7 ms·

Apple Made A Deal With The Devil (No, Worse: A Patent Troll)

301 points by llambda 15y ago

oniTony 15y ago
This is really really messed up. Besides the usual patent troll options of: - (costly) settle - (costly) fight There is now a third option of: - (profitable!) join the bandwagon, not get sued (by this particular company), strengthen your own IP defence position by gaining licenses to the entire portfolio that was threatening you in the first place. There's even profit-share for settlement revenue!(Edit: profit-share might be for "board" seats only, but it sounds like it costs IP contributions to get in anyway.) All for a low low cost of transferring over some patents (that are just licensed right back to you). Of course this just enables more of the other companies to get sued. This has a potential to get really out of hand, really fast. :(
- joe_the_user 15y ago
  Yes, Once you accept the framework of software patents and all its implication, you have embarked on the project of dividing up the "digital commons". And to do that, you just need an "alliance of the willing" - ie, you first gather together the muscle power needed to control the turf and then divide the spoils. There's no idealism and no distinction between patent troll and "real company" once the company is playing the intellectual property game.
- r00fus 15y ago
  That third option is what forms the basis of Intellectual Ventures' business model [1]. [1] http://en.wikipedia.org/wiki/Intellectual_Ventures http://en.wikipedia.org/wiki/Intellectual_Ventures
MBlume 15y ago
Remember that the primary power the average HN reader has to fight abuses like this is simply not to work for the companies that engage in this chicanery. Good hackers are valuable, and companies fight for them. When companies do things most hackers consider evil, it should hurt them.
- thwarted 15y ago
  Apple most likely isn't in this camp, and has enough cachét and goodwill to still be a desirable place to work, but those kinds of companies usually can't recognize good hackers, or even know that there's a difference. They will execute on their harmful and odd undertakings with whoever they can find, quality or not. This is how we end up with things like spyware being distributed under the guise of marketing. And patent troll/patent hording companies don't need to hire hackers.
  - redthrowaway 15y ago
    How is Apple not in the "doing things hackers consider evil" camp? They've been doing such things for a long, long time. I had hoped it might end with Cook as CEO, but apparently no such luck.
    - bonzoesc 15y ago
      Why would you expect a business (an entity that subsists entirely on money) that has made shitloads of money to suddenly stop doing everything it can to continue to make shitloads of money?
    - thwarted 15y ago
      The camp that I don't think Apple is in is the one where they can not recognize good hackers or think they don't need good hackers, which is what my comment is about. Obviously, a lot of people are misinterpreting my comment or are not reading the whole thing.
- maximusprime 15y ago
  Surely it's the rules of the game that are at fault here. You can't blame companies for using the rules of the game to their best advantage. The answer is to tell everyone how much of a ridiculous unfair idiotic idea most patents are. You shouldn't be able to patent software - it's trivial. You shouldn't be able to patent things like "Touchscreen used on mobile device" - It's obvious. Patents should be reserved for things that aren't obvious, take a lot of research, and can be done many ways. For example drugs research. They should be denied and ruled null and void for most things related to software/consumer technology.
TechNewb 15y ago
Yeah, there should be a law where you can't transfer patents like a bank note. And trolling should be illegal. Reform. We can't blame Apple with out knowing the full story, as I'm imagine the Troll threatened to sue them if not complying. It's not like Apple needs the money, but another potential law suit could be bad.
artursapek 15y ago
How much progress has been made in reforming patent software laws so this kind of shit stops happening?
- luriel 15y ago
  Zero.
- div 15y ago
  Very little to none. Software patent laws are largely written by people paid by companies who: a) have a lot of patents b) invested billions buying up patents c) would very much like to see those patents as an asset which makes them money d) would very much like to see those patents as a weapon to stifle competitors Extra patent laws that are introduced as bills are almost always laws that make the current state of affairs worse.
  - artursapek 15y ago
    This country is so corrupt
SomeCallMeTim 15y ago
I don't get why they didn't mention a very obvious reason why Apple would sell a patent to a patent troll: They want the troll to sue someone with whom they have a reciprocal patent portfolio license. Most big companies are members of lots of these agreements, where any patent owned by one company is licensed to the other, and vice versa. If Apple is simply a licensee of the patent now, and doesn't own it, then presumably it wouldn't be part of their reciprocal licenses with other companies any more, and the troll would be able to sue? Please correct me if I'm wrong, here. (The most likely way I could be wrong is that the standard reciprocal agreements cover all patents owned during the term of the license, in perpetuity -- i.e., selling a patent doesn't invalidate the reciprocal license. Even then, they may be planning to sign a new reciprocal patent license with, say, Samsung, who just won the ability to block shipments of iOS devices that support HPSA, but they still want someone else to be able to sue Samsung...?)
- fpgeek 15y ago
  AFAIK, Apple's most prominent cross-licensees are Microsoft and Nokia. If you're right, this looks like part of a pre-emptive strike against WP7. That is at least a bit surprising because the previous indications had been that Apple was fine with a iOS / Windows Phone duopoly in mobile.
  - jsnell 15y ago
    Note that a few months back Microsoft and Nokia sold a very significant amount of patents (reportedly 2000) to a patent troll company.
maeon3 15y ago
How the heck do you BUY a patent and sell licenses to multiple third parties? How does this maintain the spirit of patents where we encourage innovators? Say I want to build a new phone in the shape of a rectangle, black, with beveled edges? oops I have to purchase licenses from a gigantic enterprise which has the patents on "rectangle", "black" and "beveled edges". Well, maybe it's too much work to build a new piece of technology, I can't make it work with all the fire hoops to jump through! Guess I'll get into selling apples on the side of the road, that is until somebody patents that.
- praptak 15y ago
  Selling actual apples is safe (for now) but you better not have "apples" in your company name.
