
Apple Ordered to Pay $625M to Patent Troll in FaceTime Lawsuit - arbuge
http://techcrunch.com/2016/02/04/apple-ordered-to-pay-625m-to-patent-troll-in-facetime-lawsuit
======
dangerlibrary
Interestingly, the four patents in question cover ways of initiating a secure
connection via DNS - nothing about video transcoding or low latency
communication, which was my first guess.

[http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=H...](http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%252Fnetahtml%252FPTO%252Fsrchnum.htm&r=1&f=G&l=50&s1=6502135.PN.&OS=PN/6502135&RS=PN/6502135)

[http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=H...](http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%252Fnetahtml%252FPTO%252Fsrchnum.htm&r=1&f=G&l=50&s1=7418504.PN.&OS=PN/7418504&RS=PN/7418504)

[http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=H...](http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%252Fnetahtml%252FPTO%252Fsrchnum.htm&r=1&f=G&l=50&s1=7921211.PN.&OS=PN/7921211&RS=PN/7921211)

[http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=H...](http://patft.uspto.gov/netacgi/nph-
Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%252Fnetahtml%252FPTO%252Fsrchnum.htm&r=1&f=G&l=50&s1=7490151.PN.&OS=PN/7490151&RS=PN/7490151)

------
Cuuugi
I don't understand. If "all four of VirnetX’s patents have been found invalid
by the patent office" as Apple claims, why hasn't the case been dismissed?

~~~
DannyBee
Here's a real answer (unlike the other "corruption" and "blah blah blah"
answers):

First, note that the federal circuit has ruled on these patents before, and
_upheld them_. [http://patentlyo.com/media/2014/09/Virnetx-v-
Cisco.pdf](http://patentlyo.com/media/2014/09/Virnetx-v-Cisco.pdf)

Apple conveniently leaves this part out.

(i think it's a BS ruling, but it is a final appeals court ruling on the
validity of the patents).

As for the PTO finding them invalid:

If you look at the file wrappers of these patents, you will see what apple
means is "someone has requested review of these patents by the PTO, and they
have initially been found invalid".

(Apple's request to review validity was in fact, denied)

Go to
[http://portal.uspto.gov/pair/PublicPair](http://portal.uspto.gov/pair/PublicPair)
Enter the patent numbers Click "image file wrapper".

So they haven't "been found invalid", instead, they are going to trial before
the PTAB to see whether they are invalid.

Note: On a number of these patents, Apple's review requests have been denied a
number of times before someone else's review request was granted

~~~
piyush_soni
So as usual, Apple is lying/misleading people here. At least 'technically'.

~~~
calt
> So as usual, Apple is lying/misleading people here. At least 'technically'.
> No. Apple are arguing that the patents are invalid. They aren't sayin they
> have been found invalid already. The TechCrunch article said "All four of
> VirnetX’s patents have been found invalid by the patent office"

~~~
piyush_soni
>> _They aren 't sayin they have been found invalid already_ ..

They are saying exactly that, at least according to their press statement.

~~~
pc86
It's legal posturing.

~~~
DannyBee
Actually, they haven't. At least, as far as i can tell (they each have tens of
actions on them and i can't read every decision :P).

They have been found "likely to have serious questions of validity".

This is basically the standard you must meet to get a review. That's why they
were found that way.

Next, an actual trial will occur. But they are not "provisionally invalid" or
anything like that.

There is literally no decision yet from PTAB, and in fact, the only reigning
decision on validity is the appeals court.

~~~
pc86
You are right, I've edited my answer as such.

------
robotnoises
From the VirnetX website:

[http://virnetx.com/company/virnetx-
promise/](http://virnetx.com/company/virnetx-promise/)

"Cutting-edge secure communications technology is only one of the essential
elements of our products – another is integrity. ..."

lol, what products?

~~~
veritas20
It's actually sad that this company with only patents and no products is a
listed public company on a regulated US exchange.

~~~
_da_
Their shareholders probably don't mind - their share price is up 50+% today.
[http://finance.yahoo.com/echarts?s=VHC+Interactive#{"range":...](http://finance.yahoo.com/echarts?s=VHC+Interactive#{"range":"5d","allowChartStacking":true})

------
comex
Almost as much as the $1B Apple was originally supposed to win from Samsung
for equally silly patents. (It's since been slashed down to a tenth of that,
but still.)

Is it too much to say "live by the sword, die by the sword"?

~~~
rootusrootus
What would you do if you were Apple? Would VirnetX have refused to go after
them just because Apple had not gone after Samsung for "equally silly"
patents?

