On Feb 12, 2009, I published “Orion and Taurus: NPE’s at the Federal Circuit” in which I discussed Erich Spangenberg’s cases now pending at the Federal Circuit. In the note, I referred to the $34 million verdict that his company won against Hyundai and noted that the patent may well serve as the “poster child for damages reform.” Erich Spangenberg recently sent me a note regarding his appeals now pending at the Federal Circuit. He makes several important points:
On apportionment: As to being a “patent reformer’s poster child for damage reform,” I take it that this statement by you has two elements: (i) you put some credence in the musings of anonymous comment posters about the state of the art and (ii) the apportionment provisions set forth in the proposed patent reform legislation. In various ways, both of these were put to test at trial. . . . As to the apportionment point, I believe the problem with this point is that a similar non-infringing substitute system [did] not exist at the critical date and on the date of the hypothetical negotiation a similar system would be an enterprise system with a double digit million price tag.
On Obviousness: Every major auto manufacturer produced mountains of prior art (including Mercedes) and not a one of them claimed to have a computerized sales system in operation on the critical date as described by your poster. The art relied on turned on a system known as the IDB 2000—which was developed by Bell+Howell in the late 1980’s at the request of GM. The co-inventor of the IDB 2000 was Dr. Donald Frey. Dr. Frey was the CEO at Bell+Howell during the time the IDB 2000 was initially developed and implemented—a BA, MA and PhD in metallurgic engineering out of Michigan and a long-term employee of GM and Ford, whose credits include being one of the “fathers” of the Mustang while at Ford and a National Medal of Technology recipient. Dr. Frey was not paid for any of the information he provided. In an affidavit he provided that was discussed at trial (Dr. Frey did not testify)—he stated “I have reviewed United States Patent Number 5,283,865 entitled “Computer-Assisted Parts Sales System” (the ‘865 patent) and United States Patent Number 5,367,627 entitled “Computer-Assisted Parts Sales Method (the ‘627 patent) along with the file history for each of these patents.” While there are several points in his affidavit that are important, the most critical is the concluding paragraph in his affidavit that states, “The’627 and the ‘865 patent differ from the IDB2000 in that, among other things, they describe novel parts systems that were not contemplated, designed or implemented as part of the IDB2000.”
I am fascinated by the reverse prognosticators that claim it is “obvious to me” as they sit in their chairs today reflecting on the state of the art in 1989—most of whom posses even less experience at the critical date than the anonymous comment poster who had a summer job in a Mercedes parts bay. In this golden age of modern cynicism is it really so hard to believe that the examiner got it right?
On Anonymous Comments: I am not a fan of—and heavily discount views expressed in—anonymous commentaries. The discipline of providing your verified name gives one pause before you hit the “send” button. One idea you may wish to consider to raise the level of the discourse on your blog is to have an “anonymous” comment section (sometimes this is the only way to get valuable information) and a verified name comment section.
Erich’s points on apportionment are well taken. Apportionment does not make sense when at the time of the infringement there were no suitable substitutes. As has been discussed on the blog, even if you believe that damages should be apportioned according to the incremental value of the claimed innovation, the apportionment method proposed in the Patent Reform Act of 2009 is clearly problematic based upon its proposed procedures.
Only the blog sponsor would know that “Mooney…”
“With your tortured logic you could become a presidential candidate on the Democratic ticket – or at least a global warming “expert.”
I guess the troll is using his mom’s computer now that his old IP address doesn’t work.
“One of the best and possibly only ways to test the theoretical soundness of something is to apply it.”
That would be testing the PRACTICAL soundness of something, wouldn’t it?”
I’m sorry “Big Guy” your comment makes no sense. “Testing” a theory, e.g. the soundness of the theory, means putting the theory into to practice to see if it works. I could speculate all day as to whether the theory works; until it is actually tested, its soundness, theoretical or otherwise, can’t be known.
With your tortured logic you could become a presidential candidate on the Democratic ticket – or at least a global warming “expert.”
Dear Mr. Babel Boy,
Re: “Just sayin’ sounds like our old friend, Just An Ordinary Troll.”
Wrong, Babel, you’ve mistakenly confused me with another, one whom we-in-the-know admire.
I’ve been/am pre-occupied.
