SGI, Back From Dead, Decides To Use Patent Litigation As New Business Strategy

from the losers-litigate dept

Tue, Oct 24th 2006 7:24pm — Mike Masnick

What were we just saying about the trend of companies who failed in the marketplace to resort to patent infringement lawsuits as a last gasp effort to stay alive? When SGI filed for Chapter 11 bankruptcy back in May, many didn't give the company much of a chance of amounting to much if it could even reorganize and come out of bankruptcy. Well, last week, the company triumphantly emerged from bankruptcy, claiming that it was "lean and mean." The company claimed it had new management, new business models and a new strategy. Of course, what they didn't mention was part of that strategy was to sue others for patent infringement. It certainly didn't take the "new" SGI long to send its lawyers after ATI for apparently infringing on a patent. Perhaps SGI has a real business strategy to become relevant again -- but to kick things off with a patent infringement lawsuit suggests that they're not convinced that actually competing with their products in the market place is going to take them very far.

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17 Comments

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PhysicsGuy, 24 Oct 2006 @ 7:55pm

I miss sgi...
before the general public even heard of gigabytes they were offering terabytes worth of storage space on their systems...
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Alex Austin (profile), 24 Oct 2006 @ 9:24pm

Somehow, using floating-point numbers to describe graphic elements seems quite obvious.
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ehrichweiss, 24 Oct 2006 @ 10:19pm

which is it?
I always hear the arguement that someone shouldn't sue if they are simply in possession of patents and not actually doing anything with them eg. patent trolls so why does it matter if they "can't survive in the marketplace", isn't that why many companies then license our their technology? And hasn't it already been stated that litigation is the first step to negotiation for licensing?

Besides, ever thought that they might have "made it in the marketplace" if they had done this litigation/licensing thing sooner? Or that they lost a lot of engineers to ATI and nVidia so infringement is bound to happen "accidentally". And I wouldn't say that SGI couldn't have made it in the marketplace, only that they had some management a few years ago who made some incredibly bad decisions concerning their architecture and the results were devastating.
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Ben(damnit, 24 Oct 2006 @ 11:25pm

Hey
It's big business to exploit the loop holes given to us by our government. It may not be right, but what better way to make painfully obvious the fact that the patent system isn't striving for innovation, but rather is just another outlet to acquire disproportionate amounts of money by essentially saying 'hey, that was my idea, and just because i couldn't get it to work better than you doesn't mean i shouldn't get paid.'

We live in a capitalistic society. But that's almost an oxymoron. The practice capitalism requires that you capitalize something, which is kinda anti-social.

why don't we all just share the ideas, and who ever can actually do it the best gets the rewards?
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- wow, 25 Oct 2006 @ 3:23am
  
  Re: Hey
  That's one of the stupidest posts I've ever seen on any forum.
  
  Why don't we all just share the ideas....
  
  lol
  
  and lol
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Jon, 25 Oct 2006 @ 7:31am

Because...
"why don't we all just share the ideas, and who ever can actually do it the best gets the rewards?"

Because R&D costs lots of money. Drug companies put millions of dollars in the R&D on new drugs. Drug companies must be able to hold a patent on those new drugs for a few years if they're going to make their money back on the R&D. Of course, they do other evils besides that.

If there was no pot of gold at the end of development, a lot of development would never happen. Big or small.
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- Oliver Wendell Jones, 25 Oct 2006 @ 8:57am
  
  Re: Because...
  Jon - you mispelled "billions" as "millions". I spent a year with Eli Lilly and believe me, they wish it was millions...
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Thomason, 25 Oct 2006 @ 9:56am

Was it SGI, or its creditors, who provoked the act of suing for patent infringement?
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- Joe, 1 Nov 2006 @ 6:14am
  
  Re:
  As crazy as it sounds, SGI had already previously licensed this patent to several other companies such as NVidia. NVidia is also the company that took many of it's graphics engineers. ATI is one of those that has not purchased the rights that this patent guarantees so what's wrong in filing suit? I wonder if they tried working out a licensing deal and are usig this as a last resort? I think the timing has nothing to do with their bankruptcy, the ATI/AMD merger or anything other than patent infringement. The new management came out early and stated it was there intent to protect those R&D developments that put helped put them into bankruptcy because they WEREN'T protected. But what do I know?
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Anonymous Coward, 25 Oct 2006 @ 11:38am

For Referance See SCO
I wonder if SCO has this practice patented?
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angry dude, 25 Oct 2006 @ 11:55am

losers-litigate dept ?
Ha-Ha-Ha-Ha-Ha..................

