Cybernews from the dark side – June 24, 2014

Patent trolls – continued.

Here, alas, passions are still running high, with the occasional fit of… passion. Indeed, the issues related to patent parasites haven’t gone away; it’s just that only the most interesting – ‘loudest’ – cases ever get heard about. But if you dig deeper, you eventually hit upon stuff that is interesting, just not paid attention to. Which is what we did – and found quite a bit on patent trolls worthy of the title of this blogpost. So, he we go…

The irony’s all too much.

For this item I didn’t have to dig all that deep actually – I just checked Ars Technica. There I found some rather familiar glorification of the patent aggregator RPX – made out to be a sweet and innocent protector of orphans, the poor, and princesses (from dragons). I just couldn’t believe what I was reading: “RPX works by selling memberships to companies that feel harangued by patent trolls, including Apple and many other tech companies. RPX basically buys up patents it believes will be used by trolls. By uniting the buying power of many companies, it can get the patents for a bargain price.”  Well, maybe I could believe it… I was just so rattled at being reminded of the hypocrisy.

WHAT? RPX is some kinda anti-troll? And trolls may fly…

Patent TrollSource

We first came across this so-called anti-troll in the year of its creation, and were one of the first to bite it back – successfully.

The arrangement couldn’t be simpler: (i) a small troll files a lawsuit against you. You’re morally crushed and devastated just by the thought of the huge legal costs that lie ahead, when suddenly… (ii) as if by chance a savior appears in the form of a Chip ‘n Dale (= RPX) offering its services to get round this delicate little problem at a fraction of the court costs you face. Naturally, you agree – happily. It doesn’t remind you of anything? Reminds me of what goes on in certain movies and TV serials :). You think I’m being harsh? Read about it.

Put off what you can do today.

I’m very much an optimist – with a big O. But sometimes we need to take the rose-tinted spex off and be realists…

The patent reform we’ve been waiting for for so long has been put off.

The expected reform was promising a lot. It looked like it would make patent extortion a lot more difficult, and seriously distress the troll industry in the process. In particular what was expected was making it possible for a respondent to demand from a troll compensation of its legal costs. Alas, it was this that became a particular stumbling block for reform in general. Opponents cropped up (for example, universities and biotech companies) that feared the bill would harm not only trolls but also honest owners of patents, in particular small and medium-sized businesses. It seems the risk of extra court costs might infringe their right to legal proceedings.

So the anti-troll draft law was put off for another day – a day when more of a consensus might be obtainable on the issue. But I fear getting somewhere near such a consensus is a long way off. In the meantime, we’re preparing for an increase in the amount of troll-unfairness – and its effrontery, no matter the accompanying universal complaints from the IT and other industries. For while ever the state won’t rein in the outrages perpetrated by trolls, all they’ll do is keep on sucking the life out of genuine innovators.

And I thought we were partners?

A serious conflict has arisen between Symantec and Columbia University. Professors and researchers of the latter are pursuing litigation against the former for violation of various patents. And they were once partners!

A long time ago the US government commissioned this pair to develop technology for protection against data leaks. The ‘Columbians’ thought up the technology, submitted an application for it to be patented, and gave the description to Symantec. But once it received the description, Symantec also submitted an application with the patent office, showing the author as one of its employees, and itself as the rightholder. Moreover, this latter application was made on the quiet, so that the university would be none the wiser. Anyway, somehow it was Symantec that received the patent first. And of course, when it eventually found out, well, the university didn’t like that one bit.

The moral to this fable goes like this: partners need to be loved and respected; that way everyone’s a winner: no court costs, no patent wars. It’s as simple as ‘treat others as you’d have them treat you’. So simple – yet repeatedly ignored.

The theater of the patently absurd: Jar Jar Binks against the Death Star.

Many of you will remember the patent troll MPHJ, which made a lot of noise last year. A quick recap:

(i) MPHJ gets a patent on the technology of scanning documents and dispatching the scans by email (so, yeah – you owe them a cut too:); (ii) thousands of companies (probably copied straight from the phone book) are carpet bombed with mass mail-outs with demands to pay $1000 in licensing fees for each employee. No joke.

Funnily enough, it was ‘thanks’ to (the barefaced cheek of) this case that the first anti-troll initiatives were launched. But the MPHJ matter went further…

Monopolies and other distortions of the free market in the USA are traditionally the quarry of the Federal Trade Commission (FTC), and the MPHJ case was no exception. But wait! MPHJ became the first to ever file a lawsuit against the FTC! It hit it with a claim stating that matters of patent licensing lie outside its competence! It gets better worse: It turns out that the patent portfolio of this troll was bought for just one dollar! And with 17 companies paying MPHJ the license fee – out of the 17,000 companies that were tried to be shaken down – even after the spends on postage, it still looks like a rather profitable bit of business.

MS – patent-ism on the quiet.

In the ongoing popcorn-demand stimulant that is the patent conflict between Apple and Samsung, many seemed to forget about the guys from Redmond. While the first two are at each other’s throats in the courts, Microsoft just keeps quietly counting its patent profits – and they’re HUGE.

Not long ago a group of happy licensees of the patent portfolio of Microsoft – including Samsung, HTC, Amazon and another 20 firms – was joined by Dell and Motorola. No figures have been released for the patent licensing fees involved but various reliable sources estimate Microsoft makes about two billion dollars a year just from Android. Which means that when you, dear owner of an Android smartphone, bought your device, around eight dollars of the price went straight to Redmond. If things carry on like this, the profit the company makes from sales of patents up to 2017 will be somewhere in the region of nine billion dollars. Surely it’s time for the MS guys to quit the low-margin and high-risk software business?

Ballparks for patents.

To give you just a few more examples of the costs involved when it comes to patents…

Lenovo bought a series of patents of a ‘mobile technologies’ flavor from Unwired Planet. The total sum of the deal – hold onto the table folks: 100 million dollars! And there’s more: Twitter at the end of last year purchased 900 patents from IBM – for $36 million. So one patent cost around $40,000 – well, that’s like a rather nice car.

A patent – it’s not just a protective document, it’s a very expensive protective document; therefore, my advice: patent your developments comrades! Or (if there’s no money for that) at least publish articles in which the main principles of your technologies are described in detail – so that when your company achieves success, and not long after a nasty fat troll turns up, your protection-gun is fully loaded – and cocked.

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