Definition - "Patent Troll"

"PATENT TROLL" - Any party that intentionally misconstrues the claims of their patent to assert it against another. A patent troll does not have to be a non-practicing entity (NPE) or in any particular industry, all that is required is an intentional misconstruing of the claims in an attempt to extort money from another.


Disclaimer - All information and postings in this blog are provided for educational purposes only. Nothing in this blog constitutes legal advice and you should not rely on any information herein as such. If you do not have a signed engagement agreement with me, then you are not represented by me and you should retain your own attorney for any legal issues you are having.

Thursday, June 16, 2011

More potential prior art for Lodsys patents

Note - I really like this first reference, but have not had the time to compare it to the claim charts.














Non-Patent Literature  (I currently have not found these references, but would like to see them.)

"Tiny Computer," Popular Science, Feb. 1977, p. 75
"Infopac I1/2 Data Terminal," Azur Data Literature, Mar. 1976

Thank you to Richard Pitt in the comments to pointing my search in a specific direction.


Financially Viable Patent Defense Strategy for Application Developers

Some commentators believe low-income application developers have no ability ($$$) to defend themselves against absurd patent claims like Lodsys is pursuing.  Such commentators fail to think outside the box and are stuck in sort of an old world way of thinking that does not actually provide real solutions to application developers.

Various commentators, including myself, have mentioned that application developers (or other companies) could join in a joint defense agreement.  The costs of a winning strategy against Lodsys could cost a minimum of $50,000 - $100,000, so even if the couple dozen threatened developers get together, they might still have to pitch in at least $10,000 each.  This may not be feasible or a good business decision for some application developers.

However, there is another option available to application developers and I believe this has to come from the developer community itself.  While this could be tough to implement quickly to deal with Lodsys and Macrosolve, this may help deal with future threats.

The application developer community as a whole, not just those developers that are directly threatened, could start a App Dev Patent Defense Organization.  This could be implemented in may ways and I am sure people will have contributions to this that I have not thought of, but here are the basics:

1) Application developers join and contribute a yearly fee ($500?) to an organization that is solely created to defend members against patent infringement claims. 

2) If massive participation could occur (I've seen the number of publishers near 90,000, but I have no idea if that is true)  If 10,000 developers join, then the fund would have $5 MILLION dollars PER YEAR to defend against the likes of Lodsys and Macrosolve!

That is a sizable amount of cash to defend against any patent threat, as most patent infringement accusations are disposed of for a lot lower amount than that.  There would be a lot of organizational details and structure to work out.  I would suggest to have some type of Troll test so as not to defend against actually valid claim assertions, though that might be too limiting; an alternative may be to limit the fund for paying for defense costs but not paying for judgments of actual infringement.  The fund should not provide coverage for actual infringers of valid patents.

If one of the OS makers (Apple, Google, Microsoft, etc.) included contributing to the fund as a requirement to use their app store, then massive participation could occur.  However, the App Dev Patent Defense Organization should be independent of any OS maker and owe a fiduciary duty to the app developer members, not any OS maker or other distributor. (though conflicts between members would have to be addresses also)

What do people think?  Let me know your thoughts.

Just my thought for the day, if you need legal advice, go hire an attorney.

Tuesday, June 14, 2011

To Kill a Patent Troll

Multiple lawsuits for declaratory judgment against Lodsys have been filed by Foresee, ESET, OpinionLab, and The New York Times.

I previously discussed a strategy to kill a patent troll.  While what is happening is not my actual strategy being implemented, I believe this is an important development that might encourage more companies threatened by Lodsys to file declaratory judgment actions.  Hopefully facing many DJ actions will deter future patent trolls from such aggressive tactics like Lodsys is using, thought I think ultimately we need some reform concerning what is required to file an infringement suit.

I would still like to see many, many more DJ actions filed in many other jurisdictions.  I hope Lodsys sees its legal bills skyrocket.  Though, Lodsys's response so far has been like a wounded animal, lashing out at everything that moves... before it eventually dies off, hopefully.  (In the corporate sense only, I do NOT wish literal death on any person, for the most part.)

Here's to hoping more companies pile onto the DJ actions!  I also would love to see the invalidity arguments... oh the anticipation of a good legal smackdown... (legal geek at heart) I hope that the DJ suits are not settled before disclosing the invalidity arguments.


