532,900,000 Reasons Why We Need Patent Reform Now

from the what-a-joke dept

Thu, Feb 26th 2015 12:33pm — Mike Masnick

Over the last year, there's been plenty of good news in the fight against the abuse of patents to stifle innovation. A bunch of court rulings have gone the right way, with the biggest being the Supreme Court's ruling in the Alice v. CLS Bank case, that has resulted in many courts invalidating patents, the US Patent Office suddenly rejecting more patents and a rapid decline in patent lawsuits.

Based on that, you might think that we no longer need patent reform. But you'd be wrong. Patent trolls are regrouping and fighting back. Despite the big drop in patent lawsuits following the Alice ruling, patent trolls have come up with some new ideas, and have recently ramped up the filing of new trolling lawsuits at a rapid pace. And there have even been a few victories. While the dollar amounts were relatively low (especially compared to what was asked for), a troll who claimed to have a patent over Bluetooth 2.0 (despite "inventing" it years after Bluetooth 2.0 was on the market) was awarded $15.7 million, and the world's biggest patent troll, Intellectual Ventures actually won a case against Symantec (but got "only" $17 million).

But, earlier this week, there was the big one. A pure patent troll, Smartflash, with a collection of vague and broad patents (US 7,334,720, US 8,118,221 and 8,336,772 -- all for "data storage and access systems") has been awarded $532,900,000 from Apple, despite everyone happily admitting that Apple came up with the idea on its own. Here's the East Texas (of course) court jury form:

And, yes, Apple could probably pay that off with the spare change falling off the edge of Tim Cook's desk, but that's not really the point. Rulings like this don't seem to create any value towards actual innovation. Smartflash once had a product, but it failed in the marketplace over a decade ago. Apple built a product that people actually wanted. Shouldn't we be rewarding the people who actually make the things people want, rather than subsidizing failure by the successful?

Smartflash's lawyer told Ars Technica's Joe Mullin that this ruling is actually a "great example of why the patent system exists." Actually, it's a great example of how screwed up the patent system is. The lawyer also spewed this load of bullshit:

The thing about a patent is—let's say you have a university professor who spent two years researching something. It's irrelevant the effort that [an infringing company] spent to build it. It's the person who came up with it first. That's the way the Constitution, and the patent laws, are written. It's designed to cause people to spend money and time innovating. The patent office publishes it, so that advances the state of the art. In exchange for that, you get a property right.

That's also not how the Constitution is written, though it is (unfortunately) how patent laws are written. But that's not a way to get people to spend "money and time innovating" because the actual innovators here -- Apple -- had to pay out to the guy who failed in innovating. Being "first" isn't innovating. Building the product someone wants is.

Either way, Apple will appeal this ruling (and those other rulings are likely to be appealed as well). And in the last few months, CAFC has actually been shown to have gotten the message about problems with its previous interpretation of patent law. But, in the meantime, we still need serious patent reform.

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Filed Under: patent reform, patent trolls, patents
Companies: alice, apple, cls bank, intellectual ventures, samsung, smartflash, symantec

25 Comments

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Violynne (profile), 26 Feb 2015 @ 12:19pm

Hear that?

It's the world's smallest violin playing for Apple, a company notorious for trolling themselves (including the ITC).

This isn't a call for patent reform when the "victim" is often an abuser.

Worse, these same "victims" also go after smaller businesses in other arenas, such as Disney going after a day care center for a painting on a wall or, more often than not, trademark "violations".

As far as I'm concerned, this summary judgment wasn't high enough.
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That One Guy (profile), 26 Feb 2015 @ 12:41pm

Re:
Apple may deserve a bit of a black-eye for their past actions, but the problem is that if this ruling stands, you can bet that the troll will take it and go after others as well, with their now very full wallet backing their efforts.

"We got half a billion dollars out of Apple, what makes you think you'll fare any better in court? No, you'd better pay up unless you want to be sued into the ground."
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avideogameplayer, 26 Feb 2015 @ 12:59pm

Let the bodies hit the floor...when the pile is HIGH enough, then we'll see these companies want reform...

Right now,.it's pocket change, tomorrow, it'd be whole divisions shutting down...

