Internal memos from large companies leak all the time. It happens. Companies don't like it, but most learn to deal with it. Sometimes, they go a bit nuts. For example, you may remember the spying scandal at HP, in which the board tried to stop leaks by spying on phone records and other info, including trying to spy on various journalists. Apparently some companies just go a bit nutty when they think they have someone to track down, where execs suddenly think they can act like they're in some sort of spy movie. Apparently this is now happening at Cisco as well. A few weeks ago, Network World reported on Cal State's decision to use Alcatel-Lucent instead of Cisco, claiming that it saved the university $100 million. As is fairly typical at companies when such bad news is in the press, an internal memo was sent around on how to respond to questions about this story. And... as is fairly typical at such companies, the internal memo leaked to bloggers who posted it. The memo itself is fairly tame and about what you'd expect given the situation.
But... then, apparently, a VP at Cisco, Mike Quinn, got upset about the leak... and proceeded to send out an angry email telling the leaker to resign, and saying if he doesn't resign, that "finding you is now my hobby." And, of course, that new letter leaked to the same sources:
This is an open response to the person(s) that sent our internal confidential memo regarding the RFP response noted in the Subject line.
I want to advise you that no matter the color of your badge (blue or red), the years of service and or your CPC rating you have decided to violate the Code of Business Conduct. The company in response to a number of requests to share internally what our RFP contained once again is insulted by the lack of respect for the business and "family" internal to Cisco. The person or persons whom felt it was cool or correct to share this internal memo should now have the intestinal fortitude to stand up and admit that they did this, then resign.
I want you to remember that Cisco puts the groceries on your table every two weeks, not Brad Reese or other Slander Sheet Journalists. That you disrespected everyone else at Cisco. Now I know you do not have it in you to stand up and admit what you did, so I will now make you my "hobby." Ask around you will find out that I like to work on my hobbies.
Mike Quinn
Vice President - Services
Cisco Systems
And, if that doesn't sound quite threatening enough, people quickly pointed out that in the distant past, Quinn worked for the CIA.
The amazing thing about all of this is that all it's done is call much more attention to the whole thing. If they'd just let that initial leak go, it would have been mostly forgotten in a few days and people would have moved on. But now because someone went on a power trip, it's right back in the news again.
There are plenty of discussions about the problem of patent trolls, but if you think that's the only problem with the patent system, you haven't been paying attention. There have been a ton of major clashes going on between big companies, spending billions buying up patents, suing each other... and not putting that money into innovation or lower prices. So it's nice to see Cisco CEO John Chambers speak out against the patent system by calling out both the trolls and the big tech companies for abusing the system and hindering innovation. Yes, he sees the problem with trolls:
"It is a mess; There are patent trolls everywhere," said Chambers, noting that patent problems impose huge costs on every company.
But he didn't limit his comments to just trolls:
But Chambers was also critical of the trend by tech companies of suing one another over alleged patent violations. He didn't name names, but, speaking to the audience, he said for "his peers" in the room, "you shouldn't be suing your peers."
Patent litigation, he added, slows down innovation.
Given that he's criticizing basically everything, when asked what should be done, he's apparently come around to the conclusion that the system is completely broken:
"completely throw out everything, and start from the beginning."
In the same talk, he also passed on an easy chance to attack one of Cisco's biggest competitors, Huawei. You may remember that a Congressional investigation had warned that doing business with Huawei was dangerous, and hinted at possible industrial espionage by the company (which Huawei denies). In response, some had suggested that the report was really the US just trying to create protectionist policies favoring Cisco. Given that, it would be easy for Chambers to go with that easy story and knock Huawei while it's down. Instead, he suggested the whole story was overblown, telling a questioner "no" to a question about if the US should be suspicious of Chinese companies, and later noting that Cisco partners with a ton of Chinese companies, and "China should and will be an ally to the U.S. in my opinion, and you will see us interface with a number of Chinese companies."
