

Patent Troll: Bloomberg calls it what it is - wheaties
http://preview.bloomberg.com/news/2010-06-01/billion-dollar-lawyer-quits-firm-buys-patents-to-troll-for-license-fees.html

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grellas
There is so much here that is just _sad_ :

1\. One of the nation's top patent lawyers (a "top earner" at Kirkland & Ellis
- one of the nation's most prestigious firms - who served for the past 6 years
on its management committee) walks away from his position in order to
capitalize on buying a patent portfolio from Micron, setting up a holding
company for those patents, and positioning himself in his own boutique firm to
use that portfolio (we assume) either to file a multitude of infringement
actions or to exact royalties on threat of legal action - vividly underscoring
what is wrong with a patent system that hugely rewards "non-practicing
entities" that specialize in litigation far more than in any form of true
inventing.

2\. A patent system that so skews money incentives that the best and the
brightest (and, yes, by all accounts, Mr. Desmarais is a highly likable and
much admired and talented fellow) would be drawn to the seamy side of this
business in this way.

3\. What this illustrates about how a patent nightmare scenario can so easily
arise from the fall or decline of a traditional tech company. Here, it was
Micron. What happens, then, when Novell auctions its IP assets to private
equity firms who in turn parcel them out to firms such as this? Developments
such as this can raise significant threats for Linux and the open source
community, among others (see the write-up here on this issue:
<http://url4.eu/3p37m> \- "Novell auction could be patent troll bonanza").

4\. How easy it would be for Congress to make simple modifications to the
patent laws so as to preclude this type of trolling, as for example by
imposing a simple test that an invention be truly "useful" (and not merely
theoretically so) before qualifying for patentability (see a recent proposal
to this effect here: <http://ip.jotwell.com/patent-utility-reduxit/>).

5\. How patent drafting in large corporations can become as much a function of
the legal department as of legitimate engineers who are actually inventing
things.

6\. How this sort of activity does not promote inventions or the useful arts
in the slightest and yet characterizes so much of the day-to-day activity in
the patent world.

Patents generally have had a useful role in our society, whatever their
limitations, but this side of the business basically makes one want to scream.

~~~
megablast
I know we all hate what he is doing, but nothing he is doing is illegal. Is it
immoral? That one is harder to answer, depending on your perspective. He is
providing work for a whole set of new lawyers and staff in his company. He is
getting money from companies that are already rich, like Apple, Microsoft,
Intel (probably).

Obviously we are all against it, but why is that? It doesn't affect most of
us. Sure, he is making money of something he didn't create, but so do lots of
peoples, anyone who owns a shop for one.

~~~
pwhelan
I am asking in all seriousness, what about this venture seems moral? This
screams sleazy personal injury lawyer to me that wants to sue for car
collisions where the paint didn't even chip.

~~~
megablast
As I said, he is not doing anything illegal, he is paying his staff, and he is
only going after big companies.

I can understand the patent system harming small companies is bad, and I
understand there should be no patents on simple ideas, but going after big
companies is not as bad.

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dasil003
_“The good story about nonpracticing entities is that they are developing
liquidity in the market for these patent rights,” he said._

Good fucking god. Have we become so beholden to capitalist buzzwords even
after the financial wizards stole reams of cash from the taxpayers and made it
impossible for the middle class to afford a home, that we unequivocably deem
"liquidity" to be a good thing?

Before making such statements there has to be some analysis of whether the
sale of said "asset" is beneficial to society in any way—doubly so in the case
of government-granted monopolies. Otherwise we may as well just jump right to
urging serial killers to become hitmen so we can add liquidity to the murder
market and boost the GDP.

~~~
starkfist
The true entrepreneurial lesson to be learned from this is that the
opportunity is ripe for someone package up the side effects of these patents
into complicated IP instruments nobody understands and become the market
leader in patent trolling derivative trading.

~~~
megablast
Hopefully he can start up a patent market, where moms and pops can invest in
patents they like the look off, in the hope that one day they will make them
some money back.

That way, say when a new company like Apple gets into making phones, there can
be a rush on mobile oriented patents.

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rudin
How does the world tolerate these kind of people? This kind of stuff makes me
boil over in anger.

~~~
potatolicious
It puzzles me how an already extremely wealthy man, who is described as being
a family man also, would care so little about his legacy and how he is
remembered.

It's not so much how the world tolerates these people - how do these people
tolerate themselves?

I can imagine doing some pretty seedy stuff in desperation, but the people
participating in shenanigans like this are usually very intelligent, wealthy,
and already successful. Surely they have higher-level goals (e.g., leaving a
proud legacy, making the world better, etc) than merely more cash?

