The announcement to my upcoming Mizzou event with Prof Holte is exciting, but so is our topic. Discussion will center around Holte’s case-study article: Trolls or Great Inventors: Case Studies of Patent Assertion Entities.
Holte’s abstract:
There has been much debate about the economic harms caused by patent infringement lawsuits filed by patent holders who do not make or sell products covered by their own patents — entities pejoratively referred to as “patent trolls.” This debate has thus far been largely theoretical or based on broad industry-wide data. The purpose of this Article is to present a focused empirical report that has previously been lacking — detailed information regarding the inventors themselves, the patent assertion entities (PAEs) that represent them, and the stories behind their patents. The research for this Article centers on two instructive case studies: (1) MercExchange, L.L.C., the prominent PAE whose seminal patent infringement action against eBay continued to the Supreme Court in eBay Inc. v. MercExchange, L.L.C., 547
U.S. 388 (2006); and (2) Capital Security Systems, Inc., a lesser-known PAE that has sued some of the largest banks in the world on its patented electronic check processing technology. This Article explores the stories behind the inventors, the patented inventions, and the entities asserting the patents in order to develop a more complete contextualized picture of PAEs and their economic impact. Based on this more complete picture, the Article then assesses whether these patent holders warrant the “patent troll” moniker, lurking under the bridge of innovation waiting to harass and extort innovators attempting to pass, or whether they instead resemble the great American vision of a Horatio Alger novel protagonist, laboring to build that bridge of innovation brick-by-brick and eventually reaping a reward for their hard effort. The Article concludes that, while additional studies are needed, the two PAEs studied herein fall squarely into the latter honest laborer category.
Speaking of the White House propaganda piece, any update on the Executive response to the Ron Katznelson motion that is now W A Y overdue …?
Bueller?
Bueller?
As you correctly point out, a response to my Information Quality Act Request for Correction of the White House Patent Troll Report ( link to bit.ly ) is way past the deadline for agency response. It is quite apparent that the White House would rather violate its own IQA guidelines for correcting disseminated information than provide a correction, withdrawal, or a response that would necessarily be embarrassing to the White House. I will inform this community when further action is taken to ensure agency compliance with its IQA obligations.
Thanks Ron.
I find it shocking that “America’s leading source” – and in truth, not a single academic – has not pushed for resolution of what is facially a pure political propaganda play.
Did you guys see this thing awhile back by the daily show guy?
link to youtube.com
I knew I’d seen that samsung ice skating rink before but I didn’t realize why it was where it was.
This is all a false premise. Who cares who the trolls are. The trolls are just responding to incentives. Change the incentives and the trolls go away.
The problem is really that for most businesses patents are a nuisance. Except for a few who love them.
We have devalued the patent document to the point where it is worth negative dollars in “real” money. Fending off patent suits is a cost on the balance sheet of most businesses.
Stop filing and granting so many patents and this will all go away.
There are people who need patents. They are just a minority of those who have them.
They are also the ones more likely to be on the wrong end of a patent suit.
Big corporations who use patent portfolios as barriers to entry are the bigger problem. Trolls are a blip on the radar
That’s a feature – not a bug.
Rise to the challenge my friend.
You think its a good thing that big corporations can create barriers to entry via government granted privileges?
I think the property that is the patent right is agnostic to the size of the entity that owns that right.
This is a fundamental aspect of the U S patent system.
Once again my friend, come to the game prepared with a BASIC understanding.
“I think the property that is the patent right is agnostic to the size of the entity that owns that right.
This is a fundamental aspect of the U S patent system.”
Except our laws favor those having larger sizes.
Wrong yet again Topce.
The patent law is indeed agnostic as to “those having larger sizes – in material matters.
If anything, with certain fee breaks based on size, the opposite of what you say is in place. And this is not for matters of material import as to the law itself.
You need to be informed and you clearly are not.
You are also conflating the intent of laws with their effects.
Not at all, Topce, I am doing nothing of that sort.