Last year, we wrote about a crazy patent troll, named Innovatio, who had sued a ton of restaurants and hotels, claiming that anyone who used WiFi was violating its patents. It was even claiming that individuals who use WiFi at home infringed too -- but that it wouldn't go after them "at this time." Instead, it preferred to focus on shaking down tons of small businesses, offering to settle for $2,500 to $3,000 -- which is cheaper than hiring a lawyer to fight it, no matter how bogus. We noted at the time that Motorola and Cisco had gone to court to try to get a declaratory judgment to protect its customers.
Well, it seems that the effort to stop these lawsuits has been taken to the next level. Cisco, Motorola and Netgear have now filed an amended complaint which rips Innovatio apart, and doesn't just seek a declaratory judgment of non-infringement, but outlines a parade of lawbreaking by Innovatio, arguing that it's actually involved in racketeering and conspiracy among other things. The full filing, embedded below, is fascinating. The filing reveals some background about Innovatio, which apparently is connected to Noel Whitley, who had been VP of Intellectual Property at Broadcom... but then left to create Innovatio, which just so happens to have acquired most of its patents from... Broadcom. Among the parade of insanity charged against Innovatio:
Motorola, Cisco and Netgear all have licensed the patents in question, meaning that users of that equipment are covered by those patents under the concept of patent exhaustion (basically, if you buy a licensed product, it's licensed). Innovatio conveniently doesn't mention this to the people it sends threat letters to.
The patents in question are part of commitments to IEEE that they'll only be licensed on RAND terms, but the threat letters demand way more than would be considered "reasonable."
Incredibly, Innovatio includes some expired patents in the list of patents it has threatened people over. That's a massive no-no. Once a patent is expired you can't demand a license for it. At all.
Innovatio apparently tells the people it threatens that it'll be cheaper to just settle, rather than to even investigate the claims that it's making -- and has told people that the manufacturers in question aren't defending their customers, which is proven false by the lawsuit, which, again, was filed soon after Innovatio popped up on the scene.
In an attempt to appear more legit, Innovatio claims that the patents in question have "generated in excess of $1 billion in settlements and license fees" to scare small businesses into complying. It leaves out that it appears to be basing this number on the famous broad patent fight settlement between Qualcomm and Broadcom, which was a wide-ranging cross licensing program, that has nothing to do with Innovatio or its specific patents.
There's a lot more in there, but if the allegations by the vendors are accurate, Innovatio's actions are really questionable. Even if people agree that the patents in question are legit, the fact that the vendors have already licensed them makes these actions quite incredible. The lawsuit claims that Innovatio has sent threat letters to an astounding 8,000+ businesses, mostly way too small to be able to understand the details of what's happening.
Defendants prey upon end users that are not involved in the development or supply of the accused technologies, demanding exorbitant licensing amounts that breach numerous obligations on the patents and greatly exceed any notion of reasonableness. In furtherance of their plan, Defendants threaten protracted negotiations with onerous burdens on end users, and offer supposed “discounts” for promptly paying Innovatio without engaging in such negotiations, while making it clear that Innovatio will initiate costly litigation with anyone that does not acquiesce (something it cannot realistically do given the 8000-plus letters sent throughout the U.S.). Under these circumstances, Innovatio circumvents its obligations and illegally obtains and seeks to obtain licensing fees to which it is not entitled, at great detriment to the Plaintiffs in this action, their customers, and the public generally.
Oh yeah, as for that whole "expired patent" thing? That seems especially egregious:
To date, at least ten of the Innovatio Patents have expired, yet those patents continue to be highlighted in Defendants’ threat letters in furtherance of their licensing campaign. Yet Innovatio states to its licensing targets that “Innovatio proposes granting [the licensing target] an upfront, paid-up license for its use under all of 31 of the issued Innovatio Patents,” when those targets have no liability on and therefore no need of such a license to expired patents. For example, on May 9, 2012, almost one year after the ‘771 patent expired and almost six months after the ‘311 patent expired, Innovatio sent a demand letter to [redacted] .... Innovatio did not provide notice of these or its other patents to [redacted] before expiration. Notwithstanding the expiration of these patents and other patents, Innovatio’s May 9, 2012 demand letter stated “[t]he operation and use of any [WLANs that use the IEEE 802.11 communication protocols] by [redacted] constitutes infringement of at least the following Innovatio Patents: . . . U.S. Patent No. 5,940,771 . . . [and] U.S. Patent No. 6,374,311.” .... Yet circumstances here including a failure to comply with 35 U.S.C. §287, confirms that Innovatio cannot assert infringement or recover damages on at least these expired patent claims. On information and belief, Innovatio never disclosed that these patents had expired, or that its remedies were limited, and the purpose behind inclusion of these patents is to inflate the size of Innovatio’s portfolio, instill fear, increase fees and costs to investigate, and force its targets to capitulate promptly to Innovatio’s unlawful demands.
