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Patent Trolls: Make Them Pay

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Re: Patent Trolls: Make Them Pay

#71

Post by zevyoura »

SeanDav wrote: post #58
robomartin wrote: post #11

I've posted this a few times on HN. The solution to this problem is, in my humble opinion, very simple. Rather than presenting a divided community to trolls, we have to present a united front. This would come in the form of a legal support organization that would be 100% dedicated to fighting trolls on behalf of it's members. Call it insurance, if you will. Member companies would pay a monthly or yearly membership fe…

One problem with this is some of those members are potential patent trolls themselves. Witness the many Apple/Samsung/Google/Oracle cases. Although there is some debate about the exact meaning of "patent troll", I would think that using the threat of litigation to prevent innovation falls under this.

My understanding of the term 'patent troll' is that it only applies to companies that own but do not actually use their patents to bring things to market themselves. Thus, the companies you mention don't qualify. Not to say that what those companies do is all peaches and cream but it's not patent trolling.

Re: Patent Trolls: Make Them Pay

#72

Post by dredmorbius »

toddmorey wrote: post #50
dredmorbius wrote: post #43

Earlier quoted context omitted.

One of the entities RS acquired was SGI. Whom I suspect may have had a patent portfolio. Not sure who got that though. Oh ... crap. Looks like they were retained by Graphics Properties Holdings, who is, you guessed it, a patent troll themselves: http://www.techdirt.com/articles/20120419/02113518553/sgi-ba...

Oops, Rackspace never acquired SGI. That acquisition was done by a company called Rackable Systems.

Doh! Thanks, I've been making that error for quite some time now.

It never really did make sense to me that Rackspace == SGI, especially since they weren't using the mark at all.

Re: Patent Trolls: Make Them Pay

#73

Post by udpheaders »

atomical wrote: post #70
udpheaders wrote: post #55

Earlier quoted context omitted.

Think about it. What would happen if they were cheap? Anyone could amass a large portfolio. We could all block each other's every move. No one would have any leverage. But the second question you have to ask is what does it cost to sue? What if that were cheap?

I'm trying to determine the difference between vague and worthless. I assume a lot of vague patents are worthless. But where is the line?

Here's how it's done, in simple terms. This is not some new thing. IBM was doing this before there was a Microsoft and before there was a WWW.

If you amass enough vague patents, any one of which on its own isn't worth the paper it's printed on, then automagically they no longer remain worthless. Suddenly you have something valuable: a patent portfolio! This is because it costs a significant sum to pay someone (e.g. a patent attorney) to go through your wonderful portfolio of junk and determine which ones are worthless. And that is in turn because patent law firms charge very high fees to do that work. And that is in turn because not every lawyer is permitted to become a patent lawyer - so there's only a limited number of patent lawyers - hence they have less competition to drive prices down. The uncertain validity of a bundle of patent claims that I can allege others are infringing is the value. Threat == value.

Therefore if I have several hundred vague patents of which a definitely large proportion are worthless and I sue you alleging you have infringed a significant number of them, you are screwed. Because it is going to cost you a lot of time and money to have someone go through each and every claim and convince me you are not infringing. So you just concede it's not worth it to fight me and my deep portfolio of junk software patents. And we start negotiations. Needless to say everyone at the negotiating table is not going to be in a happy mood going into this given that we had to start the whole process off with threatened or actual litigation. This is "business", American-style. A model for the world to follow.

Re: Patent Trolls: Make Them Pay

#74

Post by astrodust »

rayiner wrote: post #63
astrodust wrote: post #61

Earlier quoted context omitted.

That America does not have a "Loser Pays" legal system is completely terrifying. British law, which is followed in various forms by many countries, imposes severe penalties on those that lose cases. The risk for a plaintiff is significant and the damages done to a victim of wrongful prosecution while not negligible are at least off-set by the fees paid by the loser instead of the losing party being able to walk away…

The American system isn't "terrifying" it's just different. You can't look at the European system without understanding that a lawsuit means a lot more in Europe than it does here. Many of the things that Europe does through administrative processes, the US does through litigation. It's easy to fixate on the costs of litigation, but realize that other systems don't necessarily eliminate those costs, but move them aro…

I don't know if you sleep on a mattress filled with hundred dollar bills, but even engaging a lawyer to fend of a possible lawsuit can cost thousands with costs escalating quickly from there if you need to do more prep-work before you even show up at court.

Even getting a case dismissed can cost a small firm more money than it can afford. A fifty thousand dollar dent in the cash-flow of a small business is not an easy thing to weather. Good luck collecting on damages from a wrongful suit, too.

You say it chills litigation against big corporations? It tempers it. Where you cite examples of lawsuits against companies promoting the greater good, I see ambulance chasers trying to siphon extraordinary class-action settlements. Very little of that money goes towards consumers and instead of making companies more responsible it simply paralyzes them with paranoia.

It may sound rather peculiar, but in some countries the government plays the role of advocate for the voters. It doesn't necessitate suing anyone and everyone to send a message. Too many things that used to be taken for granted have been completely eliminated because one individual decided to press ahead with a lawsuit over something that, in many cases, was either a random act of bad luck or a case of irresponsible behavior that can be blamed on another on a technicality.

