Tag: patent troll

Pollution week 2: What’s preventing me?

“Would “my” software infringe on the ‘002 patent? My answer? It probably does not infringe. But I probably should pay nevertheless.”

In the previous part of the pollution theme week, I defined a fairly  trivial software that would allow an asthmatic to follow the air pollution at some other location. I suggested that a patent  (US 8,127,002) has some features that make it look worrisomely close.

I will now try to see guess whether “my” software would infringe the ‘002 patent. And I do mean “guess”;  there is no way of finding the “truth”, as has been discussed earlier. The “truth” can only be discovered in court, when the patent owner sues someone.

Continue reading Pollution week 2: What’s preventing me?

Pollution week 1: “My” Application

“Being allergic, I am (vaguely) dreaming about someday having a “citizens’ network” of sensors to monitor pollution in real time and high resolution. Such data cannot perform miracles, but being prepared is better than being unprepared. Have I already been blocked from doing this?”

We have decided to make this week a kind of demonstrator for our kind of thinking, showing what a project like this can and cannot do.  This is as concrete as it gets.

The special theme we chose is air pollution. More specifically, solutions that would allow asthmatics to get information about the air pollution situation.

To make things as concrete as possible, the whole week revolves around just one patent,
US 8,127,002  (“Hypothesis development based on user and sensing device data”). The narrow focus has a purpose: it concretely shows what kinds of vulnerabilities might enable trolls to be attacked with their own weapons.

I asked the question: could this patent block a person with allergies from getting information about the air pollution levels at a location he is going to?

Answer: possibly. Possibly not.

Continue reading Pollution week 1: “My” Application

Troglodyte: How farmers were punished for using a shovel

“Whether or not the cases had any actual merit, the farmers could not afford lawyers. They always caved in and paid a “licensing fee” of $10-$100 (real money in 1875).”

The purpose of Project Troglodyte is to hunt for bad patents and to show what went wrong. For more information, please see the web page.

HOW FARMERS WERE PUNISHED FOR USING A SHOVEL

[Edited Appendix 2 on 30.8.2012 to suggest a more realistic cost estimate.]

The dystopia described in Trolling on the human rights  is no dystopia. I suggested there that patent trolls (companies owning essentially worthless patents for the sole purpose of extracting licensing fees) could start demanding such “license fees” for basic human rights such as clean water or education.

It turns out this has happened. It happened in the 1870’s, but similar patent mechanics apply today. Weaknesses in 1870’s patent law allowed ruthless operators to collect “license fees” from ordinary farmers who happened to be using shovels. The case is described by Gerard Magliocca (Blackberries and barnyards: Patent trolls and the perils of Innovation, Notre Dame Law Review, June 2007). [See Appendix 1 for more details].

HOW DID THE 1870s SHARKS OPERATE? 

The 1870 Patent Act loosened the criteria for filing patents. Pure design elements could now be patented, rather than functional elements. In other words, tiny (even ornamental) changes to basic designs could be patented and the patents enforced, and it was extremely difficult to know if a given product actually infringed the patent. Magliocca summarized the problem as being that “almost any farm tool could be classified as a design”.

This was quickly abused by patent sharks (as they were called then). By patenting tiny changes to essential equipment such as shovels, they could demand royalties, targeting individual farmers. Whether or not the cases had any actual merit, the farmers could not afford lawyers. They always caved in and paid a “licensing fee” of $10-$100 (real money in 1875). According to this site, ten dollars would have been a week’s salary for an urban fireman. In a  rural economy, this would have been a proportionately much larger sum of money.  Painful but not ruinous.

(I want to make a personal comment here. I do not consider patents as such to be the evil issue here. If someone uses significant money to develop, say, a truly new composite-material shovel that weighs a fraction of current shovels, they are entitled to protect it. It may not sound ethically nice, but at least it is not gaming the system, in the way that trolling is).

According to Magliocca, USPTO practices were changed during the late 1880’s so that pure design elements could no longer be patented. Shark activity was thus no longer profitable.

WHAT ALLOWS TROLLS TO THRIVE?

Magliocca sees direct parallels to today’s trolling situation, especially in software and business patents. He suggests three criteria that breed trolling behavior.

1. Substitution effect. It must be extremely difficult to find a substituting solution, either by bypassing the patents or by using a competing technology. Currently, software is dependent on multiple interacting modules, and redesigning one module can be too difficult to be realistic. On the other hand, in the 1870s, “there are only so many ways to design a shovel”. Once a patent had been granted, much anything could be alleged to infringe it. Since farmers needed shovels, they were open to attack.

