Google Patent Chief: Patent reform needed more than ever

A patent reform bill is expected to be introduced today in the Senate and House. Below is a (yet unauthorized reproduction and) editorial by Michelle Lee, Head of Patents and Patent Strategy at Google (Originally posted here)
After the last time I blogged about patent reform in late 2007, the House went on to approve the Patent Reform Act. The bill unfortunately got bogged down in the Senate the following year. Since then the problems of the current system — and the need for reform — have only grown.
Consider this: Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.” Most of these cases seem to feature the same small set of contingent fee plaintiff’s lawyers asserting patent claims against the same small set of companies. We’ve also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.
Unfortunately, the temptations and opportunities for abuse have gotten too high. Lawyers and plaintiffs have seen the potentially huge payoffs available in patent litigation. Before 1990, there had been just one patent damage award of over $100 million. Since 1990, there have been at least 15, with at least five topping $500 million.
That’s why I’m excited that patent reform legislation is slated to be reintroduced today by Senators Patrick Leahy and Orrin Hatch and Representatives John Conyers and Lamar Smith. Once a driver of creativity, our patent system now poses a hurdle for innovation. All too often, Google and other companies face mounting legal costs to defend against questionable patent claims from speculators gaming the system to reap windfall profits. And those lawsuits make it more difficult and costly to introduce the next revolutionary product.
I wrote a bit last Congress about the reform provisions that Google cares the most about. The most pressing of those is ensuring fair damage awards. The current system too easily allows damages to be assessed based on the value of the whole product often containing many features — not just the value of the innovation of the allegedly infringed patent — which means the threat of potentially massive awards forces defendants to settle. Balance should be restored by requiring damages to be based on the value of the innovation’s contribution to the product.
As members of the Coalition for Patent Fairness, we’re optimistic that patent reform faces better odds in 2009 than it has before — not least because President Obama has pledged his support. Passage of patent reform is long overdue.

53 thoughts on “Google Patent Chief: Patent reform needed more than ever

  1. Nice isn’t it, to be able to pick and choose which Law suits you.

    I notice you avoid the printed matter doctrine challenge once again. Why am I not surprised?

    Do you always run away when confronted with the fatality of your positions?

    Man up, put up or shut up.

  2. “a new machine is clearly a composition, is it not?”

    It is a composition. Is it therefore necessarily patentable subject matter?

    No, it isn’t.

    And In re Alappat is a pile of crap.

  3. “Compositions that are non-obvious…”

    …sort of like a general purpose computer that is transformed into a particular machine with the aid of a computer program that changes the composition of the electronic configuration.

    …sort of like In re Alappat. “A key finding in the decision is that once a computer program is loaded into the memory of a general purpose computer, the computer can be viewed as a new machine eligible for patent protection.” Looks pretty cut and dried that a new machine is a composition.

    Of course, Malcolm, I am ready to pull the quote out concerning the printed matter doctrine that you never did answer when you last tried your “cookbook” analogy (and whimpered away instead of putting up or shutting up).

    What say you Malcolm, a new machine is clearly a composition, is it not? Are you ready yet to put up or shut up?

  4. Hank: “mooney? take a class on IT”

    Take a class on reading comprehension. Compositions that are non-obvious and provide computers with unexpected increases in processing speed are very very much patentable.

    I hope companies continue to do research and development leading to the invention of such compositions. I also hoped they hire competent patent attorneys to claim those compositions properly.

    I don’t think this is too much to hope for. Other fields of endeavor have been progressing just fine playing by these rules.

    But maybe some of those other fields haven’t been so ridiculously overvalued as “social networking” and other garbage that is less innovative than Bono’s last fart.

  5. “Here’s the thing: like most people in the world, I’m perfectly happy with Google’s search engine. I’ll keep using it as long as they don’t screw up the interface.

    The only improvements that should be patentable in computing are those that lead to unexpected improvements in the speed of information processing. Everything else is abstract crap.”

    what is speed of information processing? is that network neutrality or DSL? how about compression? oh, forgot, bilski, cant have processes that speed information processing without transforming something or being on a particular machine …

    mooney? take a class on IT

  6. Both the manufacturing associations and the labor unions are strongly against this. Patents are the only reason to build a factory in the U.S. – it is always cheaper to go overseas, but you can prtect your IP and trade secrets. The damages portion of this bill greatly reduces the value opf those patents, and will thus drive jobs overseas.