- dextorious 15y ago
  """How does this maintain the spirit of patents where we encourage innovators?""" You think anyone in Congress cares about the spirit of the law? Once a body of patents exists and is owned by big lobbying companies, it's all about protecting them. Similar to the copyright protection, that just keeps expanding to the whims of Disney et al.
deleted 15y ago
[deleted]
akg 15y ago
Reminds me of a company that I worked for in the past. They tried to sue me for patent infringement long after I had left and started my own company. They of course had no case, but it does cost significant resources for a small startup to fight a multimillion dollar enterprise. All that wasted effort could be better spent developing real products and actually providing value -- on both ends. Not sure why big companies are so afraid of the "little guy" flying under the radar.
petrichor 15y ago
the implications of this article are potentially disturbing, but i can't even muster the energy to get upset by these things anymore. i just have this feeling that the bad guys one; it's over. (or maybe we're just in the empire strikes back phase of things) honestly, i think the most surprising thing about this article is that it was written for techcrunch, and it contains actual journalism. how refreshing to read something in the tech press that is not just linkbait aimed at activating whichever legion of fanboys. good work Jason Kincaid,
teyc 15y ago
If this is aimed at the big products like WP7 and Android, then Apple better think it through carefully. During the Cuban Missile Crisis, JFK famously said: any missile attack from Cuba would be considered an attack from Soviet Russia and bring "a full retaliatory response" from the United States against Russia itself. Transferring your weapons to a third party and then saying you have no control over what a third party does will be viewed dimly indeed.
joelmichael 15y ago
In the patent wars, patent trolls will prove to be valuable allies.
ypcx 15y ago
This is great, and exactly what we need. Through the patent war, massive losses must be incurred on the richest corporations, until one (or more) of them say "enough", and use their money to lobby the patent system into oblivion.
- OstiaAntica 15y ago
  Actually, this is a barrier to innovation and small, disruptive newcomers. The richest corporations are using patents to lockup the marketplace and secure the status quo.
  - ypcx 15y ago
    But this barrier can only fall if the titans make it fall. Probably makes sense to expect that the titans will try to make it only fall for themselves, but I don't think that would work. How that works exactly is what we see now. Hopefully soon it will be cheaper for the titans to allow newcomer competition than to continue this war. But then, maybe not!
- tobiasu 15y ago
  Why the downvotes? It's one of the more plausible ways that could end the global patent system, whether you like it or not.
chaostheory 15y ago
Not sure if I understand it well enough but is this Apple's version of pulling an SCO?
va_coder 15y ago
It's trendy to knock TechCrunch down but you have to admit that's some good journalism.
- feralchimp 15y ago
  Couldn't agree more. I've never been a fan of TC, and am something of an Apple fanboy, but they stepped in it here and I'm glad TC did the homework to call them on it.
SODaniel 15y ago
The fact that Steve Jobs pioneered the '1984' style commercials that Futurama so successfully parodied is a testament to the fact that you can indeed become larger then your cult. Apple today is one of the champions of collecting personal information, defenders of monopoly on a scale that Microsoft can only dream of, and one of the largest collectors of non-essential patents. 'I'm Loving It'
juliano_q 15y ago
Interesting how recently I am feeling more guilty using my Apple products (Macbook, iPod) and less guilty using my Android cellphone. Apple's attitudes related to patents is really starting to be a deal breaker to me. I may be looking for notebooks alternatives next year. It is a bit sad because I love the build quality from Apple's products, but I like to think that I value my morals more than my consumism.
- josefresco 15y ago
  If you value your morals, the other two choices aren't much better. Apple might be making headlines now for their patent shenanigans but next week it could very well be the other two.
  - trobertson 15y ago
    I am assuming that by "other two", you are referring to Google and Microsoft. Microsoft has a history of shady tactics, but they've been relatively "good" recently. They could easily fall back into bullying tactics, if they wished to. Although they do have tons of antitrust agreements they have to honor. Google, on the other hand, has no history whatsoever of using patents offensively. I don't think [1] they've made a single offensive patent case, ever. If the morality of a company is going to affect your choice, Google is by far the better choice. [1]: I haven't verified this statement. It probably doesn't hold true for some of the companies that they have purchased, e.g. Motorola Mobility.
    - angelbob 15y ago
      Microsoft is well aware that they can just break antitrust agreements and the enforcement is unlikely to have any teeth. That was their approach for many years, and I'm sure they remember how effective it was... And yeah, your footnote definitely doesn't hold true for a number of the companies Google purchased, which I don't (directly) hold against Google.
      - poutine 15y ago
angli 15y ago
I agree with some other commenters here that the correct response here is not to blame Apple. Yes, it's fashionable to attack them these days, but it honestly isn't their fault. The rules of the game fundamentally change when you add software patents to the mix. All it takes in this new world to ban a competitor's products is a vague patent and a sympathetic judge. Apple, in fact, has now been on both sides of this issue – suing Samsung's products out of the EU, and losing an injunction to Motorola in Germany. You can't blame Apple (or any of the other companies who may emerge) for playing this game. If they can prevent their products from being pulled off the shelves, it's stupid not to. It's akin to (as many have noted) the problem of nuclear proliferation. Blaming Apple is like blaming the US for not unilaterally disarming. Sure they didn't, but it's understood that they had a good reason, and, out of self interest, should have done exactly what they did.
- deleted 15y ago
  [deleted]
- gvb 15y ago
  Blaming Apple for giving patents to patent trolls is like blaming Pakistan for providing key information to help North Korea build nuclear weapons. http://en.wikipedia.org/wiki/North_Korea_and_weapons_of_mass_destruction#Enriched_uranium_and_foreign_assistance http://en.wikipedia.org/wiki/North_Korea_and_weapons_of_mass...
denzil_correa 15y ago
It's no longer an Apple to Apple comparison after all. :-)

