18 ms·

The Patent Protection Racket

190 points by doty 14y ago

Nux 14y ago
He's goddamn right! Patent system needs to die. Now.
mathattack 14y ago
I like the photo from the Seven Samurai. :-)
NotUncivil 14y ago
On a related note, this is one of the reasons I prefer to use, and make, Apache 2.0-licensed software. Its terms are similar to those of BSD and MIT but it also includes a patent licensing clause.
- law 14y ago
  So does GPLv3.
  - belorn 14y ago
    GPLv3 patent licensing clause was created as a copy/fork of the clause from Apache 2.0 license, and then had an added statement about patent license agreements.
samspenc 14y ago
Its so awesome that more and more medium-sized companies are paying attention to this! Patent racketeering needs to stop!
rbanffy 14y ago
Patent protection rackets have been used for more than a business model: they have been used as tools to pressure large companies into entering partnership agreements. Please see the second item of the list: https://news.ycombinator.com/item?id=5479381 https://news.ycombinator.com/item?id=5479381
mehdim 14y ago
Are open web APIs becoming the new IT patents? http://api500.com/post/46951162382/apis-are-the-new-patents http://api500.com/post/46951162382/apis-are-the-new-patents
te_platt 14y ago
Can anyone here give (and defend) an example of a good patent? By that I mean one that is non-obvious, novel, and clear enough to be able to be used to build the claimed invention.
- piokoch 14y ago
  There are many. Think of safety-pin? When it comes to software it is much harder. The thing I can accept are cryptographic algorithms, since as an outcome we get a product - encoded text. All these one-clicks, etc. are pure bullshit.
  - unimpressive 14y ago
    But math isn't patentable. You shouldn't be able to sprinkle "math implemented as a computer program" on top of your patent application and be able to skirt this.
  - te_platt 14y ago
    I just looked up the safety pin patent and it does look pretty good. I hope my original question didn't come off as confrontational. I do think we would be better off eliminating patents altogether, but I want to make sure I'm not discounting any positive effects patents may have.
  - betterunix 14y ago
    "The thing I can accept are cryptographic algorithms, since as an outcome we get a product" Of all the things... Cryptography is math in this day and age. Patents on crypto are patents on math, with only the measly "ON A COMPUTER!!!!" clause justifying their existence.
    - DanBC 14y ago
      See, for example, Clifford Cocks who invented RSA before RSA did, but was unable to patent it, and thus didn't get the profits that RSA did. He got a nice medal though.
abfan1127 14y ago
It sounds like we need "Kickstarter for Fighting Patent Trolls"...
205guy 14y ago
Given the article's opening paragraphs (small businesses and startups falling prey to the trolls), I'm surprised there hasn't been an organized attempt to inform people of the problem. Maybe I don't know about it and the author doesn't mention it, but it seems like there should be a website that categorizes the various players and their actions, with forums so victims and potential victims can share their experiences. Once you have all the data being collected in one place, then you can get the word out (how?) so that people know to check online even before checking with their lawyer. It seems like patent trolling is something that could be partially defeated with better and more widespread information.
- AnthonyMouse 14y ago
  I expect it's standard for the troll's "pay up and sign here to avoid ruinous litigation costs" deal to include an NDA that would prohibit things along those lines.
dantiberian 14y ago
It is very easy to say that a company should fight a patent lawsuit instead of paying it up but that's not always possible. In many cases pragmatism is going to be better than fighting in court for a small business, especially if the likely court costs for the battle are going to exceed your businesses accumulated lifetime revenue.
nonamegiven 14y ago
I see ads all the time on TV and billboards for DUI and settlement and disability lawyers. "Get the result you deserve." I think many of them are national firms, although they look local. It seems that patent troll victims would be a great area for a firm to break into.
SomeCallMeTim 14y ago
I just spoke with a friend about a time when his company was approached by a patent troll. The patent in question was granted in 2002 [1]. He had himself worked on the technology under "patent" in 1998, and was able to find someone who had published material as far back as 1995, and who was willing to send supporting documentation and to, if necessary, testify. He talked with his attorney, who agreed the prior art he'd found was spot on, and that in legislation they'd be almost certain to win. But that it would cost ~$3m. The patent trolls also were going after names such as Amazon, Facebook, and other huge companies. The troll was asking for $200k for a license from each company. As far as my friend knows, they ALL settled (or at least many of them had). There were 15-20 names on that list. If they'd simply put the $200k-$300k of "licensing fees" into a common pot and used that money to fight the troll, then it would have done a small amount of good in defeating one troll's patent. But really the whole system does need serious reform. His suggestion was to cause the patent trolls to have to PAY for legal fees if they lose a patent challenge, though that would just encourage them to sue from individual corporations that would declare bankruptcy on losing. But I think software patents should simply be disallowed, or the bar raised (somehow?) to exclude anything vague and hand-wavy. One thought I've had was to require an implementation of the process being patented. Then it would be far harder to claim that your patent covers something only vaguely related, and the patent would actually be useful for its original purpose, which was to put the knowledge into the public domain when the patent expires. [1] I wouldn't swear to the dates; they're from memory. The approximate order/scale is correct, though.
- shmerl 14y ago
  >But that it would cost ~$3m. Can you elaborate (if you have any idea) what this cost actually consists of?
  - SomeCallMeTim 14y ago
    Sorry, I don't know any more of the details. It was a casual conversation about patents and spurious lawsuits in general (they'd also been sued in a class-action, which they did fight and "win", in quotes only because apparently the attorneys for the plaintiffs are likely to appeal, meaning it's not over yet), and I've related what I remember from it. Though I will say this: He absolutely wanted to fight. He completely hated the concept of paying the extortion. But as a representative of a VC-backed company, he couldn't in good faith spend $3M on a lawsuit that could be put to rest for $200k.
shmerl 14y ago
What's more important that even companies which actually produce something are also engaging in patent protection racket. Such as MS, Apple and others. That's why the term "troll" (i.e. racketeer) is not exactly the same as NPE.
mtgx 14y ago
Isn't what Microsoft is doing with all the Android manufacturers basically the same thing, too?
- ZeroGravitas 14y ago
  I'm fairly convinced that it's mostly marketing and hot-air. After all Barnes and Nobles managed to get 1/2 a billion dollars out of their legal fight with Microsoft, it seems unlikely that Samsung would just roll over. But signing a bit of paper that makes it sound like a bad idea for competitors to enter Samsung's main money-making area and get some "marketing expenses" from a rich but strategy-bereft supplier makes good business sense.
csense 14y ago
What if the startup uses a scorched-earth policy? Fight 'til the money runs out, liquidating your assets and closing down the business piece by piece, then if the troll wins, they get nothing because it's all been spent on lawyers and there's nothing left for them to take.
- paulgb 14y ago
  Then the startup loses. The troll assumes that the startup is rational and won't do that. It would be interesting to see what effect a VC could have if they started a policy of not allowing their portfolio companies to settle with a troll and funding them to fight. It might be expensive at first, but in theory once they develop a reputation the trolls will know it will be an expensive and risky proposition to go after their portfolio.
- brown9-2 14y ago
  In what way is self-destruction a viable defense? This kills the startup.

