If You Read Just One Article About The Patent Mess, Make It This One

from the infuriating dept

Wed, Nov 14th 2012 10:50am — Mike Masnick

Steven Levy has always been a great writer covering the tech industry, but his article on "the patent problem" for Wired is a must read, even if you're familiar with these stories. He does a great job illustrating just how screwed up the patent system is, focusing on a few key trolls, and pulling in some important information and data to support the anecdotal claims. Much of the story is about Mitchell Medina, who took a ridiculous patent that came from an idea about scanning medical documents into electronic format, and turned it into a belief that he held a patent on which practically every website infringed. You really should read the whole thing, but a few tidbits: first off, Medina and the two other people named on the patent never actually could build a working product.

Although the three had never tried to build a working model before they were granted the patent, they now set out to create a business based on the idea. Elias made a prototype, albeit one that Medina would later admit “didn’t work particularly well.” He claimed to have visited “every big player” they could think of in the computer industry to see if they would like to license his patent and build a commercial version themselves. He also claimed that he had attempted to raise venture capital to create a company of his own. But no corporation or VC would put money into it. According to Medina, they were particularly annoyed when, during a meeting, an executive from IBM’s Lotus division rudely dismissed the idea of paying to use the concept. “He acted as if these kinds of patents were somehow laughable,” Lech says.

Eventually Medina cut out the guy who actually came up with the idea of scanning documents, and set himself up as a patent troll. He sued over 100 companies -- and realized that as long as the "license" he asked for was cheaper than fighting him in court, everyone would pay up, and everyone did... except one company, Flagstar Bancorp. Levy goes through details of the seven years spent fighting the case, including two separate district court judges who absolutely slammed the lawsuit (one said the case had "indicia of extortion") and told Medina he had to pay up for filing such a ridiculous lawsuit (in between all that, the appeals court, ridiculously, disagreed and sent it back). Eventually the appeals court agreed with the lower court, and the Supreme Court refused to hear the case, but it was a massive waste of time and energy. Amazingly, the guy who demanded payment from all those companies (and got it from most), for doing absolutely nothing to actually help with the development of e-commerce, claims he's a "victim."

Mitchell Medina, who has sued more than 100 companies for infringing his patents, sees himself as a victim. “When Jobs and Wozniak or Hewlett and Packard start in a garage, they’re heroes and captains of industry,” he says. “If you apply for a patent first, you’re a troll.” Via email from Africa, he continues to attack the Flagstar decision, claiming that Martinez ignored key evidence and ruled incorrectly. (Medina felt it best not to talk by phone, because, as he put it, “I tend to speak my mind, and it would be unwise for me to do so without the self-censorship of writing.”)

“We did nothing improper,” he writes. “The judges in this case comported themselves like spectators in a Roman coliseum who wanted to see plenty of blood on the floor in the form of litigant’s money before they considered the show worthy of their interest.”

Really, this is just touching the surface. Even if you're familiar with the Flagstar case (which we wrote about last year when the final CAFC ruling came down), reading Levy's detailed piece is worth it. The problem, of course, is that this kind of thing is happening over and over and over again -- nearly all of it taking money from productive purposes of building companies and products, and sending it to lawyers. It's a massive drain on the economy and it's about time we fixed it.

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Filed Under: e-commerce, mitchell medina, patent trolls, patents, scanning
Companies: eon-net, flagstar

41 Comments

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Anonymous Coward, 14 Nov 2012 @ 10:59am

How does building a prototype that didn't work well get turned into "never tried to build a working model."?

It's hard to trust an author's take on a matter (especially a controversial matter) when their explanation contradicts their direct quotes.
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That One Guy (profile), 14 Nov 2012 @ 11:06am

Re:
Simple enough.