Let the bodies hit the floor...
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Thrudd, 26 Feb 2015 @ 1:02pm

whatever
Can we just call them what they are? Economic Terrorists aka Pirates - by the use of threats and intimidation they part you from your money, goods and freedom. The only thing that they have not done, as far as we know, is take someone's life but I could be wrong.
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Chris Brand, 26 Feb 2015 @ 1:38pm

Hmmm
Of course if Apple came up with the idea independently, then it's clear that the patent didn't actually do anything to "advance the state of the art.", which apparently was quite capable of advancing to this state without their "help".
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OldMugwump (profile), 26 Feb 2015 @ 1:57pm

Re: Re: the troll will take it and go after others as well
This.

The problem is that the trolls use the money from their first victim to fund pursuit of others.

I've seen it happen over and over.
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OldMugwump (profile), 26 Feb 2015 @ 1:59pm

Re: Hmmm
The ironic thing is that any decent patent attorney will tell you NOT to look up previous patents in the area you're working in.

Because if you find something and then are found to infringe it, that's willful infringement and you get hit harder.

So any "advancement of the state of the art" in published patents is effectively kept away from people actually trying to build things.
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Anonymous Coward, 26 Feb 2015 @ 3:27pm

Re: Re: Hmmm

The ironic thing is that any decent patent attorney will tell you NOT to look up previous patents in the area you're working in.

Because if you find something and then are found to infringe it, that's willful infringement and you get hit harder.

So any "advancement of the state of the art" in published patents is effectively kept away from people actually trying to build things.

And this, if anything, shows how badly broken the patent system really is.
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Anonymous Coward, 26 Feb 2015 @ 4:13pm

In a Reuters article it is stated that during this lawsuit it was shown that one of the inventors met with a SIM card manufacturer back about 2000, and that one of the persons with whom he met later became an Apple exec. This seems to contradict what you say about everyone agreeing that Apple created its product offering(s) all by its lonesome. A cite to the source of the statement here might help explain the discrepancy.
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PaulT (profile), 27 Feb 2015 @ 1:46am

Re:
So, it's OK for patent law to be abused and not to call for its reform because you don't agree with the business practices of the current target? That's pretty dumb, and very short sighted.
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andyroo, 27 Feb 2015 @ 4:37am

I respectfully disagree
the majority of cases of patent trolling are seriously not reasonable but in this case I see how someone actually spent time working on something and then apple came along and used it. yes they can say they devised the system without any input form the innovator but in reality we all know apple has taken others ideas many times and used them and said that the patents are void because they did not see the initial innovation.

At some time a person like myself could come up with an idea that is absolutely ground breaking. If at any time a big business uses my idea then the time I spent on creating the innovative idea deserves compensation.

I don't know how relevant the fine is but it is correct to have apple pay someone for committing up with ideas that apple uses to help them make billions.
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That One Guy (profile), 27 Feb 2015 @ 5:16am

Re: I respectfully disagree
At some time a person like myself could come up with an idea that is absolutely ground breaking. If at any time a big business uses my idea then the time I spent on creating the innovative idea deserves compensation.

If it can be shown with a certainty that the company did in fact use your idea for their product, then yeah, you should deserve a cut of the profits. However, if they came up with the idea on their own, with no input from you, then no, you do not deserve compensation, because you had nothing to do with it.

People, and companies, should not be punished for having an idea just because someone else had if before them. Independent invention really needs to be more widely applied, the idea that more than one person can have a given idea, and it's wrong to give ownership of it to whoever happens to have it first, as to do otherwise puts a huge freakin' tollbooth on innovation, not to mention is based upon an idea that is flat out wrong.
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Pragmatic, 27 Feb 2015 @ 6:31am

Re: Re: Re: the troll will take it and go after others as well
They're like sharks. Once they smell blood...
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Anonymous Coward, 27 Feb 2015 @ 8:05am

Re: Re: I respectfully disagree
If you read the thread you would have noticed that at trial evidence was apparently introduced showing that one of the inventors met with persons at a company in which the invention was described in detail, and that one of those in attendance later entered the employ of Apple. Thus, it is not at all clear that what Apple eventually produced was free and clear of any substantive input from the plaintiff or its predecessor in interest. I should note that the occurence of such a meeting and its presentation at trial has been reported by several news agencies besides Reuters.
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Anonymous Coward, 27 Feb 2015 @ 9:19am

Re:
The problem with patents is that every idea is built from someone else's knowledge.

