Tag: patent troll

Are Patent Trolls the next China?

“Just like during the last 20 years it has been wise to move all the production to China, right now it is wise to sell IPs to NPEs. One day the threat will be reality and there are no other options available any more.”

Without any doubt there has been a lot of discussion related to NPEs or patent trolls. Their positive role in patenting has also been mentioned in some articles. After all they are one of the very few entities who are willing to buy patents that may be interesting in the future but only in the future.

But who are the organizations selling their patents and why are they doing so?

That is not hard to answer, there are several institutions who are willing to do so. And for a good reason. This may not be the case globally, but enough to be a fact over large geographical and cultural areas.

Take Finland as an example. It has been stated that granted patents are a good thing and an excellent measure among others how research institutions and universities are performing. Patents can also be listed in CVs and are merit to its inventor. It is especially very tempting when an individual does not have to pay the filing costs. In the long run very few patents actually generate any money for the institutions owning them. The overall costs for filing and holding a patent just in Finland for 20 years costs currently 8650 euros plus fees and patent drafting costs. Single patent easily costs 15 000 euros in minimum for its holder.

And a single patent is no merit for a respectable research institution who would like to enter licensing business in a significant manner. Some patent families may enable that but most not. Once we start talking about patent families in several countries, the costs are easily in the hundreds of thousands of euros or dollars per year. Which would indicate that the income should be higher, hopefully in the millions per year. Which usually is not the case.

In these examples I am leaving out the need and the burden to be able to defend one’s patents against infringement if under attack. Which adds to the costs – I’ve heard that lawyers usually get paid for their work. And that universities and research institutions are not in the litigation business. At least in Finland. They admit that openly as it is not part of research nor teaching that still (barely) is in their main focus.

We also have a lot of startups and small businesses who are trying to push their technologies and products forward. They especially need to have their work protected through patents. If for nothing else, to be investable for the investors. And if the business does not grow fast/big enough, there’s always the option to minimize the losses by selling the patents.

So when someone tries to sell a patent or a patent portfolio, NPEs are a good or perhaps the only option.

Sometimes they are used as  a strategic option as it is possible to build bigger patent portfolios and lessen the chance of an attack against a single, vulnerable company. We have seen a lot of evidence about such strategies when large corporations sell or out-license major parts of their patent portfolios to a newly formed or an existing company. Whose only task is to take care, license and defend those patents.
So it is good that there is someone out there willing to buy all these patents nobody finds valuable short term. Or is it?

Currently US patent office grants roughly 500 000 patents every year. I have not checked the latest numbers, but it is easy to guesstimate that in minimum NPEs acquire thousands to tens of thousands of patents per year. Even individual deals have included thousands of patents. NPEs also generate their own patents as we have shown in previous blogs.

After a (long) while they end up owning a lot of patents, more than today. I.e. there are entities out there who own patents that are just waiting to be able to cash their investments in a way or another. And they are not doing it just for fun, they are doing it for the business that other businesses fund directly or indirectly.

Some of such ways may be less worrying than making humanitarian help impossible, harder or just cost more, but it still begs to ask and answer if the whole patenting model overall is sustainable.

What comes out of the equation when everyone has the incentive to sell to patent trolls?

Is it like with China’s factories that everyone sees them as the best or the only option to do any production at all? After a while there is nobody else capable of producing anything or with limited capacity at best. Will it be the same for the patents that some NPEs end up owning most of the patents and actually control the markets through a common “nuclear threat”. Either you belong to one of the (future’s) major patent camps or pay dearly. If you belong to a group, you just pay a little less.

There are a lot of examples in the history that have resulted in such polarized systems. Soon to be ex music-mega-mogul-industry being one of them. The big ones control the rules and the prices.

Will it be the same for patents within the next 10-20+ years? I hope not, but I am afraid it will be the case. Unless the system is changed in a way or another when patents are once again more about inventions and building a better future. Producing exciting things than just plain business and maximizing profits.

Wishful thinking.

Before we stopped actively working on the Project Troglodyte, we found out there is not enough interest about the topic (or threat seen big enough) in Finland nor in Europe. It seems that in the US the view is changing and counter measures are planned. Very similar to what we have discussed in Troglodyte and Zygomatica during the last two years. Luckily some of the US projects and instances get the resourcing we never had.

In today’s Finland too many companies and institutions are focusing on cutting costs and turning (especially IT) experts with ideas into couch potatoes. Which seems to be a governmental goal, planned or unplanned.