Mike is clueless as usual...

Litigation is becoming a standard part of all business negotiations nowadays.
If you can't afford litigation or you have nothing to litigate about then you are a LOSER in modern high-tech.
Every good idea gets stolen almost immediately by multiple parties.
This is a dog-eat-dog world out there...
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- Mike (profile), 25 Oct 2006 @ 6:13pm
  
  Re: losers-litigate dept ?
  Litigation is becoming a standard part of all business negotiations nowadays.
  
  And this is a good thing? Think of all the money this wastes that could go towards actual innovation.
  
  If you can't afford litigation or you have nothing to litigate about then you are a LOSER in modern high-tech.
  
  And this is a good thing?
  
  Every good idea gets stolen almost immediately by multiple parties.
  This is a dog-eat-dog world out there...
  
  And this is a good thing?
  
  I certainly understand that this is how things work, but the whole damn point is that it's wasteful. It's bad for the economy. It's bad for business. It's bad for innovation. Whether or not it's "how things work" doesn't matter. It's bad.
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  - angry dude, 26 Oct 2006 @ 9:11am
    
    Capitalism is bad
    So, maybe Mike you prefer to live under communist rule?
    
    Communism is certainly more attractive (at least on paper) for idealistic people like you.
    
    Capitalism is wasteful and ugly indeed...
    
    But, sticking to the subject of patent system, the USSR (without any stinking patents - just the way you would like it here in US) was able to launch rockets in space and build an H-bomb before US could do it. On the other hand, USSR couldn't make a good mass-produced tape recorder or VCR or even a toilet paper of acceptable quality, in large part due to the absence of greedy capitalists and working patent system...
    Keep bashing US patent system every time you drive a nice car or use a high-quality Gillet razor or type your stupid notes on the latest generation of Pentium-powered PC...
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    - Mike (profile), 26 Oct 2006 @ 3:09pm
      
      Re: Capitalism is bad
      So, maybe Mike you prefer to live under communist rule?
      
      Wow. Non sequitor.
      
      Communism is certainly more attractive (at least on paper) for idealistic people like you.
      
      Huh? Where did you get the idea that I was idealistic? I'm not. You do realize that what you're supporting is much more similar to centalized communism, right? I'm talking about open and free markets, not bogged down by gov't monopolies and control. And you're voting for government control.
      
      You do realize that what I'm saying is that we should move *more* towards capitalism and away from an approach that is more fitting for centralized rule?
      
      Capitalism is wasteful and ugly indeed...
      
      Wow. You really don't bother to take the time to read, do you? Capitalism is not wasteful. If the economy is allowed to actually function, capitalism is amazingly efficient. It's when the gov't gets invovled where it's not needed (like here) that waste occurs.
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Joe Smith, 25 Oct 2006 @ 12:22pm

Floating point
Read the patent that is linked in the story which is linked above and your worst thoughts about the state of the patent system will be confirmed.

It seems pretty obvious that the timing of the lawsuit is tied to the pending ATI/AMD merger in the hope that the threat of the lawsuit will extract a quick settlement.

ATI's challenge in defending this case is going to be to get a judge and jury capable of understanding what floating point arithmetic is and why it gets used.

If ATI can make it past that (huge) hurdle then SGI is going to get a spanking for bringing this law suit.
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Shohat, 26 Oct 2006 @ 9:13am

Ahem
I'd like to remind you that unlike many others , SGI actually deserve credit and rewards for their R&D . They have made alot of progress in many areas that directly benefit ATI and Nvidia .
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Ben(damnit), 30 Oct 2006 @ 12:16pm

Shoulda said it like this.
This article (about an upcoming book) basically sums it up better than i ever could.

http://books.slashdot.org/article.pl?sid=06/10/30/1529208&from=rss
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