And you have not addressed the only “real” difference in entity size factor (a non-legally-substantive one) goes opposite of your expressed views)
Also it is not “fundamental.” There are diverse viewpoints. Many believe patents are a way to equalize market power and competition. Patents CAN allow small companies to fight the big ones. However, the small companies are getting sued by the big ones, not the other way around.
And wrong yet again – your non sequitur does not touch the base of patent law as to my point here about the fundamental nature of the US system.
What you may “believe” has NOTHING to do with the actuality. Things don’t become different merely because you want to “believe” something different.
You mentioned previously you had been involved in something while in law school. You need to look into a refund if you in fact attended a law school. Winging it – as you do – just does not cut it.
Anon. You are projecting
What is your “real world experience” that invalidates my views.
You seem to be conflating how the system “should” work with how the system actually works
What is it, Topce, that you think that I am “projecting?”
You are flailing.
And badly so.
Further, you misunderstand the notion of having real world experience with some imputed sense of conflating.
What precisely do you think that I am conflating? The real world sense of being actually involved in the process of innovation from engineering to management to law provides a knowledge base for me. What “knowledge base” do you have? Clearly, you do not know the law and you merely broadcast your “desired state” based on feelings/wants/philosophies. It is abundantly clear that you have the barest recognition of the principles here (e.g., patent term, patents expressly designated as property, etc)
Anon. You hit the nail on the head. You are so entrenched
The point is that my philosophy is a philosophy that is taking over patent law. While you became entrenched in the old ways, I learned the new ways.
Philosophies change. Policies change. You appear to want the system to go back to the “way it was” because it worked for you and your clients.
It is impossible for you to recognize other points of view because you have invested so much in the existing, broken system. Maybe the system works for you. But it doesn’t work for almost everyone else.
You mistake “entrenched” for knowing and understanding law and the legal process. Your “philosophy driven it should be this way” is not in accord with US jurisprudence.
Your admission seals the failure of your view.
“Broken” and taking over through the injection of philosophy outside of the authorized channel of changing statutory law is NOT a good thing.
In this instance, the alignment may be in what you want. What of the next instance? Your abundant lack of appreciation of all things law is not – and should not – be something celebrated.
Wake up son.
T, regarding barriers to entry, the government has forced companies to license its patents on occasion. Check this about the Wright Bros. patent war. link to en.wikipedia.org
FDR, of all people, forced the formation of a patent pool so that US aircraft development could actually get off the ground.
We should have compulsory licensing. We don’t though.
That is a reform I am in favor of. Along with variable patent term.
wow – talk about being in an alternative reality…
You don’t have any experience in the real world, do you?
This would make your clients less money I’m guessing?
T, patent pools and/or cross licensing are the normal ways of allowing progress in heavily patented technologies. The patent pool allows all comers to gain royalty-bearing licenses from the pool with the contributors to the pool receiving royalties according to their contribution.
Crosslicensing is a way for two companies to compete in a given market not based upon patents but based upon things like price and quality.
IBM and AT&T were subject to antitrust decrees that forced them to license their patents. Because they were forced to do this, they became the IP licensing beasts they are today. The compulsory licensing orders of the government backfired in a big way from anybody who has been on the receiving end of an IBM licensing executive.
But that isn’t a licensing problem per se. That is a “too many patents” problem. Why were those areas “heavily patented” to begin with?
T, well, if you were to sit across the table from a licensing exec demanding that you pay them protection money, and you were to ask why, and they were to respond by pushing forward a 10 foot stack of paper just listing the patents they have in your company’s area of business, you would begin to understand the value of a large stack.
Right. The law should not allow this.
But, T, it did — when they forced the likes of IBM and AT&T to license their patents. They were and are mega-businesses with humongous piles of patents. What is a small company to do when faced with the likes of IBM and AT&T.
The government should have policed IBM and AT&T just a bit better – perhaps by allowing all comers to get an IBM or AT&T license for fixed amount for a period of years if their business was below X revenue, more, for greater revenue, etc. But no, they created two out-of-control behemoths.