If the trolling company can't actually build a working model based upon their patent, and yet are suing other companies who are using a device that actually works, then it's pretty obvious that their patent does not in fact cover what they are suing for, because if the other companies were in fact infringing on their patent, their devices wouldn't work either.
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Anonymous Coward, 14 Nov 2012 @ 11:07am

Re:
Its a matter of sequence.
1) come up with an idea
2) Patent it without building a prototype
3) Now try to build a prototype.
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ChurchHatesTucker (profile), 14 Nov 2012 @ 11:15am

Zero Sum
It's a massive drain on the economy...

Unless you're a lawyer, in which case it's a jobs program. Mike, why do you want to kill jobs in this country?
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MrWilson, 14 Nov 2012 @ 11:16am

Re:
A working model should be a sine qua non for a patent. If you can't build it and prove that it works, you shouldn't be able to sue others for making it work. If your patent didn't actually explain how to practically create a working model, the patent should be rejected outright.
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Chosen Reject (profile), 14 Nov 2012 @ 11:16am

Re:
You stopped reading too soon. Here's the quote again:
Although the three had never tried to build a working model before they were granted the patent...
No one claimed they "never tried to build a working model" period (as you incorrectly quoted it as). They claimed they didn't before they were granted the patent.
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Anonymous Coward, 14 Nov 2012 @ 11:33am

I'm a victim just like Mitchell.

I went around a busy park robbing people of all the money in their wallets with a knife. I made over $10,000 from robbing over 100 people.

Then someone I drew the knife on fought back. In our fighting the guy kicked my wallet full of stolen money down a storm drain, and then he left without giving me the money in his wallet!

I demand justice! I demand the courts award me the $10,000 I lost from the man who dared to fight back against me!
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Mesonoxian Eve (profile), 14 Nov 2012 @ 11:34am

"Outrage may one day swing the pendulum back from patent madness to something resembling what the Constitution�s framers had in mind."
Except... many of the framers of the Constitution did not want this added because they knew the provision would be used to prevent innovation, not promote it.

Despite the wording, the provision was still a derivative (infringement!) of British laws. The difference being the very word "promote", implying (but has always been ignored) patents were not to be used to hinder.

I'm sure the framers are shaking their heads right now, disgusted in both government, for failing to fix the problem, and for Americans who abuse each other over a dollar bill.
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out_of_the_blue, 14 Nov 2012 @ 11:37am

"it's about time we fixed it."
OKAY, college boy Mike, been on the problem for 10 years, it's your time to SHINE! How do we fix it?

But, wait: as ever you've signaled a pulled punch: "it's about time we fixed it". ... ABOUT time, eh? -- Ya got nothin' but more complainin'.
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Anonymous Coward, 14 Nov 2012 @ 11:39am

Why Bad Patents
The less someone knows about a subject area the easier it is for them to come up with and invention. This does not mean that it is actually a new idea. Failure to build a reasonable prototype suggests insufficient knowledge of a subject area, and therefore of prior art. This difficulty convinces the 'inventors' that they have made a worthwhile invention.
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Anonymous Coward, 14 Nov 2012 @ 11:40am

Re:
Yeah. Guys like Robin Hood are treated like heroes, but you go around robbing people and, suddenly, you're the bad guy.

Crazy world we live in.
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Anonymous Coward, 14 Nov 2012 @ 11:51am

Re: Re:
That may answer some other question, but not the question I asked.
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Anonymous Coward, 14 Nov 2012 @ 11:54am

Re: Re:
That is one possible answer. Perhaps in the context of the full article that sequence would have been clearer, but it wasn't clear to me from the excerpt.

On a related note, am I the only one who finds the use of "now" when discussing something that happened in the past annoying/jarring?

"They then set out to..." sounds a lot better to me.
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Anonymous Coward, 14 Nov 2012 @ 11:54am

Re: Re:
Understood, but that wasn't my question.
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Anonymous Coward, 14 Nov 2012 @ 11:55am

Re: Re:
Indeed. I believe I misunderstood what the author intended.
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Anonymous Coward, 14 Nov 2012 @ 12:01pm

Re: Re: Re:
"Although the three had never tried to build a working model before they were granted the patent, they now set out to create a business based on the idea. Elias made a prototype,"

From the article. Seems a clear sequence to me.
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Anonymous Coward, 14 Nov 2012 @ 12:35pm

Re: "it's about time we fixed it."
And you're a brilliant problem solver, out_of_the_ass. We dared you to leave the site; why haven't you done so?
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iambinarymind (profile), 14 Nov 2012 @ 12:37pm

Re: Zero Sum
It is only a "Zero Sum" game when force/coercion is employed (i.e. the State granting temporary monopolies called "patents" backed by force/coercion).