Monday, June 13, 2011

Issues Raised By Apple's License

Apple is asserting license (contract) rights and patent law doctrines of exhaustion and first sale while trying to intervene in the Lodsys v. small app devs lawsuit.  This is a strategic move on Apple's part for likely many reasons, most of which we can and have guessed at, but will likely never fully know because we would need knowledge of Apple's licenses and relationship with IV. 

Apple's assertion of license rights will revolve around the critical question of who could be an infringer of the Lodsys patents.  If Apple is the direct infringer or caused contributory infringement, then per Apple's assertions, they are licensed for that.  This is the crux of Apple's defense, that Apple and only Apple could be an infringer of the Lodsys patents and Apple has a license which permits that.

However, if Lodsys can somehow establish that the application developers could infringe the patents exclusive of Apple, then Apple's license likely does not apply.  (I personally do not consider this very likely to happen; see my discussion of Divided Infringement.)  I would guess that we will see the application developers respond and assert claims of non-infringement because in essence, that is Apple's argument also, though Apple is being careful not to speak for the application developers.

Thus, if Apple is allowed to intervene and assert it's license rights, the lawsuit will still be decided on the question of infringement (direct, induced, contributory) and non-infringement.  And the issues surrounding Divided Infringement will be heavily analyzed and argued if the lawsuit gets that far.  Thus, Apple's attempted intervention does not necessarily short circuit the lawsuit by itself.  I hoped it would induce Lodsys to back off, but recent news shows that they have an aggressive campaign against many companies.

I have no idea how Lodsys will respond to Apple's assertions because I have a hard time trying to formulate legal strategies that are completely divorced from facts of the case and the law.  Lodsys's claim charts are a joke and no decent patent attorney would ever sign their name to a lawsuit asserting them.  As I have stated a few times earlier, I think Lodsys's patents are likely not infringed by anyone and highly likely to be invalid.

Just my thoughts, retain your own attorney if you need actual legal advice.


Thoughts on Apple's Intervention in Lodsys Lawsuit

If you have not heard, Apple has filed a motion to intervene in the Lodsys patent suit against application developers.  See here, here, or for additional analysis see here

I like Apple's move, as it puts pressure on Lodsys and tries to bring themselves in as a defendant with enough resources to fight Lodsys properly.  However, everyone should understand that Apple is not providing ALL application developers full indemnification.  Apple explicitly states this in the motion to intervene. (I'll add the citation later)  (It is not known if Apple has made individual agreements with the application developers already sued.) This is a smart business move by Apple because it is in their best interests to make sure Apple does not have an implied obligation to provide indemnity anytime an application developer is sued or threatened.  In some situations, an application developer may get sued, and unlike the Lodsys patents, if the patents could be infringed solely by the application, Apple will probably not want to provide indemnification or get involved.  (Note:  These possible situations are typically addressed in a standard indemnification agreement.)

In other suits,  Foresee Results has filed a declaratory judgment action against Lodsys, asking for a finding of non-infringement and invalidity of Lodsys's patents.  See here.


Tuesday, June 7, 2011

Why Macrosolve is substantially different from Lodsys

Macrosolve has been busy lately filing lots of lawsuits.  While Macrosolve seems to be a Troll like Lodsys, there are substantial differences that will affect application developers for their legal strategies and risk analysis.

A huge difference from the Lodsys analysis is that the claims in the Macrosolve patent (7,822,816) (from a quick review) do not necessarily require another party (such as the operating system or hardware) to be infringed, whereas I believe the Lodsys '078 patent does.  That is, in plain english, a software company or application developer could possibly infringe the claims of the Macrosolve patent due to just their products.

What this means from a practical effect is that there may be no hardware company or OS company (such as Apple or Google) coming to the rescue to defend the application developers or offer indemnification.

At this time, I have no opinion as to whether any applications do or do not infringe the Macrosolve '816 patent or whether there are any non-infringement or invalidity arguments with respect to the Macrosolve '816 patent.  From an initial reading of the patent, much detail will need to be analyzed to determine the scope of the claims and how they could apply to each application, which analysis may be different for each application.  Thus, a customized legal analysis for each application developer sued by Macrosolve might be needed.