The term “troll” is meaningless. Parties against which patents are being asserted will necessarily claim in every case that the patents are invalid and junk and an abuse of a “broken” patent system. Casting a patent owner as a troll is predictable. It’s the mirror image of casting every infringer as a devious copyist.
The commercial activity of the patent owner has zero bearing on whether or not the alleged patent infringement is without merit. It’s the duty of the courts to work out the merits of the case. The only question of value in this debate is whether a patent owner that does not directly commercialize an invention has an equal or lesser patent right. My vote is that all patent owners should have an identical right.
[high five] that
As I indicated below, the US patent system was built especially for the ability to fully alienate the property that is a patent and has NEVER had a “must make” feature.
Topce gain join Mr. Duell in fantasy land. Me, I will join with Adam Smith and Abraham Lincoln.
I invented that, the term patent troll is right attributed to an abuser of patent system as a whole, but particularly, of the litigation system. Thus considered, it is not limited to small entities using the high cost of litigation to force settlements, but big companies who use deep pockets to extort settlements lest they sue you.
But the big boys like to divert attention, do they not, focusing the public mind on small entities suing the helpless small business. In this way, they can structure new legislation to insulate themselves from the patents of the small fry why continuing on with their own abuse of the system to exact protection payments from lesser companies.
The stink of what is going on in Washington today is so foul that it should cause one to hold his nose in San Fransisco.
No matter which university chapter it is, the Federalist Society there provides Chik Fil A. I wonder if the national hq has some kind deal with them.
Mr. Bucket of Chicken, let the Federalist Society know that Article III is under attack by Congress/the White house their effort to remove validity of patents from the courts. They might review Federalist No. 78 (Hamilton.)
Ned, your “warning” rings hollow as you turn right around and cheer on the attack on the separation of powers with the judiciary invading the domain of the legislature (shall I remind you yet again that you were the one who provided the citation to the work of Judge O’Malley echoing yet a different Federalist Paper and the warning against the too-strong judiciary?)
Listen anon, trying to rewrite history and ignore controlling case law was the stuff of Kennedy on the Supreme Court. At least Stevens and Dyk got it right about what process meant from 1790 on. There was no ambiguity. None.
The question presented and decided in so many cases prior to Bilski was whether “this” was a statutory process. In the case of business methods and printed matter, the answer was no.
But it was Kennedy who trashed all this historical data and caselaw. Truly what he did in Bilski was remarkable.
Stevens got it absolutely wrong – he would have EXPLICITLY rewritten the words of Congress – this has been shown to you many many many times now.
And it was not just Kennedy (you remember the difference between Majoroty and Minority, right?
Sort of like 3, the new 4, is still less than 5…
Yes, large companies “selling” some of their patents to PAEs is simply another fact of business life these days.* But what % of patents of others are retaining a % of the PAE enforcement recoveries for the seller? Does this study indicate what % of the patent litigation settlements and other licensing revenues by the PAE were received by the inventors or their initial employer-assignees?
*But this can create real problems if a major customer of the patent seller get sued on one of their sold patents. Also, such sales are declining as PAE suits on over-broad or otherwise invalid claims now have more legal risks, including IPRs, attorney fee sanctions, 101 and ambiguity.
Paul, once Seagate owned a very valuable computer system patent. Think RAID. Of course, Seagate was not in the computer system business. But, nevertheless, we did not enforce that patent against computer companies, our customers. That would not have made much business sense.
But that was before the book Rembrandt’s in the Attic came out. Had the book been read by Seagate management, they could have wrecked their business by enforcing the patent against its customers/or selling the patent to a licensing agent. Retaliation can take many forms.
Ugh! Another incident that happened on my watch.
We (CDC) owned applications then in interference that eventually emerged to become the fundamental laser patents. The party losing the interference had received the Nobel prize. Because we could no long “afford” the interference, and rather than shut it down, we sold the applications back to the inventor who proceeded to exact large royalties from “everyone.”
