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Patent troll on the verge of winning 1% of iPhone revenue

183 points by kenjackson 12y ago

deleted 12y ago
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lorddoig 12y ago
We shouldn't blame patent trolls for acting the way they do in the same way that we shouldn't blame banks and stockbrokers for acting the way they do. If there is big money to be made, and it's legal, somebody is going to do it - and if it's not you, well, your loss. This is, and always has been, a problem of bad legislation. It is a structural problem in the system. The human race would save so much time, money, and energy if it tackled problems at their root instead of dossing around in the details, oblivious to the actual issue.
- higherpurpose 12y ago
  What about when they lobby to keep the current patent system in place. Can we blame them then, or is that the nature of the game, too?
  - lorddoig 12y ago
    The very idea that lobbying is a) a thing, and b) a thing that works is a failure of the political system in a massive but completely unsurprising way.
  - kryptiskt 12y ago
    Apple has a lot of money they could use to finance lobbying for patent reform. Maybe this will help them see the wisdom in that.
    - Maarten88 12y ago
      A strong signal would be if Apple raised prices for affected products (iPhones and iPods) by exactly 0.98% and send out a press release that this is necessary to offset increased patent-related costs and will only affect US prices. Further increases are not expected, but can't be ruled out. Foreign pricing will not be affected. I'd like to see politicians react to that...
      - meepmorp 12y ago
        I doubt politicians would give a shit, perhaps notwithstanding a few minutes of grandstanding during some floor speech or committee hearing. Certainly, no action would come of it. Lobbying, though, would get their attention. Like it or not, that's how one operates the levers of power in Washington at the moment
- yohui 12y ago
  If we didn't find patent trolls worthy of blame, where would the motivation to stamp out their behavior come from?
- Istof 12y ago
  The root cause of lots of bad legislations can be linked to corporate bribes (lobby)... which is legal in the USA.
- zmmmmm 12y ago
  This line always comes out, for some reason, regarding patents. In other discussions we get completely different logic - eg: people get terribly riled up about whether Google is "evil" or not and it is rarely connected to whether it's legal or not. The ultimate with your logic is that it would call for massive legislation to cover every facet of our lives - everything bad must be made illegal, otherwise nobody can even be criticised for doing it. I don't want to live in a world like that. Laws are far too crude for that, they can only work at extremes where it is clear you can put down a blanket rule. In between, people and companies behaving badly should be held to account through criticism and public pressure. We should expect companies to behave honorably and ethically and criticise them heavily when they don't.
  - vanwesson 12y ago
    Google gets grief over being "evil" because they publicly claimed not to be, and got a lot of popularity and goodwill in the marketplace as a result. When people get "riled up" about Google, they are threatening to take away that popularity and goodwill, that's all. It's not the same thing. Also, what makes you think we don't already have "massive legislation to cover every facet of our lives"? Have you ever heard of the book "Three Felonies a Day"?
  - jusben1369 12y ago
    "This line always comes out" - as does yours. We can only solve patent trolls by legislating every small piece of our lives is a fallacy of logic. One doesn't inevitably mean the other.
  - lorddoig 12y ago
    I take exception to being accused of delivering 'a line'. I commented, as I only ever do, when I see a truth that for whatever reason I decide to broadcast publicly. The veracity of my statement may be the source of its ubiquity you observe. Increased legislation is rarely the answer. I do not have a pre-rolled solution for the 'patent problem', but - contrary to popular opinion - this is not required to point out flaws in the current system. Perhaps the current system is the best we can do, but that does not excuse its flaws. We should always aim for what could be - and what we could, maybe, come up with is a system that encourages innovation (through financial reward) yet disallows this kind of destructive behaviour. How? Who knows. I bet 10 years ago if you applied such thinking to finance you wouldn't have got very far - "central bankers supplying fiat money is good enough"...yet now we have Bitcoin et. al., a whole host of currencies whose aggregate behaviour is mathematically provable. Focus on the could, anything less is not worthy of the tag 'innovation'.
- pkill17 12y ago
  Begrudgingly, I agree. I don't consider a patent holder to be a troll unless they're clearly not the first party to develop said technology. If there's clear prior art, only then would I consider someone a troll. Unfortunately, patents are becoming more commoditized than healthcare in our country. It seems silly to me that someone is permitted to sue on the basis of patent violation when a) they weren't the original inventor, b) they bought the patent for the entire reason of profiting from litigation, or c) they're suing people who 'violated' their patent prior to the time they purchased it.
- nitrogen 12y ago
  The human race would save so much time, money, and energy if it tackled problems at their root instead of dossing around in the details, oblivious to the actual issue. Nobody's oblivious to the actual issue; it's just that the root of the problem is inaccessibly mired in a tangled web of lobbying networks, conflicting interests, and impenetrable committees. Opportunists are just as guilty of making the world worse as the laws that enable them.
  - lorddoig 12y ago
    Nonsense. Opportunists are faced with the decision "Should I attempt to make a bucketload of cash, and secure my family's - and my stakeholders families' - future, or should I take a moral stance, make no money, and console myself in poverty because I'm a 'good' person?" Contrarily, lawmakers have all of the tools required to make a better system, and yet choose not to, for the same indecipherable reasons so many political decisions are made.
    - yohui 12y ago
      They could have chosen other ways to make a living. Patent trolling is hardly a blue collar enterprise.
- crazy1van 12y ago
  > This is, and always has been, a problem of bad legislation. Exactly. The legislation and regulatory apparatus built around it allow people to claim exclusivity on ideas and techniques that are already obvious to most people in the field. This must be fixed with legislation. Calling companies trolls on internet forums unread by the vast majority of citizens really doesn't help the cause. These companies make their living enforcing patents. They aren't going to stop because people say mean things about them. They are going to stop when the law makes their business obsolete.
