tell us how you really feel – part II

Any time you see a blog post with a picture of Alfred E. Neuman in it – you know it has to be good.

This time it is the Patent Prospector blasting away at the “over-credentialed chowderheads” who have been huffing and puffing about the havoc patents are inflicting on the economy and innovation.

Lots of good quotes (a couple of which are a bit too risque for PHOSITA), but my favorite:

Jamming what fits into a theoretical construct, leaving as offal inconvenient contrary facts.

Use of “offal” and Alfred E. Neuman in a patent blog post – I am in awe.

Posted by Douglas Sorocco, March 26, 2008 at 8:14 am
Permalink: tell us how you really feel – part II
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tell us how you really feel

It is getting very “springy” here in Oklahoma and folks are getting a bit goofy – so, I guess it should come as no surprise that we have been chuckling about this snippet from my RSS reader tonight…

If you were wondering what this is about – have a read over at Politico for the full angst, political intrique, a bank heist, and patent rhetoric.

Posted by Douglas Sorocco, March 25, 2008 at 10:08 pm
Permalink: tell us how you really feel
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In defense of offense…

A couple of months ago I came across Mike Dillon’s blog – The Legal Thing – covering all things legal from the perspective of General Counsel at Sun. 

As GC for Sun, Mike’s daily routine must entail a significant amount of attention to intellectual property issues and his blog plows a lot of ground concerning this topic.  The posts are informative – albeit they have a “big corporate shine” to them, much to the dismay of a lot of “anonymous commenters”.   If you read many patent blogs, you can probably guess the identities of many of these “anonymous commenters” – but they do make for an interesting peek at the more reactionary component of our niche of the legal world. 

That is a lot of setup for a recent post of Mike’s dealing with how Sun defends against patent “troll” lawsuits – namely, a good offense.

I recently shared dinner with a few other GCs of local technology companies. It was a nice evening in which we were able to relax and share insights (and commiserate) about topics of common interest. During the course of our meal while we were discussing rising legal costs, one of my table mates made a statement that I found somewhat bothersome. He said that when faced with patent “troll” litigation, he knows he is going to pay something to get rid of the lawsuit and so he economizes on the use of defense counsel. After all, the thinking goes, if your intent is to settle a case, why spend money on a strong defense?

His view is completely contrary to how we think about this problem at Sun. It’s also symptomatic of the way many companies view this issue as a quarterly “cost of doing business” without considering the long term consequences of settlement both for individual companies and our industry.

Before going further, let me state that we respect the intellectual rights of third parties. When a third party claim has been clear and the terms reasonable, we have entered into licenses. However, those situations are easily distinguished from the cases that make up almost all of our present docket of patent litigation. These lawsuits have usually been filed with no advance notice, by plaintiffs that don’t commercialize their patents (i.e. create and sell products) and in venues considered favorable to them. It’s also almost always the case that these plaintiffs have done little or no investigation to ascertain whether our products infringe prior to filing their lawsuit.

I think the approach that Mike outlines is a good example of how to frame decisions when confronted with a freedom to operate issue – whether the FTO issue is brought to your attention through an offer to license, or a cease and desist, or a patent search, or even when you have been served with a complaint — i.e., “How do we play offense in this particular case or instance?”

As Mike mentions, oftentimes it makes sense strategically and economically to simply license the patent – especially if the license allows you to preclude other competitors in the marketplace. 

On the other hand, a careful analysis may lead to a determination that a license is unworkable – e.g., that the patent is invalid or because the license fee does not make economic sense.  In such a circumstance, a zealous defense against an accusation of infringement may be in order – including the invalidation of the asserted claims.

In either case – taking a license or defending zealously – the accused infringer is approaching the case in an active/offensive manner and judging each case on its relative merits.  Defaulting into paying to settle every case is no better than defaulting into aggresively defending every case. 

The best defense to a patent infringement lawsuit?

