Tag Archives: patent trolls

“Everybody be cool, this is a robbery.”

Startups – affairs that are risky and slow to build up momentum. They call for big cash, a knack for seeing into the future, and a nose for where the big returns on investment are. They take years to really get going; only one in twenty (or even more) doesn’t die a premature death.

Traditionally, venture capitalists have funded startups, but there’s a new type of venture capitalist on the block. They ask: ‘Why get all tense and take risks with startups, when it’s possible to invest in… patent trolls?! Easy! One such new kid on the block is the funder Bentham IMF (I don’t give the site address on purpose; hardly want to help this company out with their SEO efforts. You can find it if you really want to).

The math is reeaal simple: the funder gives out, say, one to ten million dollars for low risk patent cases against wealthy victim-companies, which can bring in no less than ten to a hundred million dollars payout, respectively (that is, they aim for around a ten-fold return on investment). Now, the fact that patent trolls in the US – even if they lose – don’t pay a penny to defendants, and the average % of awarded ‘damages’ or out-of-court-settlement payments can be up to 99%… well, it all adds up to a practically guaranteed-returns venture scheme! 

Who the heck needs innovation? Much better: ‘invest’ money in small patent trolls so they can shake down litigate against the innovators. Wonderful. The American Dream turned inside-out and upside-down. The new American Patent Dream in full effect!

Bentham IMF

Of course, there’s an official basis to this legitimatized extortion – the support of law, universal justice and punishment of rotten violators. But no matter how much it’s talked up, there’s still no getting away from the simple fact: a troll is a troll.

Read on: Stratospherically absurd and wrong and bad things in the world of patent extortion…

‘Consumer champions’ coming after you? Show them who’s really champ by standing up to them! 

Law firms. Traditionally such a necessary and benevolent force for good throughout the world. Regulating business, following rules, enforcing rules, getting justice… That’s how many and maybe even I once viewed much of the law profession last century. But this century…

It reminds me of Animalism. Or, to be more precise, originally the seventh commandment of Animalism: ‘All animals are equal’.

We all know how it was amended, becoming ‘All animals are equal, but some animals are more equal than others’. And that phrase in particular brings to mind many law firms today. Some are fair, benign and indispensable and play by the rule-book. Others are more equal than others: unfair, malignant, superfluous and scornful of the rule-book: operating seemingly outside the law – above the law – when they’re the ones that should be upholding it! Yep ladies and gents, I’m talking about the unscrupulous law firms that manipulate laws and moral norms to extract a pretty penny from large (and sometimes not so large) companies – which have done nothing wrong!

I’ve already written plenty about patent trolls (and how we have a policy of never giving in to them). Today I’ll be telling you about a similar phenomenon we recently came up against…

So what’s all this about?

Picture the mise-en-scène:

Take a manufacturer of a consumer good. A law firm decides to uncover an alleged small flaw in that consumer good (and one can be found in any consumer good; these guys are like wizards in making them appear anywhere), and once they find the best ‘defect’ they seek out a supposedly affected and aggrieved consumer, who then files a claim against the manufacturer, but not just on his or her own behalf, also on that of a large group in a class action lawsuit claiming violation of consumer rights. A website is created and an advertising campaign is launched (no joke) calling on consumers to join their concerted effort against the ‘excesses, unfairness and incompetence’ of the alleged guilty party.

At first blush the intentions of one of these campaigns and the corresponding slogans look convincing and honorable. It can indeed seem that it’s just the small people being gallantly looked after. And from a legal standpoint it does look like all is well-intentioned, good and proper. But all you have to do is probe a little deeper, and a different– vastly different –picture then comes into view: one resembling deceit and underhandedness (to put it politely), or sham/scam (to be less polite but no less accurate)!

This particular business model first took root in the good ole U.S. of A. a long time ago, somewhere in the last century. Today, consumer class actions in America have become serious business. There are dedicated websites that keep track of all such litigation and that send emails out listing new such class actions and agreements and how to easily sign up to them with a few keystrokes on the keyboard. Ten bucks here, another ten there… a tidy sum of extra income can be earned.

Now, to large multinational companies with multimillion dollar turnovers these class actions hardly even register, like a flea-bite to an elephant. However, for not-so-big companies, like for example small software vendors, class actions add up to huge sums having to be taken out of the pot for development of new technologies; often it’s simpler to just declare bankruptcy and start the business over.