    It is a terrible idea. Remember that we STRENGTHENED patents in the prior downturn.

    Goolge and their 23 buddies who produce no real goods are getting ready to screw up a system we need, and they need to maintain the country and jobs.

  7. Oh, while we are hating on Google – I recommend http://www.ixquick.com for all your searches. It is the most private, you can even search under a secure connection so noone knows what you search.

    Google does not do this, and saves your searches so they can use them in Google Trends and make more money, I guess.

  8. “That’s why Google is trying to pass legislation that will decrease the expected value of patents generally. You seem to think that’s an indisputable good. I’m not so sure.”

    I think that it’s guaranteed to diminish the value of crappy internet method patents that have ZERO value beyond their utility as a revenue-generating tool for so-called “little guys” “trolls” and “sleazebag attorneys”.

    That is an indisputable good, certainly from the viewpoint of anyone who isn’t addicted to the gravy already generated by the aforementioned actors.

    Frankly, I don’t think the legislation will have much impact on those engaged in actual research and development who are focused on trying to protect products that are marketing or expecting to market. And it’s THAT sort of business that we need to encourage, not the paper-pushing legal business of creating over-inflated virtual property for people to speculate and fight over.

    We’ve tried that. It’s not working.

  9. “It’s not Google’s patents that are interfering with people’s ability to compete with Google.”

    That’s why Google is trying to pass legislation that will decrease the expected value of patents generally. You seem to think that’s an indisputable good. I’m not so sure.

  10. “I think it’s fair comment to suggest that Google’s (and Microsoft’s) business strategy is to rely on size, market power and high entry barriers to prevent any opponents from gaining traction.”

    Anybody can write software for searching a database and spitting out results. It’s not Google’s patents that are interfering with people’s ability to compete with Google. It’s the fact that nobody really cares because Google is free and it’s clean.

    Even people who compete with Google use Google. Get it?

  11. Here’s the thing: like most people in the world, I’m perfectly happy with Google’s search engine. I’ll keep using it as long as they don’t screw up the interface.

    The only improvements that should be patentable in computing are those that lead to unexpected improvements in the speed of information processing. Everything else is abstract crap.

  12. Mooney said:
    “‘Google just said that non-practicing entities are trolls.’

    I think a far more reasonable interpretation of what Google said is that non-practicing entities who own crxp patents who sue Google asking for millions of dollars are trolls.”

    What Google’s patent honcho actually said:
    “Consider this: Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or ‘patent trolls.’”

    Her own plain language is that non-practicing entities are “patent trolls,” your spin notwithstanding.

    I agree, however, that Google isn’t calling itself a “troll.” This pejorative is simply intended to stifle a debate on the merits about the special interest legislation Google, Microsoft, et al. are pressing their bought-and-paid congressional clients to stick us with. To point this out doesn’t require someone to advocate every abuse or mistake in the current system. But I think we ought to be wary of the motives of the proponents of these bills–their “solutions” are akin to using high-explosive to get rid of a few rodents, or a sledgehammmer to kill a few insects. I think it’s fair comment to suggest that Google’s (and Microsoft’s) business strategy is to rely on size, market power and high entry barriers to prevent any opponents from gaining traction. The current evisceration of antitrust enforcement and their gambit of buying off Congress to devalue patents fit their strategy.

  13. “Overturn State Street, and almost all of these problems go away.”

    It would be a great improvement, as that is one of the worst patent decisions ever.

    Of course, that would greatly impact the livelihood of “scores” of “little guys” who earn a living by drafting crxp patents for the sole purpose of seeking windfalls from businesses with actual employees, products, and services.

  14. “Google just said that non-practicing entities are trolls. ”

    I think a far more reasonable interpretation of what Google said is that non-practicing entities who own crxp patents who sue Google asking for millions of dollars are trolls.

    Google itself owns patents on methods it doesn’t practice. Is Google calling itself a troll? Of course not.

  15. Dear Mr. Andrew Dhuey,

    Re: “It’s unfortunate, Ms. Lee, that you equate non-practicing entities with “patent trolls”. This is a gratuitous insult to scores of inventors who either haven’t the means to commercialize their inventions, or who conclude that their time is better spent inventing and leaving the commercialization to others.

    If you did not mean to conflate these categories of patent litigants, perhaps you’ll make that clear next time.”

    If I may speak for independent self-employed inventors at large, we appreciate your thoughts – right on.

