What’s All This Patent Troll Stuff, Anyhow?

I was recently interviewed for a major article “Patent Trolls Come in All Shapes and Sizes” published today in the New York Observer.  The article is definitely worth a read.

One important case that is not mentioned in the article is Eon-Net v. Flagstar Bancorp.  And you may want to know what happened in that case because it was a bad day for non-practicing entities, that is, for patent trolls.

Eon-Net is a patent holding company that, with its related entities, had filed over 100 lawsuits against many companies for patent infringement.  In most cases, the companies settled for between $25,000 and $75,000 rather than going through the expense of a lawsuit, something which could easily exceed $1,000,000.   Flagstar Bancorp, however, decided to fight and spent over $600,000 to litigate the case, an amount that would have been substantially more had the district court allowed full discovery.

To the surprise of many, the court found in favor of Flagstar,

… Eon-Net’s case against Flagstar had “indicia of extortion” because it was part of Eon-Net’s history of filing nearly identical patent infringement complaints against a plethora of diverse defendants, where Eon-Net followed each filing with a demand for a quick settlement at a price far lower than the cost to defend the litigation.

The court went on to state that Eon-Net “acted in bad faith by exploiting the high cost to defend complex litigation to extract a nuisance value settlement”, that cases like theirs are meritless, and that as a non-practicing entity (i.e. troll) Eon-Net faced little risk in filing lawsuits; they faced no business risk, were generally immune to counterclaims, antitrust, and unfair competition claims.

For their legally baseless infringement allegations, the Court of Appeals for the Federal Circuit affirmed the district court’s decision to impose Rule 11 sanctions against Eon-Net.

What does that mean?  It means the court may impose monetary penalties which may include awarding reasonable expenses, including attorney’s fees, to the prevailing party (in this case, Flagstar).

And it means a potentially very bad decision for trolls who now might want to reconsider their strategy of filing a barrage of lawsuits.

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Supreme Court: Software is Patentable

The Supreme Court has issued its long awaited opinion in Bilski v. Kappos.  Read it here.  The Supreme Court essentially affirmed the Federal Circuit’s decision which is summarized here.

via Patently-O and Filewrapper.

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Business Method Patents at the U.S. Supreme Court

On June 1, 2009, the United States Supreme Court granted certiorari in Bilski v. Doll, and will consider whether the en banc decision of the Court of Appeals of the Federal Circuit “Federal Circuit” in subjecting business method patents to the “machine or transformation” test was appropriate. Specifically, the Supreme Court will consider the following two issues:

  • Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing “machine-or- transformation” test, to be eligible for patenting under 35 U.S.C. §101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”, and
  • Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. §273.

via Business Method Patents at the U.S. Supreme Court – Martindale.com.

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Apple Buys iPad Trademark from Fujitsu

ipad_fujitsu_apple_tm_assignment_124315Apple now owns the iPad trademark.  The trademark (Serial No. 76497338) was filed by Fujitsu in March of 2003 for their iPad wireless handheld computing device used by retailers.  Records at the U.S. Patent and Trademark office show that the trademark was assigned to Apple on March 17.

There has been much speculation over the last few months about the iPad trademark.  Apple initiated opposition proceedings challenging the validity of the mark in September last year.  However, the proceedings never developed into anything substantive and Apple simply filed three requests for extensions of time, presumably while they were in talks with Fujitsu.

The assignment is public record and can be purchased from the USPTO by requesting Reel/Frame: 4168/0447.

Links: IPAD Trademark Description and History, Assignment from Fujitsu to Apple, Order Copy of Trademark and Assignment.

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Mobile Patent Lawsuits… No End in Sight

mobile patent lawsuits

The New York Times reports,

Although patent litigation is not new in the technology world, these suits, specifically around mobile, point to the drastically changing mobile landscape. Lawyers I spoke with explained that mobile technology was still in its infancy and these large computing companies were trying to stake their claim to the future of computing.