190 points by doty 14y ago

Nux 14y ago

He's goddamn right! Patent system needs to die. Now.

mathattack 14y ago

I like the photo from the Seven Samurai. :-)

NotUncivil 14y ago

On a related note, this is one of the reasons I prefer to use, and make, Apache 2.0-licensed software. Its terms are similar to those of BSD and MIT but it also includes a patent licensing clause.

law 14y ago
So does GPLv3.
- belorn 14y ago
  GPLv3 patent licensing clause was created as a copy/fork of the clause from Apache 2.0 license, and then had an added statement about patent license agreements.

samspenc 14y ago

Its so awesome that more and more medium-sized companies are paying attention to this! Patent racketeering needs to stop!

rbanffy 14y ago

Patent protection rackets have been used for more than a business model: they have been used as tools to pressure large companies into entering partnership agreements. Please see the second item of the list: https://news.ycombinator.com/item?id=5479381 https://news.ycombinator.com/item?id=5479381

mehdim 14y ago

Are open web APIs becoming the new IT patents? http://api500.com/post/46951162382/apis-are-the-new-patents http://api500.com/post/46951162382/apis-are-the-new-patents

te_platt 14y ago

Can anyone here give (and defend) an example of a good patent? By that I mean one that is non-obvious, novel, and clear enough to be able to be used to build the claimed invention.

piokoch 14y ago
There are many. Think of safety-pin? When it comes to software it is much harder. The thing I can accept are cryptographic algorithms, since as an outcome we get a product - encoded text. All these one-clicks, etc. are pure bullshit.
- unimpressive 14y ago
  But math isn't patentable. You shouldn't be able to sprinkle "math implemented as a computer program" on top of your patent application and be able to skirt this.
- te_platt 14y ago
  I just looked up the safety pin patent and it does look pretty good. I hope my original question didn't come off as confrontational. I do think we would be better off eliminating patents altogether, but I want to make sure I'm not discounting any positive effects patents may have.
- betterunix 14y ago
  "The thing I can accept are cryptographic algorithms, since as an outcome we get a product" Of all the things... Cryptography is math in this day and age. Patents on crypto are patents on math, with only the measly "ON A COMPUTER!!!!" clause justifying their existence.
  - DanBC 14y ago
    See, for example, Clifford Cocks who invented RSA before RSA did, but was unable to patent it, and thus didn't get the profits that RSA did. He got a nice medal though.

abfan1127 14y ago

It sounds like we need "Kickstarter for Fighting Patent Trolls"...

