
Patent troll on the verge of winning 1% of iPhone revenue - kenjackson
http://arstechnica.com/tech-policy/2014/06/apples-last-ditch-effort-to-dodge-a-368m-patent-verdict-has-backfired/
======
x0054
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.

~~~
piyush_soni
You mean they are just a little less baseless than the patent for 'rounded
corners'?

~~~
stephenr
Apple doesn’t have a patent for rounded corners.

They have a design patent for the ornamental design of the iPad. Just like
Google has design patents for the ornamental design of a smiley face, a usb
cable, a “computer icon” etc etc. Just like Samsung has a design patent for
the ornamental design of a "Terminal for portable mobile communication”, which
based on the images looks like a tablet.

In 1981 some company got a design patent for the ornamental design of a
briefcase, with rounded corners.

Please stop talking shit.

~~~
JohnTHaller
D670,286 is, quite literally, a design patent on a rectangle with rounded
corners (it's about the solid lines in the drawing). And they sued Samsung
over it and Samsung was forced to make the rounded corners on the top and
bottom of their phone different sizes. Despite the fact that multiple phones
and tablets predated the iPad and iPhone and were rectangles with rounded
corners.

~~~
stephenr
They sued samsung over a number of combined similarities:

"Closely comparing Apple's patented design with Samsung's products reinforces
the conclusion of substantial similarity. Samsung copied every major element
of Apple's patented design:

* a flat, clear, black-colored, rectangular front surface with four evenly rounded corners [emphasis mine];

* an inset rectangular display screen centered on the front surface that leaves very narrow borders on either side of the display screen and substantial borders above and below the display screen; and

* a rounded, horizontal speaker slot centered on the front surface above the display screen,

* where the rectangular front surface is otherwise substantially free of ornamentation outside of an optional button area centrally located below the display."

~~~
JohnTHaller
And _ALL_ of that already existed in the marketplace before the iPhone. Heck,
the things that are claimed to be unique in what you quote above is an almost
exact description of the LG Prada which came out before the iPhone.

Seriously, look at this a moment:
[http://i.imgur.com/iBD3A1z.jpg](http://i.imgur.com/iBD3A1z.jpg)

Remove the phone answer/end keys from the bottom row, and it basically is the
front of the iPhone. Re-read what you wrote above and look at that picture of
the LG Prada. That design patent should have never been issued.

~~~
stephenr
Its not about whether those individual attributes existed already.

Samsung blatantly copied apple product designs, from the physical appearance
of the device, to the design of the packaging right down to the design of the
chargers and cables.

This is not speculation, it's fact.

I don't deny that most modern smartphones, including the iPhone, look
__vaguely __similar to that LG. No way you would confuse them for the same
product though.

Now look at this image:
[http://i.imgur.com/TmUj2.jpg](http://i.imgur.com/TmUj2.jpg)

This isn't some case of "oh but Apple's design is obvious how can it not be
the same?"

This is Samsung's business model.

Motorola RAZR (copied Samesung Blade) - even the name is a pun on the fact
that its a copy (hint: razor blade)

Blackberry (copied as Samsung BlackJack) - again the even the name is a
ridiculous rip off. This one went to court and funnily enough RIM won.

Samsung Innov8 (copied from Nokia N96)

In 2012 Samsung released their Chromebox, which copies the circular cover on
the 2 year old MacMini. The MacMini has it there to allow RAM upgrades. The
ChromeBox has no reason for it, besides copying the MacMini design.

In their advertising they have a history of either reproducing Apple ads (e.g.
the way a phone and the earbuds are arranged). In one case, they literally
photoshopped the iOS Google Maps app onto their own device.

Their "iRemote Control 4" is a ridiculously blatant copy of the iPhone 4

Do a quick search for "Dyson Samsung clone"

There is no question that Samsung copies it's competitors designs, packaging
and advertising. Apple was granted a design patent and used that in its fight
with Samsung.

