Intellectual Ventures Sues AT&T, Sprint And T-Mobile; While Saying That Such Lawsuits Are Evidence Of Progress

from the that's-chutzpah dept

Fri, Mar 2nd 2012 4:25am — Mike Masnick

After years of not suing anyone (but always threatening that it might, someday), Intellectual Ventures has become more and more aggressive of late in suing lots of companies. A few weeks ago it sued AT&T, Sprint and T-Mobile over a bunch of patents that (of course) involved some of IV's favorite shell companies. Just as it was preparing this lawsuit, a VP from IV went public with an attempt to argue that all this litigation is a sign of innovation at work. The article is rather shocking in how it presents its argument. It mainly relies on false claims that correlation means causation, concerning historical periods of innovation and lawsuits over patents. Of course, what it ignores is that the patent fights often come right after the innovation, not before. In other words, the patent battles aren't a sign that innovation is working. Rather it's a sign of patent holders freaking out that others are innovating. It's entirely about hindering innovation, not helping move it forward.

Along those lines, the folks at M-CAM who continue to call out bogus claims in patent lawsuits analyzed the patents in this IV lawsuit and found them... well... lacking:

Our systems found nearly 500 AT&T patents, with similar claims, that predate the fifteen asserted patents. Sprint Nextel also owns 12 patents that predate the asserted portfolio.

M-CAM also questions the claims that these lawsuits have anything at all to do with innovation, and hint at more nefarious reasons for the use of a bunch of shell companies:

Is IV’s patent litigation helping inventors or investors? Considering that the bulk of the patents in suit were each “acquired” from what the USPTO characterizes as a “merger” with a different relatively unknown LLC, we’ll let you decide. Seems to us that it simply represents an attempt to use opacity and “hidden weapons” for a tactical assault having ABSOLUTELY NOTHING to do with innovation. In fact, these kinds of structures are also typically employed for tax “optimization” which is to say, to avoid paying taxes for any economic gains resulting from a successful assault, ahem sorry again, we mean “settlement”.

By the way, you may have noticed that Verizon is conspicuously absent from the list of mobile operators being sued here. That's because Verizon paid the entrance fee and is a "member" in the IV club... which apparently only cost the company $350 million. Oh yeah... and it then became an enabler. One of the patents in the new lawsuit... once was owned by Verizon.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: mobile phones, patents
Companies: at&t, intellectual ventures, sprint, t-mobile

32 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

abc gum, 2 Mar 2012 @ 4:35am

RICO?
[ link to this | view in thread ]
Jed (profile), 2 Mar 2012 @ 4:52am

Re:
Suave?
[ link to this | view in thread ]
Richard (profile), 2 Mar 2012 @ 4:57am

In a related development
It has been noticed that increased police activity is associated with increased crime. In a bid to reduce crime, police budgets will now be cut!
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 5:01am

Here's an idea...
How about adding a "use it or lose it" law to patent ownership. In other words, in order to retain a patent, you have to demonstrate that you either 1. have used it to produce a product or are working toward producing a product with it and purchasing a patent that was once used to produce a product by a former owner does not count if you don't continue to produce it. I see this as sort of adverse possession for IP. If you aren't using it and someone wants to, they can challenge your claim to it and take it over. That just might put an end to this patent trolling nonsense.
[ link to this | view in thread ]
abc gum, 2 Mar 2012 @ 5:12am

Re: Re:
Debonair?
[ link to this | view in thread ]
abc gum, 2 Mar 2012 @ 5:13am

Re: Here's an idea...
How about just the lose it part.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 5:31am

Re: Re: Re:
Chief?
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 5:32am

So why aren't anti-trust laws being used against intellectual ventures for anti-competitive behavior? Isn't this the sort of thing these laws should seek to stop?
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 5:40am

Re:
Someone has to purchase an anti-trust investigation first.
[ link to this | view in thread ]
The eejit (profile), 2 Mar 2012 @ 5:40am

Re:
Nope, on account of IV isn't actually doing anything with them.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 5:43am

Re: Re:
IV and Righthaven don't compete, their entire business model is anti-competitive in nature, yet anti competitive laws haven't done a single thing about it. Instead, they go after those who compete (mostly fairly) in the marketplace, like Google.

Our injustice system is truly a travesty.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 5:43am

Re: Re: Re:
anti-trust laws *
[ link to this | view in thread ]
That Anonymous Coward (profile), 2 Mar 2012 @ 6:28am

It is to innovation!
They are finding new innovative ways to make sure that everyone coughs up money to them so they never have to do anything but shake some paperwork at them to get it.

