. We should probably not just ignore the issue since it doesn't apply to West Hicksville Upstairs Engineering School and Diner.

What I'm saying is that a vast majority of the Baye Dole enabled schools gained nothing by setting up patent licensing offices. So we're only dealing with a small subset of schools. A lot of which are Publically funded.

B) Publically funded grant R&D should not be patented in the first place. Published. Not patented.

And since many of those universities are privately funded, this is irrelevant. But yes, publicly funded stuff should be under compulsory licensing, at a minimum, if not strictly public domain - but that's more an argument for the economists than the patent office.


It doesn't matter if the university is publically funded or private. I do work at my public university on private research. I can do public research at a private university. The point is not the university, the point is where is the funding coming from. You can get around your problem with the ban (which I've seen you bring up time and time again, using Cornell and MIT as your examples of the oh-so-wonderful Baye Dole system) by saying if you recieve private funding, your research and all patents go to the funder. If it's the government, compulsery licensing or public domain. If private funding, then guess what? It belongs to them. If the university wants to build on it, they can make a company.If the point of patents is to strike a deal with everyone involved, that benefits everyone, it's an argument for the patent office, since they're usually the ones arguing against revisions that scale back patentability. See, all Federal Appeals court decisions ever. Economists have been arguing for ages that patents are not effective measurements of progress, nor is the system currently optimized.

C) Why not simply say "You can't be an NPE unless you're an accredited University under conditions X, Y, and Z.

Because now you're simply shifting one monopoly that has judicial and legislative oversight, the patent office, to another monopoly that doesn't, the various national, regional, and specialty accrediting boards. Furthermore, your solution is slapping an unrelated band-aid on the problem: accreditation has nothing whatsoever to do with patent trolling, so why use it as a determinative condition? It'd be like saying "You can't be an NPE unless you have more than six bathrooms in your offices" or "You can't be an NPE unless your carpets have blue or green as a dominant color."


Really? We've established that we're trying to carve out a hole for Baye-Dole enabled universities. Accreditation is ABSOLUTELY at the core of this. You're arguing that we can't ban or restrict NPEs from suing because if we do so we harm University patenting offices. And then subsequently arguing that you can't define the group of people harmed by the NPE limitation? You can't hold both positions. Either you can define them as Universities, or you can't and they don't deserve protection in the first place.
 
2013-06-20 09:44:18 PM  

WhyteRaven74: Geotpf: Frankly, I don't think banning this practice is good.

I don't think patents should be something you can buy period. Right now Nathan Myhrvold, better known as the father of a few MS products, has a company that has a shiat ton of patents. How many did it actually get by filing for them? Zero. They're all bought up  from various sources...


That is 100%, undisputably false. IV has an R&D department. Sure, they buy patents from other inventors and companies, but they also do a ton of their own research.
 
2013-06-20 09:47:06 PM  
Kinek:
Really? We've established that we're trying to carve out a hole for Baye-Dole enabled universities. Accreditation is ABSOLUTELY at the core of this. You're arguing that we can't ban or restrict NPEs from suing because if we do so we harm University patenting offices. And then subsequently arguing that you can't define the group of people harmed by the NPE limitation? You can't hold both positions. Either you can define them as Universities, or you can't and they don't deserve protection in the first place.Or, you could follow one of my many counter-proposals, including proposals like the aforementioned tribunal or my other proposals relating to damage awards for infringement. Sorry, bub, but no: you don't get to put words in my mouth or pretend I hold a position that I have never agreed with in order to claim that I'm somehow arguing both sides.
 
2013-06-20 11:38:09 PM  

Theaetetus: Kinek:
Really? We've established that we're trying to carve out a hole for Baye-Dole enabled universities. Accreditation is ABSOLUTELY at the core of this. You're arguing that we can't ban or restrict NPEs from suing because if we do so we harm University patenting offices. And then subsequently arguing that you can't define the group of people harmed by the NPE limitation? You can't hold both positions. Either you can define them as Universities, or you can't and they don't deserve protection in the first place.Or, you could follow one of my many counter-proposals, including proposals like the aforementioned tribunal or my other proposals relating to damage awards for infringement. Sorry, bub, but no: you don't get to put words in my mouth or pretend I hold a position that I have never agreed with in order to claim that I'm somehow arguing both sides.


Except regulatory capture is much easier the higher you go.

My argument is that you go 'Oh no. The poor MIT. The Poor Cornell. We can't possibly ban NPEs wholesale because the poor Universities.'

And then when I go 'Why not target universities like MIT and Cornell for exemption' you go, 'Oh no, we can't possibly target universities for exemption. That's just arbitrary, just like carpets and bathrooms.'
 
2013-06-20 11:40:34 PM  

Theaetetus: WhyteRaven74: Geotpf: Frankly, I don't think banning this practice is good.

I don't think patents should be something you can buy period. Right now Nathan Myhrvold, better known as the father of a few MS products, has a company that has a shiat ton of patents. How many did it actually get by filing for them? Zero. They're all bought up  from various sources...

That is 100%, undisputably false. IV has an R&D department. Sure, they buy patents from other inventors and companies, but they also do a ton of their own research.


Other than their mosquito zapper, which they enjoy trotting out for show, and that they have not brought to market, what has IV contributed? Enlighten me.

If you are 99% patent acquisition and lawsuits and 1% in house R&D, you're still a patent troll.
 
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