This reminds of the story of the creation of the Nobel Prize: a Parisian paper
accidentally published Nobel's obituary early, and having read it he became
concerned with being remembered as a merchant of death (being the inventor of
TNT). It's one of the main drivers of why he established the prize. Surely
smart, already successful people care about what they leave behind?

~~~
zaphar
You assume there is a causal relationship between intelligence with success
and moral fiber.

While there may be some correlation I don't think there is necessarily any
causative relation. You also assume the patent and IP law issues have an
obvious morally correct stance to everyone else.

I'm not sure either assumption is warranted.

~~~
potatolicious
Perhaps not moral fiber - but there's a self-serving element to doing good. I
imagine rich, successful people like this guy here care about how they will be
remembered.

After all, nobody wants to get his grave pissed on after he's dead. Nobody
wants his children to bear the burden of having their father remembered as a
parasitic burden on society.

Even in a completely selfish frame of reference, once you've reached some
limit of wealth higher-order goals like this should start kicking in.

~~~
zaphar

        nobody wants to get his grave pissed on after he's dead.
    

I see no basis for that statement and a whole lot of anecdotal evidence to the
contrary. The article we are discussing being one of them.

------
jcromartie
"The question of whether allowing nonpracticing entities to litigate is
promoting innovation or taxing innovation is a big question"

No, it's not a big question.

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donaldc
I wonder how many decades it will be before the laws concerning copyright,
patents, and all things related are updated to reflect the realities of the
information age. I don't see things getting better anytime soon.

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aptimpropriety
Website of the newly founded company:
<http://www.roundrockresearch.com/index.html>

Very little content, but interesting to look at the design of the top graphic.
According to article, logo was designed by his 14-year old daughter.

~~~
wmeredith
It looks like it was designed by a 14 year old. I think it's hilariously
appropriate for this venture–literally adding no value to the world
whatsoever, not even aesthetically.

~~~
gloob
For what it's worth, I'm sure that many lawyers would think that most of the
legal analysis on this site is comparable to that of a 14-year-old as well.

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kevinelliott
Domain squatters, patent trolls, and spammers. They're of the same breed,
driven by greed and line the underbelly of the grey/black market border. This
highlights a particular exploitation of our legal system, our particular
implementation of "free market," and socio-political infrastructure.

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aidenn0
I don't see patent trolls as being as cut-and-dry as most other people.

Consider this, if Micron had decided to enforce their patents across the
industry would that be bad? They technically wouldn't be a patent troll since
they actually are making products. Now they would almost certainly be
countersued for patents in their competitors portfolios, whereas this company
doesn't work in the industry so has no fear of defensive patents.

I could certainly see it funny if their competitors made similar agreements
with this company or some similar one and all got sued for patents that had
originally been in the hands of competitors. That seems to me to be the
equilibrium if what Micron has just done becomes standard industry practice
for generating liquidity from R&D.

The only thing I can think of that might improve the situation would be to
apply something like adverse possession to the patent system. That is to say
if someone is openly violating some patent that you have, then you have a
limited amount of time to seek compensation.

That would fix a lot of the problem with patent trolls: namely that the
industry has adopted some innovation wide-scale and suddenly someone shows up
with a patent on it from 15 years ago.

I'm sure there would be negative consequences too, since every change has
those, but I'm not thinking of them at the moment.

~~~
loewenskind
>Consider this, if Micron had decided to enforce their patents across the
industry would that be bad? They technically wouldn't be a patent troll since
they actually are making products. Now they would almost certainly be
countersued for patents in their competitors portfolios, whereas this company
doesn't work in the industry so has no fear of defensive patents.

But this is _precisely_ why it's wrong. Micron made patents for things they
made. Instead of using them to stop others from using their inventions they
chose to use the patents to let them violate other company patents. This was
their choice. If they had chosen to enforce those patents, maybe no other
company would have violated them. Now someone who wasn't involved gets to flip
the table on all those companies who played along.

Imagine being a co-founder in a start up where your partner said "I'll never
screw you out of anything" and then promptly hires someone else to do it.
Would that be cut-and-dry enough for you?

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motters
I think there needs to be reform of the patent system, so that people who hold
the rights to an invention but are not exercising those rights in any way
(making or selling products) cannot sue others for royalties. Patents were
intended to support inventors, not parasites.

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noonespecial
He spent so much time trying to beat them that he finally decided to join
them.

~~~
megablast
Just as Bugs Bunny taught me in his informative educational movies. If you
can't beat them, join them.

