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Notorious patent enforcement entity values its entire portfolio at $2, folds
- Scoundreller 8y agoSo how much did they squeeze out and pay out to its principals?
- j45 8y agoPatent entities like this had a direct influence over transit tracking apps (many free and meant to help people recover some of their time each day). I hope this unlocks the many small guys who were sitting on the sidelines after seeing other smaller entities be chased with a demand letter.
- throwaway2048 8y agoSell the patents to another shell company for $2, rinse, repeat every time you lose a lawsuit.
- Alex3917 8y agoThat doesn't work, because if the next company won the case their winnings would be effectively capped at $2. Judges look at the sale and licensing history of patents to set damages.
- NullPrefix 8y ago$2 plus legal fees?
- drewmol 8y agoWould this be beneficial if the aim is to monetize by: securing a guilty verdict in an infringement claim with the intent being to prevent the infringing party from using the patented technology in the future, as opposed to collecting damages for prior infringement?
- ajnin 8y agoThe point is that they don't want to go to court, they send demand letters and ask for a license fee under explicit or implicit threat of litigation, hoping that in a majority of cases their targets would pay because even if they have a good chance of winning, or the damages would be low, the litigation itself is too costly and risky.
- pkaye 8y agoI think they would be obligated to auction off the patents to the highest bidder.
- hedvig 8y agoCan HN visitors all chip and purchase the portfolio?
- adamc 8y agoGood. It's not a useful business model for society.
- jjeaff 8y agoI think it's an excellent business model and even has the incentive to help and encourage small time inventors who do not otherwise have the budget or know-how to implement or protect something the invent. Otherwise, corporations with huge budgets are the only ones that benefit from the patent system. But this comes with a big "if". IF the patents were actually novel. IF the patent office was actually doing its job and enforcing its own rules that a patent should be for something novel and non-obvious to people in the applicable industry.
- Kaveren 8y agoCompanies should not be going around offering bonuses to employees for ideas of things to patent. This is a flaw in the system. If you don't have the know-how to implement something, can you really call yourself the inventor of that thing? Inventors should be able to create prototypes, and if they're small-time maybe they can form a startup and gain investments.
- vertexFarm 8y agoHelping out "small time inventors" is the convenient, reasonable explanation for patents. It's pure PR. In reality, patents benefit large players far more than small ones. It's just even more reinforcement of the status quo. Make no mistake--it was designed that way from the outset, much like all structures of systemic power. People say patents just need to be reformed, but I think it's a hopelessly outdated system. It's a relic. It's not the nineteenth century anymore. To say we just need to review patents more carefully and only grant them to deserving and truly novel ideas is naive. The span of fields of specialization is far too wide--who would pay for such an army of specialized patent clerks for every branch of technology? How would you prevent regulatory capture when only the industry they regulate has that kind of expertise? How do you prevent bribery and corruption? It's impossible. We have a terrible patent review system because that is the reality of patent review.
- monochromatic 8y agoWhat’s the strategy here for valuing the patents so low? I don’t see the point.
- hobofan 8y agoInsolvency fraud.
- monochromatic 8y agoPlease explain.
- nkrisc 8y agoGenerally, I think, to claim they have no valuable assets and can't pay any creditors.
- conistonwater 8y agoThat doesn't make sense to me, if the company declares the value of its assets as being lower than what it is, it means the creditors get a proportionally bigger share of the assets to cover their nominal debt that has a fixed value.
- chongli 8y agoThe only assets are these patents which will be sold at auction for pennies on the dollar. The creditors will get nothing. The lawyers running the scam will get contracted by the new holding company and the game will begin again.
- monochromatic 8y agoBut won’t the bankruptcy court be auctioning off these assets? Who cares what value the company says they’re worth when we’re about to find out the actual market value?