But I feel flattered you’d think of me composing such a brilliant comment written by Just sayin’, thank you.
Incidentally, your pen name suits you to a tee:
1 : a city in Shinar where the building of a tower is held in Genesis to have been halted by the confusion of tongues
2 often not capitalized a : a confusion of sounds or voices b : a scene of noise or confusion.
Boy!, I’d suggest you grow up; get a life.
“The permutations and combinations of what is actually being combined get to be endless.”
Personally I don’t make those types of rejections. In fact, I was going to include merely one extra 102e on the first claim of one app just to make sure that the rejection as a whole stuck and we moved prosecution along, and my spe didn’t want me to do it because he said that attorneys didn’t like us sending them a whole bunch of different arguments in one action to respond to. That seems to be counter to what I read on here where you guys claim to want to see all the good art and rejections. However, your problem likely stems from overclaiming. Sorry that you feel the need to do that.
“Here’s some straightforward prognostication for you, Erich: the Federal Circuit is going to invalidate your patents.”
Anon moon may very well have you on that point. Not to say that the claims are invalid or anything.
“Every major auto manufacturer produced mountains of prior art (including Mercedes) and not a one of them claimed to have a computerized sales system in operation on the critical date as described by your poster.”
Yes, that’s why the claims aren’t anticipated, Erich. But we were talking about obviousness. I hope it’s not too late to inform you that there *is* a difference.
“I am fascinated by the reverse prognosticators that claim it is “obvious to me” as they sit in their chairs today reflecting on the state of the art in 1989″
Here’s some straightforward prognostication for you, Erich: the Federal Circuit is going to invalidate your patents.
Regarding the “anonymous commenter” strawman, you should know, Erich, that many “anonymous” commenters believe that those disputed claims are crap, for good reasons. An appropriate “level of discourse” is one where future outcomes are predicted correctly at a reasonable level. That is a sign of sound reasoning and intelligence.
We’ll talk again, I’m sure, when you request an en banc rehearing.
Boo hoo. Did we hurt Spangenberg’s feelings? Give me a break.
Just sayin’ sounds like our old friend, Just An Ordinary Troll.
IQ=6 says:
“In the real world there isn’t always a non-infringing substitute because they may be technically impossible and/or cost prohibitive.”
Another example of why IQ=6. Yes, if it’s impossible, it’s likely to be cost prohibitive.
I raise the point because US examiners do this “and/or” bs all the time. Reference A combined with reference B and/or combined with reference C and/or combined with reference D. The permutations and combinations of what is actually being combined get to be endless.
“Someday he may have to contend with a serious thinker about the theoretical soundness of apportionments making it into law and he may discover his devil resides in his details that he purposely overlooked.”
Yes, but not today, apparently.
On apportionment–if a problem-solution approach is applied to a patent, then damages could become the incremental value of the elimination of the “problem”. The closest non-infringing substitute would be something that performed the same basic function, while retaining the “problem”.
On TJ–his/her post did seem unusually inarticulate.
On blogs–Blog posting to me seems to take on a sort of frenetic, quantized progress when addressing a particular issue. Rather than having the reasoning take place within a single mind, and thereby having the benefit of coherent synthesis, each blog reader is left to form his/her own paradigm within which to apply the useful quanta of information/argument. To the seasoned patent system participant, this can be easy–to the uninitiated or new arrivals, it can be a disaster. All sorts of quanta scrambled, with no ordering system. Truly the new generation.
“I understand this one to say that “in the real world” (i.e., the world inhabited by petty bureaucrats in Washington), we should embrace ignorance rather than analysis, since the former is so much more real.”
Did you even take econ? Maybe you didn’t make it past 101. You should understand the above statement to say exactly what it says, not what you make up. He uses neoclassical generalized oldfashioned nonsense and I use a better more realistic approach.
link to economicswebinstitute.org
Not to mention that D apparently uses this approach as well as the strong in the QQ attorney. Nothing wrong with either approach if you’re willing to accept the consequences, TJ’s points are just fine if that’s the way he chooses to see things. Someday he may have to contend with a serious thinker about the theoretical soundness of apportionments making it into law and he may discover his devil resides in his details that he purposely overlooked.
But TJ, seriously, serious Troll article or not serious?
“One of the best and possibly only ways to test the theoretical soundness of something is to apply it.”