Show me a case where Apple has used its design patent against a competitor
that is not obviously trying to blatantly copy their devices?

~~~
x0054
The most obvious example of trying to copy the design is the charge cable of
the galaxy tab. Apple's charge cable was ridiculously and unnecessarily wide,
as is evident by the fact that later on they switched to the new design of the
lightning cable. Samsung made their cable plug also very wide, and very
similar that I personally, on one occasion have grabbed an off brand white
Samsung cable, tried to shove it into my iPad, and was rather surprised when
it did not fit.

Rather then looking at weather or not Samsung copied apple, let's look at the
motivations. Because I believe that imitating someones design because you
think its the best and the most practical way to do something should be
perfectly ok. However, it is wrong to copy a design of your competitors in the
hopes that consumers will confuse your product for your competitors. For
instance, I would call BS on Apple arguing that a black rounded rectangle with
rounded corners is somehow their design. It's just the most obvious and
straightforward way of making an glass touch tablet. But then look at the
power / sync cord. Can you justify that choice? No, there is no practical
reason to make your cord look like that other than to make your product look
more like an iPad.

They do say that imitation is the sincerest from of flattery, and I do tend to
believe it, as long as the motivation is right. A company can look at the fact
that iPads are doing really well in the market and tell it's designers and
engineers: "Let's get a few of those iPads, play with them, figure out why
people love them, and than make better one our selves, incorporating some of
the features that we thing people really love about the iPad." I think that's
what ASUS did with their Transformer line. They observed that a lot of people
liked the simple and clean look of the iPad, and they made it even cleaner by
removing all buttons. They also decided that people really want a option to
have a keyboard on a tablet, as evidenced by the abundance of the keyboard
cases for the iPad, so they added that function as well.

On the other hand, Samsung told its engineers: "Here is an iPad, copy it! No,
don't bother figuring out why people like it, use those ideas, build on them,
and maybe come up with something better. Just copy it. You see that idiotic,
unnecessarily wide connector that only made any kind of sense when it was
first installed in the original iPod, and not even then really. Copy that
too."

So, to finish my thought, yes Apple is a bit bitchy when people copy their
stuff. In case of most manufacturers I think they are wrong. In case of
Samsung, I can see it, they copied Apple, and they did it for all the wrong
reasons.

~~~
stephenr
I think the complete unabashed copying is specifically why Apple sued Samsung.

Companies have been getting design patents on generic looking devices for
years, this one just got a lot of attention because it actually ended up in
court. If Samsung's devices were simply the same shape as the iPad but weren't
otherwise so similar, Apple would have had no case to argue, (and probably
never filed the lawsuit) and no one would care about this patent.

For reference, the 30 pin connector wasn't actually on the first iPod - it was
introduced with the 3rd gen. Previously they used a full sized Firewire 400
(1394A) port on top next to the headphone port.

------
steven2012
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
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
Are patent trolls only patent trolls if they go after small businesses?

~~~
EGreg
They are patent trolls if they push the business to settle out of court, which
usually is only possible with small businesses.

~~~
nl
A lot of patent suits are settled out of court. Look up the IBM/Sun case, or
the Apple/Microsoft cross licensing deal. All settled out of court.

~~~
EGreg
An NPE which pushes to settle out of court.

------
rayiner
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/contr...](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).

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.

~~~
jackowayed
If it was developed for the CIA, why aren't the resulting patents owned by the
government?

~~~
lutorm
It's not clear if _this particular_ "invention" was developed for CIA, but
there are also different types of government contracts, some of which assign
IP to the government, some of which do not.

~~~
brudgers
[IANAL]

My understanding is that the US Federal government cannot be sued for patent
infringement. If correct, there would be no value for it to acquire patent
rights and if the technology was to be controlled, classifying the design
would be better than filing patents.

~~~
maaku
1) yes, you can sue the government or contractors fir patent infringement.

2) the government can issue secret patents

IANAL, but I was a government contractor for many years.

~~~
Peaker
Secret patents that can be accessed by anyone with a high-enough
classification?

It seems to defeat the original purpose of patents, which was to promote
openness of inventions rather than secrecy.

------
argumentum
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_ :)

------
georgemcbay
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.

~~~
bediger4000
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
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.

------
valar_m
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-face...](http://blogmaverick.com/2012/03/13/i-hope-yahoo-crushes-
facebook-in-its-patent-suit/)

------
SeanLuke
> 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.

------
throwawaykf05
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.

------
lorddoig
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.

~~~
zmmmmm
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
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"?

------
nslocum
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...](https://www.google.com/finance?q=NYSEMKT%3AVHC&ei=h-WTU4DYNs_TqAGN_4DQCA)

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

------
octonion
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.

------
eliben
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
> 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.

------
flipped_bit
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
> 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
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."

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

~~~
meepmorp
You mean, like they publicly stated they would when the Googlrola Android
lawsuits were settled just recently?

~~~
JohnTHaller
Lip service from the company that patented a rectangle with rounded corners
(D670,286).

------
dm2
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.

------
jeffdavis
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
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
So sort of like Universities?

~~~
adventured
_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
Yes! We need to get rid of those fat cats in Washington! LULZ.

------
ps4fanboy
There will be great irony if Apple complains about patent reform after this.

~~~
Yetanfou
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.

------
mrslave
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?

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

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

------
jbb555
What? Apple already get more than 1% of iPhone revenue!

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

------
SeanDav
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.

------
dsugarman
what goes around comes back around - Justin Timberlake