- skoob 12y ago
  "Don't hate the player, hate the game" is a false dichotomy. It's perfectly possible to conclude that the system is rotten and still call out those who take advantage of it in ways which hurt others. The fact that there's money to be made and that it's legal doesn't make it any less sleazy and immoral.
dsugarman 12y ago
what goes around comes back around - Justin Timberlake
SeanLuke 12y ago
> The patents (1, 2, 3, 4) originated at a company called Science Applications International Corporation, or SAIC; they are now owned by VirnetX. It's worth mentioning that SAIC is not a lightweight. It is a large government contractor with $4 billion in annual revenue.
jeffdavis 12y ago
The fact that this is being heard in court and the patent holder is winning means, according to my definition, they aren't patent trolls. I define "patent troll" as an entity that has a sliver of a chance of winning, but 100% chance that they will impose high costs on the defendant at little cost to themselves. They use this assymetry as a form of legal extortion. They limit their downside by holding few assets aside from the patent. EDIT: I am in no way commenting on the merit of the case or the 1% figure.
- larrys 12y ago
  The "definition" of a patent troll (per google search): "A patent troll, also called a patent assertion entity, is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question." This is always the definition that I understood.
  - fleitz 12y ago
    So sort of like Universities?
    - adventured 12y ago
      Some universities are absolutely on the list of most aggressive and abusive patent trolls. Some universities are also among those fighting hardest to keep the status quo in place so they can continue to harm the US economy with frivolous patents and milk a broken system.
      - fleitz 12y ago
        Yes! We need to get rid of those fat cats in Washington! LULZ.
    - marcosdumay 12y ago
      And independent inventors, and basically anybody that is not a huge corporation and creates something useful. That popular definition looks too much like political propaganda.
rayiner 12y ago
I don't know if it's fair to call VirnetX a "patent troll." They're an NPE, but there's no indication that they're abusing the process or trying to get a low-ball settlement just to avoid actually going to court. Furthermore, the patents aren't just something they churned out. The technology in question was developed by SAIC for the CIA. SAIC is a major defense contractor and R&D company: http://www.washingtonpost.com/business/capitalbusiness/contracting-giant-saic-takes-final-step-in-split-into-two-public-companies/2013/09/30/f9c95b74-277e-11e3-ad0d-b7c8d2a594b9_story.html http://www.washingtonpost.com/business/capitalbusiness/contr.... Also, the inventor listed on the patents, Dr. Robert Short, who previously worked at SAIC, is CTO at VirnetX: http://virnetx.com/company/executive-management http://virnetx.com/company/executive-management ("Dr. Short has been the Chief Scientist for VirnetX since May 2007 . . . . From February 2000 to April 2007, Dr. Short was Assistant Vice President and Division Manager at Science Applications International Corporation, or SAIC. . . . Dr. Short is named as a co-inventor on substantially all of the patents in the VirnetX patent portfolio.") I haven't studied the patents in question and am not commenting on whether they're any good or not. But considering how much of the core internet technologies were developed by private defense contractors working for the government, it's not far-fetched that some of them would hold key patents.
- ghayes 12y ago
  > VirnetX is a company some call a "patent troll" because its only business is now patent enforcement. I believe this viewpoint is shared by a number of people. Specifically, that a litigious NPE is, by colloquial definition, a "patent troll." There is a conversation to be had as to whether the practice is good or bad, or if they are acting more appropriately than their peer group, but I think the term fits in this case.
  - ScottBurson 12y ago
    The fact that a viewpoint is shared by a number of people is hardly an argument for its validity. We need to understand what we're fighting. Defining a patent troll as any NPE who files an infringement suit is clearly too broad, because the only way to prevent trolling under that definition is to shut down the patent system. As long as patents are issued, and can be bought and sold, it will be possible for NPEs to own them. Furthermore, independent inventors, of whom I believe there are still a few left, and whom I think we all believe the patent system should protect if it protects anyone, are generally NPEs.
quellhorst 12y ago
If this happens, then maybe Apple will get behind real patent reform.
- meepmorp 12y ago
  You mean, like they publicly stated they would when the Googlrola Android lawsuits were settled just recently?
  - JohnTHaller 12y ago
    Lip service from the company that patented a rectangle with rounded corners (D670,286).
georgemcbay 12y ago
At this point I honestly believe the only way the patent system gets any better is by becoming so overbearing that it collapses under its own weight. The lobbying machine in place to protect patents essentially as they are now (with maybe some token changes to look like progress) is way too big and way too strong for reform otherwise. So in that sense, I'm happy about this.
- deleted 12y ago
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- bediger4000 12y ago
  That was my emotional reaction too, but my thought was different. I saw the article and thought, "Maybe if 2 or 3 more trolls win big against Google, Microsoft and GM or GE, we'll see some legislative action."
  - reddit_clone 12y ago
    I remember RIM was nearly brought down with patent litigation. I expected some backlash since a lot of people in US government were affected by the potential outage. Sadly nothing happened. Rim paid up I believe.
x0054 12y ago
Have you guys looked at the patents in this case? They look thick and serious, but if you actually read the claims, you will soon realize that it's nothing but an obvious and straightforward procedure for deciding when and with whom to establish a VPN. None of these patents make sure that a VPN connection is more secure, more reliable, or in any way better. Majority of the patent is explanation on how a VPN works, different mathematical explanations on how to generate random numbers, the theory behind secure communications. But none of that stuff is actually covered by the patent, so don't be impressed by it. What is covered is basically the straightforward and logical application of the explained VPN concepts, but the VPN concepts them selves are not patented. I am not sure if the patent examiner of this patent was dazzled by the 50+ pages of VPN theory and just granted this thing. To me it's stunning! It's like filing a patent that in intricate detail explains how an automobile works and than sneaking in a claim that you invented that an automobile can be used to move personal belonging from place to place.