Early analysis of the case and its relative merits (including the type of entity bringing the lawsuit).  As each case and situation is unique, arbitrary “blanket rules” – while being easy to implement – don’t necessarily increase value to the corporation.  Licensing everything or defending against everything is not a strategy – it is simply an invitation for disaster.

In any event, go on over and read Mike’s blog – I can guarantee that you will learn something.

The best offense…is a good defense.: the legal thing… by Mike Dillon.

Posted by Douglas Sorocco, March 17, 2008 at 9:33 pm
Permalink: In defense of offense…
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1st annual dcr patent poetry throwdown –2007

Mr. Michael Schade did an excellent job for the first round of poems.  Now, it is time for my creation. 

Everyone loves a good limerick….especially when it involves a little bit of “trolling”.

There once was a troll from the city,

who opened the trial with this ditty,

“Now the object of my patent

was to be non-combatant,

I simply just wanted your pity.”

To the rest of PHOSITA…..Bring it.

Posted by Douglas Sorocco, October 3, 2007 at 7:12 pm
Permalink: 1st annual dcr patent poetry throwdown –2007
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universities as patent trolls – part 2

Well, when you are wrong – the best thing to do is to acknowledge the error and applaud the person who pointed it out to you.

Well, kudos to Lawrence Ebert at the IPBiz blog who spent some time talking about patent trolls in a recent blog post.  With respect to my error, Lawrence kindly pointed to previous comments in print that suggested that Universities should/could be considered patent trolls.

The PHOSITA blog suggested that this might be the first time universities were suggested, in print, as possible trolls: Ahh… someone finally put into print what a lot of us patent practitioners have wondered for awhile – when would someone claim that universities are patent trolls?

Not even close…

CIO in an article entitled Has the Enemy of Patent Trolls Become One? published December 5, 2005 talks to Peter Detkin:

[CIO] Some people consider a “patent troll” to be any person or business that doesn’t produce a product or service, but instead makes money from licensing and patent assertion primarily. Has the definition of the term you coined, “patent troll,” changed since you coined it?

[Detkin] At best, I would say it’s become a little bit more refined. My concern is that the term has now been used so broadly as to mean any plaintiff you don’t like. Look at the definition you just used. Under that definition the University of California is a troll, Intel’s a troll—and since I was at Intel at the time, Lord knows I wasn’t trying to call myself a troll. But Intel routinely asserts patents—that it bought, that it’s not practicing—against others, looking for money. IBM would be a troll. Thomas Edison would be a troll.

NAPP wrote in May 2005:

To the extent that the term [troll] is used to derogate inventors who do not develop corporate structures or manufacture products, NAPP believes that inventors who merely invent but do not manufacture products – which, after all, includes most university and government researchers – do not deserve epithets or less patent protection.

Martin Lueck wrote in September 2005:

For example, Eolas and the University of California have been berated as patent trolls since their $521 million victory against Microsoft. Lueck also stated: “I don’t hear anyone saying IBM is a troll — even though they have a bunch of patents and license them. To suggest that the University of California is a patent troll is absurd — they make contributions just like corporate America, and they want to protect their intellectual property.”

Separately, Michael Kanellos wrote:

Moreover, Stanford University made itself into a global powerhouse in part through licensing patents to professors and students who had start-ups. Without an exclusive license of Stanford’s PageRank patents, Google wouldn’t be the behemoth it is today. Though the PageRank technology was invented by Google founders Sergey Brin and Larry Page, they were Stanford students at the time, and the university owns the patents.

Posted by Douglas Sorocco, May 14, 2006 at 10:01 am
Permalink: universities as patent trolls – part 2
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Abe Lincoln was a Patent Troll?

I guess he could be – he didn’t commercially exploit his patented technology, afterall.

That “patent troll” definitional thing is a bit tricky when you actually think about it.

But who is and who isn’t exploiting the system is a grey area. Abe Lincoln obtained a patent, noted Brian Halla, CEO of National Semiconductor. He got it for inventing an inflatable pontoon that helped boats get past sandbars and other obstacles on canals. It’s patent number 6469–see reference here.

via Abe Lincoln: patent troll? | News.blog | CNET News.com.

