Football Helmet Maker Drives Competitor Into Bankruptcy With Patent Lawsuits

from the safety-is-less-important-than-monopolies dept

Fri, Sep 24th 2010 2:25am — Mike Masnick

Danny alerts us to the story of how sporting goods maker Riddell was able to drive competitor Schutt Sports into bankruptcy thanks to patent lawsuits. Riddell first sued Schutt for patent infringement on its football helmet design, winning a $29 million jury award. Right afterwards, it sued Schutt again, this time for shoulder pad design. A week later, Schutt declared bankruptcy. Now I'm sure, some will be quick to claim that this is exactly what the patent system is designed to do, but it does seem pretty troubling that, especially when it comes to safety issues, we're allowing one company to have a total monopoly on a type of safety gear. What's wrong with actually competing in the market?

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Filed Under: football, helmets, patents, safety
Companies: riddell, schutt sports

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Anonymous Coward, 24 Sep 2010 @ 3:52am

That Is The Way It Goes With Patents
Where do they find these incredibly cruel juries? Riddell will now enjoy an extended period of reduced competition and raised profitability. There is now little need for them to innovate. Customers will pay in raised prices and stagnant development. "Promoting the progress" -- not so much.

It will all end when, after years of complacency, they are wiped out by Chinese competitors. Another "win" for the patent system.
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Anonymous Coward, 24 Sep 2010 @ 4:11am

but if we allowed competition, you may buy the other guys stuff because it is better. can't have that. not at all.
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sum guy, 24 Sep 2010 @ 4:27am

"Now I'm sure, some will be quick to claim that this is exactly what the patent system is designed to do"

you don't give enough information in the post to make that determination. i suppose i could look it up for myself, but that defeats the purpose of coming to techdirt.

"especially when it comes to safety issues, we're allowing one company to have a total monopoly on a type of safety gear. What's wrong with actually competing in the market?"

wow! a strawman argument from MM?!? you hit the safety, monopoly, and competition buzzwords correctly, but where is the evidence that Schutt was competing and not copying? competition in a market is always a good thing, but it has to be based on a companies own innovation driving its competitors to create something better. replicating a rivals product without any value added doesn't increase innovation.

is it just me, or is techdirt getting lazy lately?
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Anonymous Coward, 24 Sep 2010 @ 4:35am

Re: That Is The Way It Goes With Patents
The worst part was the innovation was designed to reduce concussions. How can anyone demand profit over that? It's someone's life.

Football is a dangerous sport. At least now we can relax and know that there will be fewer future football innovations. This patent lawsuit eliminated the need to improve.

Scutt should have called IV. At least then he could have had a countersuit. So silly, he just wanted to sell football gear.
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R. Miles (profile), 24 Sep 2010 @ 4:36am

What's wrong with actually competing in the market?
*goes to Webster
com·pe·ti·tion noun \käm-pə-ˈti-shən\ - A word you will not find in trademark, copyright, or patent laws, United States Code, and the Constitution of the United States.

Therefore, it does not, can not, and will not exist.

Damn, Webster. Harsh.

(note: Webster reference is parody, not factual)
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Edward, 24 Sep 2010 @ 4:37am

Wait, its a "Riddell" : How do we make sure the competition/ market stays "schutt"? Bad puns aside, Riddell sucks. Way to not innovate.
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noesbueno (profile), 24 Sep 2010 @ 4:45am

really a shame. schutt made a very good product, my kids used them. i guess this jury wasn't "thinking of the children".
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Anonymous Coward, 24 Sep 2010 @ 5:00am

Re:
It's just you. Copying *is* competition, fyi. The value-add isn't always in the product itself. And where do you get this odd notion that competition has to be done through innovation? There are probably more companies today emulating the bigger ones than there are companies innovating, in any industry. Just because you don't like it doesn't mean it's a bad thing to everyone else.
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Edward, 24 Sep 2010 @ 5:10am

Re: wait.....one better.....
If we get "Riddell" the competition, we can keep the market "Schutt" . ; P
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abc gum, 24 Sep 2010 @ 5:13am

Re:
"i suppose i could look it up for myself ... is it just me, or is techdirt getting lazy lately?"