- ScottBurson 12y ago
  Okay, I'm looking at 6502135... Claim 1 is a joke. How does this not apply to HTTPS? I would toss it and all its dependents. Claim 13 is almost as obvious, but in this case I am not sure about the dependent claims. Some of them sound to me like they might be inventions. Claim 10 seems stronger to me. Networking is not my field, so I am not at all sure there is not prior art, but at least it seems to contain an actual idea. I'm not going to read the whole description, but a quick scan seems to support your contention that there is a lot of material here that is not referenced by the claims.
  - analog31 12y ago
    IANAL, but Including material that is not referenced by the claims, gives you the chance to submit amended claims at a later date if your original claims are invalidated.
- piyush_soni 12y ago
  You mean they are just a little less baseless than the patent for 'rounded corners'?
ps4fanboy 12y ago
There will be great irony if Apple complains about patent reform after this.
- Istof 12y ago
  hopefully they will loose more money then they made from patents
- Yetanfou 12y ago
  Live by the sword, die by the sword. It won't come that far, but Apple certainly has no leg to stand on when it comes to spurious patent claims. Given the size of their war chest, legal department and political clout (reaching as far as the current president of the US, it seems) they'd have a good chance at instigating effective patent reform. Now all that is needed it the will to do so.
argumentum 12y ago
In this overwhelmingly depressing article, I saw a ray of hope, an enchanting possibility .. a silver lining if you will: > Instead, two other mysterious companies came forward seeking to challenge VirnetX's patents. First was a shell company called New Bay Capital, which filed an IPR and then reportedly asked VirnetX for 10 percent of its massive jury award in exchange for backing off. New Bay dropped its case on April 4 without getting any money—and without revealing who was behind the claim. Then came RPX, a defensive patent aggregator that has become increasingly well-known, and increasingly profitable, in recent years. RPX works by selling memberships to companies that feel harangued by patent trolls, including Apple and many other tech companies. How wonderful it would be if the ultimate demise of patent trolls was brought about by other patent trolls :)
valar_m 12y ago
I actually hope the trolls win.[0] I believe that the current state of IP law does far more to stifle innovation than to support it, and I fear that it will only change when sufficient monied interests become inclined to support a change. Put another way, I believe change will come when the juggernauts like Apple stand to lose more than they gain from the current state of the law. Until then, I suspect that the status quo will continue. [0] Others have made similar arguments, including Mark Cuban in re: Yahoo's patent suit vs. Facebook: http://blogmaverick.com/2012/03/13/i-hope-yahoo-crushes-facebook-in-its-patent-suit/ http://blogmaverick.com/2012/03/13/i-hope-yahoo-crushes-face...
steven2012 12y ago
At some point, the patent trolls will force software companies like Apple, Google, and IBM to admit to themselves that software patents themselves have no value and cause more bad than good. So we need more of these patent trolls to win substantially more and more revenue from these companies, until the pain is so great that the big companies do something about it.
- EGreg 12y ago
  In this case I don't think this is a patent troll. They are an NPE but they aren't trying to bully small companies to settle out of court. If they win maybe more people will want to join the dark side and make large corporations pay. Maybe then they will put pressure on Congress to finally pass the bipartisan bill that Leahy and Harry Reid forced to be shelved.
  - eridius 12y ago
    Are patent trolls only patent trolls if they go after small businesses?
    - EGreg 12y ago
      They are patent trolls if they push the business to settle out of court, which usually is only possible with small businesses.
      - tempestn 12y ago
        AFAIK it's pretty common in any lawsuit to try to convince the other party to settle out of court.
        EGreg 12y ago
        An NPE which pushes to settle out of court.
      - nl 12y ago
throwawaykf05 12y ago
On a mobile device, so can't research much, but a couple of things: 1) The claims are incredibly broad, and I'm surprised they have held up so far. Many such patents issued back then (it happens much more rarely these days) but even by those standards this is broad. Without indulging too much in the sin of simplifying claims, they basically cover detecting if a server supports secure connections, and if so, establishing a VPN instead of a normal connection. One of the patents covers a DNS server which indicates whether a server supports secure connections. 2) One of the comments on TFA, which is significant if true (would be good if someone could verify): > If you read through the court docs, the actual royalty imposed was 0.52%. It was Apple's various shenanigans and lies (partial and outright) to the court that prompted additional penalties up to a 0.98% rate. Similar things have happened in the past, e.g. In i4i, where a Microsoft lawyer was sanctioned for insisting plaintiff was a patent troll. However, in that case the lawyer paid the price rather than the company as a whole. In any case, even 0.52% is incredibly high a single minor feature. I guess the lesson here is clear: don't piss off the court.
bsder 12y ago
Good. When the big companies have to pay real money, they'll fix the software patents problem.
octonion 12y ago
The real problem is that patents have become an intellectual land grab, no matter how obvious, whether or not violators were even aware of the patents, and whether or not the patenting company has any interest whatsoever is using the patent in an actual product. The majority of inventions are not strokes of genius - when the time is right, ideas emerge naturally and tend to be invented by multiple people around the same time.
nslocum 12y ago
If VirnetX were on the verge of winning 1% of iPhone revenue, their stock price would reflect it. However, it does not. https://www.google.com/finance?q=NYSEMKT%3AVHC&ei=h-WTU4DYNs_TqAGN_4DQCA https://www.google.com/finance?q=NYSEMKT%3AVHC&ei=h-WTU4DYNs... VirnetX's market cap is $850 million, which would be a very steep discount if the company were "on the verge" of being paid $340 million/year from Apple.