The filing also includes standard claims of non-infringement and invalidity of the patents in question, but the highlighting of these other behaviors by Innovatio are really quite stunning. Even in cases of extreme patent trolling it's pretty rare to see such egregious behavior. Every so often we see RICO claims being used to counter trollish behavior, but they rarely work. However, the details in this case suggest that if a RICO charge is going to stick, this seems like a reasonable case for it to happen.
One of the things that we keep learning in a connected, digital age, is that what you think you "bought" you often don't really own. Companies who sell you products seem to feel a certain freedom to unilaterally change the terms of your purchase, after the fact. I'm reminded of Sony removing key features on the PS3, though there are plenty of other examples. A new one is the story of Cisco, pushing out a firmware update to routers without customer approval and (even worse) having that firmware update block people from logging in directly to their own routers. Apparently, if you don't like it... er... too bad.
Cisco has started automatically pushing the company's new "Cloud Connect" firmware update to consumer routers -- without customer approval. Annoyed users note that the update won't let consumers directly log into their routers anymore -- they have to register for a new Cloud Connect account. The only way to revert to directly accessing the device you paid for? You have to unplug it from the Internet.
Oh, and registering for such an account means you have to agree to give up your data so that Cisco can sell it. As per the terms:
...we may keep track of certain information related to your use of the Service, including but not limited to the status and health of your network and networked products; which apps relating to the Service you are using; which features you are using within the Service infrastructure; network traffic (e.g., megabytes per hour); Internet history; how frequently you encounter errors on the Service system and other related information ("Other Information"). We use this Other Information to help us quickly and efficiently respond to inquiries and requests, and to enhance or administer our overall Service for our customers.
We may also use this Other Information for traffic analysis (for example, determining when the most customers are using the Service) and to determine which features within the Service are most or least effective or useful to you. In addition, we may periodically transmit system information to our servers in order to optimize your overall experience with the Service. We may share aggregated and anonymous user experience information with service providers, contractors or other third parties...
Seems like a good way to drive people into buying routers from other companies. I can see how a "cloud service" could have value, but it should be presented to users as a choice, where the actual benefit to them (if there is one) is clearly presented. Instead, this rollout seems designed solely to benefit Cisco and its partners, rather than the people who bought (or so they thought) their routers.
Over the past few years, as competition in the DVR market has become tougher, TiVo has become more and more reliant on using its patents to stop competition and innovation, rather than focusing on competing in the marketplace. its most famous case was the one against EchoStar, which even included TiVo buying a bull (literally) in Eastern Texas, where the district court case was heard. While it won at the district court level, during the appeals process, the Patent Office suddenly indicated that the patents might not be so solid. Not long after that, TiVo and EchoStar worked out a settlement.
TiVo found the process so enjoyable that it apparently started thinking about a second career as a patent troll -- and has already sued Verizon and Motorola. Not surprisingly, it's been pushing some others to license some patents... and at least one large player has had enough. Cisco, owners of Scientific Atlanta, a maker of settop boxes and DVRs, has filed a lawsuit seeking to invalidate four TiVo patents -- or, if the patents are found valid, a declaratory judgment that it does not infringe.
Of course, by filing first, Cisco was also able to file the case in San Jose, rather than letting TiVo try to get the case into Texas (despite the fact that both Cisco and Tivo are located not far from each other in Northern California). As far as I know, TiVo has not purchased a bull in San Jose.
We've written, in great detail, about the research that shows that the ability for employees to switch jobs freely almost certainly contributed massively to the huge success of Silicon Valley. Multiple studies, looking at multiple different factors, have shown that a simple legal issue -- the fact that non-compete agreements are unenforceable in California -- was the key driving factor in Silicon Valley's success. Sure, other things were important: good universities, investors, etc. But other areas had that too. What set Silicon Valley apart was the fact that employees switch jobs much more frequently.