    I for one have manufactured and sold various and numerous products over the years under my own patents, and I have also licensed other patents of mine covering products that I haven’t manufactured.

  16. What a load of nonsense.

    The electronics industry has a problem that arose because an error was made under 35 USC 101 with respect to business methods and software. We could, of course, fix that mistake. But no, the electronics industry thinks that a better solution is to confiscate the value of everybody else’s patent portfolios. Lunacy, sheer lunacy.

    Overturn State Street, and almost all of these problems go away.

    We do not need significant patent reform, other than to legislate a standard of obviousness higher than the de facto KSR standard, as interpreted and applied in the PTO, of “Because I say so”. We need proper application of the patent laws we already have. Howard Markey, please come back to us.

  17. “…but I suspect that the judges use the ‘inequitable conduct’ route to filter out patents that plainly should not be asserted and to impose a costs sanction on the plaintiff.”

    Your suspicion is incorrect, Paul. Inequitable conduct has nothing to do with the filing of frivolous lawsuits. The judge does have Rule 11 of the Federal Rules of Civil Procedure at his disposal, but it doesn’t get used enough, in my humble opinion.

    “Those considering litigation should as part of their preparation do a good fact/bad fact analysis. If the patentee cannot show that he is exploiting the invention either directly or through licensing, then that has to go into the bad fact column and may be reason enough for not rushing to court.”

    We don’t have a “working” requirement in the U.S., and will probably never have one, notwithstanding the “patent troll” rhetoric. In any case, your notion of how to properly “consider litigation” is a bit naive, at least with respect to some patent litigation. Despite the indignant howls from the peanut gallery here, nobody appears to be denying that a significant portion of the litigation against electronics companies, internet companies, telecommunication companies, and the like, is based on patents in which the litigating attorneys have acquired a stake. These attorneys are not particularly interested in working these patents. It’s all perfectly legal, but some think it smells a bit. Kind of like a slip-and-fall lawyer dispensing with the need for a client and doing his own slipping-and-falling.

  18. “I’m a patent prosecutor and I’m telling you that there is way too much room for non-inventors to exploit weaknesses in the system to achieve money for themselves and their attorneys and virtually nobody else. Can you guess how it is that I am 100% that this is the case?”

    Because you WERE that non-inventor?

  19. It is the job of the patent office to act as at least a primary screen and to filter out those applications that are plainly meritorious. So any issued patent has passed at least that hurdle.

    One of the issues to which attention should be paid is 35 USC 112. Is there really an enabling disclosure, has the inventor gone through the development process, does he carry the scars of that process and have the lessons that he or she has learned found their way into the specification? The disclosure by a knowledgeable inventor at the end of a development process is often hugely different from a hand-waving exercise by an opportunist of the type alluded to and experienced examiners should be able to detect that difference and be alert to gaps in the disclosure.

    Once the patent is granted, however, it is the right of the patentee to sue for infringement, be he or she manufacturer or no. Some “trolls” might be academics in universities and the university exploitation office which is anxious to see a return on their research efforts.

    In the UK, however, the losing party pays the taxed costs of the winner (usually about 70% of actual costs) and this is a significant disincentive to those otherwise inclined bring frivolous proceedings. In the US this does not usually happen, but I suspect that the judges use the “inequitable conduct” route to filter out patents that plainly should not be asserted and to impose a costs sanction on the plaintiff.

    Those considering litigation should as part of their preparation do a good fact/bad fact analysis. If the patentee cannot show that he is exploiting the invention either directly or through licensing, then that has to go into the bad fact column and may be reason enough for not rushing to court.

  20. The root of the problem here, is that there is hardly any way to distinguish between the backyard inventor who has to licence to get a product on the market and the person who writes a ‘paper patent’ so as to get a big settlement. Legally their position is the same. What’s more, ‘bigcorp’ is equally happy to squelch both, which is why they call both of them trolls. Google just said that non-practicing entities are trolls.

  21. It’s unfortunate, Ms. Lee, that you equate non-practicing entities with “patent trolls”. This is a gratuitous insult to scores of inventors who either haven’t the means to commercialize their inventions, or who conclude that their time is better spent inventing and leaving the commercialization to others.

    If you did not mean to conflate these categories of patent litigants, perhaps you’ll make that clear next time.

  22. “People will absolutely switch from one free product or service to another if the new one is even slightly better. This is especially true of services like internet search that are mostly fungible.”