205guy 14y ago

Given the article's opening paragraphs (small businesses and startups falling prey to the trolls), I'm surprised there hasn't been an organized attempt to inform people of the problem. Maybe I don't know about it and the author doesn't mention it, but it seems like there should be a website that categorizes the various players and their actions, with forums so victims and potential victims can share their experiences. Once you have all the data being collected in one place, then you can get the word out (how?) so that people know to check online even before checking with their lawyer. It seems like patent trolling is something that could be partially defeated with better and more widespread information.

AnthonyMouse 14y ago
I expect it's standard for the troll's "pay up and sign here to avoid ruinous litigation costs" deal to include an NDA that would prohibit things along those lines.

dantiberian 14y ago

It is very easy to say that a company should fight a patent lawsuit instead of paying it up but that's not always possible. In many cases pragmatism is going to be better than fighting in court for a small business, especially if the likely court costs for the battle are going to exceed your businesses accumulated lifetime revenue.

nonamegiven 14y ago

I see ads all the time on TV and billboards for DUI and settlement and disability lawyers. "Get the result you deserve." I think many of them are national firms, although they look local. It seems that patent troll victims would be a great area for a firm to break into.

SomeCallMeTim 14y ago

I just spoke with a friend about a time when his company was approached by a patent troll. The patent in question was granted in 2002 [1]. He had himself worked on the technology under "patent" in 1998, and was able to find someone who had published material as far back as 1995, and who was willing to send supporting documentation and to, if necessary, testify. He talked with his attorney, who agreed the prior art he'd found was spot on, and that in legislation they'd be almost certain to win. But that it would cost ~$3m. The patent trolls also were going after names such as Amazon, Facebook, and other huge companies. The troll was asking for $200k for a license from each company. As far as my friend knows, they ALL settled (or at least many of them had). There were 15-20 names on that list. If they'd simply put the $200k-$300k of "licensing fees" into a common pot and used that money to fight the troll, then it would have done a small amount of good in defeating one troll's patent. But really the whole system does need serious reform. His suggestion was to cause the patent trolls to have to PAY for legal fees if they lose a patent challenge, though that would just encourage them to sue from individual corporations that would declare bankruptcy on losing. But I think software patents should simply be disallowed, or the bar raised (somehow?) to exclude anything vague and hand-wavy. One thought I've had was to require an implementation of the process being patented. Then it would be far harder to claim that your patent covers something only vaguely related, and the patent would actually be useful for its original purpose, which was to put the knowledge into the public domain when the patent expires. [1] I wouldn't swear to the dates; they're from memory. The approximate order/scale is correct, though.

shmerl 14y ago
>But that it would cost ~$3m. Can you elaborate (if you have any idea) what this cost actually consists of?
- SomeCallMeTim 14y ago
  Sorry, I don't know any more of the details. It was a casual conversation about patents and spurious lawsuits in general (they'd also been sued in a class-action, which they did fight and "win", in quotes only because apparently the attorneys for the plaintiffs are likely to appeal, meaning it's not over yet), and I've related what I remember from it. Though I will say this: He absolutely wanted to fight. He completely hated the concept of paying the extortion. But as a representative of a VC-backed company, he couldn't in good faith spend $3M on a lawsuit that could be put to rest for $200k.

shmerl 14y ago

What's more important that even companies which actually produce something are also engaging in patent protection racket. Such as MS, Apple and others. That's why the term "troll" (i.e. racketeer) is not exactly the same as NPE.

mtgx 14y ago

Isn't what Microsoft is doing with all the Android manufacturers basically the same thing, too?

ZeroGravitas 14y ago
I'm fairly convinced that it's mostly marketing and hot-air. After all Barnes and Nobles managed to get 1/2 a billion dollars out of their legal fight with Microsoft, it seems unlikely that Samsung would just roll over. But signing a bit of paper that makes it sound like a bad idea for competitors to enter Samsung's main money-making area and get some "marketing expenses" from a rich but strategy-bereft supplier makes good business sense.

csense 14y ago

What if the startup uses a scorched-earth policy? Fight 'til the money runs out, liquidating your assets and closing down the business piece by piece, then if the troll wins, they get nothing because it's all been spent on lawyers and there's nothing left for them to take.

paulgb 14y ago
Then the startup loses. The troll assumes that the startup is rational and won't do that. It would be interesting to see what effect a VC could have if they started a policy of not allowing their portfolio companies to settle with a troll and funding them to fight. It might be expensive at first, but in theory once they develop a reputation the trolls will know it will be an expensive and risky proposition to go after their portfolio.
brown9-2 14y ago
In what way is self-destruction a viable defense? This kills the startup.