Now, I don’t know how many tens of thousands of lawyers earn their living feeding at this trough (Animal Farm-related pun not intended) or what the annual turnover is ($6-8 billion has been estimated), but what I do know is that it’s very widespread. And I also know for sure – they openly admit it themselves – that the main reason these lawyers go for class actions is just because the like them (fast forward to 2:11).

And it’s small wonder why they like them. Costs are minimal (they don’t even need to buy up patents!), and the courts’ default stance is to be on the side of the consumer ‘victims’ – protecting them from the ‘excesses of capitalism’. It’s also small wonder that the other victims in this sorry state of affairs – the companies that are targeted by this extortion – prefer to negotiate than fight through the courts: many don’t have the wherewithal to go to court (it’s never cheap), and for some it’s a lot simpler and economically more viable to just pay the ransom instead of having their legal department get bogged down for eons. As a result this industry flourishes as more and more lawyers pour into it after getting a whiff of the easy bucks.

Still not convinced these wholesome attorneys aren’t just wanting to line their pockets and in fact only just want to protect the rights of consumers?

Then let me give you an example…

One of our competitors (the information is public domain already, but all the same I think it’s only right not to mention any names) recently settled a class action lawsuit and paid $700,000 to the lawyers of the suer, $1.25 million to third organizations, and $9 plus three months’ free use of its product to each participating consumer! So there you have it folks: straight-up, honest looking after the poor consumer, plain and simple for all to see :).

Precisely a year ago we found out we were to be targeted by a set of these white-collar ‘consumer champions’. But they needn’t have wasted their time…

For we have a firm policy for how to deal with such unscrupulous behavior: no negotiations. Instead, we fight – to the end. It’s not the easy way out that’s for sure, or the cheapest one, but it’s worth it – especially if they go off with their tales between their legs and never come back.

So, like I say, exactly one year ago we were hit with one of these sham(eful) lawsuits, from a certain Barbara Machowicz (and her representative, the law firm Edelson). It was brought against our free Kaspersky Security Scan (KSS). They alleged “[that they were] fraudulently induced to buy [KL’s] security software through … KSS, which is purportedly designed to ‘detect unwanted malware, software vulnerabilities, and other non-malware security problems’ “ and “that KSS is essentially ‘scareware’ engineered to detect fake security threats”.

And btw, this Edelson (surely just by a coincidence) was the law firm that brought the case against our competitor mentioned above. Fancy that?! Taking another closer look (the devil’s always in the details in these matters), we found out that they’d decided to simply do a repeat of their lawsuit against our competitor: basically, the claims against KSS were mostly copied word-for-word from it. I can just see the MS Word template used for the statement of claim, with blanks left for just the name of the defendant :).

Just how we were defamed in the statement of claim with their groundless accusations… I won’t go into here; that wouldn’t be quite proper. All I’ll say is that we didn’t ignore the statement or regard it lightly. After having received it we took it seriously (despite the wholly unserious allegations) and started to analyze what’s afoot. And sure enough, soon enough, all became clear.

KSS scans a computer for malicious and suspicious programs, system and application vulnerabilities, the correctness of settings, and other particulars that could affect the security of the computer. Ms. Machowicz had KSS scan her comp, and though it didn’t find any viruses, it did find a slew of vulnerabilities, including dangerous Windows and Internet Explorer settings, USB and CD auto-runs, cookies being saved, and caching of data received via https. As a result, KSS rightly issued Ms. Machowicz its verdict: ‘Your computer could be at risk. Problems found!’

Kaspersky Security Scanner Free Antivirus

Read on: This is how the story ended up…

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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.

Read on: a simple arrangement…

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Top-10 tips for fighting patent trolls.

Increasingly of late – particularly since our recent much publicized triumph in court against a patent troll – I keep getting asked for advice on how to combat patent parasites. So… here they are: our top-10 tips for fighting back against and conquering patent bloodsuckers.