So what if it keeps people from trying new things for fear of being sued. So what if they are stupidly broad, they thought of this idea and they should be able to cash in!

Why has no one patented patent trolling? Could end up suing IV or at least make the patent office look at the mess they are enabling.
[ link to this | view in thread ]
Pixelation, 2 Mar 2012 @ 7:00am

Shocking!
The emergence of Intellectual Vultures.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 7:32am

Re: It is to innovation!
Someone has tried...

http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p= 1&u=/netahtml/PTO/srchnum.html&r=1&f=G&l=50&s1=%2220080270152%22.PGNR.&OS=DN /20080270152&RS=DN/20080270152
[ link to this | view in thread ]
MrWilson, 2 Mar 2012 @ 8:29am

Re: Here's an idea...
"they can challenge your claim to it and take it over."

Or rather, it just releases the patent to the public.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 8:32am

Not surprising coming from Mr Toy Chef, founder and chief patent troll of IV. He would buy USPTO if he thought he'd make a buck off of it.
http://www.dailywireless.org/2011/07/25/nathan-myhrvold-patent-troll/
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 8:50am

Re: Re: Re: Re:
McCloud?
[ link to this | view in thread ]
Shmerl, 2 Mar 2012 @ 9:34am

Intellectual Ventures is such a classical and vanilla patent troll that one can never expect their claims to be anything but protection racket.
[ link to this | view in thread ]
minijedimaster (profile), 2 Mar 2012 @ 10:09am

Re: Here's an idea...
You have me on the edge of my seat! What's 2?
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 11:57am

Re: Re: Here's an idea...
I thought of that but I like the idea of adverse possession better. The only people who would be able to issue a challenge to take over a patent by adverse possession would be people actually planning on using the patent to produce a product (ie. the innovators). And the only way they could take a patent from someone who holds it is if they could not demonstrate that they had a product that was being produced or were in the process of actively developing a product to be released (ie. the trolls). No one would care anymore about having a patent that they didn't plan to use for something and all of this ridiculous litigation would go away. And the spirit of (ie. "to promote the Progress of Science and useful Arts") would then be returned to U.S. Patent Law.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 12:00pm

Re: Re: Here's an idea...
LOL I for got to add in the #2. it should be after the "or"

*or 2. are working toward producing a product with it and purchasing a patent that was once used to produce a product by a former owner does not count if you don't continue to produce it.

(Was early in the morning and using my phone while still having coffee.)
[ link to this | view in thread ]
David Collado (profile), 2 Mar 2012 @ 12:34pm

It's Time to Close Down the Extortion Racket "Market"
Comparing NPEs from previous centuries with today�s patent trolls is extremely disingenuous. True, the patent system was designed to allow patent assignment. But the intent behind the entire system, has and always will be �to promote the Progress of Science and useful Arts�. Today�s NPEs simply don�t do that, by any stretch of the imagination.

I have no doubt that NPEs from previous centuries, when actual working models were required to demonstrate a useful invention, actually promoted innovation. The sympathetic idea of an independent inventor with no means to commercialize his invention was very real back then. Not anymore. With the Internet and today�s incredibly connected and efficient startup-slash-venture-capital ecosystem, independent inventors have a plethora of outlets to market their inventions. Unfortunately for some, only inventions with real value are picked up by this system.

This relegates today�s NPEs to the role of picking up the scraps; the overly-broad, obvious and worthless patents nobody else wants because they offer nothing of value. Sadly, there is no shortage of such crap on the market thanks to the increasing glut in patent issuance.

So yes, thanks to today�s NPEs like Intellectual Ventures, �inventors� all over the world are motivated to patent anything and everything they can think of that might bear some resemblance to an actual useful invention. No need to worry, IV will add their useless patents to a pool of more useless patents and then go find someone to threaten with it.

So yes, the patent system is broken, to the extent it encourages and enables bad patents to clog up the system. I have no doubt that good quality patents are still issued on a regular basis. Those don�t need NPEs like they used to. But thanks to today�s NPEs and the blood-sucking innovation-killing patent-litigation-slash-bullshit-licensing market they have created for the least valuable patents out there, we can expect to see increasingly epic proportions of economic waste coming from our broken patent system.