Who is lazy?
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Anonymous Coward, 24 Sep 2010 @ 5:28am

They should have gone into the Dark Helmet Business instead...
...After all, no one wants a Dark Helmet, and the results would have been the same.

...Yeah. I just went there. Now where's My Quad Grande Mocha?

_____________________
Sent from my Windows 7 Zune Phone
PR Release, Special Edition, Version 6.0
Raspberry Scented
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Anonymous Coward, 24 Sep 2010 @ 5:35am

Seems to be a bit simplistic opinion given the article, which appears to indicate that the company was already in financial trouble for other reasons. Additionally, the article does not mention what type of bankruptcy was filed. Liquidation? Reorganization? The former is going out of business. The latter in significant part includes the restructuring of debt.

A lot of assumptions are being made here for which pertinent facts are missing from the article.

BTW, in safety related products perhaps one of the most compelling reason to constantly improve such products is the spectre of product liability lawsuits (many of which are premised on "strict liability"). Yes, even the law to some indeterminate degree provides good reason to innovate.
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Dark Helmet (profile), 24 Sep 2010 @ 5:49am

Re: They should have gone into the Dark Helmet Business instead...
See, now that was just doubly not nice. First, you insult me. But far, far worse: you beat me to the joke of whether or not they make Dark Helmets.

That's it, gay minty looking gravitar, this means war!
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Anonymous Coward, 24 Sep 2010 @ 6:16am

Re: Re: They should have gone into the Dark Helmet Business instead...
Yeah?

Stand well back, Sir, or else my Windows Zune Phone 7.0 release 6.0, SRSPRE (Special Raspberry Scented PR Edition) will bite!

See kids- this is why you need a Windows Zune Phone 7.0. So you can declare VICTORY!
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Danny, 24 Sep 2010 @ 6:30am

???
From the link:
"A Wisconsin jury last month found that Schutt's DNA and ION helmets, introduced in 2004 and 2007, respectively, infringed on Riddell's patents aimed at reducing concussions. The jury ruled that Riddell was entitled to about five years of lost profits and royalties"

I'm a bit lost here. Does this mean that Riddell somehow patented the very concept of reducing concussions (meaning that anything Schutts did in relation to reducing concussion was infringement) or was Riddell claiming that Schutts was infringing by way of using Riddell's exact method of reducing concussions.

I can understand a patent on an exact method of reducing concussions (meaning Schutts is okay to come up with other methods) but patenting the very concept of reducing concussions (meaning that Schutts would be infringing even if they were using some other method) seems overly broad to me.
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Anonymous Coward, 24 Sep 2010 @ 6:39am

This is factually inaccurate:

but it does seem pretty troubling that, especially when it comes to safety issues, we're allowing one company to have a total monopoly on a type of safety gear. What's wrong with actually competing in the market?

There are af other companies making helmets and shoulder pads including Adams and Nike. I
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Anonymous Coward, 24 Sep 2010 @ 6:43am

Re:
You must be new here. This is typical techdirt style. Mike writes something slanted toward his agenda and the fanboys all chime in about how terrible it is. Anyone with a different view is instantly deemed a troll/shill/idiot by said fanboys.
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Dark Helmet (profile), 24 Sep 2010 @ 6:44am

Re: Re: Re: They should have gone into the Dark Helmet Business instead...
When did cell phones become Pokemon? Oh well, to battle then:

I call you, Droidachu! Droidachu uses the new Android 2.2 distro. It is very effective!
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Anonymous Coward, 24 Sep 2010 @ 6:55am

Re: Re:
No, not new here.

My comments typically result from when I believe that the law has been misstated, which could lead to an erroneous understanding by readers, or when opinions are expressed in the absence or information relevant to the formation of such opinions.