First, your applause please for the KL guys behind the tips (and our fight against patent trolls):

  • Nadya Kashchenko, Chief IP Counsel
  • Dmitry Polyakov, Head of IP Protection & Defense
  • Nikolay Borovikov, Head of IP Research & Analysis
  • Sergey Vasilyev, Senior IP Counsel

From our various battles over the years with patent piranhas in different countries, we’ve come to a number of conclusions about patent trollism. Of course, every country has its own particular economic and socio-political features, plus its own unique patent legislation, but still, on the whole the pattern pretty much stays the same when it comes to trollism – with just a few minor differences. For both clarity and practicality here I’ll concentrate on specifically the US patent environment, since trollism there is currently the most out of control and problematic for innovative companies.

10 tips for fighting against patent trolls

Read on: rule #1 – don’t panic!…

Inventors and inventions.

As recent events have confirmed – we have an active patent life.

Our inboxes keep getting filled with all sorts of e-mails – both positive and negative, interesting and insipid – about various patent claims and assorted inventions…

…Which got me thinking…

…Which led to my doing some research of some of the weird and wonderful – and totally wrong – predictions of ‘experts’ with regard to various new ideas, inventions and undertakings over the centuries.

Here’s an interesting list of 20 extremely bizarre absurdities which I found on the web; I’m sure it will at least raise an eyebrow or two, maybe compel a chuckle or three, or hopefully induce four LOLs:

1. “The fall of stones from the heavens is physically impossible.” – Paris Academy of Sciences on meteorites, 1772.

2. “In the future computers will weigh more than 1.5 tons.” – Popular Mechanics, 1949.

3. “I think there is a world market for maybe five computers.” – Thomas Watson, CEO, IBM, 1943.

4. “I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year.” – Editor, Business Books, Prentice Hall, 1957.

5. “But what…is it good for?” – Engineer, Advanced Computing Systems Division, IBM, 1968, commenting on the microchip.

6. “There is no reason anyone would want a computer in their home.” – Ken Olson, Chairman, Digital Equipment Corp., 1977.

7. “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” – Western Union internal memo, 1876.

8. “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” – Associates of David Sarnoff who was seeking investment in the radio in the 1920s.

9. “The concept is interesting and well-formed, but in order to earn better than a ‘C’, the idea must be feasible.” – Yale University management professor in response to Fred Smith’s paper proposing a reliable overnight delivery service. (Smith went on to found Federal Express Corp.)

10. “Who the hell wants to hear actors talk?” – H. M. Warner, Warner Brothers, 1927.

11. “We don’t like their sound, and guitar music is on the way out.” – Decca Recording Co. suits rejecting the Beatles, 1962. (I LOLed to this one.)

12. “Heavier-than-air flying machines are impossible.” – William Thomson, Lord Kelvin, British scientist, 1899.

13. “That Professor Goddard with his ‘chair’ in Clark College and the countenancing of the Smithsonian Institution does not know the relation of action to reaction, and of the need to have something better than a vacuum against which to react – to say that would be absurd. Of course, he only seems to lack the knowledge ladled out daily in high schools.” – 1921 New York Times editorial about Robert Goddard’s revolutionary rocket work. The remark was finally retracted in the July 17, 1969 issue.

14. “Drill for oil? You mean drill into the ground to try and find oil? You’re crazy.” – Workers whom Edwin L. Drake tried to enlist to his project to drill for oil in 1859.

15. “Airplanes are interesting toys but of no military value.” – Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre, 1911.

16. “Everything that can be invented has been invented.” – Attributed to Charles H. Duell, Commissioner, U.S. Office of Patents, 1899.

17. “Louis Pasteur’s theory of germs is ridiculous fiction.” – Pierre Pachet, Professor of Physiology at Toulouse, 1872.

18. “The abdomen, the chest, and the brain will forever be shut from the intrusion of the wise and humane surgeon.” – Sir John Eric Ericksen, British surgeon, appointed Surgeon-Extraordinary to Queen Victoria, 1873.

19. “640 kb ought to be enough for anybody.” – Attributed to Bill Gates, 1981.

20. “$100 million dollars is way too much to pay for Microsoft.” – IBM, 1982.

As is becoming a habit already, I’ll finish with another brainteasing conundrum:

A rope is stretched snugly around the Equator. It gets cut at one point and an extra one-meter section is inserted to its length. If this rope could magically float on air so that it is fully stretched out (as before), how far above the earth would it be floating?

Breathe the pressure!

Prevention is better than cure. And that goes for fighting patent trolls too.