I am an electronic engineer and I design new 'inventions' all the time. Most of what I create is based on previous technology even though I guess you could call them new inventions.

Looking at thee specific patents in this case each one looks like a common sense approach to an issue that any half decent engineer could come up with. Put simply, these should never have been patentable.
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dave duncan (profile), 27 Feb 2015 @ 9:23am

They appear to actually hold the patent. They do not appear as a troll, so what is the problem?

I see that the majority of comments agree apple violated and has been charged and fined.

Are you just another troll, for the big business side?

I do not generally agree with "trolls" but this one I have to give the company.
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Zonker, 27 Feb 2015 @ 11:34am

Re: Re: Hmmm
So, how do we promote invention guys?

How about we have people write their inventions down on a piece of paper so that others can learn from their inventions?

OK, but then won't others steal the work they did?

Oh yeah, right. OK, so we make it so that anyone who reads that paper and uses what they learned guilty of willful infringement and pay the inventor a lot of money in penalties?

Brilliant idea! We'll make inventors share their inventions with the world and punish anyone who tries to actually use them. We could even allow people to patent obvious ideas, things found in nature, mathematics, and things other people have already done before but using new tools. One day we will be the most innovative country in the world!
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Goober (profile), 27 Feb 2015 @ 11:42am

Bad article
Clearly you aren't a patent attorney. Maybe you should stick to writing about things with which you are familiar. You said, "[Smartflash] "has been awarded $532,900,000 from Apple, despite everyone happily admitting that Apple came up with the idea on its own.

Sounds to me like the patent system worked. This isn't copyright law where independently coming up with a work is good enough. It's about patents. It's about first to file on an invention.

You've implied one of the stupidest things I've read coming out of your writings--that you think a patent should be invalid based on a newcomer's financial (or otherwise) success of a product that is based on a third parties prior IP.

I have no problems necessarily with what you suggest. I work for a large corporation and there are a ton of patents out there that are held by small inventors that can't really commercialize their inventions because they don't have the money or the connections. To scoop those up for free, make the product successful and then say the patent was invalid would be a huge boon for the company.

So yes, please continue advocating for big business. It helps line my pockets.
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Goober (profile), 27 Feb 2015 @ 11:44am

Re: Bad article
Sorry about the incorrect quotes and other miscellaneous typos. Stinks that a person can't edit his message.
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staff, 27 Feb 2015 @ 1:47pm

more dissembling by thieves
'good news in the fight against the abuse of patents to stifle innovation'

Patents don't 'stifle innovation' -only theft of.

The word on the street is Masnick and his monkeys are paid puppets for some of the world's biggest invention thieves. All hey know about patent is...they don't have any.

Don’t fall for propaganda from China and large invention thieves. Just because they call it patent "reform" doesn't mean it is.

Those who trumpet what they call patent ‘reform’ are long on accusations, but short on details for a simple reason. The evils they decry largely do not exist which their proposed changes have little to do with anyway. Rather, all these changes are a shell game intended to legalize theft -allowing large invention thieves to rob and destroy their small competitors. Has Congress been severely duped, doped, or bought?

It’s about property rights and jobs. When government fails to uniformly and justly enforce property rights they contribute to the wealth and power of the well placed few, suppress the ability and rights of the rest to make better lives for themselves and their families, and support giant monopolies that enslave and impoverish the public and commandeer the government. We all remember ‘too big to fail' which led to the last economic disaster.

