So, there’s a new patent reform bill in the US that is supposed to put an end to “patent trolls”.
The chairman of the House Judiciary Committee, Rep. Bob Goodlatte (R-VA), has introduced a bill [PDF] that directly attacks the business model of “patent trolls.” The bill has a real chance at passing, with wide backing from leadership in both parties.
Don’t believe all the cheers online – this bill is a disaster. What it essentially does is make it very hard for smaller companies to file patent lawsuits. While this does, indeed, make it harder for small patent trolls to operate, it has the side effect of shifting the balance of power even more in favour of the larger companies. Additional costs and legal legwork are a huge hindrance for small companies, but entirely inconsequential for large companies which employ the same patent trolling tactics as actual patent trolls, such as Apple’s software and design patent abuse or Microsoft’s mafia practices regarding Android.
With this bill, it will become a lot harder for a small, innovative startup with a great idea to protect itself against the big players. I would call that an unintended side effect, were it not that I am a huge cynic and know perfectly fine that this is anything but ‘unintended’.
I would have to agree with it not being unintended. You really think the large corporations, which generally are the ones backing the campaigns of the politicians, would really help pass a bill that didn’t bend things in their favor.
Oddly, I keep thinking back to the cyberpunk genre of literature, where corporations run the government and the ones that aren’t high up business employees are just trash in the street, using their decks to try to get that golden bit of information from a corporation’s mainframe to sell to another corporation for small fortunes.
We’re already getting on the age where we have powerful computers in our pockets, wearable gadgets are on the horizon, all we need are the bionics and we’re in the Cyberpunk era. We even already have dubstep!
So much frothing about patents, whats so bad about patents again?
By definition patents trolls are going after the money, by definition a small company does’nt have any
To add to that, “innovative startups” have two conclusions: death or being not so small anymore. Their shelf life is often shorter than the turnaround time for a court proceeding.
and they’re often overcapitalized by inflated valuations anyway, so they’re flush with cash. This isn’t Mom&Pops filing with the USPTO
That is completely misguided logic. The root of the problem is that most of the patent trolling is happening to these small companies with no money – because most of the patent trolls don’t have all that much money either.
The problem isn’t so much the Sharks, its the guppies. Small outfits with just a few lawyers and one or two overly broad and probably irrelevant patents. Its a really easy way to make money – just send out a boatload of threats and collect the settlements. The only companies paying these settlements ARE the ones with no money that don’t know better – the companies with money and lawyers mostly just ignore them unless they perceive it to be a real threat (it usually isn’t). The small guys can’t tell the difference, and they can’t afford a lawsuit anyway, so they pay up.
Its extortion, plain and simple. You make it sound like the scam is all about going after wales for big paydays. There is a little bit of that going on sure, but most of the damage is small one-time settlements less than $10,000, or worse, small ongoing licensing deals. When there are hundreds or even thousands of these little papercuts going on the economic damage adds up quick. This is specifically the kind of trolls this bill aims to defang.
Unlike Thom I think this bill is actually mostly good. Its much better than the current status quo at least. Yes, it will make it more difficult for smaller companies with productized patents to bring suit against larger companies – but imo that is a small price to pay for the other reforms.
The thing Thom is not factoring in is that most small companies with a few productized patents WANT to get bought out by a big guy. The decision for a big company to buy a patent holder vs. ignoring the patent is really a calculated decision mostly based on the size and value of the patent holder – if they are small they are more likely to get paid off fairly (assuming they have a legitimate claim). Sure, you have the occasional greedy little company that wants some ridiculous royalty for their patent so they get the door shut on them – but should we shed tears over that? All in all I think Thom is making a mountain out of a molehill.
Im still an abolitionist as far as software patents go, but this is imo a pretty good effort to reform the law as far as trolling goes.
I won’t condemn this act as far a Thom does, but I can see reasons for his worries. But it remains to be seen whether or not his concerns bare merit.
Let us not forget Samsung’s patent abuse (despite OSNews whitewashing) which may cost them 18 Billion dollars.
http://mobile.theverge.com/2013/10/17/4847684/samsung-offers-to-not…
or Google’s patent abuse which required a settlement with US regulators
http://modmyi.com/content/11621-ftc-google-finalize-antitrust-settl…
and the US jury which found Moto breached its FRAND commitments and awarded Microsoft damages
http://www.mondaq.com/unitedstates/x/262132/Antitrust+Competition/C…
More on Moto trying to abuse FRAND commitments to extort $4B/yr out of Microsoft and hilariously only getting $1.8M/yr.
Samsung spends $13 BILLION on marketing alone, if they thought they had a chance in hell of invalidating Microsoft’s patents they’d be in court. Maybe they are legitimate after all. This fantasy you all live in where two dozen licensees don’t reinforce the strength of a patent arsenal is pathetic.
