New bipartisan bill could squash the widely-hated patent troll industry for good | The Verge

New bipartisan bill could squash the widely-hated patent troll industry for good | The Verge.

It appears that today U.S. Representative Bob Goodlatte of Virginia introduced a piece of legislation to broad bi-partisan support which is aimed squarely at cutting down on the number of frivolous and abusive patent suits which are roiling the technology industry.

 

The proposed legislation would  institute a “loser pays” system for attorneys’ fee awards, would delay burdensome discovery requests until the court has first interpreted the disputed patent, and would increase transparency of patent ownership (curtailing patent troll’s favored M.O. of using multiple shell companies to hide behind and/or use a fronts in patent litigation).

 

This proposed litigation, while not necessarily a panacea for the the intelelctual property problems currently facing companies in the technology industry, would certainly go a long way to curb some of the more egregious and abusive tactics currently being utilized by non-practicing entities (a/k/a patent trolls).

 

It will be interesting to see if this bill will actually be passed into law. Here’s to hoping!

A new(ish) tactic: Patent trolls want $1,000—for using scanners | Ars Technica

Patent trolls want $1,000—for using scanners | Ars Technica.

A disturbing new trend is emerging in the world of patent litigation. Non-Participating Entities (“NPEs” or, more colloquially, “Patent Trolls”) have now started threatening, and in some cases suing end-users of technology which the NPEs are claiming infringes upon patents they now own.

In the ArsTechnica article above, you can read the tale of an Atlanta-based IT services company, BlueWave, who recently tangles with such a troll. In this instance, the NPE, through a law firm, was seeking to “settle” an infringement claim against BlueWave for making use of scanners to create .pdf documents from hard copies and then e-mailing and otherwise distributing the .pdf files (as just about every business in this country now does). Of course, it sounds ridiculous on its face that this could be a violation a valid patent, and yet, there do exist several patents which claims to cover this series of processes.

While it is probable that these patents (and many like them) are vulnerable to attack, NPEs are increasingly making use of such patents to press for settlements from companies who they believe are unlikely to go the time and expenses of fighting off such claims (or seeking to invalidate the underlying patents). In some cases, the NPEs are even filing suit, in hopes that by increasing the pressure on the alleged infringer, that a settlement will result.

Technically, there is nothing illegal about such tactics. At the same time they reek of bad faith and dubious business practices. At a minimum, they certainly represent a perverion of the intent behind our intellectual property system.

Legitimate or illegitimate  though, we can expect to see much more of this kind of behavior.

Twitter limit: University of Washington caps live game coverage for media, threatens credential revocation – GeekWire

Twitter limit: University of Washington caps live game coverage for media, threatens credential revocation – GeekWire.

Based in this article from GeekWire, it looks like the University of Washington (a public institution, I believe) may have set itself up for a bit of a First Amendment issue with its “Live Coverage Policy” for journalists credentialed to cover its sports program.

The policy explicitly limits journalists to 20 Tweets per basketball game and 45 per football game. Violations can result in revocation of the violator’s press credentials. As a public institution, and thus, arguably, a “state actor”, the UoW may be violating the First Amendment with this policy.
Even if it is not, it certainly raises (once again) the issue of social media in the press and what its implications are for First Amendment speech (including, but not limited to freedom of the Press).

Of course, there are (albeit distant and indirect) additional issues of trademark, fair use, and the role of public university ownership and use of intellectual property implicated in these situations as well. Those, however, are subjects for another time.

A healthy reminder from Amazon: You don’t buy ebooks, you rent them | GigaOm

Gigaom

Updated: Sometimes the language we use fails to capture the essence of what we’re doing when we are online, or lulls us into a false sense of security about our behavior and what it means. For example, we’ve gotten pretty used to the idea that we can “buy” ebooks from Amazon (s amzn): we just click a button and pay with a credit card and there it is on our Kindle. Except that we aren’t really buying it in the traditional sense of the word; we are merely renting it, or paying for access to it under a specific set of circumstances — and a recent incident in which a woman’s account was blocked and all of her books removed without explanation is a healthy reminder of that.

Norwegian technology blogger Martin Bekkelund describes how his friend Linn Jordet Nygaard found that her Amazon account had been shut down…

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Study: Trolls account for 40 percent of patent lawsuits — Tech News and Analysis

Study: Trolls account for 40 percent of patent lawsuits — Tech News and Analysis.

A recent article on GigaOm.com discusses a recent study which documents a significant spike in the number of patent suits being brought by NPEs (or “trolls” in common parlance), with such suits now making up nearly 40% of all patent litigation.