With this old adage in mind we recently filed a lawsuit against Device Security LLC seeking invalidation and non-infringement of the patent covering the tech involved in protecting data on mobile devices. This marks a distinct change of tactics on our behalf: Though we’ve been warring with patent parasites for eight years already, this is the first time we’ve gone for a preventative attack.

Kaspersky Lab vs Device Security LLC

Read on: So why have we done this, and why?…

“To live is to war with trolls”*

The euphoria after our recent single-handed victory over a patent troll has died down – a little. It was real nice to read lots of different accounts of the good news (like this, this, this, this and this) and multiple encouraging  comments from users. However, the real struggle has only just begun – ahead lies a lot of hard work and hassle, albeit interesting hassle. So now’s probably a good time to sum up everything.

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Read on: The first and main thing – never let your guard down…

The patent trolls can be defeated – just never give up!

Hurray! Drum roll… cymbal crash + orchestral hit! We’ve beaten yet another US patent troll! The enemy is defeated, demoralized, and on the run! Churchill was right: “Never give up!” We’ve followed his advice in our fight against a particular troll. As a result the troll gave up and ran away with nothing and its tail between its legs.

“Shock, happiness, joy and adrenaline – all in one”

– That’s how N.K. (our Chief Intellectual Property Counsel) described this victory. For this time the troll was of a higher caliber and its ‘connections’ were way more heavyweight.

lodsys

Shock, happiness, joy and adrenaline all in one – I couldn’t agree more. Our 18-month court case with Lodsys (one of the ‘tentacles’ of the world’s largest and most notorious of patent trolls – Intellectual Ventures (“IV”)) was brought to a sudden halt by a full and unconditional capitulation by this abominable patent parasite. As per the norm, we won once again alone, with another 54 defendant companies deciding to settle with the extortionist, while others shamefully fled the battlefield altogether. In all the patent troll has shaken down more than 400 IT companies!

Now for the details…

More: Once upon a time there was an inventor, who invented feedback…

Revenge can be sweet, especially against patent trolls.

Payback can be slow – painfully slow – in coming, but thankfully, at last, it does seem to be showing signs of finally arriving and hitting some most unsavory types – patent trolls – squarely in the nether regions.

I’ve already waxed lyrical here about trolls and what needs to be done to up the fight in tackling this scourge.

Here, let me give you a quick review of what needs to be done:

  • Patent use to be limited – a ban on claims for a term preceding their acquisition;
  • Mandatory compensation of a defendant’s expenses if a lawsuit against it is either defeated in court or withdrawn;
  • A ban on patent aggregators bringing lawsuits;
  • An increase in the required detail and accuracy of patent descriptions, and mandatory technical expert examinations;
  • The main thing: not for ideas to be patented, but their concrete practical application.

Sometimes it seems like US legislators read my blog! Finally, something is getting done – and not just anywhere, but in the state of Vermont, where the first anti-troll law has come into effect!

There’s a lot of interesting stuff in this law, but what I like most in it is that now a defendant company can demand from a patent troll reimbursement of all its legal costs if it manages to prove that the troll acted not in good faith.

More: Special thanks for the law go to … a patent troll!

Patents against innovation – cont’d.

“Patents against innovation”. Sounds as paradoxical as “bees against honey”, “hamburger patties against buns”, “students against sex” or “rock ‘n’ roll against drugs”.

Patents against innovation? How can that be possible? Patents exist to protect inventors’ rights, to provide a return on R&D investment, and generally to stimulate technological progress. Well, maybe it’s like that for some things, but in today’s software world – no way.

Today’s patent law regarding software is…well, it’s a bit like one of those circus mirrors where reality is distorted. Patent law is now just so far removed from common sense that it’s patently absurd; the whole system right down to its roots needs to be overhauled. ASAP! Otherwise innovative patents meant to encourage and protect will simply fail to materialize. (Good job, patent system. Stellar work.)

So how did everything end up so messed up?

Well, despite the virtuous original intention of patents to protect inventors – today they’ve mainly turned into nothing more than an extortion tool, whose objective is just the opposite of protecting innovation. The contemporary patent business is a technological racket – a cross-breed between… a thieving magpie and a kleptomaniac monkey – with a malicious instinct to drag anything of value back to its lair.

Growth in the number of patent lawsuits with the participation of trolls

trollcase

 Source: PatentFreedom

Now for some detail. Let’s have a closer look at the patent business.

More: aggregators, trolls and pools …