Microsoft merely licenses out its R&D, much like ARM does. Be glad they do that and don’t seek injunctions or we’d only see Samsung’s phones in a galaxy far, far, away.
Edited 2013-10-24 12:03 UTC
That’s preemptive abuse, that’s okay.
If Microsoft had balls and the patents they keep waiving, mafia style like, in front of various manufacturers held anything else but bullshit they would go after Google. They are the ones making Android. Instead they extort money from the manufacturers that use Android. Not that I would say oh poor defenceless Samsung could not fight big bad MS. Seems they choose not to. Android is not *their* OS, it’s Google’s. Why isn’t MS going after Motorola for their Android phones huh? Not that big of a player? Then why did they go after HTC then?
I remember when MS was spreading the same FUD about linux infringing their patents. The developers called their bluff and told them to show the infringing code so they could fix it. Never happened.
If they really wanted people to stop “infringing” on their patents they would publicly disclose them. But that means that the BS that makes the bulk of them would get thrown to the wind as prior art would be found and any valid ones would just be worked around.
But where’s the money in that approach?! It’s way better to behave like mobsters and extort money.
Go shill some place else.
Microsoft has been fully engaged in a legal battle with Motorola for the last 3 years.
False. Samsung takes in a majority of Android profits and they are a licensee.
No, Moto is not a big player and is in fact a smaller player than HTC if that was even possible.
Nonetheless, Microsoft and Moto were in a legal dispute that MSFT just swatted away.
It isn’t Microsoft’s job to show them their code, obviously. Microsoft in addition to signing on Android OEMs has signed on ChromeOS OEM/ODMs. Microsoft is monetizing Linux at this very moment due to what you claim to be FUD.
I find it amazing that none of the OEMs have challenged said patents in courts, not even Samsung. Prior art is tricky business as Samsung has learned.
Patents that the OSNews brain trust have claimed were obvious and had prior art were in fact affirmed upon reexamination by the USPTO. Why don’t you leave that to the patent lawyers.
You don’t know what you’re talking about.
Microsoft buys out companies that have already done r&d and have working products. They also do a lot of their own r&d. That being the case, I’m not sure where your comment is coming from.
Its contesting the label of patent troll attributed to a company which licenses out its IP and comparing it to ARM which does something similar but isn’t demonized for it.
I also point out that things could be much worse, they could be (and would be within their rights to) seek injunctive relief as a remedy.
“large companies which employ the same patent trolling tactics as actual patent trolls, such as Apple’s software and design patent abuse or Microsoft’s mafia practices regarding Android”
It is sad to see someone as clever as you are being so blind regarding patents that you cannot make the distinction between actual patent trolls and Apple / MS patent abuse (according to you) while still apparently granting a free pass to Samsung and Motorola/Google regarding SEP patent abuse.
Couple of facts for the reading impaired:
The same jury that awarded Samsung money also found that Samsung did NOT abuse its FRAND responsibilities.
The reason the Samsung ban was terminated by the President had to do with financial effects. The statement even made a point of saying that it was not because there were no grounds for the ban. So Apple got a free walk because our economy sucked, not because they were innocent.
Everything Microsoft does with patents around Linux is always under NDA. But when B&N took Microsoft to court, they entered 50 pages of prior art on the 5 patents used in the trial. Mind you these were 5 different patents from the ones Microsoft originally threatened them with. So what? The original claims were fraud? Or more likely 5 patents that Microsoft knew wouldn’t stand up to a trial. But as soon as someone wouldn’t back down, Microsoft settled rather than have any of the patents over turned. So much for Microsoft’s confidence in its patent portfolio.
It’s your knowledge that is impaired.
The ITC does not have juries. Samsung was not awarded money. I’m not even sure (in fact, I’m fairly certain that it is not the case) if any jury in any case in any jurisdiction in the US has awarded Samsung any money as yet.
It was not overruled solely for economic effects. The veto clearly cited several reasons. The primary one being that the ITC ruling regarding FRAND is largely out of step with current legal rulings and the current administration’s recommendations for how SEPs should be adjudicated. 95% of the 4 page veto is specific to FRAND-committed SEPs. I’m hard pressed to believe you even read it at all, never mind comprehended it.
Edited 2013-10-24 16:20 UTC
Apple vs Samsung was not in front of the ITC. And it did have a jury. And the jury did award Apple ~$1.5 Billion. Do you really need a link to the jury verdict?
Wow.
It must certainly was and still is. It is certainly the only case that was vetoed by the President. In fact, it is the only form of quasi-judicial proceeding that could even theoretically be vetoed by the President.