However, if individuals engage in voluntary exchange then said individuals are able to produce more than if they worked alone. In economics this is called "comparitive advantage" and it is how wealth (and more jobs) are created.

For further explanation of this, I highly recommend reading the short book "Not a Zero-Sum Game: The Paradox of Exchange" by Manuel F. Ayau which can be downloaded and read for free [HERE].
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iambinarymind (profile), 14 Nov 2012 @ 12:40pm

Re: Re:
"Until men learn that of all human symbols, Robin Hood is the most immoral and the most contemptible, there will be no justice on earth and no way for mankind to survive."
~ Ragnar Danneskjold - Atlas Shrugged ~
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John Fenderson (profile), 14 Nov 2012 @ 12:44pm

And it has come to pass
From the article:

if everyone could stake a claim to whatever idea floated into their head, nobody would be able to create anything without infringing on someone else�s intellectual property.

This is exactly was is allowed with software patents, and is exactly the result that we have seen as a consequence.
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John Fenderson (profile), 14 Nov 2012 @ 12:46pm

Re: Re: Re:
Ayn Rand is funny.
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Anonymous Coward, 14 Nov 2012 @ 12:55pm

It won't change. The liayers are making too much money.
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Anonymous Coward, 14 Nov 2012 @ 12:58pm

Re: Re: Re: Re:
All I can say is that it wasn't clear to me the first time. Obviously, with hindsight and the input of third parties, I think I understand what the author was getting at.
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Anonymous Coward, 14 Nov 2012 @ 1:00pm

Re: Why Bad Patents
This may be true. I came up with a great idea for an app the other day. Turns out, a lot of what I came up with has already been done. Maybe part of my idea is novel, but certainly not all of it.
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Anonymous Coward, 14 Nov 2012 @ 1:27pm

Re: Re: Re:
They never tried to build a working model.

If they had tried (and were determined) they would have succeeded. AC FAIL!
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Anonymous Coward, 14 Nov 2012 @ 1:28pm

Re: Re: Re: Re: Re:
Reading the article helps!
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Anonymous Coward, 14 Nov 2012 @ 1:32pm

Re: "it's about time we fixed it."
Mike is a journalist, why is it his job?
Surely its the job of the entrepreneurs?!?
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Anonymous Coward, 14 Nov 2012 @ 1:34pm

Re: And it has come to pass
A perfect example of why the US patent systems sucks and should be destroyed!
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Ruben, 14 Nov 2012 @ 1:35pm

Re: "it's about time we fixed it."
Abolish software patents. Greatly reduce the scope of what is patentable. Hire actual experts as patent examiners. Allow for an independent inventor defense.

I think that would be an excellent start.

Personally, I'd like to see patents abolished altogether, but I know that would never happen.

Of course, your M.O. is to move the goalposts or somesuch, or say my post is invalid because I'm not Mike. Anything to avoid addressing the actual content of my post. Have a nice life. May you live forever.
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Anonymous Coward, 14 Nov 2012 @ 1:51pm

Re:
Is that lawyers or liars, or are lawyers liars? :-)
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Anonymous Coward, 14 Nov 2012 @ 2:26pm

Well this congress won't fix it. Most of the politicians are lawyers and they smell money!
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Richard (profile), 14 Nov 2012 @ 2:28pm

Re: Re: "it's about time we fixed it."
Personally, I'd like to see patents abolished altogether, but I know that would never happen.

Actually I don't think it is impossible. You only have to look at the exponential increase in the cost of patent litigation to realise that:

1) It will inevitably stop at some point. (Or it will bring down civilisation.)