As for why that has such a massive impact on innovation and economic growth, it has to do with the sharing of ideas. While traditional economic theory might suggest companies are better off hoarding information on new products, that's not true in many cases. Take, for example, an emerging market where multiple players are on the verge of key breakthroughs -- but the market won't really emerge until that breakthrough is complete. What studies have found is that the more minds thinking about a problem and cross-pollinating ideas, the faster it is that the necessary breakthrough can happen. Now, companies may not work directly together on solving the challenge, but when employees shift regularly between companies they act to pollinate the ideas from one organization to another, helping those organizations reach the breakthrough point sooner, creating those large new markets. This isn't a bad thing. Speeding up the process of innovation and creating large new markets is a non-zero sum game, so the fact that an employee leaves can actually help spur a huge market that the employee's former company can take advantage of too. At the same time, it allows companies, who might be upset about losing certain employees, to similarly hire people away from other competitors.
So, it always strikes me as a bit strange when companies get so worked up about an employee leaving to join a competitor -- especially in California. However, Cisco General Counsel Mark Chandler is directly calling out HP for a series of lawsuits against employees who left HP (a company clearly in turmoil) to go to Cisco. Chandler highlights the fact that noncompetes are unenforceable in CA, but notes that (even though both companies are headquartered not far from each other in California), HP has used the fact that it has locations elsewhere to file lawsuits against former employees three times. And the stories suggest that HP is really going overboard in these efforts:
In the first of the three cases, HP was so persistent in the litigation and so threatening, that the individual, who had retired from HP months before even talking to Cisco, withdrew. There seemed to be little concern with the stress that a big company turning its legal guns on an individual can cause. In another case, an employee who worked in HP’s financial services group was sued to block her from working in Cisco’s customer finance group, even though there was no argument whatsoever that relevant intellectual property at stake. She persisted and HP relented. In the most recent case, just last week, the employee, who’d given HP over two decades of loyal service, had moved to California before starting work at Cisco. He asked a California court to declare that he was protected by California law and that HP could therefore not enforce its non-compete. A court hearing was scheduled in California, we notified HP and HP retained counsel. Cisco also reached out to senior legal staff at HP to try lay out some voluntary steps to avoid further litigation and to give further reassurance that the employee wouldn’t even inadvertently leverage any HP confidential information.
HP’s reply was to file an action in Texas against the employee and schedule an “emergency” hearing to try to enjoin the employ from working with Cisco, seeking to have a judge issue the injunction with no notice and no opportunity for the employee to be represented. Fortunately, an eagle-eyed Texas lawyer working for the employee saw the filing appear on line and showed up in court. Given that the matter was already in front of a California court, with HP fully represented, in a hearing scheduled for two hours later, the judge in Texas was not impressed by HP’s effort to get her to act without a hearing. She refused to proceed. And the California judge issued an order allowing the employee to begin his new career at Cisco.
There's no way to look at this and not wonder what is going on at HP. The company is flailing. It's been firing CEOs left and right -- and paying them ridiculous sums for failing in the process. Why not just spend some of the money that's being wasted in these silly and damaging lawsuits to actually innovate? In his post, Chandler also notes that HP has been on the other end of similar fights, which makes this even more bizarre. He closes with a pledge that, no matter where they are, Cisco will not use litigation to stop employees from working elsewhere, and challenges HP to do the same:
Cisco’s promise to those looking to work in the networking industry is that no matter which of the fifty states you live in and work for Cisco, if you come to work for us we will apply California’s rule in favor of employee mobility nationwide. We know that employee retention is a matter of fair compensation and career opportunity, not litigation. And we challenge HP, with new leadership deeply steeped in Silicon Valley’s environment of mobility and opportunity, to step up and support employee freedom and stop suing employees just for leaving.
Whenever we talk about the very serious risks and likely abuses of new laws favored by the entertainment industry -- such as PROTECT IP and the felony streaming bill, S.978, supporters of those bills insist that we're crazy for suggesting that the laws will be abused or that there will be any unintended consequences. We're told, over and over and over again that these laws are designed for and targeted only at the "worst of the worst." They're targeted at "rogue" actors, who must be stopped.