- TomGullen 12y ago
  Good catch, will be interesting to see how this plays out. I tend to believe indicators like this over news reports.
mrslave 12y ago
If patents are in any way good (bullshit, but assume true for now) then I'm ok with this. Why can one person own imaginary property and another cannot? If Amazon can one-click some bullshit, why cannot someone else have exclusive rights to another idea?
flipped_bit 12y ago
The core of the issue (if any) is that historically, the patent system is inextricably tied into the free-market/laissez-faire economic system, which for all its flaws, did create the world as we know it for the last ~ 200 to 300 years which led to an exponential rise in technological development - a unique phase started in the Western world, where now some of the 'successful and well-developed' countries in the Eastern world (e.g. Japan, South Korea, Singapore) have incorporated into their respective systems. From Stallman's article which did show up here: https://www.gnu.org/philosophy/not-ipr.html https://www.gnu.org/philosophy/not-ipr.html "Patent law was intended to promote the publication of useful ideas, at the price of giving the one who publishes an idea a temporary monopoly over it—a price that may be worth paying in some fields and not in others." The real question is does all software patents come in the last part of the aforesaid sentence: ".....—a price that may be worth paying in some fields and not in others." A knee-jerk reaction to throw out the baby out with the bathwater by abolishing the whole patent system may not be the right solution here.
- quink 12y ago
  > A knee-jerk reaction to throw out the baby out with the bathwater by abolishing the whole patent system may not be the right solution here. To further that analogy, if that bathwater is a toxic brew with, at least in the software industry, a serious chilling effect on innovation and enterprise is that really a bathwater the baby should be in? If you can point out to me more success stories because of software patents than nightmare scenarios like the above and the X-Plane saga, then I might agree. But as it stands, the biggest success story, Uniloc, that's relevant to Australia, which is where I am, makes me just pissed off.
  - flipped_bit 12y ago
    Sorry to get back too late for the response as I hadn't seen it earlier. I do agree that the patent system as it is applied to software (and possibly other areas too like biotechnology) needs to be reformed. I am not defending the status quo but just pointing out that people who argue for abolishing the whole system needs to first understand its historical role before taking a drastic action. At the risk of over-simplifying, there is a tussle between 'software as a collection of algorithms which in turn are defined as a special class of mathematics' which is not patentable, vs software as a 'product' that provides useful functions which is in-line with how patents have been applied in other areas. Things get a little more complicated with 'process patents' as applied to software. It is hard to draw a fine line here and I don't claim to have any answers except looking at each case individually and deciding to apply it, sort of like the early definition of art vs porn: "I know it when I see it" (or something to that effect). Even if you were to grant a expansive protection for functional cases or business methods (implemented by the software), you will still have ridiculous ones like the 'Amazon one-click patent'. Regarding examples of 'success stories', I am not sure if these apply but the entire model of software business was driven on licenses during its critical growth period in the 1980s. One example is the core functionality of Excel which is probably one of the most successful software ever built: http://www.google.co.in/patents/US5272628 http://www.google.co.in/patents/US5272628 Even Google's core search ranking algorithm was patented: https://www.google.com/patents/US6285999 https://www.google.com/patents/US6285999 I should leave with this comment from PG: http://www.paulgraham.com/softwarepatents.html http://www.paulgraham.com/softwarepatents.html "Frankly, it surprises me how small a role patents play in the software business. It's kind of ironic, considering all the dire things experts say about software patents stifling innovation, but when one looks closely at the software business, the most striking thing is how little patents seem to matter."
einarlove 12y ago
Read "Patient troll on The Verge, winning 1% of iPone revenue"
deleted 12y ago
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SeanDav 12y ago
This is a good illustration for Karma, or "what goes around, comes around". Apple have only paid lip service (at best) to patent reform, so now there might be some serious consequences to that decision.
valvar 12y ago
Well, at least they are hitting other (albeit larger) patent trolls... Karma!
dm2 12y ago
Could someone explain to me how companies are suppose to avoid infringing on patents? With a device as complicated as a smartphone it's inevitable that someone holds the patents for numerous parts of the device and the software. Is there a lawyer that is supposed to check out every single aspect of a device and check for prior patents? If so, then shouldn't the lawyer be responsible in this instance? Note: I personally don't care if Apple loses patent cases, they've done enough damage with their own frivolous patent lawsuits.
eliben 12y ago
Could someone explain what the thing with East Texas is? A district where juries and judges are more favorable than usual towards patents? This sound kind-of ridiculous, no? Can't the defending companies find similar anti-patent areas and file counter-suites there?
- rando289 12y ago
  > Could someone explain what the thing with East Texas is? A district where juries and judges are more favorable than usual towards patents? It started a bit randomly, based on the politics of the region the judges/juries were slightly more favorable toward patents than anywhere else. Then it became self perpetuating since it helps the local economy & the judges own careers. > This sound kind-of ridiculous, no? Absolutely ridiculous. Patents are federal law, but 1 small region is effectively making serious changes to that legislation. > Can't the defending companies find similar anti-patent areas and file counter-suites there? They do. There are a range of locations, never in east texas. No one place has emerged as THE anti-patent location. For example, Microsoft files suit in Seattle since it's based there, has influence, people want it to win since it's a benefit to their local economy, etc.
deleted 12y ago
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jbb555 12y ago
What? Apple already get more than 1% of iPhone revenue!