If there is no interest, there are no resources. In the current economy everyone in Finland is just trying to cope and don’t need new ideas that cannot be built. Also in this scenario NPEs are a good thing and they are entering Finland that was seen improbable just a year or two ago.

Just like during the last 20 years it has been wise to move all the production to China, right now it is wise to sell IPs to NPEs.

One day the threat will be reality and there are no other options available any more.

Learn to live with the trolls or change the thinking where greed is not the only good. Perhaps it just needs a fancy name and big headlines?

Ramping down Project Troglodyte

“On a personal level, I may have found a niche which I will need now that I have been “liberated” from my previous job and am “facing new challenges”: humanitarian IPR. “

Last year we decided to make a spinoff from Zygomatica, focusing on “hunting for bad patents”. We called it Project Troglodyte (www.project-troglodyte.org) and found new collaborators. We gave it about six months to evolve. The six months is now up. The readership and core team did not grow enough, so we are ramping it down. We will rewrite and republish some of the material here on Zygomatica.

I do not really consider this a failure, as we learned a good many valuable and interesting things. On a personal level, I may have found a niche which I will need now that I have been “liberated” from my previous job and am “facing new challenges”:  humanitarian IPR. There is plenty of humanitarian activity going on; for the most part, patents and IPR are not considered at all relevant in that world. Yet, they can be relevant — and almost never in a good way. Someone needs to understand the risks and also the upsides.

Our initial interest was in fighting “patent trolls” — entities that file and buy patents purely for the purpose of litigation. A major eye-opener was the possibility that trolling could quite quickly lead to trampling of basic human rights: See Trolling on the human rights. See also “How farmers were punished for using a shovel” and “The trolling triad“. The risks are real.

We came up with ideas that might actually genuinely have worked, in particular “antipatents”. Simple concept:

  • It seems to be possible to patent almost anything.
  • If something has already been “invented”, it can no longer be patented. (In technical terms, there is “prior art” that prevents it).
  • If so, why not “invent” everything trivial before someone else has time to patent it?
  • This collection of “inventions” could be called the “Antipatent Office” (APO).

This sounds flippant, but in fact this could be technically doable. I will summarize some of the better antipatent ideas in later postings.

However, in the end we ran into a major wall of demotivation. It might be possible to fight patent trolls in the United States with the antipatent strategy. However, the craziest features of the US patent system are not really being exported to the rest of the world, so mostly this is a US issue. American companies are suffering greatly from patent trolls; as Europeans, we really could not care less, as long as we are not contaminated. Antipatents might work if someone is motivated; we are not.

I found that the patent systems of developing countries are far more interesting, as are questions related to the use of IPR in humanitarian situations. However, I did not manage to drum up sufficient enthusiasm in the rest of the team. So, it makes more sense to pursue them as a solo project here on Zygomatica.

I wish to thank our collaborators (Kalle Pietilä, Viv Collins, and Florian Lengyel) for their contributions to Troglodyte.

 

Pollution week 5: Summary

“So we will continue to plod on. In fact, we will be expanding this activity to a new website soon.After all, what’s the alternative? Maybe if we all close our eyes and ears, all the bad things will go away?”

Written by: Jakke Mäkelä, Timo Tokkonen, and Niko Porjo.

The postings this week have, we think, given an overview of what a project like Troglodyte could hope to achieve against entities like Intellectual Ventures. Not much, but even a tiny bit helps. Especially posting four might give ideas on countermeasures against the worst of the trolls.

The possibilities are quite limited; on the other hand, being prepared is infinitely better than being unprepared.

Continue reading Pollution week 5: Summary

Pollution week 4: Could we do something about Intellectual Ventures?

“But a normal company would never let a poo reference take pride of place on its patent document. For most healthy companies, patents are simply too serious a matter to allow sophomoric poo humor.”

Even if the previous parts of the Pollution week (Part 1, Part 2, Part 3)  left a general sense of bewilderment, they don’t necessarily have to leave a sense of complete hopelessness.  Maybe the phenomena that were noted in Part 3 could be useful. Even if it’s not directly possible to fight trolls, it makes eminent sense to see what vulnerabilities they might have. This information might be useful to someone, somewhere.

The metadata of part 3 suggests that the inventors have been working in a “patent factory” mode, i.e. churning out applications for the purpose of churning out applications. This may have happened during one intense day, or during several workshops, or over a longer period of time.

It so happens that this mode is not completely unfamiliar to me.  This means that I may have insights into the weaknesses of this mode, which might be helpful should anyone ever wish to try to invalidate a patent of this type.