301 points by llambda 15y ago

This is really really messed up. Besides the usual patent troll options of: - (costly) settle - (costly) fight There is now a third option of: - (profitable!) join the bandwagon, not get sued (by this particular company), strengthen your own IP defence position by gaining licenses to the entire portfolio that was threatening you in the first place. There's even profit-share for settlement revenue!(Edit: profit-share might be for "board" seats only, but it sounds like it costs IP contributions to get in anyway.) All for a low low cost of transferring over some patents (that are just licensed right back to you). Of course this just enables more of the other companies to get sued. This has a potential to get really out of hand, really fast. :(

joe_the_user 15y ago
Yes, Once you accept the framework of software patents and all its implication, you have embarked on the project of dividing up the "digital commons". And to do that, you just need an "alliance of the willing" - ie, you first gather together the muscle power needed to control the turf and then divide the spoils. There's no idealism and no distinction between patent troll and "real company" once the company is playing the intellectual property game.
r00fus 15y ago
That third option is what forms the basis of Intellectual Ventures' business model [1]. [1] http://en.wikipedia.org/wiki/Intellectual_Ventures http://en.wikipedia.org/wiki/Intellectual_Ventures

MBlume 15y ago

Remember that the primary power the average HN reader has to fight abuses like this is simply not to work for the companies that engage in this chicanery. Good hackers are valuable, and companies fight for them. When companies do things most hackers consider evil, it should hurt them.

thwarted 15y ago
Apple most likely isn't in this camp, and has enough cachét and goodwill to still be a desirable place to work, but those kinds of companies usually can't recognize good hackers, or even know that there's a difference. They will execute on their harmful and odd undertakings with whoever they can find, quality or not. This is how we end up with things like spyware being distributed under the guise of marketing. And patent troll/patent hording companies don't need to hire hackers.
- redthrowaway 15y ago
  How is Apple not in the "doing things hackers consider evil" camp? They've been doing such things for a long, long time. I had hoped it might end with Cook as CEO, but apparently no such luck.
  - bonzoesc 15y ago
    Why would you expect a business (an entity that subsists entirely on money) that has made shitloads of money to suddenly stop doing everything it can to continue to make shitloads of money?
  - thwarted 15y ago
    The camp that I don't think Apple is in is the one where they can not recognize good hackers or think they don't need good hackers, which is what my comment is about. Obviously, a lot of people are misinterpreting my comment or are not reading the whole thing.
maximusprime 15y ago
Surely it's the rules of the game that are at fault here. You can't blame companies for using the rules of the game to their best advantage. The answer is to tell everyone how much of a ridiculous unfair idiotic idea most patents are. You shouldn't be able to patent software - it's trivial. You shouldn't be able to patent things like "Touchscreen used on mobile device" - It's obvious. Patents should be reserved for things that aren't obvious, take a lot of research, and can be done many ways. For example drugs research. They should be denied and ruled null and void for most things related to software/consumer technology.

