China’s Patent-Lawsuit Profile Grows - Troll Tolls Too - WSJ

China’s Patent-Lawsuit Profile Grows - WSJ:

China as a focal point of Intellectual Property, in the patent office and in the courts.

This law suit by WiLAN is interesting to see how the "assertion" of patents can move and shift.

Here's a little background on WiLAN from Wikipedia.

As you can see the company originally developed stuff so it would not be categorized as a Non-Practicing Entity (NPE), or Patent Troll in the ungracious term that is sometimes more appropriate for NPEs. WiLAN seems to be moving more steadily into the troll category.

Now with a war chest of some 3,000 patents+pendings, WiLAN is a strong international force.

In 2013 Daniel Fisher describes the Texas case where WiLAN had its core patents to the suit invalidated in "how to bag a patent troll". The stock (on the Toronto exchange) fell 33% to $3.25. In 2014, Apple won again in California.

Apple has won several law suits against WiLAN including a 2016 verdict. Look at the 6mo & 10yr stock chart on Yahoo, where it dropped from $3.40 to $2.30 in a few days at the end of July 2016. It now trades at $1.80.

The Investor profile is not so good, even with the Samsung licensing deal last year.

WiLAN continues to build its patent portfolio.

One of the things that a Patent Troll never wants to do, is actually go to court. Patents can be invalidated, remedies can be diminished, and the golden goose can give up the ghost.

Gotta love the trading symbol that starts with WIN (WIN.to).

There are several things that WiLAN could do to make it a much more legitimate player, and less of a troll. But those involve capital investments in R&D to invent, manufacturing to produce, sales and marketing to sell. That's a different business model. As long as investors are happy with investing in trolls, the trolls will rein supreme within their little serfdom of bridges.

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Toll of the Patent Troll

The Wall Street Journal has a great article about Patent Trolls and the Toll the cost on an innocent economy. Here's the excellent WSJ Article: America’s Biggest Filer of Patent Suits Wants You to Know It Invented Shipping Notification, By RUTH SIMON and  LORETTA CHAO, Updated Oct. 27, 2016 1:11 p.m. ET.

Small(er) companies are targeted by a non-practicing entity (NPE), sometimes ungraciously referred to as a Patent Troll. IPZine previously discussed Patent Trolls in their various forms. Efforts to kill the trolls, or at least send them back under the bridge have moved forward with mixed success. In the US, the court costs have been paid by both parties historically, so winning in court, might still be losing. It might be better to simply pay the fees that would go to lawyers and be 100% certain of the outcome. A court ruling in 2014 has shifted this court cost dilemma. (See Wikipedia article on Patent Trolls.)

Imagine a portfolio of patents related to predictive arrival. That is, when will a product, person or thing arrive. The patent portfolio has 60 some patents with about half still active. That affects almost every business concept from shipping, manufacturing, service and more. It certainly hits on most of the activities that occur on the internet as well. Airlines, shippers, buses, and school buses -- government and private -- have fallen prey to the transit NPE.

So a small(er) business, attempting to do business, gets suddenly clobbered by legal notices and maybe even law suits. WHAT!!!??? The company probably has no patent attorney, so they scramble to find one. The patent attorney advises, at say $500 per hour, on the options and the potential costs. Litigation will cost $250,000, unless you lose; then it gets expensive!.

So, what's a small firm to do? This fight is like taking a pocket knife to a gun fight. Might be better to pay some fee, say $25,000-$50,000 and possibly a licensing fee (say a small % of sales), then to risk the bankrupting if the business. 

All agreements are confidential, so it is hard to see who paid what licensing fees, and how much. The big shippers of FedEx and UPS have, apparently, full licensing for them and their clients. So a small company that uses their services, and only their services (of shipping and notification), might be in the clear. 

The big NPE in this Simon & Chao article is Shipping & Transit LLC. About 10 years ago, the company tried to do a product for buses and shipping (Bus Stop and ArrivalStar). But neither worked out. So now Shipping and Transit sit around suing companies. 

Not a single law suit has gone the distance. Consequently, none of the patents have been really tested. This is interesting since many of the patent claims are rather obvious and arrival/queuing goes back 50-100 years. 

It seems like some type of a class action suit would be possible and force the issue against the NPE. The secret to the success of the Patent Troll, however, is to pick off the prey a few small targets at a time. Then, those victims who survive, are signed into an iron-clad agreement that cannot be breached under penalty of death. The airlines, FedEx and UPS are not talking, but what an interesting conversation that would be. 

The Jones gang of Shipping & Transit, way back in the day (circa Y2K) of ArrivalStar were ruthless. Doesn’t seem like much has changed… 

Keywords: NPE, Patent Troll, licensing, PLA, patent licensing agreement, economic development, 

Supreme Court Brings back Treble Damages - WSJ

Supreme Court Makes It Easier for Patent Holders to Win More in Damages - WSJ:

The unanimous ruling by the Supreme Court brings back the serious damages -- up to 3 times -- for willful patent infringement. Recent lower court rulings were making it virtually impossible to go after big, treble-the-losses, damages. That is the BIG STICK in patent infringement cases. Some companies strategy is to just keep infringing and simply let the lawyers do the heavy lifting. Smaller companies often do not have the resources to fight, especially if it becomes long and protracted.