2. Marginal improvements. When almost all patents look almost the same, it is difficult to know whether one is infringing or not. This is true of today’s software patents; it was true of design elements for shovels. When one has no prior way of actually knowing whether an infringement has taken place, going to court is a huge risk.

3. Cheap technology. Trolling only makes sense if it is very cheap to file and maintain patents, and owning just one critical patent can bring the targeted system to a halt. In the 1870’s the problems were due to the loose standards for patenting. Today, systems are highly integrated, and just one patent can block an entire system.  In both cases, a strong “portfolio” could be created by just owning one single patent.

Cheapness is also related to the ability to hold on to patents for a long time. In the 1870s, “inventors” could patent small design elements, and then allow the patents to stay inactive until they saw them actually being used.  Currently, this practice is discouraged by making maintaining a patent more expensive over time. However, Magliocca doubts whether the cost currently rises sharply enough.  See Appendix 2 for details.

COULD 1875 BE REPEATED IN 2015?

Patent weirdness today get the most press in areas which are, in my opinion, socially irrelevant. We could survive without pinch-and-zoom user interfaces on touchscreens. We could not survive without water. Could trolls start to interfere with, say, access to water?

I will focus on sensor systems needed to monitor and optimize irrigation. Such ensors are a crucial part of controlling irrigation and conserving water.  I will focus concretely on a patent which I have analyzed already (see Troglodyte: Cleantech 2). That patent is only one specific sample; there could be significantly worse ones.

1. Substitution effect. This might not seem like a severe risk, as a variety of sensor technologies that can be used.  However, patents in the core of data transmission protocols are difficult to bypass because of their very generality, and because a single patent on a small detail can block an entire complex system.  The Cleantech 2 patent certainly is in the category.

2. Marginal improvements. To exaggerate a little, all patents these days look alike. A small company won’t have the time or competence to estimate whether a case is valid. (Bizarrely, trying to do so could actually make things worse. If an infringement is judged to be “willful”, courts may triple the damages. In other words, if a company does try defend itself, in principle it risks being punished three times more severely.  It is a Catch-22). An average company confronted with the Cleantech 2 patent probably would have no idea what to do.

3. Cheap technology. Patenting is cheap compared to the possible profits (see Appendix 2). And the USPTO is in serious trouble with spurious patents. Companies can now file spurious patents in critical areas, and keep them quietly hidden away. The Cleantech 2 patent is a good example. It may (at least partly) be in force for the next twenty years. If someone during that time develops a good real-time system for optimizing irrigation using rain sensors, the patent could come to haunt them.

I truly don’t know if we could see a repeat of 1875. Magliocca’s criteria do seem to be satisfied. The magnitude of the risk is completely impossible to predict. It could lead to severe disruptions in the development of irrigation technologies; it could be a minor irritant that slightly raises licensing costs; or, nothing at all might happen.

However, the right time to start preparing for potential attacks is now, before litigation (or threat of litigation) has even begun. Whether anything can actually be done I do not know; but being unprepared is the worst possible option.

 

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APPENDIX 1: STATISTICS

It appears that Magliocca’s paper is the only major study of that case, and the subjective description is largely based on one historical paper from the 1940’s (however, the paper is backed by extensive legal references).  For the sake of general skepticism, I decided to see whether there are other sources that would support that description.

I made a Google Patents search for patent applications with the term “shovel” between 1860 and 1895 (Figure 1). There is indeed a dramatic peak after 1870, decreasing in the 1880’s. (I have no explanation for the secondary peak before 1890).

It is necessary to consider whether the growth could be due to general trends in patenting after 1875, rather than the specific shark effect. Figure 2 shows the number of patent applications, from USPTO statistics. There is more or less consistent growth throughout the same period. The peak in “shovel” applications is not related to any general growth of patent applications. The statistics are consistent with the shark hypothesis.

Figure 1: Number of patent applications with keyword “shovel”



Figure 2: Overall number of patent applications

 

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APPENDIX 2: HOW CHEAP IS PATENTING, ACTUALLY?

[Edit 30.8.2012: It was pointed out by an experienced reader that a more realistic cost for getting and maintaining a patent for 20 years is closer to 75 kUSD than 15 kUSD, if done properly.  I accept that the estimate below is unrealistically small. However, if a higher cost estimate is used, then part of my point is made stronger: doubling the lifetime of the patent only adds some 5-10% to the overall cost].

From the USPTO’s current fees, filing a patent costs in the ballpark of 1500 USD. If the patent is granted, an issue fee of about 1700 USD must be paid. There can be various hard-to-predict fees which may raise the cost considerably.