On Tuesday when I spoke with Eric Von Hippel, a professor of technological innovation at M.I.T.’s Sloan School of Management. He pointed out that patent lawsuits had turned particularly unpleasant lately as a result of companies that only buy and sell patents.

via: An Explosion of Mobile Patent Lawsuits – Bits Blog – NYTimes.com.

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The complaints in Apple’s lawsuit against HTC

As reported yesterday, Apple is suing HTC for infringing on twenty iPhone related patentsHTC makes mobile phones and smartphones including Google’s Nexus One and phones sold by Verizon, Sprint, and T-Mobile (1, 2)  running Google’s Android operating system.

Below are the complaints filed in U.S. District Court in Delaware and with the U.S. International Trade Commission (ITC).


Apple complaint – Delaware


Apple complaint – ITC

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Apple Sues HTC – maker of Google Nexus – for Patent Infringement

“We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it,” said Steve Jobs, Apple’s CEO. “We think competition is healthy, but competitors should create their own original technology, not steal ours.”

via Apple Sues HTC for Patent Infringement – Barrons.com.

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Patent Litigation Trends – It Pays to be a Patent Troll

A recent PriceWaterhouseCoopers study suggests that nonpracticing entities (NPE), more commonly referred to as patent trolls, are thriving.

The largest award went to Dr. Bruce Saffran who, in 2008, was awarded nearly $432 million in damages (and, not reported in the study, another $69 million in pre-judgment interest awarded by the judge after the trial).  A jury found that Boston Scientific Corporation infringed on his drug-eluting stent system patent.

Rambus, a company that at one time actually sold computer memory but now proudly bills itself as “one of the world’s premier technology licensing companies,” was recently awarded $397 million plus future royalties in a final judgment against Hynix Semiconductor.  Not to be stopped, Rambus is now pursuing damages against NVIDIA, a maker of computer graphics chips.  A favorable decision by the U.S. International Trade Commission (ITC) found three of five asserted Rambus patents to be valid, enforceable, and infringed by NVIDIA.

Some other highlights of the study include:

•     Damages awards for NPEs have averaged more than double those for practicing entities since 1995.

damages-npe-vs-pe

•     Annual median damages award has ranged from $2.2 to $10.6 million, with no discernible trend since 1995.

median-damages-1995-to-2008

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PTO Rescinds Controversial Patent Rules

The claim and continuation rules that were supposed to go into effect on November 1, 2007 are dying a slow death… thankfully.

via Law.com – PTO Rescinds Controversial Patent Rules.

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Patenting Methods of Determining the Value of Patents?

So, will we see lawsuits for infringement, not of the patents that are sold, but for determining how much to sell them for?

7,493,262 Method for valuing intellectual property

7,386,460 System and method for developing and implementing intellectual property marketing

7,346,545 Method and system for payment of intellectual property royalties by interposed sponsor on behalf of consumer over a telecommunications network

7,346,518 System and method for determining the marketability of intellectual property assets

7,315,836 Method for obtaining and allocating investment income based on the capitalization of intellectual property

7,292,994 System and method for establishing value and financing of intellectual property

7,272,572 Method and system for facilitating the transfer of intellectual property

7,269,566 Method for obtaining and allocating investment income based on the capitalization of intellectual property

7,228,288 Method of repeatedly securitizing intellectual property assets and facilitating investments therein

7,216,100 Method for obtaining and allocating investment income based on the capitalization of intellectual property

7,188,069 Method for valuing intellectual property

6,959,280 Method of protecting against a change in value of intellectual property, and product providing such protection

6,330,547 Method and apparatus for establishing and enhancing the creditworthiness of intellectual property

6,018,714 Method of protecting against a change in value of intellectual property, and product providing such protection

via Ip Prospective “Proof of a Burgeoning Market: Patenting IP Valuation Methods | IP P®OSPE©TIVE“; 12:01 Tuesday “Patenting the Business of Patents“.

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