183 points by kenjackson 12y ago

deleted 12y ago

[deleted]

We shouldn't blame patent trolls for acting the way they do in the same way that we shouldn't blame banks and stockbrokers for acting the way they do. If there is big money to be made, and it's legal, somebody is going to do it - and if it's not you, well, your loss. This is, and always has been, a problem of bad legislation. It is a structural problem in the system. The human race would save so much time, money, and energy if it tackled problems at their root instead of dossing around in the details, oblivious to the actual issue.

higherpurpose 12y ago
What about when they lobby to keep the current patent system in place. Can we blame them then, or is that the nature of the game, too?
- lorddoig 12y ago
  The very idea that lobbying is a) a thing, and b) a thing that works is a failure of the political system in a massive but completely unsurprising way.
- kryptiskt 12y ago
  Apple has a lot of money they could use to finance lobbying for patent reform. Maybe this will help them see the wisdom in that.
  - Maarten88 12y ago
    A strong signal would be if Apple raised prices for affected products (iPhones and iPods) by exactly 0.98% and send out a press release that this is necessary to offset increased patent-related costs and will only affect US prices. Further increases are not expected, but can't be ruled out. Foreign pricing will not be affected. I'd like to see politicians react to that...
    - meepmorp 12y ago
      I doubt politicians would give a shit, perhaps notwithstanding a few minutes of grandstanding during some floor speech or committee hearing. Certainly, no action would come of it. Lobbying, though, would get their attention. Like it or not, that's how one operates the levers of power in Washington at the moment
yohui 12y ago
If we didn't find patent trolls worthy of blame, where would the motivation to stamp out their behavior come from?
Istof 12y ago
The root cause of lots of bad legislations can be linked to corporate bribes (lobby)... which is legal in the USA.
zmmmmm 12y ago
This line always comes out, for some reason, regarding patents. In other discussions we get completely different logic - eg: people get terribly riled up about whether Google is "evil" or not and it is rarely connected to whether it's legal or not. The ultimate with your logic is that it would call for massive legislation to cover every facet of our lives - everything bad must be made illegal, otherwise nobody can even be criticised for doing it. I don't want to live in a world like that. Laws are far too crude for that, they can only work at extremes where it is clear you can put down a blanket rule. In between, people and companies behaving badly should be held to account through criticism and public pressure. We should expect companies to behave honorably and ethically and criticise them heavily when they don't.
- vanwesson 12y ago
  Google gets grief over being "evil" because they publicly claimed not to be, and got a lot of popularity and goodwill in the marketplace as a result. When people get "riled up" about Google, they are threatening to take away that popularity and goodwill, that's all. It's not the same thing. Also, what makes you think we don't already have "massive legislation to cover every facet of our lives"? Have you ever heard of the book "Three Felonies a Day"?
- jusben1369 12y ago
  "This line always comes out" - as does yours. We can only solve patent trolls by legislating every small piece of our lives is a fallacy of logic. One doesn't inevitably mean the other.
- lorddoig 12y ago
  I take exception to being accused of delivering 'a line'. I commented, as I only ever do, when I see a truth that for whatever reason I decide to broadcast publicly. The veracity of my statement may be the source of its ubiquity you observe. Increased legislation is rarely the answer. I do not have a pre-rolled solution for the 'patent problem', but - contrary to popular opinion - this is not required to point out flaws in the current system. Perhaps the current system is the best we can do, but that does not excuse its flaws. We should always aim for what could be - and what we could, maybe, come up with is a system that encourages innovation (through financial reward) yet disallows this kind of destructive behaviour. How? Who knows. I bet 10 years ago if you applied such thinking to finance you wouldn't have got very far - "central bankers supplying fiat money is good enough"...yet now we have Bitcoin et. al., a whole host of currencies whose aggregate behaviour is mathematically provable. Focus on the could, anything less is not worthy of the tag 'innovation'.
pkill17 12y ago
Begrudgingly, I agree. I don't consider a patent holder to be a troll unless they're clearly not the first party to develop said technology. If there's clear prior art, only then would I consider someone a troll. Unfortunately, patents are becoming more commoditized than healthcare in our country. It seems silly to me that someone is permitted to sue on the basis of patent violation when a) they weren't the original inventor, b) they bought the patent for the entire reason of profiting from litigation, or c) they're suing people who 'violated' their patent prior to the time they purchased it.
nitrogen 12y ago
The human race would save so much time, money, and energy if it tackled problems at their root instead of dossing around in the details, oblivious to the actual issue. Nobody's oblivious to the actual issue; it's just that the root of the problem is inaccessibly mired in a tangled web of lobbying networks, conflicting interests, and impenetrable committees. Opportunists are just as guilty of making the world worse as the laws that enable them.
- lorddoig 12y ago
  Nonsense. Opportunists are faced with the decision "Should I attempt to make a bucketload of cash, and secure my family's - and my stakeholders families' - future, or should I take a moral stance, make no money, and console myself in poverty because I'm a 'good' person?" Contrarily, lawmakers have all of the tools required to make a better system, and yet choose not to, for the same indecipherable reasons so many political decisions are made.
  - yohui 12y ago
    They could have chosen other ways to make a living. Patent trolling is hardly a blue collar enterprise.
crazy1van 12y ago
> This is, and always has been, a problem of bad legislation. Exactly. The legislation and regulatory apparatus built around it allow people to claim exclusivity on ideas and techniques that are already obvious to most people in the field. This must be fixed with legislation. Calling companies trolls on internet forums unread by the vast majority of citizens really doesn't help the cause. These companies make their living enforcing patents. They aren't going to stop because people say mean things about them. They are going to stop when the law makes their business obsolete.
skoob 12y ago
"Don't hate the player, hate the game" is a false dichotomy. It's perfectly possible to conclude that the system is rotten and still call out those who take advantage of it in ways which hurt others. The fact that there's money to be made and that it's legal doesn't make it any less sleazy and immoral.