In order to maintain the patent, maintenance fees must be paid: 1100 USD at 4 years, 2900 USD at 8 years, and 4700 USD at 12 years. The patent is then valid for 20 years. (The prices can be halved for small entities such as individual inventors). The absolute minimum cost to maintain a patent for 20 years is in the ballpark of 12,000 USD. A practical estimate is at least 15,000 USD, including patent attorney fees.

Magliocca notes that the purpose of the maintenance fees is to make it sharply more expensive to maintain patents for long periods. However, he suggests the rise is not sharp enough. Indeed, given the the initial filing phase also includes requires the patent application to be written by a patent attorney (not cheap), a good ballpark estimate is that the patent has already cost at least 6000 USD by the time of the first renewal, and there are no significant attorney fees after that. A large part of the money has thus already been spent up front.

In practice, maintaining a patent for eleven years easily costs about 10,000 USD, while maintaining it for the whole twenty years costs only 5,000 USD more. This does seem like a no-brainer: if there is any potential, one might as well go the full twenty years.

Troglodyte: The trolling triad

“So is Sipco a patent troll? I follow the old adage: ‘If it quacks like a duck and walks like a duck, it probably is a duck.’ Sipco even smells like a duck. You decide.”

The purpose of Project Troglodyte is to hunt for bad patents and to show what went wrong. For more information, please see the web page.

SIPCO LLC

What makes a patent troll truly venomous? In a previous posting I analyzed a spurious patent owned by Sipco LLC. I will now analyze Sipco itself. I use Sipco as a concrete example because it sticks out so nicely. It is also involved in technology areas with a high human and environmental impact. That worries me (see Trolling on the human rights;  The kiss of death of IPR;  Another view; Humanitarian Patent Pool).

The Wikipedia article on patent trolls has a  perfect definition: “Patent troll is a pejorative term used for a person or company who enforces patents against one or more alleged infringers in a manner considered aggressive or opportunistic with no intention to manufacture or market the patented invention.”

The difficult part is the term “considered”.  Bad press by itself means nothing. In my decade of IPR experience I have really learned only one useful thing: trust no one. The press could be wrong, or biased, or even bought off. And blogs… forget it.

Sipco certainly has gotten very bad press. See SmartGridToday,  Green Patent Blog, CleanTech Blog. There’s no doubt that Sipco is litigating aggressively, and doing it proudly and openly (The SmartGridToday article in particular is fascinating, as it describes the company owner’s worldviews in his own words). But that’s not good enough. I believe it’s crucial to be as coldly objective as possible.

The trolling triad

I believe that there are three characteristics that a company needs to have to be considered a truly dangerous troll. The company has a provable history of aggressive litigation; the company doesn’t actually produce anything itself; and the company’s patent portfolio consists of spurious and overly vague patents.  I call this the “trolling triad”.

Two out of three can make a company a nuisance, but I believe that all three are needed  for a company to become the equivalent of a loose cannon.

Flag 1: Aggressive litigation

If a company is heavily involved in litigation, it may be a red flag.  It is not automatic proof of anything. If someone genuinely invests money and time into development, and then finds that someone else is making huge profits on the invention having copied it, the inventor does have a case (legal, and perhaps even moral) for suing the copycat. It’s necessary to look at the context.

(Personal sidenote: I can actually empathize with inventors who go berserk when their ideas are stolen, and go on a litigation rampage. If an inventor spends years of his life working on something, it gets personal.  If he further sacrifices his money, friends, health, and family for the invention, it gets deeply personal).

Sipco’s case is quite clear though. The references above make it amply clear that Sipco is in the business of aggressive litigation, and is proud to be so. Sipco’s own press release in PRNewswire also shows that its main business is licensing. One red flag.

Flag 2: Lack of own production

From Wikipedia again: “The non-manufacturing status of a patent troll has a strategic advantage, in that the target infringer cannot counter-sue for infringement.” When two companies both actually produce something, there is a balance of terror. If one sues the other and tries to halt production, the other can sue back and try to halt production. Many of the highest-profile patent litigation cases, for example in the telecommunications industry, are of this type.

I will now say something that may come back to haunt me: I feel that when two equally big players fight each other, society really doesn’t suffer. If one of the players loses, then the other one will just keep manufacturing and developing the products that were argued about.  For us in the audience, it really is mostly just a game.

However, if one of the participants is actually producing nothing, it can turn deadly serious. The non-practicing entity (NPE), to use the polite term for a troll, cannot be countersued. If the NPE wins, at minimum the cost of the product will rise due to the extra licensing costs. At worst, the NPE can actually prevent the product from even being produced, and can certainly drop further development dead in its tracks.