And yet, we've seen all too often how US officials have abused other such laws to attack and protect certain US companies from competition. A whole bunch of you have been sending over this incredibly frightening example of the Justice Department conspiring with Cisco to effectively try to destroy a former exec's life for daring to file an antitrust claim against Cisco, due to Cisco's desire to block competitors from servicing some of its products. Unfortunately, I actually found the version of the story at the Ars Technica link above a bit confusing (and it buries many of the key points). A much better way to understand just what Cisco and some federal prosecutors appear to have done is to read the ruling, embedded below, from a Canadian judge, who explains the whole thing clearly and bashes Cisco and the US Justice Department for its incredible overreach, for no reason other than to try to destroy the life of Peter Adekeye.
Adekeye, born in Nigeria, but a UK citizen, had apparently been a quite successful Cisco exec in both the UK and the US for many years. In 2005, he left Cisco and started a couple of companies himself, including one, Multiven, that offered to help provide maintenance services for various Cisco equipment. Apparently, Cisco tried to force customers into purchasing maintenance contracts only from them by denying third parties, such as Multiven, access to various bug reports and fixes. Because of this, Multiven sued Cisco, claiming antitrust violations. Cisco then countersued, including suing Adekeye directly, claiming that Adekeye had accessed Cisco's internal network illegally over 90 times. Adekeye does not appear to deny accessing Cisco's internal systems, but notes that he was given the login information from a Cisco employee, which he believed meant he was now authorized to use the system. It sounds like he used this access to get some of the info that Cisco had been denying Multiven. As part of its "hardball" litigation strategy, Cisco also sought to get the federal government to file criminal charges against Adekeye based on the exact same issue.
Separate from all of this, Adekeye had been dealing with attempts to get a work visa to be in the US for Multiven. The court ruling documents the incredibly ridiculous bureaucratic nightmare that Adekeye went through over the period of a few years in an attempt to seek proper visas to work in the US. At no time does it appear that Adekeye violated the various visas he did have. In fact, it sounds as though Adekeye bent over backwards (and then some) to always comply with US immigration and visa rules, even when it resulted in absolutely ridiculous circumstances, such as when he wasn't allowed back into the US, even though he'd been granted his H-1B visa. That story is crazy, but tangential to the point here -- though I suggest reading the ruling to get a sense of the ridiculousness of US immigration and visa policy.
In part because he was unable to get back into the US, Adekeye moved to Switzerland where a new Multiven office was opened, and continued his efforts to get his immigration status cleared up. As part of the ongoing legal dispute, Cisco wanted to depose Adekeye. Adekeye applied for permission to enter the US to do that... but was denied, and he was told if he went anyway, it could harm his chances of getting his visa status fixed. And Cisco used this to their advantage:
Notwithstanding this entirely reasonable explanation for his inability to attend a U.S. deposition, Cisco had the unmitigated gall to commence contempt proceedings for the applicant's "failure" to attend a U.S. deposition. It was, of course, unsuccessful, but it speaks volumes for Cisco's duplicity.
Eventually, all of the parties agreed to handle the deposition in Vancouver. It was outside the US, but close to Cisco's offices here in Silicon Valley. There was a separate (again tangential) issue involving the belief (which may not have been accurate, apparently) that a US deposition could happen in Canada without having to alert Canadian officials. It was at this deposition hearing in Vancouver on May 19th of last year that things got crazy. Cisco, knowing full well where Adekeye was and why he was in Vancouver -- and that he had tried and failed to get to the US -- apparently told the US Attorneys, who they'd been pushing to file criminal charges, about Adekeye's presence in Vancouver. The Justice Department then filed its criminal charges -- once again totally abusing the Computer Fraud & Abuse Act (CFAA) to make Adekeye's actions sound much worse than they actually were, and had a warrant issued for Adekeye's arrest.
