If You Have To License The Software You Claim Infringes On Your Patent, How Is Your Patent Valid?

from the keep-'em-coming dept

It's certainly beginning to feel like we're hitting something of an inflection point in getting people to realize just how incredibly broken the patent system is. There has been a flurry of mostly excellent news stories from a variety of sources picking up on this and detailing specific cases of a broken patent system. The This American Life episode certainly helped kick off a lot of attention, but it's definitely been growing in other areas as well. The latest entrant into the field is an excellent article from Ben Popper over at The Observer's BetaBeat site, which focuses on one specific smaller patent troll, a company called IQ Biometrix, and what it's done over the years... which is basically nothing productive. However, it does have two hugely questionable patents: 7,289,647 for a "system and method for creating and displaying a composite facial image" and 6,731,302 for a "method and apparatus for creating facial images."

The company was created over a decade ago and made a single piece of software, which hasn't been updated since 1999. They still send it out on CD-ROMs, and talk about how maybe its patent trolling victories will allow it to offer a downloadable version. The CEO readily admits this:

"Our technology hasn’t really changed since the shrinkwrap copies we handed out in 1999. So the hope is to collect enough funds to launch a new version that will be available for download over the web, instead of as a mail order CD-ROM."

Of course, that new version actually involves technology from one of the companies it sued. While it didn't make the article, we've been told that part of the settlement that Oddcast made with IQ Biometrix over IQ Biometrix's patent lawsuit was to also license Oddcast's technology to IQ Biometrix so it could use it in its own product. Is there any greater indictment of the patent system than that? IQ Biometrix is claiming that it "invented" this technology, but it's been unable to actually build it. So, instead, it sues a successful company that did build it (not because of the patent, but independently) and then, as a part of the settlement, asks to be able to use the software of the company it sued!

Now I'm sure some defenders of the system will claim that this is somehow fair because IQ Biometrix invented it first and just couldn't raise the money to build it. But there are serious questions as to whether or not IQ Biometrix had any idea how to actually build anything it talked about. The article goes through the history of the company's two main patents, and you realize what a joke this is:

It doesn’t take a deep dive to understand the shaky ground for this patent. “That is an absolutely ridiculous claim. If this patent was filed today, it would almost certainly be rejected,” said Elliot Furman, a Manhattan-based patent prosecutor who has worked for firms like Gawker and BuzzFeed. Betabeat sent Mr. Furman a copy of the patent in question for evaluation. “It’s like they tried to patent a time machine, and they told you how big it was, and the color of the seats, but neglected to mention how it travels through time.”

The issue is a systemic one, says Mr. Furman, a former software engineer with a master’s degree from Stanford. “Many technical patents, and especially software patents, are just bad. The lawyers who wrote them don’t understand the history of computer science or the fundamentals of programming. They obscure that in legalese and it gets through the examination so the business thinks they have something great, like a patent on the entire avatar industry, when in fact what they have is a mess that probably wouldn’t hold up in court.”

At every instance the patent office bent over backward to allow IQ Biometrix to pursue its patent, despite numerous rejections on the grounds that the concept was obvious, that there was “prior art” and that the documents were technologically illiterate. After the first rejection in 2006, the IQ Biometrix legal team went back to the drawing board with new claims that referenced codes, values, screens, keyboards and processors, attempting to dignify the childishly simple act of reconstructing a face with an arsenal of technical gibberish. These claims were rejected outright a second time for being vague and indefinite.

Each time the patent was rejected, IQ’s lawyers went right back to work rephrasing the claims. “It’s a back and forth with the examiner,” explains Mr. Furman, “a feeling-out process to see what they can get approved.”

The whole story is a frustrating read of the patent system clearly being used to shakedown companies that actually innovated by a company that failed to do so. There are tons of quotes from tech industry people and investors about how patents just get in the way of innovation and are a major problem. Multiple people note that the system appears to work in the exact opposite way from its intended purpose.

As for IC Biometrix, the company sounds like a joke. It had a weak product that never did very well. The company apparently has revenue of less than $60,000 per year from its software, and despite filing the patents in the late 90s and getting nowhere with them, the process of constantly rewriting gibberish in the mid-2000s allowed it to claim broad, ridiculously worded patents. The company insists that it's not a patent troll, and says that it has to do this since venture capital is difficult to raise these days. Of course, Popper immediately points out that there's a massive amount of VC flooding into the market these days, more than any time in the last four years.

The company's execs also seem a bit delusional. Popper kindly passed along a hilarious part of his interview with the company's execs which didn't make it into the article:

"We are the farthest thing in the world from a patent troll. In fact, we have one of the top five technology companies in the world!"

According to who?

"Wikipedia! And I didn't even write that entry."

And while the company has been out trying to raise money based on plans to sue potentially up to 40 more companies over patents, its execs insist that they don't really plan to do that. They also position themselves as mere pawns used by the big law firm Kirkland & Ellis:

“Kirkland and Ellis came to us,” said Mr. Micek, naming the firm who represented them against Oddcast. According to Mr. Micek, Kirkland and Ellis offered to allow IQ Biometrix to retain ownership of their patents, but litigate on their behalf, with the two parties splitting the cut from any settlement. “I’m a bystander in this whole thing.”

I have no idea the details of this particular case, but we have heard similar stories from other small companies. The big law firms with aggressive IP practices effectively try to pull a Righthaven, but at least are smart enough to act as a law firm, rather than a partner company. But really, that's no excuse at all. Even if Kirkland & Ellis did approach IQ Biometrix in the first place, the company still went forward with the plan.

It's also amusing that the company now claims that rather than suing more companies, it's planning to sell itself. And... what exactly do you think any buyer is going to do? I'm sure the company is most attractive for one thing and one thing only: the patents over which any buyer can sue.

So once again, we have to ask why won't Congress actually do something about this? Everyone involved in the tech world is talking about these problems. Venture capitalists, developers, and execs alike are all complaining about a totally broken system that is irrefutably holding back innovation. And Congress twiddles its thumbs and passes bad legislation that only makes the problem worse.

Filed Under: patent trolls, patents
Companies: ip biometrix, oddcast