(I have to run this will likely be updated later)


Monday, June 6, 2011

Leverage If You Are Threatened with Patent Infringement (and why you should ignore FOSSpatents)

Gene Quinn over at IP Watchdog has some good information on "What To Do If You Are Sued for Patent Infringement".  Go read the entire article.  Whatever you do, please ignore the advice of non-attorney commentators (such as Florian Muller @ fosspatents) because they can be shortsighted and are not qualified to provide the complex legal analysis and advice you will need.  (e.g. from one of Florian's latest posts about the Lodsys patents, any patent attorney should be able to recognize that Florian does not understand the law regarding patent infringement and numerous other issues.)

For example, some commentators (including Florian Muller @ fosspatents) are advising targets of patent trolls to roll over and pay the license fee; Florian is even advising you that the license agreement that has not been made public is acceptable for you to sign.  I very much question the soundness of this advice, especially considering the above article at IP Watchdog. Contrary to the bad advice and legal analysis put forth by Florian, there are options available to companies threatened by patent trolls and even if the outcome is a license agreement, Florian's legal analysis and advice is not solid. (I could write a white paper explaining why Florian's analysis is messed up, but I don't have the time right now.  If anyone requests me to provide more detailed analysis, I will put it on my to-do list.)

For starters, in my opinion, Lodsys probably LOVES Florian's analysis and opinions.  (I have no connection or contact with anyone at Lodsys, Apple, and no longer any contact with Florian).  He seems to be making all the arguments that support the troll's business plan - you can't afford to fight, don't even try, the trolls arguments are decent, just give in and sign the license.  Florian dismisses prior art searching, dismisses non-infringement arguments when he clearly does not understand the law, ignores invalidity arguments, misinterprets the claims to determine that Lodsys has a case that is possibly good enough to go to trial (remember, he is not an attorney), and makes statements such as "app devs will lose" unless they have blanket coverage from someone else.  (note - of course, Florian includes CYA language in his posts so that he can have wiggle room out of his responsiblity for misleading people.)

Generally, this is why Florian is wrong:  "In order to be a party at the peace talk table, however, you need to have leverage of some kind, otherwise you are not a party to talks as much as you are having terms dictated."  See Gene Quinn's article.  Gene does not provide a list of what that leverage might be, but he alludes to invalidity or reexam arguments.

To expand on that article, here are potential strategies that could add leverage during negotiations for a company threatened by a patent troll:
- have a non-infringement opinion
- have an invalidity opinion
- have a reexam prepared to file or filed
- file a motion for summary judgment
- file a declaratory judgment action
- consider counter claims (tortious interference, antitrust, etc...)
- have IP insurance provisions
- help fund a joint defense agreement
- hold off settling until a Markman opinion

Many of these strategies can be implemented by a small company.  Some companies may even implement more than one of these strategies at the same time.  As I have said before and Gene notes: "The advice you need, and will get if you hire an attorney, will be tailored to your unique circumstances.There are many variations of these strategies and others that can be implemented that will NOT cost one million dollars.  You need to determine the right strategy for your company based on your circumstances.

Any good negotiator (which IMO excludes Florian) will tell you that you do not negotiate with yourself.  Thus, I have no idea why Florian claims to be supporting application developers when he writes analysis that attempts to shred their potential leverage arguments and advises them to pay what Lodsys is asking.  If someone was truly supporting the application developers, they would be trying to bolster the application developers leverage arguments (as I have been trying to provide on this blog).

Another issue I have with Florian is he seems not to recognize the value of a non-infringement or invalidity opinion, which can reduce a significant amount of risk for a comparatively small cost.  Just another fail in his analysis.  (I think his excuse for will be that none of the accused application developers have the resources available for any strategy other than pay the fee.  Again, I think this shows why Florian is not qualified to advise anyone on strategy or risk concerning patent litigation.)

On a personal note, Florian accused me of being an "anonymous smearer".  While I am doing this anonymously, my response still stands:  "FYI rebutting factually inaccurate statements does not make me a "smearer", it makes you uninformed".

If you are threatened, whatever you do, hire an attorney to advise you for your particular circumstances.  There are many options and strategies available to you whether you fight or negotiate.

Just my opinion, go hire your own attorney for legal advice.