    And the reason nobody has improved on Google’s searches is …? Why? Because Google is evil?

    I’m confused. Those other search engines you mentioned stank for reasons that have nothing to do with patents. They were simply UGLY. That’s why I switched to Google way back when.

    Same with Firefox. I didn’t switch to Firefox because it did more stuff or it was faster or anything like that. I switched to Firefox because it did ***LESS***. It was cleaner. Is there a patent on an interface with LESS blinking lights and unnecessary bullshxt than all the others?

    Your drinking your own kool-aid. Yes, patents matter. But they aren’t the whole story behind the success of a product. Not even close. That’s why so-called secondary considerations are nearly always a pile of intellectual crxp.

  23. moe: “Besides, how many such patents are you talking about, 5? Out of maybe a couple million patents issued in the last few years?”

    Very impressive kicking up of the dust. The issue is: how many patents asserted by trolls against Google (and their ilk) were “invented” by attorneys?

    Do you understand how desperate and silly you sound, moe? Stop acting like Joe the Plumber of the patent world. Nobody is that naive.

    We all want our bread to stay buttered. But there is not need to engage in self-delusion and (worse) the propogating of self-serving nonsense to achieve that goal.

    The fact is that there are people who have made careers for themselves out of exploiting weaknesses in the patent system. These people contribute nothing whatsoever to public. Their goal is to create pieces of paper and use those pieces of paper to extort money from entities who employ hundreds or thousands of people and who provide actual services and products. Are those entities’ hands perfectly clean? Of course not. But it doesn’t excuse the disgusting behavior of patent trolls.

    So please give up your pathetic attempts to excuse them.

    “Therefore, all this present day discussion of “trolls” is a hoax”

    Again, you’ve completely gone off the deep end if you actually believe that. You might as well say that “the behavior of bankers has nothing to do with the economic crisis.” People do say such mindless things. They say such things because it is in their interest to say such things.

    I’m a patent prosecutor and I’m telling you that there is way too much room for non-inventors to exploit weaknesses in the system to achieve money for themselves and their attorneys and virtually nobody else. Can you guess how it is that I am 100% that this is the case?

  24. “I don’t think it matters WHAT TYPE OF LAWYER BRINGS the lawsuit either. A patent’s language and claim’s do not change based on WHAT TYPE OF LAWYER BRINGS the lawsuit OR WHAT FEE ARRANGEMENT exists.”

    Nice strawman. The point is that lawyers are the alleged “inventors” on these patents. In fact, the real “invention” is one Bilski’s Dreams: it’s the realization that a clever lawyer with some money and perhaps the help of one of his partner’s wives can game the USPTO and achieve a massive windfall while contributing positively ZILCHO to the advancement of any art, except perhaps the art of being a cad or a sleazebag.

  25. Quote:
    “Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.”

    Response:
    All this talk about “patent trolls” is pure hype. If you will look at the 1898 Rude et al. v. Westcott et al. SCOTUS case [130 US 152, 9 S Ct 463, 32 L Ed 888] you will see that at least since 1874 inventors have been selling and partnering with other parties to enforce their patents. Without doing so, few inventors and small companies can afford to enforce their patents, meaning larger competitors can easily beat them out of the market they created and run them into bankruptcy. That’s big companies idea of “patent reform”. Therefore, all this present day discussion of “trolls” is a hoax whose purpose is to cut off the small entity support system and deny them any profit from their creations. Simply put, its intent is to legalize theft.

    Quote:
    “We’ve also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.”

    Response:
    Ever hear of Chester Carlson? He was a patent attorney and physicist who invented Xerography. Sound familiar? If you had any clue of what you were talking about, you would know patent attorneys most always have a technical/scientific degree which is critical to do their jobs. It’s tough to write a patent application for a technology you can’t understand. Besides, how many such patents are you talking about, 5? Out of maybe a couple million patents issued in the last few years? My heart bleeds for you. Stop spinning your web.

  26. “Consider this: Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — “

    As I see this it confirms that Google is:
    a) Unable to produce the inventions they need to sustain their business.
    b) That they probably license patents from the 900 pound gorillas but play school yard bullies when dealing with small entities.
    c) That they are likely doing EVIL by taking lots of other’s peoples inventions which is why they have so many lawsuits pending.
    d) That like many young and very successful companies that Google‘s ego has grown faster than good sense.
    e) That they are taking the very same ill-considered path as many other companies which preceded them.
    f) That they will learn the hard way that regardless of how big and bad a bully they may be that sooner or later they will be hosed just like RIM and Microsoft have been.