Posted by Douglas Sorocco, May 11, 2006 at 9:11 pm
Permalink: Abe Lincoln was a Patent Troll?
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universities as patent trolls?

Ahh… someone finally put into print what a lot of us patent practitioners have wondered for awhile – when would someone claim that universities are patent trolls?

The managing director of the Wisconsin Alumni Research Foundation – i.e., WARF – does a nice job battling the inference, but still – it does seem to be a narrow line one must walk to avoid the obvious connection.

Carl Gulbrandsen, managing director of WARF, takes it a step further. Patent trolls “don’t exist. Trolls are imaginary creatures,” Gulbrandsen said. “I think the whole issue is overblown.”

WARF, a middleman organization that owns patents on discoveries made at the UW and licenses them, could be considered a patent troll under some definitions, he said.

“Patents are a piece of property. To say that it’s wrong that a company acquires property and then expects to be paid for use of that property, I think, is a pretty simplistic approach,” Gulbrandsen said.

Once again, those who seek to define the phrase “patent troll” better use carefully crafted language – the company/institution/individual/innovator you love today, just might be the patent troll of tomorrow.

Posted by Douglas Sorocco, May 7, 2006 at 5:00 pm
Permalink: universities as patent trolls?
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Trying to Burst the bubble – Just another troll?

So last week we asked ya’ll to give us your best shot at a litmus-test definition for the term ”patent troll.”  It’s an understatement to say that the response was somewhat underwhelming.  We received a grand total of……zero definitions.

We’ve decided to take that as an indication of the difficulty associated with defining the term and not a statement about the readership of the blog (which, for the record, is reaching all time highs right now).

We do believe that the issue is important enough for a follow-up, though.  How about a real life example?

Check this out – Burst.com recently filed a patent infringement suit against Apple Computer.  The patents at issue relate to technology that speed the delivery of data, including audio and video files, over a network.

We’ve got a question for you.  A simple one.  Is Burst.com a patent troll?

Wait…don’t answer.  Consider a few facts first:

The company has two (count ‘em, 2) employees and a portfolio of ten (count ‘em, 10) U.S. patents.  It routinely asks companies to license its patents, and sues them if they don’t.  It focuses on software and high-technology companies for some reason (must have something to do with the fact that the technology relates to that area).  Just last year, it successfully settled a dispute with Microsoft for a reported $60 million.

Hmmm…smacks of a patent troll by most definitions, right?

Consider this description from the company’s web site:

The company focuses exclusively on licensing activities and strategic relationships.

(emphasis is ours)

Are you serious?  An exclusive focus on licensing and strategic relationships?  Does that mean they don’t actually produce anything?  (based on the web site, it’s hard to tell if any “products” are available from the company at this time)

Surely there must be a bridge running over the Burst.com headquarters in Santa Rosa.

But, don’t answer the question yet…Here’s a few more facts:

According to a recent article in BusinessWeek, the Microsoft settlement reportedly earned the lawyers a fee of about $20 million.  That lawsuit was apparently financed by “an investor.”  Oh, and the company openly states that its goal in the Apple lawsuit is to seek a chunk of the growing revenues for online music distribution. 

A troll for sure, right?  These guys are Pure Evil.  Damn trolls.

Humor me, though.  Don’t answer yet.  As Lee Corso would say, “not so fast, my friend.”

Here are a few more facts that you should consider:

The founder of Bust.com is recognized by many as a true visionary in computer network technology.  He’s an inventor.  His technology apparently wowed the crowd at the Consumer Electronics Show in 1991.  He had invented improved methods for transmitting data over computer networks long before large video and audio files were of concern to the masses.  The company was once viewed as a real tech startup success story, and had even grown to include 110 employees in the late 1990’s.

But when Microsoft upgraded its Media Player software, Burst’s product, Burstware, stopped working.  Strange.  Payroll shrank immediately from 110 to 4.