Even more disturbing is the fact that typical costs in patent litigation are now ranging from $650,000 to $5 Million (depending, largely, on the amounts of money at stake). This is a huge amount of money being tied up in IP fights that could otherwise be used in R&D or to otherwise drive innovation or fund job growth.

Of course, filed patent lawsuits are only the tip of the iceberg. This does not not include the impact of IP disputes which do not even reach the litigation stage involving threats, forced licensing deals, and disputes which settle on other bases before litigation.

UN sponsored “patent peace negotiations” underway. Is there hope on the horizon?

Here is an opportunity for there to be real and substantive dialog regarding reforming and harmonizing patent law. Sadly, it appears unlikely and true progress will be made here, but one can hope.

In Technology Wars, Using the Patent as a Sword – NYTimes.com

In Technology Wars, Using the Patent as a Sword – NYTimes.com.

In it’s seventh installment on the iEconomy, The New York Times focuses in on the dysfunction in the current patent system. The article uses as a graphic example of the carnage regularly be wrought on certain sectors of the innovation economy the cautionary tale of a small-sh technology company names Vlingo.

Vlingo was a voice-recognition software company which became embroiled in a patent infringement suit with a much larger rival, Nuance. Vlingo ultimately prevailed at trial, but the expenses were such that company was completely drained at the end of the litigation and ended up being acquired by Nuance (the result that Nuance apparently wanted all along).

The NYT article is a good read for a view of just how broken the current system is. The article is by no means perfect. (The Apple enthusiast site imore.com correctly takes the NYT article to task for almost loosing the point of the impact of the patent system on small, outsider innovation company in its examination of Apple’s role in the process.) Nevertheless, the article does get the essential point across: in the process of trying to encourage innovation through the protection of intellectual property, the current system is now subverting its own goals, by creating an environment in which only the massive players at the very top of the market can afford the huge costs of protecting intellectual property (and protecting themselves from attempts to use IP laws to crush competitors).

Although I spend a lot of time attempting to raise awareness of the problems with our current intellectual property laws, much of my writing leave unanswered the question of what, as a company attempting to navigate these complicated and sometimes treacherous waters, should I do. Outside of actively pressing for updates and reforms to our current laws, there are actually quite a number of things that innovation companies can and should be doing.

While these steps will (and need to be, given the complexity and length of the subject matter) discussed in detail in subsequent blog posts, the two most important steps companies can take are: (1) take affirmative steps to protect your intellectual property, (2) ensure that you have processes in place within your company (or through outside resources) to ensure that your products and services are not infringing on the intellectual property of others. Both of these are significant undertakings for an innovation company, particularly ones still in the early-growth phase. These, however, are critical business considerations and failure to incorporate them into a company’s business plan can have dire consequences. As such, planning and budgeting for these as an integral part of a business’ development is a critical risk-management step.

Twitter’s Ben Lee: Tax the Trolls! (or “Cost-shifting as a deterrent to frivolous patent litigation.”)

This is an interesting opinion piece by Twitter’s Ben Lee. I absolutely agree with his proposition that US IP enforcement laws should include a cost shifting mechanism (i.e. loser pays winner’s attorneys’ fees) where the litigation is found to be frivolous. Frivolous litigation clearly is an unwanted economic drain. Unfortunately, however, such cost shifting mechanisms do not address the issues created by NPEs (i.e. patent trolls) who amass intellectual property portfolios in order to become virtual gatekeepers on the road of technological advancement. That is an issue which will require a much more subtle, nuanced approach, balancing the benefits of rewarding innovation while preventing the financial road-blocking of further innovation.

Gigaom

Twitter is an engineering company, and engineers like to innovate. Twitter is also well known, and, as a result, we receive patent threats and lawsuits from time to time. Many of these are baseless, and our policy is to fight them with all our might. In fact, we have never agreed to pay to settle a patent suit.

Still, even meritless lawsuits cost us money in attorney fees, and force our engineers to spend time with lawyers rather than improving our product. For example, we recently won a case regarding U.S. Patent No. 6,408,309, entitled “Method and System for Creating an Interactive Virtual Community of Famous People.” After a trial before a jury, we managed to prove that we didn’t infringe and that the asserted claims from the patent were invalid. This patent was “invented” by a patent lawyer, Dinesh Agarwal. According to his own testimony at trial, Mr. Agarwal…

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European Newspapers vs. Google – Copyright tug-of-war with consequneces.