    “in other words, by non-practicing entities or “patent trolls.”

    We all know that some people are great inventors but not necessarily great business people. Conversely, some people excel at business but rarely are capable of producing the inventions they need to prevail in the market. It is rare for inventors to be effective self promoters and common for patent pirating businesses to be very creative with their public relations. So I guess we could conclude that media hype is the only area where patent pirating companies are still creative.

    “Most of these cases seem to feature the same small set of contingent fee plaintiff’s lawyers asserting patent claims against the same small set of companies.”

    Translation: Attorneys on their white stallions are teaching serial infringers to keep their sticky fingers out of other’s patent cookie jars by slamming the lid on those fingers.

    “We’ve also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.”

    It should come as no surprise that some patent attorneys have what it takes to be inventors. One could argue that they might serve society’s interests better as inventors than as paid mercenaries for patent thieves.

    “Since 1990, there have been at least 15 (judgments against patent thieves), with at least five topping $500 million.”

    All this proves is that Piracy Coalition members are committing larceny on the grandest of scales. Perhaps they need to learn to respect other’s patent property rights.

    “Once a driver of creativity, our patent system now poses a hurdle for innovation.”

    You MUST have inventors to have innovation. Stealing other’s inventions and combining them into a product does not make the person or company doing so an “innovator”. What it makes them is a destroyer of inventors and the jobs and prosperity which the real inventors could have produced. This is the last thing America needs today.

    “All too often, Google and other companies face mounting legal costs to defend against questionable patent claims from speculators gaming the system to reap windfall profits.”

    There is nothing questionable about patents which survive litigation. What is questionable are those who force inventors to divert their attention from producing more inventions to defending their rights. Does everyone hear that big sucking sound of job creation being destroyed by disreputable businesses who think that their s*** doesn’t stink?

    “As members of the Coalition for Patent Fairness, we’re optimistic that patent reform faces better odds in 2009 than it has before — not least because President Obama has pledged his support. Passage of patent reform is long overdue.”

    There is nothing “FAIR” about the horrendous conduct of Piracy Coalition members. Piracy Coalition members have been making rosy predictions of passage for the last four years, and failed year after year. These are companies which steal other’s property and then conduct massive lobbying and public relations campaigns painting their victims as evil trolls. They lie and cheat to promote their agenda. Patent deform is all about getting a bunch of get out of jail fre cards. The problem is there is nothing free and it is every American who pays the price to feed unbridled greed of these companies.

    If Obama is stupid enough to back these companies he will go down in history as being an accomplice in the destruction of American ingenuity.

    Piracy Coalition members have had the power to end litigation. No inventor likes litigation. All the members of the Piracy Coalition need to do is start aquiring the rights to patent properties before using them. The war between American inventors and transnational’s would abruptly end.

    One last point, if Piracy Coalition members had a clue as to what inventors have been doing since we made organized labor aware of how disastrous patent deform legislation is they would not be predicting that it would pass. After all, they have been wrong three years in a row. What such predictions and their continued misappropriation of others patent property rights show is that they are slow, very slow learners. 

    Ronald J. Riley,

    Speaking only on my own behalf.
    Affiliations:
    President – http://www.PIAUSA.org – RJR act PIAUSA.org
    Executive Director – http://www.InventorEd.org – RJR at InvEd.org
    Senior Fellow – http://www.PatentPolicy.org
    President – Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (810) 597-0194 / (202) 318-1595 – 9 am to 9 pm EST.

  27. “people use Google out of habit. Nobody cares if there is a “slightly better” free searching tool.”

    The way they used Webcrawler out of habit and no one cared when Altavista came along? The way they used Netscape and no one cared when Internet Explorer came along? The way they used Internet Explorer and no one cared when Firefox came along?

    People will absolutely switch from one free product or service to another if the new one is even slightly better. This is especially true of services like internet search that are mostly fungible.

    “Right. Because Google became successful by sueing people.”

    No, Google never needed to sue others because it had strong patent rights. Google’s competitors realized that it would be a fool’s errand to infringe Google’s patents. Now that Google is wealthy and influential, it naturally wants to preserve the status quo. Manipulating the patent regime to weaken the position of potential competitors without weakening its own rights is a good way to do that.