Now you make the call, was the inventor a troll? Were we trolls?
What is one to do with the Nobel prize after some else proves they invented first? What does the Nobel committee do?
Without more Ned, it does not sound like you proved your case, and the inventor prevails.
If anything, this sounds like more sour grapes and a rather NON-objective “recollection.”
All in all, very difficult (if possible at all) to give you the benefit of the doubt here.
One very important point that seems to be assumed away: there is NO requirement anywhere in patent law that mandates the actual practice of ANY object covered by a patent.
None
At
All
It is merely a sign of Kool-Aid addiction to so automatically presume that any entity making product must be the party wearing the “white hat.”
Check your assumptions folks – the system (from day one) was NOT built for that. Patents have always been a negative right. To lose sight of this fundamental aspect is to start on the slippery slope of anti-patentism.
Anon, what we would have done with the laser patents had we kept them is unknown. But the inventor cleaned up. Didn’t get the Nobel Prize himself — small company, no PR, and besides, he was out for the money, not for academic glory.
The point I am making here is that the inventor of the laser got paid. Is there anything wrong in that?
Nobody HAS to do anything. But asserting without practicing is detrimental to the economy. You are just imposing costs on others without add anything of value.
You exhibit a PROFOUND lack of inderstanding of how innovation works with a statement like that Topce.
You never heard of the Mother of Invention…?
Well, you would need to practice the invention, and prove other elements – to recover ‘lost profits.’ Of course, we know how high that bar is set under current law.
I have an idea. I often use different computer systems next to each other, and find myself trying to use the mouse on one to move the mouse on the other screen. Obviously, it doesn’t work. I want to integrate mouse control between different computer systems, while keeping the systems still otherwise independent.
Would I be a troll if I successfully claimed:
A system for integrating mouse control between otherwise independent computer systems, comprising: a single mouse configured as an input to a plurality of independent computer systems, wherein the computer systems remain otherwise independent, and the mouse continuously scrolls from a first screen of a first computer system to a second screen of a second computer system.
You wouldn’t be a troll unless you tried to enforce the resulting patent.
You WOULD be guilty of “functional claiming,” which some here find very disturbing. However, if your spec explains HOW this function is achieved, and IF you reword the claim a bit so that it clearly includes several components and isn’t “a single means claim,” you should be good to go.
Do they really need to include any more detail about how to achieve this function? Once you have the idea, any programmer having a degree in programming and 2 or more years experience can implement this.
You could break this functional requirement down into more detailed functional requirements, but the breakdown and implementation are still obvious to any PHOSITA, for example:
You have a communication module on each computer.
You send messages from the module on the ‘single mouse computer to the ‘current computer’ when the mouse moves.
When the message from the ‘single mouse computer’ directs the ‘current computer’ to move the mouse past the edge of the screen of the ‘current computer’ then the ‘current computer’ hides the mouse and sends a message to make the next computer the ‘current computer’
etc.
The actual coding of a commercially useful product would be very lengthy. You need a UI to configure the screen order. You need very detailed design for handling communications failures. You need it all to run very quickly since a mouse must move fast. You probably want to support different versions of Windows. Lots of work!
You appear to have inadvertently stumbled upon the crux of the 101 issue: That any PHOSITA can create the claims (although perhaps not the specific implementation) once the idea is dreamed up. But since the patent office, or a judge, has to find every specific element under 103, dreams become patents.
SR: The actual coding of a commercially useful product would be very lengthy. You need a UI to configure the screen order. You need very detailed design for handling communications failures. You need it all to run very quickly since a mouse must move fast. You probably want to support different versions of Windows. Lots of work!
You seem to believe that the differences between computer operating systems are somehow important to anyone. The US patent system has yet to acknowledge these kinds of minute details which, after all, are of genuine concern only to laborers and other underlings whose views are best swept under the rug in favor of the views of The Most Important People Ever (i.e., “True Innovators”).