- Kaveren 8y agoThe patent system needs to be changed in some way. When people talk about monopolies, they seem to rarely mention that the government enforces awful patents. And you don't even need to make the thing, just patent it! I'm not sure if it's fair to R&D costs to gut patents entirely, but I'd like to see them weakened considerably. Patent trolls should not exist. Glad to see justice in this case. Edit: Watched Shenzhen: The Silicon Valley of Hardware, was interesting in regards to loose IP rights. [1] https://www.youtube.com/watch?v=SGJ5cZnoodY https://www.youtube.com/watch?v=SGJ5cZnoodY
- dcow 8y agoWasn’t there a time when you had to actually present a prototype of the thing you wanted to patent to the patent office? I think the patent system needs a little work, yes, but I think it’s often conflated with the bass ackwards copyright law in the US. Used together, the two give you the ability to perpetually remain the proprietor of your “invention” because your invention is only ever distributed as a licensed work. This is directly at odds with the purpose of the patent system in the first place. Patents are supposed to 1) reward inventors, during a limited, exclusive, window, for their inventions, and 2) reward society for curating good inventors by giving everyone access to the details of the invention immediately so our collective knowledge increases. It’s not meant to be used to build your corporate fortress. However, the patent into copyright strategy is how purely digital content behemoths survive. So good luck.
- thrmsforbfast 8y agoShipping & Transit LLC had not only a prototype, but also a product: Jones developed this into a service called BusCall, which had some modest success. I think the actual solution is simply improved patent review. The patent system is broken because there are so many bad patents; if only truly innovative stuff was patented, I think a lot of the reasonable criticism would become a lot less reasonable. But without additional funding, improved scrutiny at filing time would also dramatically increase the cost of acquiring a patent, which is already expensive for individual inventors.
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- trhway 8y agoPatent is a monopoly in exchange for public disclosure. There is no societal benefit today from such a disclosure, so there is no point in granting the monopoly.
- john_moscow 8y agoOne valid use case for patents is medical research, where you do invest considerable resources in finding a drug formula that works. That said, it could be handled on the FDA certification level instead.
- IncRnd 8y agoThe societal benefit is that others can improve on what is patented and not be subject to the patent.
- eruci 8y agoNow, that's an innovative way to fold.
- ummonk 8y agoOne plausible thing I've heard is that the weakening of software patents has entrenched the position of the big tech monopolies. Quite simply, it's difficult new startup to establish itself (without getting bought out by the big companies) because it can't protect its product / ideas with patents, and is thus going to get outcompeted by larger tech companies with better funding and better brand recognition (the value of brand recognition cannot be overstated, as it greatly reduces the need to engage in costly marketing).
- EGreg 8y agoQuite the opposite. For every weapon X that is touted as helping the little guy, consider how many X the large guys have stockpiled. It is far more likely that you’re going to get sued by a large corporation or troll and go out of business because your innovative idea “infringes” like a whole lot of other things that you can’t afford to fight in court. They are nice to let you pay a ransom fee — look up the story of IBM and Sun Microsystems[1]. They could just bankrupt you using the legal system. 1. https://www.forbes.com/sites/timothylee/2011/07/07/microsofts-android-shakedown/ https://www.forbes.com/sites/timothylee/2011/07/07/microsoft...
- rayiner 8y agoMIPS and ARM were both founded or went from small players to big players based on patent protection. Xerox, and everything it spawned (GUIs, email, networking) was built on its copier patents. It was a fairly small photography company before that.
- EGreg 8y agoAin’t it great they didn’t patent the GUI?
- rayiner 8y agoIs it? I would answer that question by asking whether it would've been great if Xerox hadn't patented the copier. I think the answer is no, because we probably wouldn't have gotten Xerox PARC and everything it invented if Xerox was immediately thrust into race-to-the-bottom competition with clone copiers. (Note: Xerox and PARC rapidly went downhill after a DOJ antitrust lawsuit forced Xerox to license its copier patents to Japanese competitors.) What if Xerox had patented the GUI? Maybe Microsoft and Apple would've had to pay to license it instead of just stealing it from Xerox. What innovations did we miss out on because PARC never made any money off GUIs?
- shmerl 8y agoAnother troll bites the dust.