This article involves both, i.e., decrying a "monopoly" on safety in general, and failing to note that the article listed some other factors concerning the company's precarious financial condition.
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NullOp, 24 Sep 2010 @ 7:05am

Competition
If there is truly infringement then the suit is worthy. The keyword is "truly". All it takes is a lawyer convincing a jury that there really is a violation. Which, in a way, is really unfortunate since larger, read: those with deeper pockets, companies can hire the legal dream team to convince unsophisticated juries of injury. It's not like arguing 100 is not 99. Legal cases are, more often than not, a matter of subjective decision. 12 people 'think' you done it....then you done it!

Hey, this is what America is all about. Keeping business strong and succeeding over the little guy! Monopoly is the 'perfect' business status and all companies must work to achieve it! If it means throwing millions into mean spirited suits or political payoffs....then so be it.
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Sean T Henry (profile), 24 Sep 2010 @ 7:08am

Re: Re: That Is The Way It Goes With Patents
The shoulder pads and helmet are designed after armor that has been around for hundreds or years. The only real difference is the materials instead of leather or metal its plastic instead of rags for padding in the helmet its a plastic cushion filled with air.
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Greg G, 24 Sep 2010 @ 7:12am

Re: Re: They should have gone into the Dark Helmet Business instead...
Hmmm

I would think you were the only one able to actually make more authentic Dark Helmets. If Riddell did, they would be mere replicas.
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A Dan (profile), 24 Sep 2010 @ 7:12am

Re: Re: Re: Re: They should have gone into the Dark Helmet Business instead...
I think you mean It's Super Effective!
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Dark Helmet (profile), 24 Sep 2010 @ 7:29am

Re: Re: Re: Re: Re: They should have gone into the Dark Helmet Business instead...
Droidachu uses Advanced Task Killer on A Dan. It is Super Effective!
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Anonymous Coward, 24 Sep 2010 @ 7:47am

How does this tie in with recent studies regarding high school atheletes and the underreporting of concussions?
There's been some studies claiming that our high school youth are suffering serious potentially life altering injuries during high school sports and not reporting them.

If they report that they got hit so hard in the head that they feel dizzy, they get benched and sent to the doctor to get checked, if it's determined that it's a concussion, they can be sidelined for a while, many 'students' therefore choose not to report the injuries, which can lead to serious complications later on.

So as far as I'm concerned, anything that can improve the quality of the protective equipment that our youth are using should be done. Even if that means 'copying' someone's existing design to improve the level of protection provided. I don't see how anyone can justify putting company profits over our youth's health.

WHY WON'T THEY THINK OF THE CHILDREN....
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Anonymous Coward, 24 Sep 2010 @ 7:56am

What is happening here. Posts are being uploaded, shown as having been uploaded, and then not appearing as a comment.

I uploaded one about 1/2 hour ago addressing all of the points made in 20 above, as well as other related matters.

Any ideas why this is happening. It has occurred about a dozen times or so over the past couple of months.
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The Groove Tiger (profile), 24 Sep 2010 @ 9:02am

Re:
I suppose I could rebut your comment, but your comment should have included a rebuttal... otherwise, what's the point of me coming here to read your comment? You're so lazy.
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The Groove Tiger (profile), 24 Sep 2010 @ 9:04am

Re: Re: wait.....one better.....
Because Schutt is like, shut... and Ridell, it's like, rid of... and... yeah.
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The Groove Tiger (profile), 24 Sep 2010 @ 9:08am

Re: Re: Re:
Well, at least we should give you credit for not just shouting "agenda!" at the top of your lungs.
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Anonymous Coward, 24 Sep 2010 @ 9:24am

Re: Re: That Is The Way It Goes With Patents
if you don't want to get hurt playing a game then don't play. duh.
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Jose_X, 24 Sep 2010 @ 10:02am