Ok…now give us your answer (or keep it to yourself, we don’t care…just try to answer the question).  Is Burst.com a patent troll?

Or is it just an angry innovator seeking to protect its property?

Do you see the challenge?

Posted by Douglas Sorocco, April 18, 2006 at 10:40 am
Permalink: Trying to Burst the bubble – Just another troll?
11 Comments

What the heck is a patent troll?

What is a patent troll?

Everyone in the patent community has a general idea of what makes a patent owner a troll, but I can’t find a litmus test definition anywhere.  If you’ve got one, please put it in the comments.  I’m looking for a definition that allows me to decide if a particular patent owner is, or is not, a troll. 

Based on several popular media accounts of NTP (of BlackBerry fame) and other famous trolls, I have the following questions relating to the term:

Must a patent owner eschew commercialization of the claimed invention to qualify as a troll?

Are you a troll before you sue someone who has commercialized the claimed invention?  Or are you magically deemed a troll once you seek to enforce your patent?  Are preliminary licensing negotiations enough to earn the moniker, or must you actually file suit?

Can you be a troll on the day a patent issues only later to earn the right to shed the term, perhaps when you start commercializing the invention?

Can an inventor be a troll?  Or is there some sort of requirement that the patent owner acquired the patent from the inventor or some other previous owner?

Is it enough if that acquisition was part of an ordinary business transaction, or must it have been through some sort of “fire sale” or bankruptcy proceeding, as some have suggested?

There seems to be consensus on a threshold requirement that, to qualify as a troll, the patent owner must not have made use of the invention.  But, even that is vague.  In my mind at least, it raises more questions than answers.  What the heck does ”make use of the invention” mean?  Must the invention have been commercialized?  To what extent?  Do initial commercialization activities qualify as ‘commercialization’, such as market testing, prototyping, and the like, or is actual shipment of product and/or provision of service required?  Could a real troll duck the term if legally advantageous by doing some quick and dirty rapid prototyping?  Market surveys?

Maybe the Supreme Court will fill the gap with its forthcoming decision in eBay v. MercExchange.  A little dicta could go a long way on this issue.  Let’s just hope we don’t see an “obscenity style” definition.

Posted by Douglas Sorocco, April 14, 2006 at 1:07 pm
Permalink: What the heck is a patent troll?
8 Comments

Trademarking Corruption

Well, it appears that it isn’t just tax cuts, immigration and hurricane Katrina rebuilding that threaten congressional members these days – now they have to worry about trademark infringement.

“Conservative activist Grover Norquist is seeking a trademark on “K Street Project,” saying Democrats and Majority Leader John Boehner (R-Ohio) have wrongfully acquired the term to describe unethical practices that have nothing to do with his organization.

Far from running away from the term, as most other Republicans have since January, when lobbyist Jack Abramoff agreed to plead guilty to corruption charges, Norquist is embracing it.

His project is a branch of Americans for Tax Reform (ATR), which he heads. He says the project is an innocuous list of job openings for Washington lobbyists and a database of lobbyists’ political ties and federal campaign contributions.”

While there are no apparent pending registrations for “K Street” or “K Street Project” currently available online at the US Patent and Trademark Office, there is a trademark registration for “K Street Coffee” — could the two be considered confusingly similar?

Furthermore, since the purpose of a trademark is to indicate a single source or origin of goods or services – could Mr. Norquist claim that the term “K Street Project” is indicative of a single source or has it become more generic for lobbying corruption in general (a la escalator and aspirin)?  If nothing else, it will be an interesting political “hot potato” when and if Mr. Norquist actually files an application.

In any event, what does Mr. Norquist want to do:

“Some people say Kleenex when they mean tissue,” Norquist said. “We will jealously guard the real phrasing the way Kleenex and Coca-Cola do. We will sue anyone who says it wrong and make lots of money.”

So, does this make Mr. Norquist a “trademark troll”? 

Posted by Douglas Sorocco, April 12, 2006 at 1:30 pm
Permalink: Trademarking Corruption
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