dsugarman 12y ago

what goes around comes back around - Justin Timberlake

SeanLuke 12y ago

> The patents (1, 2, 3, 4) originated at a company called Science Applications International Corporation, or SAIC; they are now owned by VirnetX. It's worth mentioning that SAIC is not a lightweight. It is a large government contractor with $4 billion in annual revenue.

jeffdavis 12y ago

The fact that this is being heard in court and the patent holder is winning means, according to my definition, they aren't patent trolls. I define "patent troll" as an entity that has a sliver of a chance of winning, but 100% chance that they will impose high costs on the defendant at little cost to themselves. They use this assymetry as a form of legal extortion. They limit their downside by holding few assets aside from the patent. EDIT: I am in no way commenting on the merit of the case or the 1% figure.

larrys 12y ago
The "definition" of a patent troll (per google search): "A patent troll, also called a patent assertion entity, is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question." This is always the definition that I understood.
- fleitz 12y ago
  So sort of like Universities?
  - adventured 12y ago
    Some universities are absolutely on the list of most aggressive and abusive patent trolls. Some universities are also among those fighting hardest to keep the status quo in place so they can continue to harm the US economy with frivolous patents and milk a broken system.
    - fleitz 12y ago
      Yes! We need to get rid of those fat cats in Washington! LULZ.
  - marcosdumay 12y ago
    And independent inventors, and basically anybody that is not a huge corporation and creates something useful. That popular definition looks too much like political propaganda.

rayiner 12y ago

I don't know if it's fair to call VirnetX a "patent troll." They're an NPE, but there's no indication that they're abusing the process or trying to get a low-ball settlement just to avoid actually going to court. Furthermore, the patents aren't just something they churned out. The technology in question was developed by SAIC for the CIA. SAIC is a major defense contractor and R&D company: http://www.washingtonpost.com/business/capitalbusiness/contracting-giant-saic-takes-final-step-in-split-into-two-public-companies/2013/09/30/f9c95b74-277e-11e3-ad0d-b7c8d2a594b9_story.html http://www.washingtonpost.com/business/capitalbusiness/contr.... Also, the inventor listed on the patents, Dr. Robert Short, who previously worked at SAIC, is CTO at VirnetX: http://virnetx.com/company/executive-management http://virnetx.com/company/executive-management ("Dr. Short has been the Chief Scientist for VirnetX since May 2007 . . . . From February 2000 to April 2007, Dr. Short was Assistant Vice President and Division Manager at Science Applications International Corporation, or SAIC. . . . Dr. Short is named as a co-inventor on substantially all of the patents in the VirnetX patent portfolio.") I haven't studied the patents in question and am not commenting on whether they're any good or not. But considering how much of the core internet technologies were developed by private defense contractors working for the government, it's not far-fetched that some of them would hold key patents.

ghayes 12y ago
> VirnetX is a company some call a "patent troll" because its only business is now patent enforcement. I believe this viewpoint is shared by a number of people. Specifically, that a litigious NPE is, by colloquial definition, a "patent troll." There is a conversation to be had as to whether the practice is good or bad, or if they are acting more appropriately than their peer group, but I think the term fits in this case.
- ScottBurson 12y ago
  The fact that a viewpoint is shared by a number of people is hardly an argument for its validity. We need to understand what we're fighting. Defining a patent troll as any NPE who files an infringement suit is clearly too broad, because the only way to prevent trolling under that definition is to shut down the patent system. As long as patents are issued, and can be bought and sold, it will be possible for NPEs to own them. Furthermore, independent inventors, of whom I believe there are still a few left, and whom I think we all believe the patent system should protect if it protects anyone, are generally NPEs.

quellhorst 12y ago

If this happens, then maybe Apple will get behind real patent reform.

meepmorp 12y ago
You mean, like they publicly stated they would when the Googlrola Android lawsuits were settled just recently?
- JohnTHaller 12y ago
  Lip service from the company that patented a rectangle with rounded corners (D670,286).

georgemcbay 12y ago

At this point I honestly believe the only way the patent system gets any better is by becoming so overbearing that it collapses under its own weight. The lobbying machine in place to protect patents essentially as they are now (with maybe some token changes to look like progress) is way too big and way too strong for reform otherwise. So in that sense, I'm happy about this.

deleted 12y ago
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bediger4000 12y ago
That was my emotional reaction too, but my thought was different. I saw the article and thought, "Maybe if 2 or 3 more trolls win big against Google, Microsoft and GM or GE, we'll see some legislative action."
- reddit_clone 12y ago
  I remember RIM was nearly brought down with patent litigation. I expected some backlash since a lot of people in US government were affected by the potential outage. Sadly nothing happened. Rim paid up I believe.

x0054 12y ago

Have you guys looked at the patents in this case? They look thick and serious, but if you actually read the claims, you will soon realize that it's nothing but an obvious and straightforward procedure for deciding when and with whom to establish a VPN. None of these patents make sure that a VPN connection is more secure, more reliable, or in any way better. Majority of the patent is explanation on how a VPN works, different mathematical explanations on how to generate random numbers, the theory behind secure communications. But none of that stuff is actually covered by the patent, so don't be impressed by it. What is covered is basically the straightforward and logical application of the explained VPN concepts, but the VPN concepts them selves are not patented. I am not sure if the patent examiner of this patent was dazzled by the 50+ pages of VPN theory and just granted this thing. To me it's stunning! It's like filing a patent that in intricate detail explains how an automobile works and than sneaking in a claim that you invented that an automobile can be used to move personal belonging from place to place.