They then sought rather extraordinary efforts from the Canadian government to arrest Adekeye immediately. Part of that, according to the Canadian judge who issued this ruling, appeared to involve a US Attorney leaving out key information, making blatantly false insinuations about other facts, and in some cases, what appears to just be lying:
The affidavit made no mention of the fact that United States immigration authorities had refused the applicant entry to the United States. No mention was made that the applicant had no criminal record. No mention was made that the United States Federal Court had ordered a deposition in Vancouver, presided over by a "special master" at which six or more United States lawyers would be present. No mention was made that the criminal complaint "mirrored" a counterclaim brought by Cisco in the main action in which the applicant was seeking large damages in an antitrust suit.
Sinister inferences were suggested, leading to an inference that the applicant would be a flight risk. The affidavit stated that the applicant "is a Nigerian citizen who claims to have citizenship from the United Kingdom", and that he possibly had British citizenship, and that he was in Canada on a Nigerian passport. The latter reference invited an inference he might flee to Nigeria, a country from which extradition was highly unlikely. In fact, U.S. authorities well knew and had a duty to disclose to the issuing judge that the applicant was a citizen of the United Kingdom and possessed a British passport, on which passport he had entered Canada. They also knew and had a duty to disclose that he had been a resident of England, but was currently residing with his wife and child in Switzerland, and that he had travelled from Switzerland to Canada for purposes of the deposition.
What happened then was somewhat astounding. In the middle of the deposition, RCMP officials walked into the room, interrupted the deposition in progress and arrested Adekeye in the middle of the proceedings. The beginning of this is on videotape. Adekeye, his lawyers, and the "special master" clearly have no idea what's going on, but what's notable is that, while people repeatedly ask for the recording to be turned off, Cisco's lawyers immediately say that the recording should be left on. It appears they knew exactly what was going on and wanted the humiliating arrest on the deposition tape. You can see the video below. As the judge in this ruling notes, the police's actions "could be compared to entering a courtroom and arresting a person during the course of his or her testimony. It is simply not done in a civilized jurisdiction that is bound by the rule of law."
Believe it or not, the situation then gets even worse and even more egregious. Adekeye was, in fact, arrested -- and the charges could have resulted in almost 500 years in jail, all for accessing a Cisco network with a password given to him by a Cisco employee. As you can see, he was removed from the deposition, much to the confusion of the special master appointed by the US court. After being arrested, he asked for bail, and Richard Cheng, an Assistant US Attorney for the Justice Department, sent a letter that was chock full of false and misleading information, which the judge in this case goes through step by step. It falsely implies that Adekeye did not really have British citizenship and that he did not really live in Switzerland. It stated that he used his Nigerian passport to enter the US under an E visa, which was not true. It claimed that the US had denied all of Adekeye's attempts to obtain a visa to visit the US since 2007, which as the ruling now notes "is simply not true." It also falsely stated that Adekeye had fled from law enforcement in the past. Again, the ruling noted "this statement was completely untrue."
And yet, federal officials continued to seek extradition. Even then, months after the arrest, the civil suit between Cisco and Multiven were settled, in a manner that everyone agrees was a "win" for Multiven, with Cisco changing its policy. So the key matter over which this highly questionable criminal charge was brought was settled. And yet, the feds continued to push forward. It was only in May of this year, a year after his arrest, that this new ruling came out and freed Adekeye to leave Canada and go back home.
Honestly, the whole story is really terrifying and makes me depressed to think that my government would do something like this. However, it should seriously call into question whether or not new laws like S.978 and the PROTECT IP Act should be allowed. It seems clear that the Justice Department has no problem using very questionable means to act as the private bullies of certain large companies. It should also call into question some of the recent efforts by other US Attorneys from the Justice Department, such as the efforts in coordination with Homeland Security/ICE to seize domains on questionable evidence, the attempt to extradite Richard O'Dwyer from the UK over very questionable charges and, of course, the recent charges against Aaron Swartz.
All of these cases have key factors in common. They involve what at best should be minor civil issues between private parties in court -- but in which, due to the presence of certain large industry interests, the Justice Department steps in and starts throwing its considerable weight around, including insane possible punishment, all because of dubious and often extremely misleading claims from these private interests. It's possible that the Justice Department officials here are simply incompetent (and honestly, that's an only slightly more comforting idea than the alternative) and unable to realize they're being manipulated by companies seeking to stamp out competition. But it's certainly demonstrating a really horrifying pattern of questionable behavior by the Justice Department and US Attorneys not to focus on real criminal behavior, but to abuse the criminal justice system to take vindictive action against potential competitors for big US industry players.