It doesn�t have to be this way. A realignment of the patent system with its constitutional mandate �to promote the Progress of Science and useful Arts� is achievable with some tweaks to the patent assignment provisions. For example, making patents dissolve if they are not put into practice within 3-5 years is one option. Or taxing them heavily for each year they are not put into practice is another. Or both ideas put together. But somehow, someway, we need to kill the market for bad patents; a market made possible today by NPEs like Intellectual Ventures.
[ link to this | view in thread ]
Lawrence D'Oliveiro, 2 Mar 2012 @ 4:00pm

Re: Re: Here's an idea...
Yeah, just use the lose-it part, and lose the use-it part.
[ link to this | view in thread ]
Willton, 2 Mar 2012 @ 4:07pm

Analysis? What analysis?
Once again, this M-Cam company shows how lacking its analysis actually is. M-Cam claims to have found a whole bunch of patents that were owned by telecom companies and were published before the IV patents were. Big f***ing deal. Where is the analysis that these prior art patents actually invalidate the claims of IV's patents, hmm? How can you call what M-Cam does analysis when they don't actually present any explanation of what they claim to analyze?
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 4:23pm

Re: Here's an idea...
A "use it or lose it" law will not work. The trolls can easily counter such a law by sub-contacting out to some (maybe Chinese) company to allegedly develop some product. There are any number of Chines companies who are actually innovating, who would be happy to pick up some small extra income. Then, as soon as someone tries to take the patent off the troll, the troll whips out the Chinese company and claims development is proceeding. Game over for the "use it or lose it" law. However, the entity attempting to deprive the troll of its patent, has just identified itself as a suitable victim for the troll.
[ link to this | view in thread ]
Anonymous Coward, 2 Mar 2012 @ 6:22pm

Re: It's Time to Close Down the Extortion Racket "Market"
"I have no doubt that good quality patents are still issued on a regular basis."

Citation needed. It is a funny thing how extraordinarily difficult it is to find any of these "good quality patents". Can anybody produce some links to say a half dozen or so of them?
[ link to this | view in thread ]
Richard (profile), 3 Mar 2012 @ 2:31am

Re: Analysis? What analysis?
How can you call what M-Cam does analysis when they don't actually present any explanation of what they claim to analyze?

Actually they do - if you click through to the full report.

Admittedly they do only go into detail on one patent - but then again there are so many that a detailed explanation of them all would not be possible in a reasonable sized document.
[ link to this | view in thread ]
Richard (profile), 3 Mar 2012 @ 2:34am

Re: Re: Analysis? What analysis?
Plus - if you are still not satisfied - they inviote you to contact them for more details.

"For a more detailed examination of the Intellectual Ventures patents mentioned in this report, please contact us at
patentlyobvious@m‐cam.com."

I suggest you either take them up on that offer or withdraw your comment.
[ link to this | view in thread ]
Richard (profile), 3 Mar 2012 @ 2:36am

Re: Re: Analysis? What analysis?
Also they invite you to contact them for more information - I suggest you take them up on that - or withdraw your comment.
[ link to this | view in thread ]
Willton, 4 Mar 2012 @ 7:51pm

Re: Re: Analysis? What analysis?
Actually they do - if you click through to the full report.

Admittedly they do only go into detail on one patent - but then again there are so many that a detailed explanation of them all would not be possible in a reasonable sized document.

The only thing that M-Cam does with that one patent is "match" its claims against another patent's claims (i.e., USPN 5,38,458 to Tsai). I use the word "match" loosely here, since the claim language of IV's patent is distinctly different compared to the language of the Tsai '458 Patent, mainly because the two patents claim two entirely different things: the IV's patent is directed to a method, while the Tsai '458 Patent is directed to an apparatus. Basically, M-Cam did a lazy job in comparing the two patents, and the reader is left to wonder why M-Cam thinks these two are similar, let alone why one anticipates the other. Some "analysis".
[ link to this | view in thread ]
Willton, 4 Mar 2012 @ 7:57pm

Re: Re: Re: Analysis? What analysis?
Plus - if you are still not satisfied - they inviote you to contact them for more details.

"For a more detailed examination of the Intellectual Ventures patents mentioned in this report, please contact us at
patentlyobvious@m‐cam.com."

I suggest you either take them up on that offer or withdraw your comment.

Absolutely not. I should not have to ask them to explain themselves if they want to be taken seriously as a patent analyst. If M-Cam thinks IV's patents are invalid, then they should have no problem freely explaining themselves in detail without needing someone like me to prod them. They don't seem to have a problem posting vague search results publicly, so why would they have a problem posting an explanation of their analysis publicly?

Basically, M-Cam wants someone to pay them to do the analysis I'm calling for. Based on my view of the initial effort they posted publicly, I don't see why anyone would choose to pay for their weak analysis.
[ link to this | view in thread ]