After all, we wouldn’t want to get bogged down in trivial details — they’re so very tiny! — and slow down the incredible progress* that we’ve achieved to date.
*in monetization schemes
Yea god forbid we actually looked at the code.
You do recognize the ladders of abstraction, the philosophy of MarhS, and the fact that “code” is just not the same as software, right?**
** I am pretty sure that you are not ready to be handing out separate patents for different codes
Why not? If your code uses 3 classes and 10 objects to achieve a step, and mine utilizes 3 materially different classes and 9 objects those are separate methods. Just as digging a hole with a backhoe is a different method than digging it with a shovel, even if the same hole is created in the the end.
What you are drafting is a product-by-process claim, where the product is unpatentable information.
For software the highest rungs on the abstraction ladder are ‘stored’, ‘transmitted’, ‘displayed’, ‘calculated’, ‘determined’ etc. Even though they are the highest rungs, they are usually all that is needed for a PHOSITA to create working software which embodies the rest of the claim.
Once again Alex – you miss, and miss badly.
Do you understand the ladders of abstraction?
Do you understand the philosophy of MathS?
Apparently not, as you have moved the goalposts and added the supposition of a materially different process. You need to brush up on both of the items I included in my answer because that constrains the claim to its equivalents.
I am most definitely NOT drafting a product-by-process claim.
You apparently did not even stay at a Holiday Inn last night.
Dreams?
Software is not the thought of software.
Yes, but the claims so often are.
Not so Alex – you are gulping the Kool-Aid of those who want to move the goalposts and move claims into some “TOTALLY in the mind” position but to those POSITA, it just (so often) is not so.**
** for the hard goods categories – for methods, of course you are aware that MoT is not a law, but merely a clue, right?
Yes…and?
If you truly believe such patents are legal patents you should stop filing for clients and file hundreds of patents on behalf of yourself. Because the claims require no special skill to conjure up. THE CLAIMS, not the inventions themselves (mostly), are drawn towards nothing more than the whimsy of a kindergartner appended to boilerplate.
“should stop filing for clients and file hundreds of patents on behalf of yourself”
My clients are the inventors.
Duh.
Now you too imbibe in the Malcolm “anyone can do it” drink. Funny that – is that not a good thing that inventions are accessible by more people?
Oops.
…and I am curious as to what you consider to be “legal patents” beyond what I consider to be “legal patents,” as what I consider to be “legal patents” are “legal patents” as they might the requirements of the real law. Do you have some super secret shiny different law you want to share with the class?
Alex, which is why one should not proceed to 102/103 unless there is in the claim some invention in otherwise eligible subject matter.
In the PTO or in court, the latter analysis might be conducted first where ineligible subject matter is given no weight unless it functionally relates to the eligible subject matter in a new way.
Once again you seek to p3rv3rt what is actually in the law with your canard of Point of Novelty for 101.
You do not get to parse the claim and try to decide legibility merely on an element of the claim.
Stop with the windmills.
Yes. We agree Ned.
SR: The actual coding of a commercially useful product would be very lengthy. You need a UI to configure the screen order. You need very detailed design for handling communications failures. You need it all to run very quickly since a mouse must move fast. You probably want to support different versions of Windows. Lots of work!
You seem to believe that the differences between computer operating systems are somehow important to anyone. The US patent system has yet to acknowledge these kinds of minute details which, after all, are of genuine concern only to laborers and other underlings whose views are best ignored in favor of the views of The Most Important People Ever (i.e., “True Innovators”).
After all, we wouldn’t want to slow down the incredible progress* that we’ve achieved to date by judiciously ign 0ring all that boring “real world” stuff about how computers work.
*in monetization schemes
Prior art = Synergy, which is a cross-platform, open-source replacement for a KVM switch.
anony, you would be a troll regardless of the invention claimed for the simple fact that your handle includes the consecutive letters “a n o n.”