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  (Source: AP)
Dean Kamen blasts FTC probe, says he's a proud "troll"

They may be "trolls" according to some, but they're not stupid.  While scrutiny by politicians of so-called "patent trolls" -- companies that buy up hordes of patents, while not producing actual products -- is mounting in part due to arguably valid concerns, it's also being pushed by the invisible hand of large companies that have suffered at the hands of the "trolls" and are now pushing the politicians they paid off to fight back.  But the trolls are wising up to this bias and are looking to step up their own lobbying efforts, challenging tech firms to an effective bidding war to see who can pay off the most U.S. federal politicians.

I. Intellectual Ventures Argues Patent Trolling is a "Myth"

Intellectual Ventures -- oft pilloried by critics as a "troll" -- is leading these efforts.  

IV was founded by Microsoft Corp.'s (MSFT) former chief technical officer (CTO) Nathan Myrhvold, but has come under fire for "trolling" Apple, Inc. (AAPL), Google Inc. (GOOG), and Intel Corp. (INTC) with its portfolio of 40,000 patents.  IV denies these claims and what it calls "the myth of patent troll litigation" arguing that its helped startups like Nest Labs Inc. (the maker of smart thermostats) protect themselves against large rivals. Nest was sued by defense contractor Honeywell Int'l Inc. (HON) last year, however, it has thus far escaped a product ban.

Nathan Myrhvold
Ex-Microsoft CTO Nathan Myrvhold insists that "patent trolling" is a myth propogated by anti-intellectual property activists. [Image Source: ZUMA Press]

IV does not produce any significant consumer product, but rather subsists off of forcing licensing settlements for its large portfolio of patents.  It is believed to be one of the key firms targeted by President Barack Obama in a recent release in which he accused "trolls" of "hijacking" American technological progress, issuing five executive orders targeting the practice.

The situation is growing tense for the "trolls" -- also known as patent assertion entities (PAE) or non-practicing entities (NPE).  Last week the U.S. Federal Trade Commission announced that it would look to subpoena "trolls" under the Congressional authority granted to it by the FTC Act (specifically, 15 USC § 45), the law that created the Commission back in 1914.  This investigation in turn could lead to actions by the agency, other agencies, or even new laws.

In an effort to beat back that investigation Mr. Myrhvold -- and his pocketbook -- have headed to Washington, D.C., looking to "convince" federal politicians that the idea of patent trolling is a myth, which he says is invented by big corporations to disenfranchise small patent owners.

II. "Trolls" Look to Fight Payola, With Payola

The Coalition for Patent Fairness -- whose members include Google, Dell, Oracle Corp. (ORCL), and Cisco Systems Inc. (CSCO) -- has been leading the efforts to encourage the FTC and Congress to combat litigation from NPEs.  It has donated $110,000 in funds.  And the members of the Coalition have donated millions more to the Congress and the President.

Adam Mossoff, a law professor at George Mason University School of Law, told Politico in a recent interview that these contributions are starting to have an impact.  He remarks, "[The anti-trolling rhetoric is in part because] patent companies weren’t active in lobbying or PR.  They let patent skeptics in the academy and in think tanks and firms that oppose them set the terms of the patent policy debate."

Congress bribes
The anti-trolling crowd has made Congress listen with donations. 
[Image Source: Wikimedia Commons]

IV's chief counsel Russ Merbeth attacks this lobbying effort, which he says may weaken intellectual property rights.  He remarks, "[Investigations] seem to create uncertainty around patents generally.  From our perspective, that’s going to have a long-term negative impact on American competitiveness."

But his company is learning from its rivals and is now aiming to master the payola game.  IV is reportedly working to put together a new lobby, which would donate to members of Congress and encourage them to push back against patent reform.  Some lobbyists are skeptical of the effort.  Comments one lobbyist reportedly familiar with it, "For such an entity to be effective, it needs to secure members from all corners of the industry, and I think the companies that need to be involved realize that."

While they work on crafting a new lobby, they're getting assistance from The Innovation Alliance -- a veteran lobby that isn't fully supportive of the so-called trolls, but also is concerned that hasty reform may hand power over to large serial litigators that do produce like Apple and Microsoft.  The IA's largest member is Qualcomm, Inc. (QCOM), a top use maker of smartphone chips.

Dean Kamen
Dean Kamen says he's a proud troll. [Image Source: The Colbert Report]

At an IA event last week, Segway inventor Dean Kamen mocked the "troll" allegations, commenting, "It took me years to become a troll.  If you undermine the value of patents, you make it hard for innovation to be funded."