TechNewb 15y ago

Yeah, there should be a law where you can't transfer patents like a bank note. And trolling should be illegal. Reform. We can't blame Apple with out knowing the full story, as I'm imagine the Troll threatened to sue them if not complying. It's not like Apple needs the money, but another potential law suit could be bad.

artursapek 15y ago

How much progress has been made in reforming patent software laws so this kind of shit stops happening?

luriel 15y ago
Zero.
div 15y ago
Very little to none. Software patent laws are largely written by people paid by companies who: a) have a lot of patents b) invested billions buying up patents c) would very much like to see those patents as an asset which makes them money d) would very much like to see those patents as a weapon to stifle competitors Extra patent laws that are introduced as bills are almost always laws that make the current state of affairs worse.
- artursapek 15y ago
  This country is so corrupt

SomeCallMeTim 15y ago

I don't get why they didn't mention a very obvious reason why Apple would sell a patent to a patent troll: They want the troll to sue someone with whom they have a reciprocal patent portfolio license. Most big companies are members of lots of these agreements, where any patent owned by one company is licensed to the other, and vice versa. If Apple is simply a licensee of the patent now, and doesn't own it, then presumably it wouldn't be part of their reciprocal licenses with other companies any more, and the troll would be able to sue? Please correct me if I'm wrong, here. (The most likely way I could be wrong is that the standard reciprocal agreements cover all patents owned during the term of the license, in perpetuity -- i.e., selling a patent doesn't invalidate the reciprocal license. Even then, they may be planning to sign a new reciprocal patent license with, say, Samsung, who just won the ability to block shipments of iOS devices that support HPSA, but they still want someone else to be able to sue Samsung...?)

fpgeek 15y ago
AFAIK, Apple's most prominent cross-licensees are Microsoft and Nokia. If you're right, this looks like part of a pre-emptive strike against WP7. That is at least a bit surprising because the previous indications had been that Apple was fine with a iOS / Windows Phone duopoly in mobile.
- jsnell 15y ago
  Note that a few months back Microsoft and Nokia sold a very significant amount of patents (reportedly 2000) to a patent troll company.

maeon3 15y ago

How the heck do you BUY a patent and sell licenses to multiple third parties? How does this maintain the spirit of patents where we encourage innovators? Say I want to build a new phone in the shape of a rectangle, black, with beveled edges? oops I have to purchase licenses from a gigantic enterprise which has the patents on "rectangle", "black" and "beveled edges". Well, maybe it's too much work to build a new piece of technology, I can't make it work with all the fire hoops to jump through! Guess I'll get into selling apples on the side of the road, that is until somebody patents that.

praptak 15y ago
Selling actual apples is safe (for now) but you better not have "apples" in your company name.
dextorious 15y ago
"""How does this maintain the spirit of patents where we encourage innovators?""" You think anyone in Congress cares about the spirit of the law? Once a body of patents exists and is owned by big lobbying companies, it's all about protecting them. Similar to the copyright protection, that just keeps expanding to the whims of Disney et al.

deleted 15y ago

[deleted]

akg 15y ago

Reminds me of a company that I worked for in the past. They tried to sue me for patent infringement long after I had left and started my own company. They of course had no case, but it does cost significant resources for a small startup to fight a multimillion dollar enterprise. All that wasted effort could be better spent developing real products and actually providing value -- on both ends. Not sure why big companies are so afraid of the "little guy" flying under the radar.

petrichor 15y ago

the implications of this article are potentially disturbing, but i can't even muster the energy to get upset by these things anymore. i just have this feeling that the bad guys one; it's over. (or maybe we're just in the empire strikes back phase of things) honestly, i think the most surprising thing about this article is that it was written for techcrunch, and it contains actual journalism. how refreshing to read something in the tech press that is not just linkbait aimed at activating whichever legion of fanboys. good work Jason Kincaid,

teyc 15y ago

If this is aimed at the big products like WP7 and Android, then Apple better think it through carefully. During the Cuban Missile Crisis, JFK famously said: any missile attack from Cuba would be considered an attack from Soviet Russia and bring "a full retaliatory response" from the United States against Russia itself. Transferring your weapons to a third party and then saying you have no control over what a third party does will be viewed dimly indeed.

joelmichael 15y ago

In the patent wars, patent trolls will prove to be valuable allies.

ypcx 15y ago

This is great, and exactly what we need. Through the patent war, massive losses must be incurred on the richest corporations, until one (or more) of them say "enough", and use their money to lobby the patent system into oblivion.