 

Note that these points are not in any way related to this particular ‘002 patent. The same kind of mechanisms seem to be operating in any number of cases, and the ideas here are fully applicable there as well.

The article in bizjournals.com is worth quoting again. “….Several times per year ISF brings together thought leaders across industry and academia for these day long, forward ideation discussions. At times, a specific innovation is created as a result of these sessions. When that happens, it is customary for the individuals who have contributed to the innovation to be credited if a patent application is filed.”“

This may well be “customary” at IV, but I do not believe I have seen such a cavalier attitude expressed elsewhere. The question of “who contributed” is actually a hotly contested issue. (See C.R. Bard v. W.L. Gore & Associates for an 800 million USD case that has lasted 38 years, and is about who should be credited as a co-inventor). Any incorrect names in the inventor list would certainly be interesting in litigation.

Also there seems to have been a long development time for these patents; the ‘002 seems to be a variant/extension of an original idea that was more closely related to personal health monitoring. There are certainly innocent explanations for this in the filing process (applications may have to be rewritten and so on). However, it does leave open the question of just *when* something was invented.

Specific possibilities:

  • Are they sure they have the right inventors? In principle, having even one name included incorrectly, or lacking just one name, could mean the patent (or at least some claims) are invalid. The Bizjournals article suggests that IV has a somewhat cavalier attitude toward this aspect.
  • If these were made at ideation discussions, where and when were they, and who took part? Were minutes taken? Who invented which claim?
  • In general, is all the paperwork in order? Has every inventor signed every piece of paper that needs to be signed? A group filing an application a week is bound to make careless mistakes at some point. Cases can be made or destroyed on small technicalities.
  • Are there any anomalies, such as people being on inventor lists when they did not attend a specific meeting at all?
  • Was everything in these patents really invented during one day long session? If so, why have there been so many additions and amendations throughout the years? Who has made the additions? Where are they documented?
  • If the additions the workshop results were considered just technical steps rather than new inventions, who made that evaluation?
  • Are these applications actually the result of multiple inventions? If so, who made them, and are they documented? What claims are owned by what inventor?

 

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CODA

The ‘002 patent itself provides a somewhat appropriate note on which to end.  The first reference, in a prominent place, is the following:

Figure 1: First reference in ‘002 patent

 “Buchanan, Matt: “Twitter Toilet Tweets Your Poo”; Gizmodo.com; Bearing a data of May 18, 2009; Printed on Jul. 1, 2009; pp. 1-2; located at http://gizmodo.com/5259381/twitter-toilet-tweets-your-poo”

The reference does not seem to be cited in the actual document. It has a vague connection with the subject matter, but so could any number of articles,  so it is not really clear why it is here in the first place.

It is even less clear why it is here, in first place. The list is in no particular order, and there is for example Agger in the references, so it is not a question of Buchanan being the first in alphabetical order. Someone somewhere wanted a poo reference to be the first thing that hits the reader in the eye.

I would definitely have wanted done something like this in high school. Or university, for that matter. Or, come to think of it, even now. I’m childish. I would love to have to have a poo reference on a serious document like this.

But a normal company would never let a poo reference take pride of place on its patent document. For most healthy companies, patents are simply too serious a matter to allow sophomoric poo humor.

An attitude that is this cavalier toward inventor status and poo humor is a sign that something is just not quite working right. And that makes it increasingly probable that the company will make careless mistakes. A single comma in the wrong place can make all the difference.

What overall conclusions can we now draw from the exercise? (Subject of next posting).

 

Pollution week 3: How does Intellectual Ventures do this?

“Two of the inventors (D and N) have been producing close to one granted patent per each working day for the last decade … I am trying to remain neutral, but I cannot help but feel that there is something moderately ridiculous here about Intellectual Ventures.”

In part two of the pollution week, I analyzed patent US 8,127,002  (“Hypothesis development based on user and sensing device data”) and how it (perhaps) relates to monitoring of pollution. I described a software program that I might write, which would estimate the air pollution level at a certain place.

I found that, most likely, my software would not infringe on the patent, and the patent holder would not win in court. However, I would still pay the fee.  Given that the patent is controlled by Intellectual Ventures, I would have too much to lose. Whatever the actual facts might be, the general perception is that IV is a large patent-litigation machine. Personally, I would not go against it.

Here’s the interesting question: how is IV able to do this?

Continue reading Pollution week 3: How does Intellectual Ventures do this?

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