No, it most certainly did not.
A jury has certainly awarded APPLE money. But YOU were talking about the ITC case. And YOU said SAMSUNG was awarded money. Not only are you unable to comprehend reading, and largely seem unable to read, you can’t comprehend YOUR OWN WRITING.
Not in the least. Do you you need to return to primary/grade school or are you still there?
Edited 2013-10-24 17:08 UTC
That was a typo in my original post. Samsung was not awrded money, Apple was. And I was not talking about the ITC case, which of course was not before a jury.
Was “The reason the Samsung ban was terminated by the President had to do with financial effects. The statement even made a point of saying that it was not because there were no grounds for the ban. So Apple got a free walk because our economy sucked, not because they were innocent.” also ONE GREAT BIG TYPO too?
How ’bout you get your shit together, come back when you know your ass from your elbow, and then maybe we can begin to talk about who is or is not capable of reading comprehension?
The quotes I posted from the USTR letter clearly state that the reason for overturning the ban had little to do with the facts of the case and more to do with economical reasons. It fact it says that in plain english. Doesn’t make it fair to Samsung now does it?
Firstly, you still appear to be ignorant of the fact that you are conflating two very separate and very different legal proceedings.
Secondly, as clearly stated in the veto letter, the only grounds for an executive veto of an ITC decision are the impact on (1) public health and welfare, (2) competitive conditions in the US economy, (3) production of competitive articles in the US, (4) US consumers, and (5) US foreign relations, economic and political.
So why you find it controversial that the decision results from the case’s impact on economic and competitive effects is completely beyond me. The veto could NOT have stemmed from any error in finding of facts or judicial decisions.
And the letter clearly states that his decision is in compliance with conditions (2) and (4):
The basis for finding the decision as negatively impacting (2) and (4) is that granting bans based on SEPs is harmful to standards and consumers.
Since the decision is perfectly in compliance with the mandate of the President (i.e the boss of the ITC) and Samsung still has its rights to pursue a case in the courts rather than via an international trade body of the executive branch, I absolutely do not see anything as unfair towards Samsung.
Edited 2013-10-24 18:22 UTC
Reading impaired yet this clearly shows that you yourself did not read the USTR’s report. That’s rich.
Another card carrying member of the Always Wrong Club.
Yes, lets take a look at that shall we?
“it is beyond the scope of this policy review to revisit the Commission’s legal analysis or its findings based on its record.”
“This decision is based on my review of the various policy considerations discussed above as they relate to the effect on competitive conditions in the US economy and the effect on US consumers”
“My decision to disapprove this determination does not mean that the patent owner in this case is not entitled to a remedy.”
So the ITC found evidence suggesting that Apple was employing reverse hold up and yet the ban was overturned. But apparently not because of any thing contained within the case itself.
I’m not sure why you’re quoting something I’ve already read, but the USTR cited the rationale for the veto as it is codified in the law.
That’s it. What he has also done is encourage parties to have these matters resolved before a District Judge.
This is fairly open and shut. I don’t understand the point you’re trying to make, that the USTR didn’t make a determination he never had the authority to make anyway?
My point was that Samsung is not the patent abuser. Apple is. Thats why, both a jury and the ITC concluded that Apple was using reverse patent holdup. Its shameful that the ban was removed for Apple “cuz of consumers and the market and all” but not for Samsung. If the merits of the case don’t matter, why not veto both bans.
Your doing a horrible job. Moreover, part of your point was to denigrate the misinformed, but you appear to be the most misinformed reader in this entire discussion.
No, this did not occur.
Yes, the jury in the Apple v. Samsung case in the Northern District of California did not uphold Apple’s antitrust claims regarding FRAND abuse, but they also did not find Apple guilty of infringing the patents WHATSOEVER. So how does Apple having its affirmative defenses invalidated in that case, prove to you that Apple is guilty of patent holdup if they were found to not infringe any patents? Also, I thought the jury was horrible wrong? No?
So what you are doing is cherrypicking the most trivial of all details from the Apple v. Samsung case and the ITC Presidential veto, completely muddling what is actual fact, and distorting your own muddled mess according to your own delusions.
Yes, the ITC, after multiple initial rulings in Apple’s favor, finally found Apple guilty of infringement. And their enforcement action was overruled. None of which indicates that Apple is a patent abuser. Merely that Apple has not made a FRAND payment for SEP payments. And that the ITC (a quasi-judicial organ of the executive branch of government, which seeks to protect or expand its powers as any organ of government is likely to do) is completely out of step with their boss, the President, and the entire judicial branch of the US government.