2) The only effective way to stop it is to abolish it completely. See how difficult it was to kill just one smallish patent troll when you had them already bang to rights.

The consequence is that sooner or later it will be abolished.
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Anonymous Coward, 14 Nov 2012 @ 2:31pm

Re: Re:
a little from column a, a little from column b
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phayes, 14 Nov 2012 @ 2:32pm

Quackery�
The tale of a chiroquack, an AIDS quack and their patent(s). Wonderful!
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crade (profile), 14 Nov 2012 @ 3:12pm

Re: Re: Re: Re:
That book gets fricken hilarious if you stick with it long enough.
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Mike Masnick (profile), 14 Nov 2012 @ 11:03pm

Re: "it's about time we fixed it."
OKAY, college boy Mike, been on the problem for 10 years, it's your time to SHINE! How do we fix it?

But, wait: as ever you've signaled a pulled punch: "it's about time we fixed it". ... ABOUT time, eh? -- Ya got nothin' but more complainin'.

Yes, that's right, we've never, ever suggested possible solutions... oh, wait:

http://www.techdirt.com/articles/20120712/18322919680/judge-posner-mission-to-fix-patents-w e-have-some-suggestions.shtml
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The Infamous Joe (profile), 15 Nov 2012 @ 9:54am

Re: Re: Re:
I tried to build a working time machine, but it didn't work very well. As far as I could tell, it jumped me forward in time 0.000000000000000000000000000000001ns. (Margin of error, +/- .01 seconds.)

Luckily, I've now got the patent I deserve for my hard work, so when someone else actually makes it work, their money all belong to me.
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Anonymous Coward, 15 Nov 2012 @ 12:52pm

Re: Re: Re: Re:
Thanks, Yoda, but the article explicitly states that they built a model. It just didn't work well. You think built one without trying?
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Gene Cavanaugh (profile), 15 Nov 2012 @ 6:21pm

Patent trolls
DEFINITELY a problem (and as an IP (aka "patent") attorney I can see it better than most. It would be worthwhile at least
considering getting rid of the USPTO (which would put me out of business, but be good for the US).
So, maybe we should whine less and do more??
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Anonymous Coward, 25 Feb 2013 @ 12:22pm

A common argument asserted by the deluded pro-patent people is: "If patents are so bad, why haven't any modern countries reversed course and abolished their IP laws?" Discuss - any takers to answer this assertion?

See the little snippet from Patentlyo below:

"Patent Bobo said...
http://www.techdirt.com/blog/innovation/articles/20130201/16463921862/bad-economics-confusi ng-correlation-causation-when-it-comes-to-patents-innovation.html

Reply Feb 25, 2013 at 06:38 AM
anon said in reply to Patent Bobo...
Patent Bobo,

Techdirt? Consider the source and please supply that short (very short) list of one modern advanced country that has seen the light and eliminated all IP laws.

Just one.

Please.

If there were even just one, then that cause-correlation claptrap you are so fond of might, just might, be more than dust-kicking.

Come back and c_rrp again real soon."
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Gene Cavanaugh (profile), 25 Feb 2013 @ 1:34pm

Easy one to answer.
"Techdirt? Consider the source and please supply that short (very short) list of one modern advanced country that has seen the light and eliminated all IP laws.

Just one.

Please.

If there were even just one, then that cause-correlation claptrap you are so fond of might, just might, be more than dust-kicking."

The answer is the same as for any vital area of our lives. Illustration: Automobiles at one time were a leading cause of death in this country. Did we eliminate autos? No, we worked to fix; well, reduce; the problem.
Faced with appalling IP laws and usage world wide; should we just opt out, thereby giving the bad guys the victory? Hardly! If all the world would come to their senses and fix or abandon IP (I favor fix, but I AM an IP attorney (a good one, I might add, and appalled by IP laws as they exist).

If you had been actually listening, that is the message I get from Techdirt. Don't ignore the problem by opting out, FIX it!
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