The lawsuit, which seeks class-action status, alleges that Golden Shield--described in Cisco marketing materials as Policenet--resulted in the arrest of as many as 5,000 Falun Gong members. Cisco "competed aggressively" for the contracts to design the Golden Shield system "with full knowledge that it was to be used for the suppression of the Falun Gong religion," according to the lawsuit.
While I find the Chinese government's actions in suppressing dissident reprehensible, I'm not at all sure how there's a legitimate case against Cisco here. It may have made a bad decision to do business with the Chinese government, but is that illegal? While News.com doesn't supply a copy of the lawsuit (and why not?), I can't see what legitimate charges there can be here. This seems like yet another case of misapplied liability. Obviously, these people feel they can't go after the Chinese government, but using Cisco as a legal proxy doesn't make much sense. I could see protesting Cisco's actions, but suing the company seems like a stretch.
A few weeks back, we noted how some were freaking out over the fact that patent applications were down, without bothering to look behind the numbers at why. Instead, they jumped to the conclusion that innovation in the US was dropping. johnjac points us to an article where folks at Cisco suggests that it might just be tech companies realizing that patenting everything is a waste of time and money. In fact, the story states that Cisco recently changed its patent strategy from trying to patent everything to trying to focus on things that it believes is really innovative, rather than everything it can possibly get a patent on.
I can already hear the usual crowd of patent holders in our comments. They hate Cisco and pretty much any big company. They'll interpret this statement as meaning that Cisco has become less inventive and is more focused on "stealing" inventions. Of course, what's amusing is that they'll never present any evidence for those accusations (though, I'm sure they'll accuse me of being on the take for Cisco even though we've never done any business with Cisco in any way whatsoever).
That said, I do find some of the comments from Cisco odd and somewhat unsupportable:
"The arms race approach doesn't pay off," he says. "It doesn't do you a lot of good to have a lot of patents."
Why? The patent landscape has changed dramatically. Patents often land companies in court as they fight over who invented the idea first. Lawsuits still might involve competitors, but increasingly Cisco finds it is battling what Chandler calls "non-practicing entities." These are companies that exist only to acquire patents and then seek to extract money from big companies for infringing on them. The more patents you hold, the more likely one of these companies will sue you.
The first part is true. Lots of companies find themselves being sued by non-practicing entities, but it's not because of the number of patents they hold. The NPEs (patent trolls, patent hoarders, whatever you want to call them) aren't suing those who have the most patents. They're suing whoever has (1) products on the market and (2) a large bank account. Cisco could have no patents at all, and it would still be getting sued just as much by NPEs. So, frankly, I don't buy the claim that the more patents you have, the more likely you are to get sued. Instead, my guess, is that Cisco has realized that getting patents (especially in such large numbers) is an expensive process, for little benefit. It may help in some lawsuits against competitors (when Cisco can threaten to counter sue over other patents), but you only need so many patents for that. So, it looks like Cisco is building up a stable of defensive patents, and has realized that you don't need the largest number. That's a good thing, but the claim that more patents makes you more of a target just doesn't make sense.
We'd already noted that it seemed like an uphill battle for the lawyers in Eastern Texas to prove defamation claims against the "Patent Troll Tracker" Rick Frenkel, and last night the judge chose the high bar of an "actual malice" standard to determine if Frenkel was guilty of defamation. With such a high standard, it seemed exceedingly unlikely that the plaintiffs could win a case, so perhaps it's no surprise that the two sides agreed to settle the case before it went to the jury. While no one knows the details of the settlement, Frenkel and Cisco issued an "apology," and I'd guess not much more, if anything.
But, really, all that's besides the point. The real question is whether or not this means Frenkel will start blogging again. Some of his statements in the past (and having to go through this entire ridiculous process) suggest that he may not blog again. However, I'm hopeful that he'll get back to it, though obviously not anonymously any more. His work in highlighting some of the more nefarious actions of patent system abusers is still sorely missed.