This is unsubstantiated gibberish. Why is it shameful? Have you afforded for the differences in the two separate ITC cases (one being SEP patents, one not)? Or are you confusing the Northern District of California case and the ITC again and claiming the President should veto a jury verdict, even though that’s not the law? No one has said the merits of the case do not matter. What has been stated (because it is true and easily comprehendible if you can read) is that the veto does not consider the factual or judicial merits of the case (because that is the law) but rather the competitive and economic implications resulting from the ITC ruling. What am I supposed to find shameful or unfortunate or unfair about that? Because you haven’t remotely demonstrated that. Rather you’ve demonstrated your own personal ignorance and misunderstanding of what is reality.
Edited 2013-10-25 00:14 UTC
“What am I supposed to find shameful or unfortunate or unfair about that?”
The same reasons that Apple’s ban was overturned apply to Samsung as well, don’t they? If the judicial merits don’t matter and we are talking purely economics, then why is Apple not subject to the same rules as Samsung?
No, they do not. Apple’s patents are not SEPs. The majority of the devices banned from importation are off the market. Those that are still being sold Samsung claims to have developed a software workaround of the patent. Part of Samsung’s argument is that the Apple patents cover insignificant features that don’t impact consumer’s purchasing decisions. So there is neither consumer harm nor economic harm as a result of holding up standards promised to be shared on FRAND terms.
You can’t work around SEPs. You can work around other patents, generally.
The Jury in that very same case awarded Apple a billion dollars and Samsung zero dollars.
Now if you want to talk REAL Jury rulings, a Jury ruled Motorola had breached its contract in seeking discriminatory rates for its standard essential patents. A Jury ruled that Google itself was abusing patents.
Furthermore as my first link has shown, Samsung is having to make concessions to EU regulators or risk an $18 BILLION dollar fine over SEP abuse.
That is more damning than a Jury which never ruled Apple infringed any SEP and the ITC which got told by its Boss that it didn’t do its job correctly.
The appellate chain of custody for ITC cases is the USTR. I’m sure you’re all for Samsung’s appeal of its Jury verdict with an appellate court so why do you seem to not appreciate the judicial system when it does not work in the favor of the team you’re rooting for?
Face it, you came into this denigrating others for supposedly not knowing how to read but what is now more than obvious is that your own lack of comprehension is what’s egregious here.
The unspinnable fact is that Google and its OEMs are losing important cases, especially Google who may even have to write off the Moto purchase as worthless.
So some jury rulings are ok and some aren’t? Who gets to make that decision? As for the ITC, the letter from the USTR specifically states that the reversal was in no way a judgement based on what the ITC found or its logic. So that doesn’t really say anything about the merits of Samsung’s claims does it?
And which jury said Google was abusing patents? Unless you mean Motorola. While Motorola lost here in the US, they settled in Germany, where the court basically let the two sides hash it out for themselves. Thats actually how its suppose to work. Microsoft couldn’t be bothered to actually negotiate and instead got a local judge (thats real fair) to agree, against all contract law on the books, that IT should be able to set the arbitrary value of someone else’s property. Microsoft wants special rules for dealing with SEP patents that favors its weak position of not having any.
You’re reading comprehension is horrible. Wasn’t that your initial point? Neither myself or Nelson are saying this — however, we can only logically conclude you are.
You are claiming that in Apple v. Samsung in the Northern District of California Apple was found responsible for holding up it’s lawful obligation to pay for Samsung’s patents based on the fact that the jury rejected its affirmative antitrust/FRAND defenses. But the same jury found that Apple did not violate the patents in question at all. So how is Apple abusing patents by not licensing their use if they were found to not infringe them at all?
Correct, the veto does not say anything whatsoever about the merits of the final ITC ruling, merely that their judgment would be inappropriate to impose. And?
Edited 2013-10-25 16:27 UTC
Okay, since we’re apparently going to have to go back to establishing the basics:
You are aware Google OWNS MOTOROLA? Right? It says it on their website. A Google Company. Motorola’s actions are Google’s action.
So by Motorola, I mean Google.
Do you refer to Microsoft and Skype as two separate entities? Alcatel and Lucent? Mike and Ike (okay..lol).
Google swallowed up a loss making entity with patents worth approximately zero, and which are either standards based or broadly licensed. It was worthless when the deal was announced and its worthless now.
A Judge intervened because there was a question of whether or not Motorola’s demands were FRAND, a judge found they were not and set a rate accordingly. A rate higher than what Microsoft wanted and way lower than Motorola’s astronomical amount.
A question, do you believe that Motorola’s request was FRAND? Because if you do you’re insane, and if you don’t you have to agree they’re abusing SEPs, hence my point.
My bad. The above should read “the jury that awarded Apple money also found ……” Sorry for the confusion.
Edited 2013-10-24 17:22 UTC