The threat of treble damages, kind of keeps every honest, usually. Take that away and infringement becomes much less risky.

One of the first options for a patent holder is to enjoin the infringer from producing and selling. This can take some time; the patent claims are always contested, etc., etc. Fortunately, the USPTO has improved this process of patent review so that the strength and quality of the patent can be established early on.

Of course, one end result of infringement is a licencing agreement. However, someone who will infringe your patent, might also go to great lengths to avoid giving an accurate count of the units sold and the royalties payable.

During all this time, the infringing company is trying to develop a work-around so that they can continue selling the products but avoid the infringement. Market build, product established.

If the patent has not yet been issued, the game is even more convoluted.

On the flip side of treble damages is the patent troll (NPE). One would hope that judges would evaluate the case of a troll company that simply sits on a pile of patents with no intentions of producing any actual products and takes a toll off of any and all commerce in the industries/products where their patented technologies apply.

*** Update below on June 17, 2016. ***

An excellent Legal-centric focus of this ruling comes form Dennis Crouch at Patently-O. He also discusses "willful" and suggests that "egregious infringement" might be the new standard going forward.

From a more business perspective, Joff Wild at IAM-media offered some interesting insights about the Halo ruling. He noted that Justice Roberts gave us the first official definition of "Patent Trolls", there s also a discussion of "efficient infringer", and this ruling obviously is a great step forward for patent owners, but a small, first-step.

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Apple Loses Patent Infringement Suit, Ordered to Pay $533 Million | Rolling Stone

Apple Loses Patent Infringement Suit, Ordered to Pay $533 Million | Rolling Stone:

It seems apropos that Rolling Stone would have a great report on the iTunes (Apple) law suit loss to the tune of 1/2 billion dollar$. The loss rules that Apple did infringe on the 6 patents related to the storing and accessing of songs, videos and games.

In the suit that might well be called the the Apple vs. the Troll, the ruling was that Apple not only infringed, but willingly did so and consequently results in the terrible treble-damages penalty that makes patents such a powerful weapon.

The other company is Smartflash. This is a non-practicing entity (NPE), that might unkindly be called a patent troll.

Apple plans to appeal. Smartflash is aiming for the iPhone and iPad sales/profits because those devices actually play iTunes music that is subject to the infringing patents.

Imagine how many billion paid downloads from iTunes it takes to make up a $0.5B to pay the fine.? WoW.

This could get uglier and uglier.

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The Toll of the Patent Troll by any other name: Intellectual Property - Bloomberg

Symantec, Microsoft, Blue Cross: Intellectual Property - Bloomberg:

A patent troll, by any other name, may not be called a "patent troll" in court.

This would be funny, if it weren't true. The often called "patent troll" company Intellectual Ventures LLC, can not be disparages by such names as "patent troll" in court the presiding judge says. IV -- a play on the vampire concept of draining all the blood from the body of otherwise living and productive entities -- does not produce anything and has a monster war chest of patents which it brings out only during the stealth of night.

In the case of an entity that buys up patents but doesn't invent and doesn't produce anything, the company is often referred to unkindly as a "patent troll". In the real world, like cell phone makers, someone producing a product is exposed to other producer's patents, and vise verse. The players are forced to work together, license and cross-license in order for anyone to produce anything.

But the troll has a wonderful vantage point. Any product produced is fare game, and the real players in the game don't have much recourse if they want to produce anything and run a productive business.

Non-Practicing Entity (NPE) is another name for the troll, but it is not nearly so accurate.

IV was rated #1 troll in 2012 in the kingdom of patent trolls: here.

And, of course, the targets of the NPEs are larger and more innovative companies like AT&T and Google. In 2013 the "troll" toll in terms of law suites were up 19% from the prior year. (Fortune article on this topic.) It will be interesting to see what the stats for 2014 are since there has been a big drop in several types of law suits based on benchmark legal rulings.

For now, a patent troll, by any other name, will have to be by a nicer name, at least in court. I wonder if Patent Vampire, or intellectual property parasite is acceptable?

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Business method patent issuance has plummeted since Alice | Managing Intellectual Property

Business method patent issuance has plummeted since Alice | Managing Intellectual Property:

Trends in Business method patents has seriously dropped since the Supreme Court ruled on the Alice v CLS Bank case in June. The court ruled that an abstract idea is not necessarily a business method and saying that it will be done on computers (network/cloud) doesn't assure it to be a valid claim either.

This ruling knocks back business method (and software patents).

So the major drop in business method patents could well be attributed to this case. The charts are rather telling but looking at a few more moths in 2015 should really crystallize the picture.

This should also setback those questionable entities that camp out under the economic freeway, with a bundle of patents, and charge everyone coming and going a toll.

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Intellectual Ventures: Patent Troll plans to Start actually making things, not breaking things.

Intellectual Ventures: Patent Troll Funds Startups, New Products - Businessweek:

The worlds largest patent troll, apparently, has decided to go legit. Kinda.

