By Greg Aharonian [LINK]
The 11 August 2008 edition of the Wall Street Journal, page R6, has an idiotic article on patent licensing, starting with a review of the Microsoft v. Avistar squabbles. Microsoft earlier was in talks with Avistar to license its technology, but in the midst of discussions, filed reexam requests challenging 29 Avistar patents, causing Avistar a month later to fire 25% of its workforce (27 employees). Avistar is crying foul, while Microsoft is arguing it found legitimate prior art that the PTO must use to reassess the validity of the patents.
I looked at a few of Avistar’s patents (7412482, 7398296, 7152093 – some of the earlier patents are assigned to Collaboration Properties or Vicor Incorporated). On the side of Avistar, many of their patents cite an excellent amount of patent and non-patent prior art. On the side of Microsoft, the patents are in the crowded area of network communications, so a priori I would not be surprised if a company like Microsoft that can afford to spend tons of money for prior art searching has found additional prior art to use in the reexam requests. Unless the prior art they cited is bogus in order to cause delays to squeeze Avistar, I would say that Microsoft’s countermove is a legitimate tactic.
In short, this is a case that has little to do with tr-lls, but rather is a case that should be the basis for an article on the tactics of prior art searching (how much should small companies spend on searching during patent prosecution versus how much should they spend before entering into negotiations or litigation?). Indeed, if anyone has seen any of the Microsoft reexam requests, I’d be interested in knowing the quality of the new prior art that they found. But the article uses this squabble as an intro into the ill-defined, made up problem or tr-lls (tr-lls being the restless-leg-sydrome of the IP world). The author of the article, not wanting to do much thinking, sets the stage of the article as follows:
At the epicenter of the struggle are so-called ‘patent tr-lls’, a derogatory term for small firms whose only business is to buy patents and assert them in court in hope of obtaining large settlements or damages.
This is a sentence of economic nonsense. First, is ‘tr-ll’ really a derogatory term if tr-lls are using the same tactics as the infamous non-tr-ll tr-ll, IBM? If, when IBM was doing this, it didn’t earn the label of derogatory, it shouldn’t be applied now except as a compliment.
Worse, this paragraph completely betrays free markets (something the Journal is glad to do when it is in the interests of its big company buddies), because it forgets the fact that a patent is an asset created by the government in exchange for an inventor’s public disclosure of a new and useful invention. When the asset is so created, there is absolutely nothing freakin wrong with people doing with patents what they do with all other financial assets – buying, selling and exploiting them. To attack this practice is to attack free market economics. If an inventor doesn’t have enough money to fully enforce his or her patent, it is pure free market economics for that inventor to sell the patent (for a fixed sum and/or royalty) to another economic player who can fully enforce the patent. To complain about this is to attack free markets (something too prevalent in big increasingly-uninnovative companies).
Speaking of which, the article quotes head abuse-patent-reform leader Mark Chandler of Cisco (who I would be glad to debate this issue with, while I am totally drunk, and still win):
Mark Chandler, general counsel of Cisco Systems, says companies that don’t produce anything can buy low-cost patents, hire contigency fee lawyers and file lawsuits seeking massive damages for patents that contribute negligible value to a product. Proposed patent reform that links damages to the economic value of the patent would help solve the problem, he says.
Again, Chandler is attacking free-market economics, in that there is absolutely nothing wrong with companies raising funds to help enforce patents where the original inventor does not have the financial resources to do so. And I don’t think that is what Mark is whining about.
Rather what I think he is whining about is that a) companies like Cisco refuse to spend much time and money monitoring issued patents in their field to anticipate such problems (something the bio-pharma-chem companies, acting like grownups, routinely spend lots of money doing so), and b) companies like Cisco (and most of Silicon Valley) refuse to pool their monies and talents to build prior art resources and tools to help kill much of the crap being issued by the PTO that is used to harass children such as Cisco. I have asked around for 15 years in Silicon Valley for funding to build two prior art collections, one to remain in the Valley for everyone’s use, and the second to be donated to the PTO for examiner’s use. No interest whatsoever, and not just no interest in not funding me (hey, I know I am a jerk), but they don’t want to fund anyone to effectively solve the prior art problem. Because the large companies like Cisco (lead by …. IBM) want to continue to get their crappy patents (which would be threatened by any serious prior art effort – that patent peer review project being a logistic scam at IBM’s behest to prevent serious treament) while whining about smaller companies’ crap.
So anyone use the full word ‘tr-ll’ with the ‘o’ in the patent world is either an idiot or a liar. Or both. No crappy patents should be asserted in courts for only one reason – that such crappy patents don’t issue in the first place. But will companies’ like Cisco use their clout to get Congress to investigate incompetent and corrupt PTO management? NO. Until they do, they should stop whining. If someone gives me his address, I will send Mark a pink blankee he can wipe his tears with.