However much I search, I can’t find anything that Sipco would actually have produced. Absence of evidence is not evidence of absence, and if I run into some actual Sipco product, I will consider retracting the flag. But for now: second flag, bright red.

Flag 3: The patent portfolio

The truly lethal trolls are ones that have overly broad and vague patents in their arsenal. As long as the patents are specific enough, only a limited number of companies can be attacked. But if the patents are too spurious and vague, almost anyone can be attacked on almost any grounds.

(See the EFF’s Patent Busting site for examples. My personal favorite is the patent on taking and scoring educational tests online. It takes real chutzpah to demand royalties on something like that).

Trying to evaluate the “quality” of a patent is difficult and subjective, but I have so far analyzed Sipco’s patent US7739378 on pollution monitoring. I considered it essentially spurious, and it should not have been granted. So far, I’m not aware of litigation over that patent though.  GreenTechGrid discusses several other Sipco patents in the smart grid technology area, which Sipco is in fact litigating on.  Based on a quick look, I am highly skeptical whether those patents have much merit, but I need to analyze them more closely. Somewhat tentatively, a third red flag.

So is Sipco a patent troll? I follow the old adage: “If it quacks like a duck and walks like a duck, it probably is a duck.” Sipco even smells like a duck. You decide.

 

Troglodyte: CleanTech 1

“This is really no different from saying ‘If my invention sees a problem, it solves it'”

The purpose of Project Troglodyte (ended in 2013) is to hunt for bad patents and to show what went wrong. 

TRANSMITTING POLLUTION INFORMATION OVER AN INTEGRATED NETWORK 

I’m starting my part of  Project Troglodyte with something that might be unwise if I lived in the USA: I will dissect a patent which I think has value for just one purpose: trolling (see EFF article for more on patent trolls). I’m not saying anything that would cause legal problems, but it’s still good to have an ocean between me and the patent.

The patent is in the area of cleantech, and in particular pollution monitoring, which is a subject close to my heart.  The case is particularly interesting because there are two connected patents: US7424527 (filed 2001, granted 2008) and its continuation US 7,739,378 (filed 2008, granted 2010).  Differences in the two show how the patent system has changed in the last decade, and not for the better.

The patents are owned by Sipco LLC. Is Sipco a patent troll? I prefer not to commit myself at this point, but will let the reader decide himself, based on several articles (SmartGridToday,  Green Patent Blog, CleanTech Blog). I have put Sipco on my list of companies to follow, but for this article I will only stick to these patents.

Figure 1: Schematic from the patent application

SECTION 1: SUMMARY

The 2008 patent basically claims the following invention: there are “pollution sensors” (whatever that means) that are connected by a wireless network to a monitoring site. When the pollution level gets too high, the sensors send a warning to the monitoring site. As far as I can determine, that’s basically it.

So what is the inventive step that makes the 2008 unique and worthy of a patent?

I don’t see one. It is difficult to be diplomatic about this particular patent: it has no real value, except for trolling purposes. (I also suspect the patent-filing system has been gamed; see Section 3 below for details). In the worst-case scenario, anyone sending pollution information via a wireless network may now need to pay Sipco royalties.

The original 2001 patent at least had a somewhat concrete application area: in principle, it was directly applicable to monitoring of pollution from industrial facilities, and helping operators make decisions when something unexpected happens. Even so, the “invention” was completely trivial even in 2001. It is somewhat astonishing that the patent was granted; in Section 3 I speculate on why this may have happened (though it is speculation only).

The 2008 patent, by contrast, is sort of applicable to the monitoring of some kind of pollution from something in order to perhaps do something. A pollution monitoring management controller is mentioned in Claim 13, but since it is a dependent claim, it can be dropped without really affecting the patent. The main claims are completely abstract.

But overall it is difficult to see much non-trolling value in the 2001 either. Just one example of its vagueness: on page 17, the patent describes what happens if one of the network elements stops working. “In such a situation, upon the detection of the failed transceiver or transceiver component, the pollution monitoring management controller 302 (Fig 3) redefines communication paths out to the transceivers, and transmits the redefined paths out to the transceivers, transceiver stations, transceiver units and site controllers such that the paths are redefined”. This is also the thing that is claimed in Claim 12. That’s all the information we’re given.