Property rights and jobs in America are now hanging from a frayed thread. These changes are killing our small and startup firms and the jobs they would have created. Some in Congress and the White House continue to follow the lead of their giant multinational campaign donors like lambs...pulling America along to the slaughter.

http://www.forbes.com/sites/richardepstein/2015/02/13/patent-law-gone-awry-how-bob-goodlat tes-bill-combines-useless-rigidity-with-dangerous-discretion/
http://townhall.com/columnists/eriktelf ord/2014/10/22/google-leverages-patent-reform-for-crony-ends-n1908760
http://www.npr.org/2013/11/06/2 43022966/secret-persuasion-how-big-campaign-donors-stay-anonymous

All this patent troll and ‘reform’ talk is mere dissembling by China, huge multinational thieves and their paid puppets. If you tell a lie often enough and can dupe others to repeat that lie, eventually it is accepted as fact. As Mark Twain said, 'truth is not hard to kill, and (that) a lie well told is immortal'. Those who use the amorphous phrase 'patent troll' expose themselves as thieves, duped, or doped and perpetuate the lie. They have already damaged the American patent system so that property rights are teetering on lawlessness. Simply put, their intent is to legalize theft -to twist and weaken the patent system so it can only be used by them and no one else. Then they can steal at will and destroy their small competitors AND WITH THEM THE JOBS THEY WOULD HAVE CREATED. For the last several years now they have been ransacking and looting small entities taking everything they can carry. Meanwhile, the huge multinationals ship more and more American jobs to China and elsewhere overseas.

Do you know how to make a Stradivarius violin? Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of or weaken patent rights? Think again.

Most important for America is what the patent system does for America’s economy. Our founders: Jefferson, Franklin, Madison and others felt so strongly about the rights of inventors that they acknowledged inventors rights to their creations and discoveries in the Constitution. They understood the trade off. Inventors are given a limited monopoly and in turn society gets the benefits of their inventions (telephone, computer, airplane, automobile, lighting, etc) into perpetuity AND THE JOBS the commercialization of those inventions bring. For 200 years the patent system has not only fueled the American economy, but the world’s. If we weaken the patent system, we force inventors underground like Stradivarius and in turn weaken our economy and job creation. For a robust and stable economy America depends on a strong patent system accessible to all -large and small, not the watered down weak system the large multinationals and China are foisting on America.

For the truth, please see http://www.truereform.piausa.org/
http://piausa.wordpress.com/
http://www.iam-magazine.com/blog/Detail.aspx?g=30b6cec4-c53e-4939-8731-8b6e8404db9a
http://dailycalle r.com/2014/12/04/the-conservative-case-against-patent-reform/#disqus_thread
http://humanevents.com/20 14/10/22/depriving-property-rights-is-patently-offensive/
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Anonymous Coward, 27 Feb 2015 @ 2:02pm

Re: more dissembling by thieves
China ignores patents for the most part already so that pretty much takes all the wind from the sails of your argument.

Patents are not inherent rights nor are any of the so called intellectual property concepts. The truth is the majority of the world would not cease to exist or even be affected by the absence of these ill convinced concepts.
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Anonymous Coward, 27 Feb 2015 @ 8:50pm

Re: Re: more dissembling by thieves
Yup! China, Myanmar, Vietnam, Cambodia, Eritrea, Turkmenistan, San Marino... Any other countries that ignore patent and copyright laws?
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Reality bites, 11 Mar 2015 @ 3:49am

Any wonder judges are thought to be childish clowns?
Any troll tool judge should be disbarred then given the bill for re-trying every case the bad haired idiot banged his baby rattle on.
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Thomas Mather (profile), 23 May 2015 @ 8:00am

Re: whatever
My company is being sued by a patent troll. We donate over 50% of our after tax profits to global health charities that save lives. A back of the envelope calculation suggests that charities we support save approximately one life per $50k donated. Because of the lawsuit we are unable to donate as much to charity, and possibly not able to save as many lives.
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Martin Thomas (profile), 6 Jun 2015 @ 6:25pm

Patrick Racz blogs for the Huffington Post:
Patrick Racz from Smartflash just wrote a blog for the Huffington Post:

http://www.huffingtonpost.co.uk/patrick-racz/this-inventor-is-no-patent-troll_b_7494076.html

He says that Apple did not develop the idea independently, but stole it from him.

I do not know much about the case, but I find it strange that an inventor should write an article like this without explaining what it was he invented.
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