OstiaAntica 15y ago
Actually, this is a barrier to innovation and small, disruptive newcomers. The richest corporations are using patents to lockup the marketplace and secure the status quo.
- ypcx 15y ago
  But this barrier can only fall if the titans make it fall. Probably makes sense to expect that the titans will try to make it only fall for themselves, but I don't think that would work. How that works exactly is what we see now. Hopefully soon it will be cheaper for the titans to allow newcomer competition than to continue this war. But then, maybe not!
tobiasu 15y ago
Why the downvotes? It's one of the more plausible ways that could end the global patent system, whether you like it or not.

chaostheory 15y ago

Not sure if I understand it well enough but is this Apple's version of pulling an SCO?

va_coder 15y ago

It's trendy to knock TechCrunch down but you have to admit that's some good journalism.

feralchimp 15y ago
Couldn't agree more. I've never been a fan of TC, and am something of an Apple fanboy, but they stepped in it here and I'm glad TC did the homework to call them on it.

SODaniel 15y ago

The fact that Steve Jobs pioneered the '1984' style commercials that Futurama so successfully parodied is a testament to the fact that you can indeed become larger then your cult. Apple today is one of the champions of collecting personal information, defenders of monopoly on a scale that Microsoft can only dream of, and one of the largest collectors of non-essential patents. 'I'm Loving It'

juliano_q 15y ago

Interesting how recently I am feeling more guilty using my Apple products (Macbook, iPod) and less guilty using my Android cellphone. Apple's attitudes related to patents is really starting to be a deal breaker to me. I may be looking for notebooks alternatives next year. It is a bit sad because I love the build quality from Apple's products, but I like to think that I value my morals more than my consumism.

josefresco 15y ago
If you value your morals, the other two choices aren't much better. Apple might be making headlines now for their patent shenanigans but next week it could very well be the other two.
- trobertson 15y ago
  I am assuming that by "other two", you are referring to Google and Microsoft. Microsoft has a history of shady tactics, but they've been relatively "good" recently. They could easily fall back into bullying tactics, if they wished to. Although they do have tons of antitrust agreements they have to honor. Google, on the other hand, has no history whatsoever of using patents offensively. I don't think [1] they've made a single offensive patent case, ever. If the morality of a company is going to affect your choice, Google is by far the better choice. [1]: I haven't verified this statement. It probably doesn't hold true for some of the companies that they have purchased, e.g. Motorola Mobility.
  - angelbob 15y ago
    Microsoft is well aware that they can just break antitrust agreements and the enforcement is unlikely to have any teeth. That was their approach for many years, and I'm sure they remember how effective it was... And yeah, your footnote definitely doesn't hold true for a number of the companies Google purchased, which I don't (directly) hold against Google.
    - poutine 15y ago

angli 15y ago

I agree with some other commenters here that the correct response here is not to blame Apple. Yes, it's fashionable to attack them these days, but it honestly isn't their fault. The rules of the game fundamentally change when you add software patents to the mix. All it takes in this new world to ban a competitor's products is a vague patent and a sympathetic judge. Apple, in fact, has now been on both sides of this issue – suing Samsung's products out of the EU, and losing an injunction to Motorola in Germany. You can't blame Apple (or any of the other companies who may emerge) for playing this game. If they can prevent their products from being pulled off the shelves, it's stupid not to. It's akin to (as many have noted) the problem of nuclear proliferation. Blaming Apple is like blaming the US for not unilaterally disarming. Sure they didn't, but it's understood that they had a good reason, and, out of self interest, should have done exactly what they did.

deleted 15y ago
[deleted]
gvb 15y ago
Blaming Apple for giving patents to patent trolls is like blaming Pakistan for providing key information to help North Korea build nuclear weapons. http://en.wikipedia.org/wiki/North_Korea_and_weapons_of_mass_destruction#Enriched_uranium_and_foreign_assistance http://en.wikipedia.org/wiki/North_Korea_and_weapons_of_mass...

denzil_correa 15y ago

It's no longer an Apple to Apple comparison after all. :-)