That would be testing the PRACTICAL soundness of something, wouldn’t it? But it must be nice to know that you’re in full accord with 6. I’m still trying to wrap my head around this gem: “And if there is such a case then you might have a problem with the soundness of the applicability of your theoretically sound law.” This one’s good, too: “Since we live in the real world I suggest we use that as our basis rather than economics.” I understand this one to say that “in the real world” (i.e., the world inhabited by petty bureaucrats in Washington), we should embrace ignorance rather than analysis, since the former is so much more real.
When 6 and just sayin’ are on the same team, the rest of us should probably listen up.
As an anonymous contributer to this blog, on obviousness, I’m thrilled to read Mr Spangenberg’s comment that he will “heavily discount” any such comments. I hope he does discount them as much as they will bear. But, if there’s any merit left after the discounting process has taken its course, I expect that to register. It’s not who says it, but the substance of what is said, that should count. It’s not my opinion that matters but, rather, my observations on the substance of the matter under review. I couldn’t care less who “Malcolm Mooney” is just whether the points he makes are adding something of value to my appreciation of the thread. Something tells me that the anonymous commenters have touched a Spangenberg nerve. I suspected as much already, but now I have confirmation.
“…paying inflated prices thanks to them[patent troll] do not count…”
I guess paying high prices for revolutionary technology brought to us by a solid patent system that rewards inventors, or should I say your so-called trolls, is the price of the most vigorously evolving economy in the world.
In a communist regime where the government and government run “business” owns everything, products are free. That’s the lowest price of all. But, fact is, there are still a lot of people that live in huts. Any revolutionary products that exist were copied (poorly) from the west.
Oh, and there aren’t any patent trolls, or inventors either for that matter, they were all killed in the last purge of intellectuals and dissidents…
What a pleasant way of life that must be.
Instead of worrying about who I might be TJ and defending yourself against some guy posting anonymously on a website, you should focus on what the heck you are allowing to get into print with your name attached to it.
“but that is just a difference in view of what it qualifies to have knowledge.”
You are clearly the product of feel-good outcome based education. I suppose we could define a world in which the common rock has “knowledge.” And in such a world even the rock, saying nothing, would appear more erudite than you, sir.
And you still haven’t responded to my substantive question regarding RDRAMs. Further, after your gem above:
“it makes no sense to contest the *theoretical* soundness of something by asking how it can be applied.”
– that I can’t believe anyone purporting to be an educator in an area remotely near the sciences would say, I can’t believe you aren’t heading to the nearest shower to rinse off the sweat of embarrassment. I highly recommend liberally applying duct tape to your mouth and your keyboard lest you further embarrass yourself and anyone else affiliated with Mason.
One of the best and possibly only ways to test the theoretical soundness of something is to apply it.
To say what you said is scandalously ignorant.
Oh and TJ, the civility level is still high, relative to the avg.
“I think I conceded that implementation of apportionment is difficult. ”
But will you concede that it is impossible, at least in some circumstances? Will you also concede, if you concede the first, that the whole idea will not be good law and isn’t worth discussing? That is, I believe, what some commenters are after.
One thing though TJ, JD brought up that perhaps your troll article was actually making fun of the troll whiners, and I thought he might be right. But I couldn’t really see it. So which is it, serious or not serious article?
My apologies to Dennis, first of all, since my very presence seems to lower the general civility of comments on his blog.
I think I conceded that implementation of apportionment is difficult. My point is that as a theoretical goal, nobody has suggested anything better. People put forward theoretical goals before addressing their practicality all the time–e.g. “all men are created equal” before we abolished slavery some 80 years later. So now there is something wrong with discussing theory?
And Just Sayin’–What makes you think I am not “familiar with the facts of patent trolls”? True, I have not prosecuted patents for one, but that is just a difference in view of what it qualifies to have knowledge. As if litigating for them, litigating against them, studying them, and paying inflated prices thanks to them do not count. At least I am willing to put my name out so that other people can verify what facts I do and do not know, much unlike someone I cannot name. Are you somehow affiliated with Mason so as to be “ashamed”?
Just sayin’,
As you might tell from my pal 6’s comments, we wouldn’t let TJ drink with us. It wasn’t the lack of reality when ity comes to the patent world (my pal 6 outshines the lad), but truth be told, he tries too hard with the ladies and scares them off. We like the guy, but 6 and I got our priorities.