Re: Re:
Yeah, their chief engineer should probably never have "copied" that thing that was completely "non-obvious" to a person having ordinary skill in the art. The chief engineers who graduate above average in their class cannot use their craftiness as an excuse and should know better. It's the 20 year monopoly rule penalty for being second; for not recognizing the "non-obvious" to your students; for being socially conscious or having morals; for not being wealthy; for being too eager to get to work on building and optimizing the actual product; for not spending the time to analyze millions of patent claims, any of which might apply to any part of your production; etc.
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MrWilson, 24 Sep 2010 @ 10:13am

Re: Re: That Is The Way It Goes With Patents
"How can anyone demand profit over that? It's someone's life."

Welcome to Big Pharma, where your life and death struggle with the cost of artificially expensive medications and medical procedures are what we call "profit."
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Jose_X, 24 Sep 2010 @ 10:23am

Re: Re:
One thing to mention about copying is that we all must copy a very large fraction of what we know. That is "human" nature, and the greatest of creative minds have done very large amounts of copying, mimicking, imitation, etc, throughout their lives since creativity that survives in engineering means understanding intimately the top skills and best practices in society so as to be able to shine in a bit of a new way when the opportunity presents itself, when the muse (or whatever) blesses you, when you copy what someone else informally suggested or did and then took the extra mile.

Your reward is being first or early, etc, in understanding a concept, to market, and in the minds of people, and you can likewise copy those that surpass you later on.

Patent monopolies stifle and lead to higher costs on everyone, abridge free speech, and destroy many interesting jobs: remove the opportunity for others to likewise shine or to shine even more greatly than you because they have ideas that are more refined and so were included within your vague and broad patent claims.. and perhaps they were willing to work 3x as hard as you, but now can be denied the opportunity for 20 years.

We all suffer from patent monopolies. Tying the hands of the worlds' engineers to suit *one* should be declared unconstitutional, for this, perhaps in no case, promotes the progress of science and useful arts while it does restrict liberties and hurts the general welfare.
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Jose_X, 24 Sep 2010 @ 10:29am

Re:
I've never had a comment fail to upload here. Make sure you hit "submit", then go back to the original page and "refresh" the page.

Send me today your comment to hozelda-at yahoo punto com, and I will submit it for you here. Also, send me all of your comments that have failed and instruct on where to post them and under what pseudonym. Finally, add "techdirt" on the subject line so that it becomes hard for it to pass to the spam box or me to miss it. I don't mind doing someone this favor periodically.
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Jose_X, 24 Sep 2010 @ 10:38am

Re: Competition
Patent law has a number of problems with it, eg, as suggested in this article: As applies to safety, now, rather than have many innovating safety equipment, one single entity can get a monopoly and block all other ideas out or create very discouraging obstacles.

Use a bad law, and even if the lawsuit has legal merit, we all lose.
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Jose_X, 24 Sep 2010 @ 10:41am

Re: Re:
I also wanted to say, it's possible there is a cache failure somewhere between the server and your PC (eg, after you "refresh" the browser window).
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Edward, 24 Sep 2010 @ 11:18am

Wait, its a "Riddell" : How do we make sure the competition/ market stays "schutt"? Bad puns aside, Riddell sucks. Way to not innovate.
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Anonymous Coward, 24 Sep 2010 @ 12:46pm

Schutt is NOT out of business. It has filed for bankruptcy under Chapter 11, which allows it to continue doing business (i.e., competing with Riddell and other manufacturers) while it reorganizes its operations.

To home in on a patent suit is misleading. It seems that Schutt's financial problems are due to a number of factors having nothing to do with patents. Moreover, it is my understanding that the infringement suit is under appeall, so any award against Schutt to date will be paid out, if ever, well in the future.
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Christopher (profile), 24 Sep 2010 @ 1:09pm

Re:
Unfortunately, they were thinking of the law here and had no choice but to shut down this other company. HOWEVER, this espouses why patents, copyrights and trademarks are BAD FOR AMERICA!

Very bad for America!