ScottBurson 12y ago
Okay, I'm looking at 6502135... Claim 1 is a joke. How does this not apply to HTTPS? I would toss it and all its dependents. Claim 13 is almost as obvious, but in this case I am not sure about the dependent claims. Some of them sound to me like they might be inventions. Claim 10 seems stronger to me. Networking is not my field, so I am not at all sure there is not prior art, but at least it seems to contain an actual idea. I'm not going to read the whole description, but a quick scan seems to support your contention that there is a lot of material here that is not referenced by the claims.
- analog31 12y ago
  IANAL, but Including material that is not referenced by the claims, gives you the chance to submit amended claims at a later date if your original claims are invalidated.
piyush_soni 12y ago
You mean they are just a little less baseless than the patent for 'rounded corners'?

ps4fanboy 12y ago

There will be great irony if Apple complains about patent reform after this.

Istof 12y ago
hopefully they will loose more money then they made from patents
Yetanfou 12y ago
Live by the sword, die by the sword. It won't come that far, but Apple certainly has no leg to stand on when it comes to spurious patent claims. Given the size of their war chest, legal department and political clout (reaching as far as the current president of the US, it seems) they'd have a good chance at instigating effective patent reform. Now all that is needed it the will to do so.

argumentum 12y ago

In this overwhelmingly depressing article, I saw a ray of hope, an enchanting possibility .. a silver lining if you will: > Instead, two other mysterious companies came forward seeking to challenge VirnetX's patents. First was a shell company called New Bay Capital, which filed an IPR and then reportedly asked VirnetX for 10 percent of its massive jury award in exchange for backing off. New Bay dropped its case on April 4 without getting any money—and without revealing who was behind the claim. Then came RPX, a defensive patent aggregator that has become increasingly well-known, and increasingly profitable, in recent years. RPX works by selling memberships to companies that feel harangued by patent trolls, including Apple and many other tech companies. How wonderful it would be if the ultimate demise of patent trolls was brought about by other patent trolls :)

valar_m 12y ago

I actually hope the trolls win.[0] I believe that the current state of IP law does far more to stifle innovation than to support it, and I fear that it will only change when sufficient monied interests become inclined to support a change. Put another way, I believe change will come when the juggernauts like Apple stand to lose more than they gain from the current state of the law. Until then, I suspect that the status quo will continue. [0] Others have made similar arguments, including Mark Cuban in re: Yahoo's patent suit vs. Facebook: http://blogmaverick.com/2012/03/13/i-hope-yahoo-crushes-facebook-in-its-patent-suit/ http://blogmaverick.com/2012/03/13/i-hope-yahoo-crushes-face...

steven2012 12y ago

At some point, the patent trolls will force software companies like Apple, Google, and IBM to admit to themselves that software patents themselves have no value and cause more bad than good. So we need more of these patent trolls to win substantially more and more revenue from these companies, until the pain is so great that the big companies do something about it.

EGreg 12y ago
In this case I don't think this is a patent troll. They are an NPE but they aren't trying to bully small companies to settle out of court. If they win maybe more people will want to join the dark side and make large corporations pay. Maybe then they will put pressure on Congress to finally pass the bipartisan bill that Leahy and Harry Reid forced to be shelved.
- eridius 12y ago
  Are patent trolls only patent trolls if they go after small businesses?
  - EGreg 12y ago
    They are patent trolls if they push the business to settle out of court, which usually is only possible with small businesses.
    - tempestn 12y ago
      AFAIK it's pretty common in any lawsuit to try to convince the other party to settle out of court.
      - EGreg 12y ago
        An NPE which pushes to settle out of court.
    - nl 12y ago

throwawaykf05 12y ago

On a mobile device, so can't research much, but a couple of things: 1) The claims are incredibly broad, and I'm surprised they have held up so far. Many such patents issued back then (it happens much more rarely these days) but even by those standards this is broad. Without indulging too much in the sin of simplifying claims, they basically cover detecting if a server supports secure connections, and if so, establishing a VPN instead of a normal connection. One of the patents covers a DNS server which indicates whether a server supports secure connections. 2) One of the comments on TFA, which is significant if true (would be good if someone could verify): > If you read through the court docs, the actual royalty imposed was 0.52%. It was Apple's various shenanigans and lies (partial and outright) to the court that prompted additional penalties up to a 0.98% rate. Similar things have happened in the past, e.g. In i4i, where a Microsoft lawyer was sanctioned for insisting plaintiff was a patent troll. However, in that case the lawyer paid the price rather than the company as a whole. In any case, even 0.52% is incredibly high a single minor feature. I guess the lesson here is clear: don't piss off the court.

bsder 12y ago

Good. When the big companies have to pay real money, they'll fix the software patents problem.

octonion 12y ago

The real problem is that patents have become an intellectual land grab, no matter how obvious, whether or not violators were even aware of the patents, and whether or not the patenting company has any interest whatsoever is using the patent in an actual product. The majority of inventions are not strokes of genius - when the time is right, ideas emerge naturally and tend to be invented by multiple people around the same time.

nslocum 12y ago

If VirnetX were on the verge of winning 1% of iPhone revenue, their stock price would reflect it. However, it does not. https://www.google.com/finance?q=NYSEMKT%3AVHC&ei=h-WTU4DYNs_TqAGN_4DQCA https://www.google.com/finance?q=NYSEMKT%3AVHC&ei=h-WTU4DYNs... VirnetX's market cap is $850 million, which would be a very steep discount if the company were "on the verge" of being paid $340 million/year from Apple.