Seems like what you really want to say is "don't hate the player, hate the
game."

~~~
shawabawa3
> Seems like what you really want to say is "don't hate the player, hate the
> game."

More like, "Hate the game, and hate the player for playing it"

Instead of everyone joining in the patent suing racket, these big players
should be lobbying for the laws to be changed

~~~
djrogers
>Instead of everyone joining in the patent suing racket, these big players
should be lobbying for the laws to be changed

Except you have to do both - if you ignore the racket you are much more
exposed to lawsuits. Patents are used defensively between companies like Apple
and Samsung, and if you give up that defense while trying to change the laws
you are severely exposed. Tough balancing act..

The flip side of it is that I don't think we're likely to see these laws
change until the current 2 party corrupt system is torn apart. Congress is
completely bought and sold on both sides of the aisle and their owners like
the current system (more laws = more lawsuits = more $$ for lawyers).

~~~
linkregister
> Except you have to do both - if you ignore the racket you are much more
> exposed to lawsuits

Check this out: [https://www.eff.org/deeplinks/2012/06/defensive-patent-
licen...](https://www.eff.org/deeplinks/2012/06/defensive-patent-license-and-
other-ways-beat-patent-system)

Google and Facebook are playing as well:
[https://code.facebook.com/posts/1639473982937255/updating-
ou...](https://code.facebook.com/posts/1639473982937255/updating-our-open-
source-patent-grant/), [https://www.google.com/patents/licensing/dpl/non-
sticky/](https://www.google.com/patents/licensing/dpl/non-sticky/)

It should be mentioned that both of the above corporations grant this patent
license for use and modification of the software they have open sourced.

------
SCHiM
Ugh, disgusting. Think of how much damage that troll will now be able to
wreak.

With that kind of money it can buy all sorts of other patents and start the
whole progress over again.

~~~
ethbro
What we really need are patent co-ops.

The problem as I see it is: patents exist to allow innovators to get paid for
their inventions (setting aside the USPTO not being able to do its job
correctly due to under-funding and granting bad patents), patents therefore
have a monetary value, however that monetary value in fact scales with the
monetary resources of the company it's held by (i.e. small companies cannot
legally afford to enforce patent claims against behemoths that decide to
fight), therefore there is a market incentive to create patent trolls (which
increase the value of all patents by pooling them and amortizing prosecution
cost/risk over a larger number of patents).

It would seem like if you instead pooled patents in a co-op arrangement,
retaining ownership by their original creators, but pooling them with others
for efficiency / risk purposes and to obtain the necessary scale for optimal
enforcement. Then work out some amiable proceed-sharing method on the backend.

Win/win, and reducing the incentive for patent troll companies by providing an
alternative. (Caveat: bad patents still need to be fixed at the USPTO source
via additional funding / subject matter expert examiner requirements)

Is something like this at all feasible legally? Or does something prevent the
batching together of patents from various actual owners under a single legal
proceeding?

~~~
gnaritas
> The problem as I see it is: patents exist to allow innovators to get paid
> for their inventions

That is not why patents exist. Patents exist for the good of mankind to
convince innovators to share their trade secrets with the public. Paying those
innovators is not the goal, it is the means by which the goal is achieved,
making the inventions public. You've confused the carrot for the end goal.

Anyone wanting to think about how to fix patents needs to first understand
what the goal is, and paying inventors is not the goal.

~~~
ethbro
If there were any worldwide system of incentivization and value that was non-
monetary, I'd be inclined to agree with you. As the world exists, paying
inventors == convincing innovators to share their trade secrets with the
public.

Unless you'd like to offer feasible alternatives?

~~~
gnaritas
I didn't say paying them wasn't a valid means of achieving the goal, I'm
merely pointing out that making the inventions public is the goal, paying them
is merely a means of achieving that goal. To lose sight of the goal leads to
making bad decisions. Thinking the goal of patents is to pay inventors for
example, could lead to a far more screwed up system that doesn't benefit the
public. We want to progress human knowledge, not make inventors rich; the
latter achieves the former currently, but it doesn't necessarily have to be so
if better means are found to achieve it.

------
WalterBright
The large companies seem to be constantly in patent battles, often with each
other, both as plaintiffs and as defendants. They win some and lose some.
Since this is unproductive activity, due to lawyer bills and the diversion of
attention from their core businesses, it simply must be a net loss for those
players.

Why don't they call each other up, declare a truce, and cooperate in lobbying
Congress to fix (i.e. largely repeal) patent law?