Re: Patent Trolls: Make Them Pay

#75

Post by URSpider94 »

robomartin wrote: post #11

I've posted this a few times on HN. The solution to this problem is, in my humble opinion, very simple. Rather than presenting a divided community to trolls, we have to present a united front. This would come in the form of a legal support organization that would be 100% dedicated to fighting trolls on behalf of it's members. Call it insurance, if you will. Member companies would pay a monthly or yearly membership fe…

The problem is that each patent, by definition, is unique in its coverage. Hundreds of thousands of patents is worthless if a troll has valid patent claims that read on your business. Also, massive amounts of legal firepower don't always help, as others have pointed out -- trolls are experts in exploiting moral hazard, compartmentalizing their business venture down to the single patent, such that if they find themselves on the losing end of a legal battle, they just fold up shop and move on to the next.

There is a stereotype that all patent trolls use a flimsy set of claims to coax hapless defendants into settling, rather than face years in court. Not true -- sometimes trolls have shockingly applicable claims, and go after the big game head on -- Apple, Microsoft, Google.

Re: Patent Trolls: Make Them Pay

#76

Post by btilly »

vm wrote: post #23
robomartin wrote: post #11

I've posted this a few times on HN. The solution to this problem is, in my humble opinion, very simple. Rather than presenting a divided community to trolls, we have to present a united front. This would come in the form of a legal support organization that would be 100% dedicated to fighting trolls on behalf of it's members. Call it insurance, if you will. Member companies would pay a monthly or yearly membership fe…

RPX Corporation was created to be the white knight that you describe. It is a for-profit company with a $600M mkt cap. Kleiner, CRV and Index invested significant capital in it (I believe Kleiner incubated it). Basically, your company pays a % of revenues to be part of their patent protection scheme. They get to license your patents, which they allow other members to use. They purchase patents outright as well (thoug…

Read their FAQ. They are also willing to sell patents, under a deal that indemnifies all current (but not future) members.

They already use this threat as a reason to sign up now instead of later.

The path from their current position to monetizing themselves off of patent trolls is very short. They have an incentive not to walk this path too obviously - right now they are acquiring patents at fire sale prices - but the temptation is always there.

Disclaimer I had a previous employer take out 3 patents in my name. Those patents have wound up in RPX's portfolio. I am not happy about this fact.

Re: Patent Trolls: Make Them Pay

#78

Post by dredmorbius »

jamesmcn wrote: post #67
dredmorbius wrote: post #43

Earlier quoted context omitted.

One of the entities RS acquired was SGI. Whom I suspect may have had a patent portfolio. Not sure who got that though. Oh ... crap. Looks like they were retained by Graphics Properties Holdings, who is, you guessed it, a patent troll themselves: http://www.techdirt.com/articles/20120419/02113518553/sgi-ba...

Microsoft bought out a large part of SGI's patent portfolio in the early XBox days. Then they sold the company to Rackable .

A bunch of the OpenGL stuff. Which has since been transferred at least in part to OIN:

http://www.theregister.co.uk/2009/09/08/microsoft_sgi_patent...

Re: Patent Trolls: Make Them Pay

#79

Post by rayiner »

astrodust wrote: post #74
rayiner wrote: post #63

Earlier quoted context omitted.

The American system isn't "terrifying" it's just different. You can't look at the European system without understanding that a lawsuit means a lot more in Europe than it does here. Many of the things that Europe does through administrative processes, the US does through litigation. It's easy to fixate on the costs of litigation, but realize that other systems don't necessarily eliminate those costs, but move them aro…

I don't know if you sleep on a mattress filled with hundred dollar bills, but even engaging a lawyer to fend of a possible lawsuit can cost thousands with costs escalating quickly from there if you need to do more prep-work before you even show up at court. Even getting a case dismissed can cost a small firm more money than it can afford. A fifty thousand dollar dent in the cash-flow of a small business is not an eas…

> You say it chills litigation against big corporations? It tempers it. Where you cite examples of lawsuits against companies promoting the greater good, I see ambulance chasers trying to siphon extraordinary class-action settlements.

Read up on the economics of externalities. In the US, the legal system is pretty much the only thing we have to deal with companies trying to externalize costs. And the amount of these externalized costs is huge. $500 billion or so for the coal industry alone (http://wvgazette.com/static/coal%20tattoo/HarvardCoalReportS...).

The narrative popularized by corporate America is the ambulance chasers just looking for a quick settlement, and while that no doubt exist the truth is that lawyers are the only thing that stand between the big corporations and everyone else.

Re: Patent Trolls: Make Them Pay

#80

Post by Vivtek »

robomartin wrote: post #11

I've posted this a few times on HN. The solution to this problem is, in my humble opinion, very simple. Rather than presenting a divided community to trolls, we have to present a united front. This would come in the form of a legal support organization that would be 100% dedicated to fighting trolls on behalf of it's members. Call it insurance, if you will. Member companies would pay a monthly or yearly membership fe…

Your second part unfortunately doesn't work at all against trolls. A non-practicing entity - a company that does nothing except hold IP for the purpose of suit, but doesn't produce anything - can't violate your patents, and so can't be countersued using your own patent portfolio.

That's why patent trolling is particularly pernicious. Their entire purpose is simply to slow innovation and get rich doing it. Period.

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