TomGullen 12y ago
Good catch, will be interesting to see how this plays out. I tend to believe indicators like this over news reports.

mrslave 12y ago

If patents are in any way good (bullshit, but assume true for now) then I'm ok with this. Why can one person own imaginary property and another cannot? If Amazon can one-click some bullshit, why cannot someone else have exclusive rights to another idea?

flipped_bit 12y ago

The core of the issue (if any) is that historically, the patent system is inextricably tied into the free-market/laissez-faire economic system, which for all its flaws, did create the world as we know it for the last ~ 200 to 300 years which led to an exponential rise in technological development - a unique phase started in the Western world, where now some of the 'successful and well-developed' countries in the Eastern world (e.g. Japan, South Korea, Singapore) have incorporated into their respective systems. From Stallman's article which did show up here: https://www.gnu.org/philosophy/not-ipr.html https://www.gnu.org/philosophy/not-ipr.html "Patent law was intended to promote the publication of useful ideas, at the price of giving the one who publishes an idea a temporary monopoly over it—a price that may be worth paying in some fields and not in others." The real question is does all software patents come in the last part of the aforesaid sentence: ".....—a price that may be worth paying in some fields and not in others." A knee-jerk reaction to throw out the baby out with the bathwater by abolishing the whole patent system may not be the right solution here.

quink 12y ago
> A knee-jerk reaction to throw out the baby out with the bathwater by abolishing the whole patent system may not be the right solution here. To further that analogy, if that bathwater is a toxic brew with, at least in the software industry, a serious chilling effect on innovation and enterprise is that really a bathwater the baby should be in? If you can point out to me more success stories because of software patents than nightmare scenarios like the above and the X-Plane saga, then I might agree. But as it stands, the biggest success story, Uniloc, that's relevant to Australia, which is where I am, makes me just pissed off.
- flipped_bit 12y ago
  Sorry to get back too late for the response as I hadn't seen it earlier. I do agree that the patent system as it is applied to software (and possibly other areas too like biotechnology) needs to be reformed. I am not defending the status quo but just pointing out that people who argue for abolishing the whole system needs to first understand its historical role before taking a drastic action. At the risk of over-simplifying, there is a tussle between 'software as a collection of algorithms which in turn are defined as a special class of mathematics' which is not patentable, vs software as a 'product' that provides useful functions which is in-line with how patents have been applied in other areas. Things get a little more complicated with 'process patents' as applied to software. It is hard to draw a fine line here and I don't claim to have any answers except looking at each case individually and deciding to apply it, sort of like the early definition of art vs porn: "I know it when I see it" (or something to that effect). Even if you were to grant a expansive protection for functional cases or business methods (implemented by the software), you will still have ridiculous ones like the 'Amazon one-click patent'. Regarding examples of 'success stories', I am not sure if these apply but the entire model of software business was driven on licenses during its critical growth period in the 1980s. One example is the core functionality of Excel which is probably one of the most successful software ever built: http://www.google.co.in/patents/US5272628 http://www.google.co.in/patents/US5272628 Even Google's core search ranking algorithm was patented: https://www.google.com/patents/US6285999 https://www.google.com/patents/US6285999 I should leave with this comment from PG: http://www.paulgraham.com/softwarepatents.html http://www.paulgraham.com/softwarepatents.html "Frankly, it surprises me how small a role patents play in the software business. It's kind of ironic, considering all the dire things experts say about software patents stifling innovation, but when one looks closely at the software business, the most striking thing is how little patents seem to matter."

einarlove 12y ago

Read "Patient troll on The Verge, winning 1% of iPone revenue"

deleted 12y ago

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SeanDav 12y ago

This is a good illustration for Karma, or "what goes around, comes around". Apple have only paid lip service (at best) to patent reform, so now there might be some serious consequences to that decision.

valvar 12y ago

Well, at least they are hitting other (albeit larger) patent trolls... Karma!

dm2 12y ago

Could someone explain to me how companies are suppose to avoid infringing on patents? With a device as complicated as a smartphone it's inevitable that someone holds the patents for numerous parts of the device and the software. Is there a lawyer that is supposed to check out every single aspect of a device and check for prior patents? If so, then shouldn't the lawyer be responsible in this instance? Note: I personally don't care if Apple loses patent cases, they've done enough damage with their own frivolous patent lawsuits.

eliben 12y ago

Could someone explain what the thing with East Texas is? A district where juries and judges are more favorable than usual towards patents? This sound kind-of ridiculous, no? Can't the defending companies find similar anti-patent areas and file counter-suites there?

rando289 12y ago
> Could someone explain what the thing with East Texas is? A district where juries and judges are more favorable than usual towards patents? It started a bit randomly, based on the politics of the region the judges/juries were slightly more favorable toward patents than anywhere else. Then it became self perpetuating since it helps the local economy & the judges own careers. > This sound kind-of ridiculous, no? Absolutely ridiculous. Patents are federal law, but 1 small region is effectively making serious changes to that legislation. > Can't the defending companies find similar anti-patent areas and file counter-suites there? They do. There are a range of locations, never in east texas. No one place has emerged as THE anti-patent location. For example, Microsoft files suit in Seattle since it's based there, has influence, people want it to win since it's a benefit to their local economy, etc.

deleted 12y ago

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jbb555 12y ago

What? Apple already get more than 1% of iPhone revenue!