~~~
bobbles
Doesn't work when the companies in question exist purely for patent lawsuits

~~~
WalterBright
Right, but if Google Apple Microsoft Amazon etc. get together and lobby to end
software patents, they can overwhelm the trolls.

------
mythz
Now this Patent Troll has even more ammunition to shakedown companies in
future whilst encouraging creation of even more low-life leeching NPE's.

Clearly Patent Trolls adds negative value, harms progress and increases cost
of business - how long will this legal racketeering be allowed to continue?

~~~
replies_to_all
Or maybe they act to keep the big players honest?

~~~
mythz
The big players can afford it, their existence just adds a barrier to entry
and causes more harm to young/unestablished companies.

------
chrisgd
I should totally be a patent troll. Are there any MOOCs that cover this?

~~~
Jemmeh
A MOOC to be a mook.

------
blisterpeanuts
I have a modest proposal to get rid of these patent trolls and these
ridiculous settlements that typically are decided by a jury of West Texas
farmers.

Patents ought to be designated a non-transferrable property. Inventors may
create a trust that receives patent revenues, and direct those revenues to any
entity they please (their own company, their heirs, another company, a
charity, etc.) but would not be able to actually sell the patents to any other
company or individual.

Then, patent holding companies would evaporate, and the revenue for ideas
would go to those who created the ideas. If a company created many patents,
say, Kodak, then goes out of business, it would leave behind a trust that
would continue to receive revenue on those patents until they expired. If you
choose not to, you can forfeit the patent and then it becomes public domain.

~~~
such_a_casual
Or how about we hard delete all software patents since they are absolutely
ridiculous? Goodbye $600mil flow charts.

~~~
knodi123
But if we don't have software patents, how else will we incentivize mega-
corporations like amazon to invent innovative new technologies like a 1-click
checkout button?

~~~
such_a_casual
You make a fair point. In fact, if we had even stronger software patents,
facebook would have had to wait 20 years after the invention of myspace. A
world with no facebook? Valhalla? It seems I need to rethink my position.

------
kbenzle
If this is the kind of impetus needed to set off patent reform, all the
better. I would argue against the "Troll" label, it is a legal firm doing its
job very well. The Troll bashers I assume would prefer the companies to just
leave this $ to the infringes? Why? Is it somehow immoral to use the legal
system for financial gain? No, it is not, not at all. I'd say good on them for
finding the loop holes and driving their $600M lorrie straight through it to
the bank. Don't say fuck the trolls, fuck the patent system in the US which
Apple has used to the detriment of many young companies too, they are all
playing the game.

~~~
dangerlibrary
Typically the 'troll' label is applied to companies like Virnetx because they
produce nothing of value. They are strictly rent seekers - net negative
economic value creators.

"It's a massive verdict for VirnetX, a company that has no products and makes
its money solely through patent litigation."

~~~
kbenson
Even that's selectively looking at the facts though. At some point they paid
for those patents, and that theoretically put money in the pockets of
creators, incentivizing them to create more.

That said, to my eyes it's clearly a subversion of the intended purpose of
patents, and is societally damaging, so I see no problem with derogatory
labeling of this behavior and those that take part in it. It's unfortunate,
but it's an important part of getting consensus in a short time frame with a
large populace.

~~~
bobwaycott
That's not selectively looking at the facts at all. The _facts_ are plain:

\- company buys patents for the purpose of seeking rents

\- company aggressively pursues others who are independently creating
potentially valuable products to shake them down for rents

\- company produces nothing of value with the patent except for increased
wealth transfer by extracting value from others' work

That they [theoretically] put money in someone's pocket to get the patent in
the first place does not change any of these facts. And calling attention to
the behavior isn't selectively dealing with the facts. They exist purely for
rent-seeking.

~~~
kbenson
> That they [theoretically] put money in someone's pocket to get the patent in
> the first place does not change any of these facts.

Actually, depending on your definition of rent seeking, it either makes it
rent-seeking or not, so it _may_ affect those facts. Would inventors be
incentivized to create as much if there wasn't a market for these types of
patents? Even if you discounts the type of patents that trolls attempt to
control as useless, can we say that those crappy patents didn't subsidize
better inventions?

Now, I'm not defending patent trolls, just noting that it may be a mistake to
assume there is no economic value to what they do, even though the _net_
outcome is likely negative. The positive and negative consequences may not be
entirely comparable, making this easy to overlook.

------
kelukelugames
It's not over yet. Apple will appeal.

------
bitmapbrother
I must say it's rather funny that Apple is basically passing along their
Samsung patent money onto VirnetX.

------
DannyBee
So, virnet is a spin-off of SAIC. SAIC is definitely not a troll (though i
could believe virnet is :P).

------
Oletros
And another case with software patents and a patent troll, how much damages
they have done

------
riskneural
Makes Google's UK tax bill of 130 mill seem small.