This is really no different from saying “If my invention sees a problem, it solves it”. One reason for the whole existence of the patent system is that it makes innovations public; the inventor has a monopoly on the use of his technology, but society has been given detailed information on how to build the invention. In this case, society has gotten zilch. Zilch on how to to build a robust system as claimed in Claim 12, and I’m afraid zilch on how to build anything in any of the other claims. And in the case of the 2008 patent, it’s somewhat vague what the “something” is that has been claimed to have been invented.

In fact, the benefit for society is less than zilch: it is negative. Now that the patents have been granted, the owner can (completely legally) use them to block any real progress in this area. If someone actually invests money and R&D into actually building a network like this, they will face the risk of litigation from the patent owner. And that risk will exist for the next 20 years, while the patents are valid. (In practice, the owner almost certainly has filed new continuation applications already, so the risk will continue infinitely).

This is unfortunately not paranoid speculation; as the articles show, this particular patent holder has shown no hesitation to sue. Cleantech companies can more or less expect future litigation from this direction.

SECTION 2: DAMAGE CONTROL

The damage has been done and the patents have been granted.  The best damage control, of course, would be for someone to try to invalidate the patents on the basis that there existed prior art in 2001 which made the patents trivial. However,  that is a cripplingly difficult and expensive process (see the EFF’s Patent Busting site).

Realistically, the only thing that could really be done is to design workarounds. These are extremely difficult due to the general nature of the patents. However, there may be a few weak points in the patents. It might be possible to find more if this were done professionally, but a volunteer project can only go so far.

Claim 1 (of both patents) requires that a message be generated “if a pollution level exceeding a predetermined threshold is detected”. In principle, if the detectors are polled at regular (or random) intervals, they would not infringe this patent. Thus this patent might have no effect on systems that monitor continuously. However, if the purpose is to warn of sudden rises in pollution, this is a problem.

One other workaround might be to use changing thresholds; several threshold values are stored in a central computer, and the pollution sensors get updated threshold values every now and then. (Note that this makes no practical sense whatsoever. But if the alternative is to spend years in litigation, it might be the less insane solution).

Claim 13 refers to a “pollution monitoring management controller”. Such a centralized controller is also evident in all the Figures. If the information management is completely distributed, so that there is no central controller facility, then the patent should be severely weakened. However, litigation is still probably possible.

[Addendum 13.8.2012 1405 UTC: A reader pointed to another way to circumvent this. Since the term “pollution” is not actually defined in the patent, one might work around the patent by steadfastly claiming that the sensors are not “pollution sensors”. Rather, they could for example simply be called “gas sensors” or just “detectors for determining the composition of the air”. Insane? Yes, but it might work. Please keep these ideas coming!] 

SECTION 3: TECHNICAL ANALYSIS: SYSTEM GAMING?

There is something interesting about the 2001 patent, which looks like a boring technical detail but may reveal a lot. On any patent document’s first page, there is a section called “References cited” which lists patents that are related to the subject area (either found by the inventor, or by the patent examiner). They are, in effect, proof that the inventor knows what other people have invented, but has invented something different. Typically there will be  20-30 such references.

On the 2001 patent, there are more than four pages of references, double columns, small text. More than 500 references. I don’t recall seeing anything like this. I am not even sure what it exactly means. Most of the references seem to have been made by the drafting patent attorney, with only a few added by the examiner.

I have no idea what actually happened during this seven-year-long patent process, but I will try to imagine a scenario.  Patent examiners work under serious time pressure (see for example Wolinsky 2010). I have heard a rumor that examiners have only two hours to process an application, but haven’t been able to find reliable references. Two hours is almost nothing, and if true, it really makes the system a lottery.

If I wanted to get a spurious patent through, I might submit an application with 500 references, without specifying at all how the references actually relate to the patent. That makes it look as if I have done serious research before filing, and makes it difficult for the examiner to reject it outright. There is no realistic way for the examiner to go through even a small part of the references, yet he has to make a judgment. It is basically spamming the examiner.

The 2008 patent has less than 100 cited references, but nine of these refer to USPTO decisions made in 2009 on other patents. I don’t have the competence to even speculate what exactly has been going on behind the scenes, but obviously something has.

The time from filing to granting of the 2008 patent was less than two years, which is very short (in comparison, it took seven years for the 2001 patent). Perhaps the process was speeded up by the fact that the 2008 patent is a continuation of the 2001 patent. Hence a lighter prior art examination was considered adequate. If so, this also points to a weakness in the system: once a spurious patent has been granted, it is easier to churn out new spurious patents based on the first one.

I wish I had less reason to feel cynical about this, but I don’t. Patents like this make me feel that my Trolling on the human rights essay is not dystopian at all. It is simply a description of our future.

 

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