This company, aptly abbreviated IV as in a vampire draining blood, is the largest holder of patents with some 70,000. More than IBM with more than 20 years as the world's largest patenting company, by far.

With such a war chest of patents, it is hard for anyone to make anything that doesn't violate their patents. This is especially the case if you don't actually make anything, as a perfect troll would do.

So IV has been drawing blood for the economy on a rather endless basis. But, if you pay the blood money for a few of their patents, you get "protection" where nobody else can mess with you without having to fight the entire war chest of IV.

It seems like the perfect business model based on pirates and Somalian entrepreneurs.

So why break such a tried and proven business model?

I think on the tax returns, where you put our line of business, entering "Patent Troll" is likely no problem for the IRS. They will take the taxes on those profits just the same as for the companies that actually produced a product.

We have a few ideas why the patent troll would change his stripes, but we would like to hear what others have to offer?

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The belief that our patent system is broken is patently false | freep.com ... Broken as designed?

The belief that our patent system is broken is patently false (guest column) | Detroit Free Press | freep.com:

This is a very interesting article by David Kappos (IP attorney and director of the USPTO). Intellectual Property, especially patents, is a critical foundation of the US economy and of our entrepreneurial proficiency.

But we shouldn't take it for granted.

That's why some of the IP, Hi-Tech companies have joined together into an American alliance of innovation: Partnership for American Innovation  http://partnershipforamericaninnovation.org/.

Companies need to take advantage of IP and use it aggressively both domestically and abroad. Especially if we are in the US where we do have strong rule of (IP) law. We must avoid allowing countries with lax IP laws to overrun us on our own strengths, our strengths to innovate.

We need to aim for Perpetual Innovation(tm). Hall & Hinkelman talk about Perpetual Innovation(tm) in their 2013 book on Patent Commercialization argue that many companies are broken-as-designed. They are not designed around managing their intellectual assets; they still operate as if most of their assets and most of their value comes from physical assets.

The US Patent system may not be broken, but many companies are. And IP is a critical part of all innovation and the pipeline of new products.

Hall, E. B. & Hinkelman, R. M. (2013). Perpetual Innovation™: A guide to strategic planning,
patent commercialization and enduring competitive advantage, Version 2.0.
Morrisville, NC: LuLu Press. Retrieved from: http://www.lulu.com/spotlight/SBPlan

Hall, E. B. & Hinkelman, R. M. (2013). Perpetual Innovation™: Patent primer 2.0:
Patents, the great equalizer of our time! An overview of intellectual property
with patenting cost estimates for inventors and entrepreneurs.  Morrisville, NC: LuLu Press. Retrieved from: http://www.lulu.com/spotlight/SBPlan
(or Kindle at http://tinyURL.com/IPPrimer2) 

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These Aren’t The Patent Trolls You’re Looking For | TechCrunch

These Aren’t The Patent Trolls You’re Looking For | TechCrunch:

Wow this is a great analysis/discussion of Patent Trolls.

This is a great discussion of the companies that exercise their IP rights and ways in which they do so. IBM invents a lot (patents) but doesn't directly utilize most of their inventions directly. Plus, even if they do, they often have peripheral uses of the technology where licensing out is a great way to commercialize.

As we often tell clients, you can license key technologies -- especially exclusive licensing for your product -- to control the market.  You don't actually have to invent it.

Kravets does not necessarily propose mechanisms to address "ethical" commercialization from the "unethical" patent trolls.

Maybe that is his next article?

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Patent Trolls Threaten Green Innovation · Environmental Management & Energy News · Environmental Leader

Patent Trolls Threaten Green Innovation · Environmental Management & Energy News · Environmental Leader:

There is a lot of discussion about "patent trolls" and the impact they have on various industries.

Here is the argument about the impact they have on the innovation in "green" technology. This is really the case for all new technology and all new industries, but the argument is about the major impact the trolls have on smaller organizations in the fledgling green technologies.

Much if not most of sustainability, however, is the practice of ancient technologies like organics (manure) and energy efficiency.

Hmmm...???

Keywords: patents, Patent Troll, green business, sustainability,
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Anti-patent engineers a problem, says senior Google IP counsel - Blog - IAM Magazine

Anti-patent engineers a problem, says senior Google IP counsel - Blog - IAM Magazine:

Wow this is an interesting point related to the effect that Patent Trolls have on the invention and innovation process. Google spends an ever increasing amount of time and money in prevention and avoidance within the new product/invention pipeline.

Yuk!

This is like the doctor avoiding malpractice issues by exercising defensive medicine, but on steroids.  (Sorry about the pun!)

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America's patent problem - POLITICO.com Print View

America's patent problem - POLITICO.com Print View:

Interesting Politico article by Leahy & Lee related to legislation to tame some of the really bad actors in the patent pool.

The didn't mention patent trolls by name, but the idea of building a bridge over the pond certainly implies that it will make it harder for trolls to reach up and pick off stray pieces of the economy.

The article talks about the problem of patent holders skipping over the (?infringing?) manufacturer and going straight to end users and consumers.

The two Senators are promoting legislation that would help curb this intrusion into the mainstream economy.

Looks pretty good on the face of it?

What do you all think?

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