Source: Politico



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Invalid patents
By dgingerich on 10/7/2013 7:06:19 PM , Rating: 5
The problem is that many things certainly should not be allowed a patent, namely things that are not new.

Adapting a "slide to unlock" concept, used for doors for milennia, for a cell phone is not a valid patent.

Adapting the concept of radio communication, which has been around for over a century, for computers to use it in any way is not a valid patent.

A simple rectangle with rounded corners is not a valid patent. Rectangles are an aspect of reality. LCD panels can best be produced as rectangles. Rounded corners keep pointy edges away from our hands. That's not revolutionary. That's common sense.

Truly new things, like a piece of software that translates human language into a program, or a drug that stops HIV from attaching to immune cells, or a chemical that allows automotive paint to 'heal' scratches, would be deserving of a patent. Real innovation.

Most of the patents submitted these days should simply be rejected. That would solve our patent troll problem.




RE: Invalid patents
By Belegost on 10/8/2013 12:18:56 AM , Rating: 3
quote:
Adapting a "slide to unlock" concept, used for doors for milennia, for a cell phone is not a valid patent


Ok.

quote:
A simple rectangle with rounded corners is not a valid patent.


I'm with you.

quote:
Adapting the concept of radio communication, which has been around for over a century, for computers to use it in any way is not a valid patent.


And you went off the edge there... Seriously, if Marconi was pumping 3Gbps over his analog vacuum tubes I would be impressed. You may as well say that Mercedes can't patent a new type of suspension system because wheels on axles have been around for over a millennium. Or Lockheed can't patent a new jet engine design because propelling objects with pressurized fluids has been done for over a century. And is just ripping off cephalopods anyways.

This is actually the primary failing of the modern patent system - knowing what is or is not a truly novel invention requires a great deal of knowledge and skill in the fields addressed by an application. This is also why it should not at all be surprising Einstein was a patent clerk - it's a job that needs highly intelligent people.

The issue is that without an ability to really get depth of understanding on each of the vast pile of patent applications waiting to be addressed, the patent office has really moved to a sort of honor system, especially for the major corporate entities. They make the corporations due as much of the heavy lifting in checking for prior art, uncovering related patents, etc. as they can. In the process this allows through a large number of rather vague, unreasonably generic, or downright ridiculous patents.

I really feel sorry for them, with so much work, and only limited resources they do the best they can, but in the long run decide that it's better to just let things go through and have the courts make a decision if the issue ever comes up.

quote:
Most of the patents submitted these days should simply be rejected. That would solve our patent troll problem.


Well yes, but it would create a whole new field of problems. Especially as large corporations take advantage of the situation to crush smaller groups (academic orgs, small startups) Already the situation is difficult, the large corporations have the funding to sue most smaller groups into the ground, irrespective of the rightness of claims. Without even the flimsy protection of patents, everything would become secrets. Publication of research would slow as universities and labs no longer have access to license funds. Already corporate and government grants greatly control the direction of research, this would just make it complete ownership.

Not to mention the difficulty in B2B relations...


RE: Invalid patents
By Dr of crap on 10/8/2013 9:18:44 AM , Rating: 2
If that were true you wouldn't have but one TV maker, one cell phone type, one microwave oven, one (insert the device). How can it be when a new thing is developed, its copied as easy as can be? That is what I don't understand. What GOOD is it to patent something when it gets copied immediately by someone else?


RE: Invalid patents
By Belegost on 10/8/2013 11:18:46 AM , Rating: 2
1) There is almost always more than one way to skin a cat. And if you make a patent too broad you run the risk of having the patent invalidated in court. So, if a competitor can find an alternative route to the same goal, good for them.

2) While some patents are used for market exclusivity, that runs risk of being examined for anti-competitive behavior. Generally the better idea is to use the patents to force your competition to pay you for every item they sell. This way you make profit off your competitor, the overall market for the product grows, and you can re-invest the money you're making into pushing forward new areas, whereas your competition doesn't have as much profit (because they are paying you), and may not be able to invest as much in research.

3) Patents have a limited life, after a period the ideas go into general domain. This means you have to continue pursuing new improvements, and new directions to maintain a lead on the competition.


RE: Invalid patents
By dgingerich on 10/8/2013 9:37:19 AM , Rating: 2
Just because a company comes up with a new way to get 40Gb network bandwidth out of copper wire doesn't mean they can patent the making of copper into wire or the general use of copper wire. That's basically what Nokia is suing HTC over. The Qualcomm processor does use wireless signals to communicate, but it is an entirely different algorithm from Nokia's technique, however, since Nokia was granted an overly broad patent, now they are able to sue HTC over their technique.