It keeps people from innovating for fear of infringing on someone else's patent. I am of the idea that we don't these damned patents!

Just let someone start a business making a product and if someone comes into the light and they cannot compete with that other guy? Too bad, so sad, I DON'T CARE!

That is COMPETITION! Where you don't get a 'mulligan' ever!
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Christopher (profile), 24 Sep 2010 @ 1:11pm

Re: ???
When it comes to something that is made to enhance safety, NO PATENTS SHOULD BE ALLOWED! Period and done with. Everyone should be automatically able to use that technology!
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Anonymous Coward, 24 Sep 2010 @ 1:58pm

Wow contrary to most posts of "think of the children" Techdirt is now saying violate patents because of the children. Not every patent is bad not every patent holder who defends themselves is bad. Not every industry needs hundreds of manufactures to supply the need. So these "poor children" can continue to buy from a company that spent money innovating and making safety products that help those same "poor children".
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Anonymous Coward, 24 Sep 2010 @ 2:07pm

Re: Re: Re:
Like I said, typical techdirt style.
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Anonymous Coward, 24 Sep 2010 @ 2:08pm

Re: Re: Re: Re:
Says the fanboy that only responds to the posts of others and never has any original ideas.
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vivaelamor (profile), 25 Sep 2010 @ 2:38am

Re:
"is it just me, or is techdirt getting lazy lately?"

Not half as lazy as the trolls.
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vivaelamor (profile), 25 Sep 2010 @ 2:50am

Re:
"Seems to be a bit simplistic opinion given the article, which appears to indicate that the company was already in financial trouble for other reasons. Additionally, the article does not mention what type of bankruptcy was filed. Liquidation? Reorganization? The former is going out of business. The latter in significant part includes the restructuring of debt."

Neither are nice. Would it have been so hard to Google 'Schutt Sports bankruptcy' to find out that it was Chapter 11?

"A lot of assumptions are being made here for which pertinent facts are missing from the article."

So far the only assumption seems to be the one you have made that Mike was suggesting Schutt Sports are going out of business. Perhaps you could list the others?
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darryl, 25 Sep 2010 @ 5:25am

the strawmen live on, and the patent system works..
Great, patents, copyright, "save the children", evil monopolies, bad juries, bad laws. You got em all in one hit Mike LOL..

Some guy is right, copying is not competition, creating a competative product in that market IS competition. You Mike mite just one day work that simple and basic fact out.. or maybe not.

So this Schutt company just copies the inventors design, and sold that for 5 years, that is not providing competition, its not innovating on a product, its not advancing the state of the art, and its not providing customers with new and competative products.

And Mike, if you cant work that out, you are not in the right job (whatever that is), and should NEVER comment on legal and econimic matters again.

But as you do, reading what you write, and trying to make some unbiased, and logical assumptions based on your comments, we'll its not easy, but hey, you have lots of people here that will follow what you say, like its the word of God himself.

And if you can convince one or two soft minds with your claims and pull some google add dollars in at the same time, its all good..

If these inventions were so obvious, and considering football protection equipment has been around FOR A VERY LONG TIME. then why didn't Schutt come up with that improvements themselves ? or something better and you know.... Original..

Most things are 'obvious' to those skilled in the field once they have seen it and understand it.
that does not make the invention any less or more significant or important, or worthy of protection.

Here here for patent laws, and a functioning legal and patent system.

Shame about all the strawmen, confused and inconsistent strawment at that !!
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staff, 25 Sep 2010 @ 5:55am

The patent system works
"What's wrong with actually competing in the market?"

The problem was Schutt was not competing, they were copying. If they had done something different, especially better, the shoe would have been on the other foot and they could have squeezed Riddell out. Should they start giving the Stanley Cup to the loser?

The patent system works. Don't screw with it.
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Anonymous Coward, 25 Sep 2010 @ 10:57am

Re: Re:
Perhaps you overlooked my later comment at 38. I found this in a press release by Schutt.