  28. So the company with the $102B market cap, $31B in assets, a shareholder expectation to launch products into existing markets, with an ethos to take the property of others and sort it out later – complains about patent holders not being in the marketplace, and their victimhood status for being sued. Only net neutrality could be more disingenuous than this debate.

    Demolishing small business and our patent system to favor the few dominant (and offshoring, hello?) companies is not the way to rebuild our domestic industrial base, middle class or the stock market for that matter.

  29. I’m not certain thier addressing the real issue (in my own humble opinion). I always thought the problem was the ability of patent troll law firms (we all know which ones) to exploit the system using crappy patents, the ability to go back 6 years for damages (since their clients obviously didn’t make anything, marking is not an issue), the threat of injunction, and using extremely agressive litigation practices. Ebay helped the injunction. KSR was a start for the crappy patents. However I wish someone would justify letting these plaintiffs claims 6 years of damages (or royalities). I don’t see why a plaintiff who never manufactured anything should be in a better position to claim damages (or royalties) over one who merely mismarked.

  30. “Consider this: Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.” Most of these cases seem to feature the same small set of contingent fee plaintiff’s lawyers asserting patent claims against the same small set of companies. ”

    Have you forgot… if I invented it first (or even filed it first under the proposed legislation), I own it, whether I make it or not. END OF STORY.

    The policy is this – DO NOT STEAL OTHER PEOPLES IDEAS.

    I don’t think it matters WHAT TYPE OF LAWYER BRINGS the lawsuit either. A patent’s language and claim’s do not change based on WHAT TYPE OF LAWYER BRINGS the lawsuit OR WHAT FEE ARRANGEMENT exists.

    I don’t think it matters if the same SMALL SET of companies is doing the infringing.

    BOTTOM LINE: Big Corp (and Dennis apparently) are changing the CLASS OF PEOPLE applying for patents (based on source of the idea, lawyers representing, or infringing entity) to fix problems in the system rather fixing the real problems. Shame, shame, shame. Remove “small entity” from the statute … thats what is really being done here.

  31. “Assume that the next PDA sells for $100 and “uses” 200 patents.”

    If none of those 200 patents are owned by Blackberry, what business does Blackberry have selling the dang thing? Why don’t we encourage Blackberry to come up with some of those patents, design around some of those patents, and take a license for the remainder of those patents (the remainder getting smaller and smaller the more innovative Blackberry is)? Because that would cut into Blackberry’s profits? That they deserve? Because they decided to market something invented by somebody else?

  32. Dear Only the little people should pay,

    Well said, extremely well said.

    Professor Crouch, may we expect you to give an opposing view equal credibility tomorrow? Maybe from one of your esteemed colleagues at MBHB who thinks this kind of propaganda really sucks.

  33. Alan – I wasn’t aware that the Blackberry was subject to 200 patents per your hypothetical.

  34. Patent_007 -

    “Alan – take a look at Georgia Pacific and its progeny.”

    Are you saying that no inventor is ever going to try to get a Blackberry-type damages award again?

    If so, I’ve got a mutual fund that has gone up 20% this year to sell you.

  35. “the same would not be true of a competitor that developed an alternative that was only slightly better than Google’s technology.”

    News flash: people use Google out of habit. Nobody cares if there is a “slightly better” free searching tool.

    “This is a classic case of a successful company lobbying to pull the ladder up behind itself.”

    Right. Because Google became successful by sueing people.

    Please try harder.

  36. Apportioned damages are, of course, in Google’s economic interest. Google’s primary patents are for its search algorithm and its advertising system, both of which represent a huge leap over the prior art and would be a large part of the value of an infringing competitor’s services. Consequently, apportioned damages wouldn’t really reduce the value of Google’s own patents.

    But the same would not be true of a competitor that developed an alternative that was only slightly better than Google’s technology. Thus, as the market and technological leader, Google is in a position to infringe competitors’ patents with near impunity. Nowadays, large companies like Google basically never get enjoined, and apportioned damages mean Google would only have to pay a small royalty at most.

    This is a classic case of a successful company lobbying to pull the ladder up behind itself. The issues surrounding patent reform need to be argued on the theoretical and empirical merits, not the self-interested arguments of a corporation, even one that claims not to be evil.

  37. Alan – take a look at Georgia Pacific and its progeny. You’ll find that in areas subject to a patent blizzard, like wireless tech, courts choke down on damages, which feeds into a GP factor, resulting in an n+1 patent suit royalty of one-half of one percent, or less. In other words, a callous develops to protect the subject technology. Of course, no court is going to award your hypothetical damages of $1000.