It's the same with many of the lawsuits from all the tech companies. They get granted overly broad patents and start suing each other for things that just shouldn't be patented. In most cases, the patents are for things that have been used in computers for decades and were just recently adapted to smartphones, like Apple's system for pushing emails to a phone or Microsoft's technique for a phone requesting an update to a mailbox. That's just wrong. It is destroying innovation, dragging everyone into court over the broken patent office's approval system. Suddenly, companies can patent just using wireless communication for a smartphone to do its thing, and hybrid cars get patents for what trains had been using for decades.

That's what I was talking about.

Once this gets corrected, research would go into things that actually deserve research, and patents on really new things would be protected. We would, the whole human race, actually advance once again. We haven't seen any real advancement since fiber optics and transistors. Every advance we have had since then was simply refining things we already had or finding new uses for what we already had. Maybe someone will actually research how to create a standing for wave to give us the beginnings of energy based shields or artificial gravity. Maybe research would begin on better ways to store energy to give us new battery technology (without someone patenting rechargeable batteries in general) to give us higher output and higher capacity. Maybe research would go into things that actually deserve to be researched, instead of "oh, I just made a new database type, now it has three levels of indexing!"


RE: Invalid patents
By Belegost on 10/8/2013 10:55:59 AM , Rating: 2
So for the Nokia case I have personally read through two of the patents being covered. One describing a method for removing spurs in the spectrum, and the other a method for using a single PLL to generate multiple Rx and Tx carrier frequencies through dividers to be used for multi-mode operation.

The spur removal is difficult for me to judge as I don't work in RF, so I can't say if it is overly broad, or obvious. Especially as what may seem obvious today, may have required huge amounts of effort to solve 10 years ago. This actually brings out the problem though - I'm a systems engineer in the field with years of experience, and even I have a difficult time determining if a patent for something just outside my direct experience is good or not, how much worse for the patent office?

The divider patent actually looks good to me, there are definitely other ways to generate multiple frequencies for multimode (one PLL per mode for instance) which may or may not be as good.

As for whether the modems covered in Nokia's suit are or are not infringing, and whether the patents are valid is up to a court to decide. However, I saw nothing in those two patents that said Nokia claims a patent on "transmitting data over radio frequencies."


RE: Invalid patents
By amanojaku on 10/8/2013 12:19:22 PM , Rating: 2
You make a lot of good points, but there is a serious flaw in your post: it's off topic. The FTC isn't investigating bogus patents filed by companies that sell products based off of them. It's investigating patent-assertion entities (aka "non-practicing entities" or patent trolls), which do not make products based off of the patents they file. PAE/NPE patents may actually be valid, but the companies haven't proven it, or they're taking advantage of someone else's work.

Slide to unlock and bounce-back animation are bogus patents because they are not novel (they even say they're adaptations of existing patents in their descriptions), but they DO exist in multiple devices. They should have been rejected on the basis that they aren't NOVEL, but the filer wasn't being a patent troll.

The same thing is true for rectangles with rounded corners. It's an invalid design patent because it is OBVIOUS. Again, multiple products were built from said design patent.

PAEs or NPEs are different from a certain fruity company because they claim to be research laboratories. They aren't. They don't spend any money testing and developing concepts. IBM is an example of a legitimate research lab. It didn't just dream up the hard drive, it actually MADE the 350. It didn't buy someone else's patents to RISC; it actually MADE the 801.

The difference between PAEs/NPEs and that-which-is-unmentionable is the approach. Fruity doesn't want competition, because it makes its money through product sales. Successful competition means its sales decrease. PAEs/NPEs don't have direct competitors, so they want companies to succeed. The more sales companies make, the more PAEs/NPEs can charge for licensing, or sue for "damages" in court.


RE: Invalid patents
By Irene Ringworm on 10/11/2013 1:08:57 PM , Rating: 2
The "only people who make stuff should own the patents" concept plays into the hands of larger entities who like to whine about patent trolls when it's their own infighting that's costing them real money. So long as NPEs hold valid patents, there's no moral or legal reason they ought to have any less standing than "real companies" to enforce and monetize them. Consider the following:

(1) A family friend purchased his employer's patent portfolio when the company filed for bankruptcy. For the last decade he has made a comfortable living licensing and enforcing that IP. His one-man LLC has never MADE products, but it's absurd to suggest that he lacks the right or standing to enforce the patents in court. He owns them. (Note that this is how most NPEs acquire their patents)

(2) I hold a patent for a process I developed in grad school that applies to semiconductor manufacturing. While I characterized the process at some level, I could not prove the concept on a working device because building a $2B factory was outside of our department budget. You seem to suggest that only a multi-billion dollar entity should have the opportunity to own patents in this field.