Please note I never made any statement that Schutt was "kaput". I only stated that it was not noted in the linked article the type of bankruptcy involved. I also stated that in the linked article is appears that Schutt was facing money problems far removed from Riddell's patents.
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Anonymous Coward, 25 Sep 2010 @ 9:52pm

Re: The patent system works
Thank you for admitting that Riddell was not doing anything better and so had to resort to patents instead of competition.

Careful, you might not get your salary from RJR if you keep making these mistakes.
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vivaelamor (profile), 26 Sep 2010 @ 1:41am

Re: Re: Re:
"Please note I never made any statement that Schutt was "kaput". I only stated that it was not noted in the linked article the type of bankruptcy involved. I also stated that in the linked article is appears that Schutt was facing money problems far removed from Riddell's patents."

But where was it assumed otherwise?
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Ronald J Riley (profile), 26 Sep 2010 @ 5:59pm

1) We are all volunteers and there is a pool of staff email accounts which PIAUSA volunteers can use. Even I do not know who is making specific posts. In any event, none of us are paid as is the case for many bloggers who are paid to carry water for specific companies. It seems pretty clear that there are paid stooges on TechDIRT.

2) "Riddell was not doing anything better" is a false statement. Riddell invented a better way to do something and Schutt was found to have misappropriated Riddell's invention.

This was one of numerous deficiencies in Schutt's business model.

The patent system is based on driving companies to compete by producing a better invention, not to just copy another person's invention. Copying is not competing. Out inventing an adversary is competing. Clearly Schutt was unable to compete in the invention arena, and now they have to pay the toll or expire.

Ronald J. Riley,

Speaking only on my own behalf.
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 - (202) 318-1595 - 9 am to 8 pm EST.
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The Groove Tiger (profile), 27 Sep 2010 @ 9:07am

Re: Re: Re: Re: Re:
Nice ad hominem. Have you stopped beating your wife yet?
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Jose_X, 28 Sep 2010 @ 8:11am

Re:
>> 2) "Riddell was not doing anything better" is a false statement. Riddell invented a better way to do something and Schutt was found to have misappropriated Riddell's invention.

That may be true, but considering how low is the "novel" bar for getting a patent granted (merely "non-obvious" to a PHOSITA), we can certainly argue that a better system of laws (or one more closely aligned with the Constitution) would not allow such a patent to have been granted in the first place.
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Jose_X, 28 Sep 2010 @ 8:21am

Copying
One reason some might have for copying might be because they feel they can do a better job in many other ways. In exchange, others are free to copy them back (well, if we were to dump the patent system).

On the other hand, society might want to create other tools to reward inventors and give small businesses a greater chance against much larger incumbents. Also, creating more "open source" all around will make it easier to keep a check on "incumbents" because the bar to competing will be lower for anyone that wants to try. I find comfort generally in businesses that don't have profitting as their number one reason. The obsession with profitting and the set of laws designed to support that can hurt society in a number of ways and make things extra difficult for the rest of us.
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Anonymous Coward, 2 Oct 2010 @ 1:41am

Re:
'1) We are all volunteers and there is a pool of staff email accounts which PIAUSA volunteers can use. Even I do not know who is making specific posts. In any event, none of us are paid as is the case for many bloggers who are paid to carry water for specific companies. It seems pretty clear that there are paid stooges on TechDIRT.'

Yes, there are paid stooges on Techdirt. You'll find them all the time spouting lies and halftruths about Mike, Techdirt, posters to Techdirt, etcetera. Oh, wait, you fall into that category, too, don't you? Many of us have often wondered who might be paying you to push the agenda you push.
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Anonymous Coward, 16 Mar 2012 @ 6:17am

Re: That Is The Way It Goes With Patents
people totally miss the point here.

this is about a company investing time and money in a unique product, protecting it and then having a competitor copy their innovation.

what people don't understand, is if you don't protect companies that innovate from copying; you will no longer have innovation.
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