

Microsoft Hit With Another Multimillion Patent Loss in Texas - grellas
http://www.law.com/jsp/article.jsp?id=1202446412310&Microsoft_Hit_With_Another_MultimillionDollar_Loss_in_Texas

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jpcx01
The plaintiff is "a 12-man operation that gets most of its revenue from
licensing its intellectual property".

So they sue people who use stuff they've patented but don't actually use
themselves.

Patent law badly needs to change.

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barnaby
Yeah, VirnetX look like a "non-practicing entity". Their website talks about
"products" but it's clear their whole business relies on "intellectual
property", whatever that is.

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rbanffy
NPEs are not bad per se. Imagine I have invented (as in done the physics and
made sure it's correct) energy generation process that requires a billion
dollar device to be built. NPEs can invent things they can't really build.

The problem is not in NPEs. It's in bad patents. Ideas and processes should
not be patentable. Period.

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phaedrus
The flaw in your argument defending NPEs is that even if the physics is
correct there will be countless engineering challenges to overcome between the
theoretical invention and the actual working billion dollar device. I put
forth that the form of the invention _after_ it has gone through that process
of building a real protype will be qualitatively different than the
theoretical one the NPE designed. So, the patent for the theoretical device
will be next to worthless to society because it doesn't represent the form of
something that will actually work. Yet, under current patent law the NPE would
be able to extort money from the company that did build the actual working
form.

One problem IS that NPEs should not be allowed. There should be several
requirements for a patent: 1. You must produce an actual, working prototype.
2. If some period of time (say, 2 years) elapses during which you're not
physically producing copies of the device for sale, you should lose the patent
right and it becomes public domain. Trademarks have to be defended to be kept;
patents should have to be backed with _production_ to be kept. 3. Patents
should be non-transferable. Companies should not be allowed to own patents,
only inventors; the inventor can give license to a company to make his
invention.

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RK
So an R&D firm shouldn't be able to get patents, only someone who does R&D
plus manufacturing?

I ask that because the startup where I work part-time does R&D for scientific
equipment and we then license the technology to companies that are interested
in possible manufacturing. Many companies would rather license a patent, and
be the exclusive manufacturer than have to invest in the R&D themselves.

And by the way, many (hardware) technologies require a significant amount of
time to bring from the conceptual stage to manufacturing stage, especially
when you have limited, such as a startup might.

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zaphar
Patent trolls are such a problem because the usual economics that protect a
company from suit (eg. being countersued) don't apply since the patent troll
doesn't actually produce anything that could infringe. This is a great example
of exactly that.

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barrkel
From the sounds of this report, cases hinge on how personable the main lawyer
seems to be.

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rbanffy
That could be a geo-social problem.

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robryan
It's interesting though because Microsoft would have to lose probably hundreds
of these cases before they would be in support of removing software patents
given the amount that they have.

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dminor
I think Microsoft would abolish the patent system in a heartbeat if they
could. What part of their operation depends on the successful prosecution of
their patents?

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ZeroGravitas
There's a lot of speculation that patents are Microsoft's next big money
earner. They hired the guy responsible for generating 2 Billion a year in
patent fees for IBM.

He's written a book, called _Burning the Ships: Intellectual Property and the
Transformation of Microsoft_ which makes for interesting reading:

<http://news.cnet.com/8301-13505_3-10215905-16.html>

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dkline
>> NPEs should not be allowed.

If so, then the industrial revolution of the 19th century and much of our nown
technological progress more recently would never have happened. Research
conducted by B. Zorina Khan and Kenneth Sokoloff found that 2/3 of the 400
"Great Inventors" of the 19th century (including Thomas Blanchard and Thomas
Edison) were NPEs.

In fact, what was hisorically unique about the American patent systemn was
that it was the first in the world aimed agt encouraging ordinary workers,
farmers and artisans to participate in inventive activity. So even though most
such inventors didn't have the capital to manufacture their products and
inventions themselves, they licensed their discoveries to large firms who
could.

The trend continues today. In fact, that's why people like Roger Hoffman,
perhaps the most prolific patentee of new environmental and anti-pollution
technologies, are able to keep inventing -- i.e., by licensing their
discoveries to larger firms.

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tomh-
I wonder why all those tech companies don't team up and hire a bunch of
lobbyist to get rid of this system as soon as possible. Is this because they
lose the ability to sue their own competitors when things get though?