No sympathy from me
By amanojaku on 10/7/2013 7:06:51 PM , Rating: 2
There are two reasons I can think of why these companies are considered trolls:

1) They buy patents from the companies that actually made them
2) They patent concepts without actually making working models

For issue one, these companies are clearly abusing their access to capital, by using existing patents to sue or force licensing, then taking the money to buy more patents in order to repeat the cycle. It's criminal, because it means anyone with wealth can become a patent troll.

For issue two, these companies are not filing patents based on existing demonstration models. It's one thing to say "this (probably) can be done"; it's another thing to prove it. And when someone else proves it can be done, the patent filler is the one to reap the benefits, not the person who put in a lot of work and managed to do it.




RE: No sympathy from me
By Master Kenobi (blog) on 10/8/2013 5:04:58 AM , Rating: 2
The easy solution: Stop letting people patent "ideas". They must patent something they have produced. Be it computer code for a feature, a prototype machine/device, etc...

This whole idea based patent system is probably one of the stupidest concepts ever to grace the planet.


RE: No sympathy from me
By Dr of crap on 10/8/2013 9:20:40 AM , Rating: 2
You pay the right people enough money and you can do whatever you want! MONEY is the reason that you can patent ice if you want!


RE: No sympathy from me
By superstition on 10/8/2013 11:30:33 PM , Rating: 2
There are things that people have developed that are too costly or difficult for them to make. Babbage's Difference Engine and Analytical Engine were never constructed during his lifetime. Does that mean he shouldn't have been able to patent them?

I suppose you could argue that the plans are what can be patented, because he made them. But, how is that different from putting down ideas formally in a patent description?


RE: No sympathy from me
By Irene Ringworm on 10/11/2013 1:31:17 PM , Rating: 2
Sometimes it's absolutely necessary to patent an idea before you have a prototype, especially in capital-intensive fields. An "idea" patent protects your interests while you look for funding to develop the idea to prototype (and prevents an entrenched player with deep pockets from stealing your idea).


Dean Kamen
By Reflex on 10/7/2013 8:36:53 PM , Rating: 3
The Segway may be the most obvious invention of Dean Kamen, but he's a prolific inventor, especially in the medical space. You have him to thank for the stents that save millions of lives every single year. You have him to thank for the portable insulin pump. He has spent decades creating lifesaving technologies without the kind of budgets medical device companies have. He can only do that because he does not produce the products or handle the regulatory and testing required, instead licensing his inventions to corporations that do have those kind of resources.

I've met the man, about 12 years ago when he gave a lecture at Microsoft, he is brilliant and has been honored multiple times for his achievements in medicine. Especially incredible given that he is an engineer, not a doctor. He has been awarded the global humanitarian award from the UN for his inventions for both health and clean water in developing countries.

He is everything that can go right with the concept of a IP based invention institution, and should not be lumped in with patent trolls.

There should be a clear line between inventors like him, who hearken to the era of Edison, Tesla and Bell and actual trolls like those who simply buy up defunct corporations patent portfolios and seek a quick profit. What he has done is no different than what virtually every major university research team does, invent great things and license them in order to fund further research.




RE: Dean Kamen
By sprockkets on 10/7/2013 10:23:28 PM , Rating: 2
Which goes to show that Dean has no idea what a NPE, a real troll is.

Oh, and IV helped out the Nest people? How nice of them. It's got to be the only stupid thermostat in the world that needs firmware updates and remote tech support to properly work.


RE: Dean Kamen
By Reflex on 10/8/2013 3:40:15 AM , Rating: 2
The vast majority of Dean Kamen's patents are for products he does not make, but instead licenses out for. I believe the Segway is the only product his company has had any involvement in the direct production of.

The same is true of most university research, as well as the R&D divisions of hundreds of corporations who often license out technologies they develop but do not see a purpose for(or that is outside of their core competencies).

NPE's are not inherently bad or trolls, often some of the best research comes out of them.


In related news
By YearOfTheDingo on 10/7/2013 6:58:27 PM , Rating: 2
Members of the Sun On Yee are also deeply concerned about your businesses' vulnerability to unfair competition and other threats.




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