Don’t all rush to prove Mr. Spangenburg’s point at once.
He raises some interesting points about the substance of his case and regardless of whether he’s right or wrong I think it’s a great thing about this blog that Dennis can post on an interesting case and, 1 month later, receive a substantive response from one of the parties.
I’d be interested in hearing anyone’s response to his point about obviousness. My gut reaction is that his patents sound extremely obvious. However, it appears that the people who had the most information on that point and the most incentive to pull that information together failed to persuade the factfinder… I don’t know why that is, and I hope that someone with more information than I have knows the answer.
“Chiaaaaaang!”
I’m all for a verified name section as long as someone can verify my name as being 6.
Erich, that is some strong QQ you have there man. You are amongst the greatest of the qqers, there is no doubt about that. My hat is off to you. I’ll see if I can help the good folks on here evaluate your claim without commenting on the validity of said claim, because goodness knows, that is a job reserved only for courts! And maybe anonymous commenters who don’t work at the office. More when I get the chance.
TJ, I’ve seen you on here for ages, I didn’t know you were a prof. But I’m be 100% honest with you man, you must be up past your “think well” hours.
“In economics, there is always a non-infringing substitute”
In the real world there isn’t always a non-infringing substitute because they may be technically impossible and/or cost prohibitive. Since we live in the real world I suggest we use that as our basis rather than economics.
“it makes no sense to contest the *theoretical* soundness of something by asking how it can be applied.”
In this case she is challenging it by suggesting there may be a case where it is straight up nearly inapplicable. That is, iirc that case correctly. And if there is such a case then you might have a problem with the soundness of the applicability of your theoretically sound law.
“it makes no sense to contest the *theoretical* soundness of something by asking how it can be applied.”
Wow, I absolutely can’t believe what I just read…
I wonder where we would be as a society if Einstein had TJ as a professor.
TJ – you should look for another line of work.
Like Starbucks.
TJ – being familiar with the facts of patent trolls hasn’t stopped you from commenting.
I’m not sure what your point is. Following your logic, if the standards body adopted RDRAM collectively, then why would some members not have willingly licensed? What was their option then?
BTW, with all due respect, after reading your troll article, I am deeply ashamed that you are in any way involved in teaching at Mason Law.
Just sayin’ — Please do not comment unless you are familiar with the facts of the case. The standard setting body could either have adopted RDRAM collectively, or adopted some other technology, again collectively.
Ms. Culpability — it makes no sense to contest the *theoretical* soundness of something by asking how it can be applied.
“On Anonymous Comments: I am not a fan of—and heavily discount views expressed in—anonymous commentaries.”
Pay no attention to the man behind the curtain…
P.S. Mooney is going to be VERY disappointed.
Sure, If I’m a computer manufacturer making the next generation box, the only “exit” option is to be to go out of business, because I sure am not going to use last year’s or last generation’s memory product, when all my competitors are using RDRAM.
“I am yet to see a convincing argument that apportionment is theoretically unsound.”
Dear TJ – how would sound apportionment have been applied to Monsanto v. McFarling?
Dennis, can you explain your comment that apportionment would not make sense if there were no “suitable” non-infringing substitutes? In economics, there is always a non-infringing substitute, and there is never a perfect non-infringing substitute. So is there an elasticicity cut-off point? Because I tend to think of this as a spectrum rather than an on-off switch.
Moreover, I am not sure that it is correct to dismiss the exit option, as current law does. Take my favorite whipping boy, Rambus. Assume that Rambus’s DRAM technology was really quite revolutionary, so that there are no “suitable” non-infringing substitutes, and the only substitute is prior RAM technology. Is it really a good idea to say that we must assume that all members of the JEDEC would have willingly licensed RDRAM on Rambus’s terms, since we must assume–completely counterfactually–they would have had no exit option in the hypothetical negotiation?
I am yet to see a convincing argument that apportionment is theoretically unsound. Of course, implementation is difficult. Though I am not sure that implementation of Georgia Pacific is any less difficult, except to the extent that we tell the jury “do whatever you want since we can always find a few factors out of the 15 factor laundry list to support your verdict”.
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