Thank god we don't have these lawsuits in Europe.

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Glide
The tech sector is only one sector of the economy. Even if they did want to
change there may be other industries that would push against it.

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pxlpshr
I don't disagree with burning patent trolls at the stake... but why does it
always seem that if something happens in Texas, it has to be called out
specifically as if we don't have enough misinformed stigmas hanging over our
head? Maybe it's my own personal bias taking offense but it just seems way to
common considering the size and diversity of the state.

Sorry to sidetrack, just annoys me. Living in Austin I'm seeing a flight of
out-of-state workers looking for economic refuge from so many of the other
bankrupt and poorly managed states. Texas has pretty sound economic policies
and infrastructure if I don't say so myself.

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akeefer
The Eastern District of Texas is particularly notorious for being very
favorable to plaintiffs in patent lawsuits (it's even specifically called out
in the Wikipedia article on patent trolls), so it's notable that this happened
in Texas both because a disproportionately large number of such cases happen
there and because Microsoft had previously lost a patent suit in this exact
same courtroom.

Perhaps Texas gets unfairly attacked in other areas, but when it comes to
patent lawsuits there really is a pretty serious problem there.

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tzs
EDT is not particularly favorable to plaintiffs. Defendants, especially in the
last couple of years, have been doing quite well.

The main reason plaintiffs choose EDT is that its a "rocket docket". A rocket
docket is a district where civil trials are speedy. There are a couple reasons
for EDT currently being a patent rocket docket.

First, it has handled many patent cases, so it has judges who know how to
handle patent cases. That came about because one particular judge, I believe
Judge Ward, worked on a big patent case just before becoming a judge. He
enjoyed the intellectual challenge (patent cases are among the most
complicated), and so after becoming a judge, he jumped on any patent cases
that showed up in his district, which in turn started attracting patent cases.
Some of those would get assigned to the other judges, and so they developed
expertise at handling patent cases. Hello, feedback loop.

Second, EDT doesn't have much crime. Criminal cases have higher priority than
civil cases (because of the right to a speedy trial in criminal cases). In
districts where there is a lot of crime, the courts are so backlogged with
criminal cases (thanks, stupid "War on Drugs") that a civil case can take
years to even get to preliminary hearings.

Whether you are a plaintiff or a defendant in a patent case, one thing you
want is for it to be over as fast as possible. I've been involved in such a
case, and even though I loath traveling, given the choice between going 2000
miles to Texas and having the thing over in a year, versus having it in the
local district, and having it take five years, I'd pick Texas.

From a programmer's point of view, here's what its like when your employer is
involved in a patent suit (on either side). First, you have to be careful in
all recorded communications, because those are subject to discovery requests--
so if you want to talk to another programmer about something even remotely
related to the patented technology, you need to go actually talk in person, or
over the phone--no email.

Second, there are discovery requests. You'll be required to produce everything
relevant you have, and the lawyers expect you to be thorough. You have no idea
how many places old code can hide until you've had to respond to a discovery
request. (And its not just code--they want all documents relevant to the
patented technology).

As your lawyers prepare their case, they will have questions. You'll get calls
at 9 PM (in the timezone of the court that the suit is filed in, not your time
zone) asking questions about source code. The lawyers need the answer to file
a motion that is due in three hours. The code is 10 year old code that you
haven't looked at in 9 years, and you weren't even the main developer. But
you'd better be able to answer the question, 'cause a lot of money is riding
on it.

Oh, and there are depositions. That's where the other side gets to have a
couple days to ask you questions about that 10 year old source code, and also
ask you about all kinds of emails and other things they received in discovery.
Try this, check all your email for a week about your current projects, and ask
yourself "is there any way a hostile lawyer could use this email to make me
look bad?". For most, the answer is "yes". Some joking reference to a
competitor that was funny at the time, say, is not at all funny when you are
sitting in a room full of lawyers, being video taped as they ask you questions
about it.

This is all very disruptive. It's barely tolerable for a year. Five
years...ugh!

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WildUtah
Microsoft must love these cases. Sure, they lose some money each time. Much
more important is that ambitious small competitors will be discouraged from
entering the software industry at all. What could be better for the
monopolist?

Aren't Microsoft lobbyists working hard to support bad software patents and
patent trolling in Washington? The best thing for our industry would be that
M'soft lose billions every year on these cases and shape up to support reform.