  38. “the occupation of the inventors is irrelevant”

    Sure, it’s irrelevant to the patent infringement case.

    But it’s hardly irrelevant to the *policy* considerations. The fact that certain attorneys (and we know who they are) risked their firm’s credibility to jump on the patent bandwagon and file hundreds of garbage claims is evidence of something.

    But go ahead and deny it. There’s no such thing as a patent bubble. Housing prices are going to keep going up forevah and evah and evah !!!!

    eeeeeeyeeeaahright and some nutty troll around here used to say.

  39. Damages law is well developed, and Google is presenting a strawman argument. Read Georgia Pacific as a starting point, and then more recent damages cases citing to it.

  40. Let’s do a little math for kicks.

    Assume that the next PDA sells for $100 and “uses” 200 patents.

    Each patent owner wants a 5% royalty, or $5 for his patent, because he is entitle to a royalty based on the entire value of the product and not on the $.10 chip involved.

    So the total royalties for the $100 PDA are $1000, making the cost of the unit $1100.

    Is there something wrong here?

    Please note – I do NOT work in the electronics field.

  41. “Only the little people should pay”

    Hey, look, it’s the Big Lie again! Anytime a corporation complains about patent trolls and crappy patents and ridiculous damage awards, it’s just because they are trying diminish the value of the patents owned by “little people.” In a country with a working patent system that wasn’t regulated by government socialists, every American would have a patent, or even ten patents! Can you imagine the innovation? America would be 100 years ahead of the future.

    Trying to minimize massive patent awards for crappy internet and business method patents is just another way of giving the shaft to Joe Sixpack. Why should he bother trying to invent anything if he can’t get $500 million dollars for his hard work? I mean, what’s the point?

  42. In the existing damages inquiry, isn’t the importance of the novel feature already evaluated in determining whether the infringement has caused the plaintiff to lose sales or profits, or in determining a reasonable royalty? If the plaintiff owns a claim to a $150 item, and then a defendant sells an aircraft carrier comprising a part that infringes, does the damages inquiry commonly (or ever) look to lost profits on the aircraft carrier as the measure of damages? Does the damages inquiry change if the patent includes a claim to “an aircraft carrier comprising the novel $150 item”? Why doesn’t Google cite examples of the problem that is the subject of this post?

  43. From EE times:

    Big electronics companies are pushing hard for such legislation. Leahy held a $10,000 per plate dinner in Silicon Valley on February 17. It was hosted by the general counsels of Apple, Cisco, Hewlett-Packard, Intel, Google, Oracle, Symantec and Yahoo among others.

  44. Would they like some cheese with their wine?

    Seriously: 1) patents are, and IMHO should be, freely transferable; 2) who cares if the inventors are patent attorneys so long as their claims satisfy the patent laws; 3) it takes real chutzpah for Google and Microsoft to complain about the “windfall profit” – outside of big oil, I doubt few make more profit than these two crocodiles.

  45. We, the Microsofts, Cisco’s, and Google’s of the world are just too big and powerful to be worrying about infringing other people’s technology.

    Now that we’ve got huge market power, we don’t need patents as much to protect our revenue. As such, we should be allowed to take other people’s technology and give it away in order to ensure our core revenue stream is maintained.

    This way, we can also argue that since we are giving the product away, “the value of the innovation of the allegedly infringed patent” is zero.

    Of course, this is exactly what you would expect out of corporate counsel. Their job, as part of management, is to maximize shareholder wealth. Shareholders only care about the price of the stock, not whether the patent system will be gutted.

  46. if you have good printed publication art have you tried a relatively inexpensive reexamination especially in this post KSR and Bilski era?

  47. “Before 1990, there had been just one patent damage award of over $100 million. Since 1990, there have been at least 15, with at least five topping $500 million.”

    translation: our patent defense counsel can’t persuade their way out of a wet paper sack with respect to damages, so we need Congress to fix what our patent defense counsel couldn’t

  48. “We’ve also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.”

    … sometimes with some much needed help from the wives of their partners. Inventing internet stuff is hard work!

    ROTFLMAO.

  49. “plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.””

    We were overdue for Just an Ordinary Tirade. I assume one’s coming

  50. May I ask who wrote this post? Based on the first link, it looks like Johanna Shelton or Michelle Lee.

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