~~~
collyw
It was small compared to their profits.

------
Animats
If they won in court against Apple, they're not a "patent troll". They
invented something which Apple copied.

Apple has patented, and tried to enforce, the claim that they have the
exclusive right to devices with a screen on the front and round corners.[1]
They lost, but they're still litigating that.

[1] [http://fortune.com/2015/08/19/apple-patents-rounded-
corners/](http://fortune.com/2015/08/19/apple-patents-rounded-corners/)

~~~
nickpsecurity
A company patented the concept of making toast well after toasters were on the
market. Another patented recurring payments of online service long after that
was normal. Another guy modified a patent to cover podcasting after podcasting
was invented and in use.

Point being, something being patented != something being invented. It just
means examiners agreed with the claims of a piece of paper then turned that
into a piece of intellectual property. The wins then mean courts agreed that
claims in that property match some other product to some degree. Neither means
someone copied someone. Whether that's true varies on a case by case basis.

I think it's telling that many defendants develop their own, "infringing" tech
without ever hearing of the plantiff or their patents. Hard to copy what you
don't know exists. In science, we call it independent invention but patent
system makes that impossible. Plus, on software patents, what programmers have
you met who comb through patent databases to solve their day-to-day problems?
I've never met one.

Concluding, patents are legal pronouncements that may or may not cover
inventions. Rulings on copying may be right or bullshit. Copying is usually
unknowing or independent invention because nobody solves problems with patent
databases in our industry. I remember running into maybe 3 or 4 worth looking
at in Google search solving a problem. One was novel but others patented ideas
already in products or Comp Sci literature. Well-known ideas that were
foundational to product success. (sighs)

~~~
Lawtonfogle
>Point being, something being patented != something being invented.

But it is still a valid patent. Don't say that specific patents are invalid,
realize that the very concept of patents are invalid.

~~~
nickpsecurity
The concept is valid but hard to implement in tech. Probably a bad idea, too.

------
azth
Why doesn't the legal system immediately dismiss such lawsuits by the patent
trolls? It is obvious what they're after.

~~~
notacoward
Because courts adjudicate laws, and it's the laws that are broken. The
alternative would be courts that just make up their own versions of the law,
which has its own problems. Among those is the tendency for patent trolls (or
their equivalents in other kinds of cases) bringing suit in whichever
jurisdiction is friendliest to them, and there's entirely too much of that
going on in East Texas already.

------
mankash666
In light of Apple patent trolling the Samsungs & HTCs on curved rectangles, is
this just karma?

------
acomjean
is it my or does 625 million seem a tad excessive for a feature of the phone
that isn't totally central and probably is used by maybe 20% of phone users?

Apple has sold maybe 800million iOS devices. Say 400 million that support
FaceTime. $1.50 per device. wow.

Or 625,000,000/ 14 employees.

------
pmarreck
@GabrielSecure is their (inactive, what a surprise) Twitter account, FYI.

------
wnevets
A patent troll getting patent trolled, great.

------
profeta
considering that apple is in itself a patent troll of the worst kind (buying
companies with interesting patents, such as FingerWorks, and forbiding any and
all licensing on those patents) i'm not even mad with this news.

~~~
cloverich
That doesn't fit my understanding of Patent troll -- buying Patents, not
making anything, then blanket suing companies to try and make a living. Not
defending Apple's behavior as such, but it seems to not be the same thing.

------
mariusz79
One patent troll has to pay another patent troll.. Good.

~~~
mcherm
Perhaps apple ABUSES patents (that's a different discussion I do not want to
get into), but I prefer to reserve the term "patent troll" for those
individuals or organizations that do not actually perform invention nor
manufacture, sales and marketing of actual products.

~~~
mc808
That doesn't seem like a very useful distinction. Suppose new patent troll
legislation comes along that would prevent enforcing a patent that isn't
actively being used or developed (similar to trademarks). The trolls would
just produce a cheap gizmo that depends on the patent in some way, and then
blame the lack of sales on patent infringement. They'd colloquially still be
called "trolls" based on a subjective judgment that they aren't really serious
about selling the gizmo.

When someone calls Apple et al. a patent troll, I think it's from the
perception that they 1) apply for overly broad or obvious patents, and 2)
enforce the patents offensively. Also a very subjective definition, but it
doesn't seem any worse than arbitrary "uses/plans to use" criteria.