A classic case of the tension between rights holders and technology companies. On one hand the technology companies (in many cases) enable greater uptake of the content. On the other, rights holders often see technology companies monetizing their content without and direct benefit to the rights holder. (Pinterest and Google are two of the big battlegrounds in this fight.) There is merit on both sides of this fight, and it is clear that not only do copyright laws need to evolve to logically deal with this tension, but so do the business models on both sides. There is not a clear new paradigm that works for both sides yet, but if one doesn’t arrive soon, there will be an awful lot of unnecessary casualties on both sides of this battle.

Gigaom

Google (s GOOG) has launched a broadside against a proposed law in Germany that would see search engines forced to pay license fees for linking people to news stories.

Well, actually that’s slightly inaccurate: the draft law would make search engines pay for reproducing newspapers’ headlines and first paragraphs. So, take those away and the links are fine. Even if nobody will have the faintest idea what they’re linking to.

Google’s North Europe communications chief, Kay Oberbeck, sounded off about the issue this morning in a guest post for a German press agency. That was in German, of course, so I got him to vent in English as well:

“Nobody sees a real reason why this should be implemented,” he said. “It’s really harmful, not just for users who wouldn’t find as much information as they find now, but such a law is also not justified for economic reasons or…

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3 reasons juries have no place in the patent system (or do they?) — Tech News and Analysis

3 reasons juries have no place in the patent system — Tech News and Analysis.

In this piece from GigaOm, columnist Jeff Roberts argues, in the wake of the verdict in the Apple vs. Samsung case, that juries should not be involved in the resolution of patent disputes. While Roberts does point out some of the issues that can potentially skew results in jury trials, I am dubious that this is really a valid “fix” to the increasingly clear problems with our current patent system.

His first two points about juries potentially being swayed by brand loyalty and/or “He’s a copy-cat!” are unfortunately just (or at least nearly) as true for judges as they are for juries. While judges are well trained in the law, that does not mean that they do come to cases with certain “biases” in place. (They are human, after all.) Nor are judges immune from falling victim to certain logical fallacies in their analysis of complex matters, including oversimplification of those complex matters to fit them into paradigms with which it is easier to grapple (i.e. “He’s a copy-cat!”). What’s more, both of these issues can cut either or both ways, in any given case. I am not sure that either of these issues necessarily favors plaintiffs vs. defendants in general. In many cases it comes down to the particular facts of that case and how effective the lawyers on each side are at telling a compelling and believable story to ties together the complexity of the case.

With respect to Roberts’ point about jury trials being more expensive than bench trial, this is undeniably true. There are more moving parts to a jury trial, and thus they are more expensive. The larger and more complex a trial is, however, the smaller the gap in complexity and expense between jury and bench trials. This gap can be huge in a small case, with a relatively small number of factual and legal issues to be decided and relatively small amounts of money at stake. The difference. in cases that are already highly complex, dealing with mountains of evidence ,and in which the stakes are very high, is, in terms of percentages of difference, relatively small. It is not the fact that each side in Apple vs. Samsung case might have saved a million dollars by having a non-jury trial that is so ridiculous. It is the fact that each side spend tens of millions of dollars on legal fees in the fight that is ridiculous.

Don’t get me wrong. The lawyers in this case worked hard (many, many late nights, missed children’s birthday parties and soccer games, etc.) and they undeniably fought hard and effectively (some more effectively than others) for their clients. They deserve their compensation for the hard work they did. The problem is a system which incentivizes the creation and hoarding of patents and the use of those patents to create an environment where companies seek to control markets through litigation. This is made worse by the fact that billions of dollars are spent each year in carrying out the strategy of market dominance through litigation, rather than spending that money on fresh R&D, charity, or other productive, positive pursuits.

Ultimately for our Intellectual Property schema to make sense in society as whole, as well as from an economic efficiency standpoint, it must balance a number of goals, including (but by no mean limited to): (1) incentivizing companies and individuals to innovate, (2) providing an avenue to grow and benefit the national economy, and (3) giving predictability and stability to industries so that it is reasonably possible to understand what is and is not protected intellectual property (anybody who tells you we are already there has never actually been involved in IP litigation).

The current system, by most objective analyses, is failing to a greater or lesser extent in each of these goals. Rationalizing out system of defining and protecting intellectual property will be no small task as there remain many fundamental disputes as how to accomplish such a reform (and, indeed, whether such reform is event truly needed.)

In the meantime, the IP landscape remains treacherous. Failing to protect one’s IP can tremendous costs, both actual and “opportunity” in nature. The process of defending that IP (and/re defending ones’ self from someone elses’) is complex, length, and expensive. Making ones way through the complexities of the technology economy is fraught with both great peril and great opportunity. And closely minding one’s IP “Ps and Qs” is a critical part of minimizing the perils and maximizing the opportunities.