

University wins $1.17 billion hard disk patent verdict against Marvell - bitcartel
http://arstechnica.com/tech-policy/2012/12/jury-slams-marvell-with-mammoth-1-17-billion-patent-verdict

======
btipling
I think patents may sometimes have the opposite effect than the one intended.
Instead of encouraging innovation and stimulating the economy through
entrepreneurship and business, it may have a chilling effect. Who knows what
patents are out there that may lead you to also face a steep penalty that
could ruin your entire business?

~~~
shrughes
This has not been mentioned on all the other patent threads.

~~~
praxeologist
It needs repeating because it is it is up there as one of the most widely
believed and repeated falsehoods.

>Marvell lawyers said CMU's closing statement was "rife with
misrepresentations," including suggestions that Marvell "broke the chain of
innovation by not paying the royalties that they now owe," and noting those
payments would be used "to fund further research, to lead to further
innovation." That resulted in a short conference at the side bar, in which the
judge warned "you can't dig deep into all of CMU's contributions to society
and mankind."

There are tons of studies showing that IP law hampers innovation and not a
single one showing it aids it.

~~~
cobrausn
_There are tons of studies showing that IP law hampers innovation and not a
single one showing it aids it._

What about pharmaceuticals? 'Tech' (as we use the term) isn't the only
industry in existence.

~~~
jrogers65
[http://levine.sscnet.ucla.edu/general/intellectual/against.h...](http://levine.sscnet.ucla.edu/general/intellectual/against.htm)

Chapter nine.

~~~
Daniel_Newby
That chapter is very silly.

It compares British and German chemical companies and explains the difference
with patent laws. But any company can build a chemical factory wherever the
patent laws are favorsble. In reality the difference was cultural: Germans
have had a kick-ass chemistry culture since alchemy turned into chemistry.

The chapter explains dye manufacturing changes with patent laws. To anyone
with chemistry knowledge, this is ludicrous to the point of deliberate
dishonesty. Dyes are embarrasingly easy to discover. If you take an existing
dye structure and make a tiny chemical change, the new material is probably
colorful and is not covered by the patent on the original dye.

In fact, a lot of early pharmaceutical work was done by taking chemical
libraries from dye companies and screening their thousands of structures for
biological activity.

The argument against patents on the basis of "me too" drugs is also ludicrous.
The chapter actually says that patents are damaging because they give patients
_too many choices_ : there is no need to waste the money on having all those
alternatives. In reality, there is huge variation between similar drugs. Many
variants turn out to work better for different people, and some variants turn
out to have unacceptable side effects. The only way to find out is to make a
bunch of alternatives and try them all out.

The chapter becomes even more ludicrous by saying thst the COX-2 inhibitors
are just a wasteful duplicate of cheap ibuprofen. Folks, ibuprofen and related
drugs kill probably a few hundred thousand people a year with side effects.
They're more dangerous than Al Qaeda. (Although by bad luck it turned out that
the aCOX-2 inhibitors were worse, but in a different way.)

The chapter makes the absurd claim that patents hurt drug discovery and
patients, ignoring the elephant in the room of generics manufacturers. If
patents were so harmful to innovation, the the generic companies would be
leading they way with new drugs. They are most emphatically _NOT_. Except for
a few minor formulation chsnges, they do nothing of their own.

~~~
jrogers65
<http://www.researchoninnovation.org/WordPress/?cat=4>

<http://www.techdirt.com/articles/20100421/1451179133.shtml>

[http://readwrite.com/2009/07/02/study_says_patents_hinder_in...](http://readwrite.com/2009/07/02/study_says_patents_hinder_innovation)

[http://archive.mises.org/10217/yet-another-study-finds-
paten...](http://archive.mises.org/10217/yet-another-study-finds-patents-do-
not-encourage-innovation/)

[http://www.healio.com/orthotics-prosthetics/development-
fina...](http://www.healio.com/orthotics-prosthetics/development-
financing/news/print/o-and-p-business-
news/%7B9af9aaea-a632-47a7-b628-24620620c197%7D/pro-competitive-action-via-
patent-sharing-may-encourage-innovation)

[https://docs.google.com/viewer?a=v&q=cache:_DA2suNYWFoJ:...](https://docs.google.com/viewer?a=v&q=cache:_DA2suNYWFoJ:www.lu.se/upload/CIRCLE/INN005/Mansfield_Patents_and_Innovation.pdf+&hl=en&gl=uk&pid=bl&srcid=ADGEESiSrZgf05T5oVhTDLkVOmUYdF43Y3zl869iodTKe4OJxuaMaq2qn0IwqNjwOmWweYVWWS6KKuY5fe3zpSNFPj-
zku2amcHzmgBp2iUvw_0eIXjIaVzDs9S_UydjZzaSxDB2EUph&sig=AHIEtbTHosHx_4LXf9sQ-
_Ct2TTnVFDhsQ)

Skip to the conclusion in the last paper.

------
rutigers
Taiwan University sues Apple over SIRI[1]. Columbia University sues
Illumina[2]. University of California sues Facebook[3]. And now, CMU sues
Marvell.

\---

[1][http://www.reuters.com/article/2012/07/30/us-apple-patent-
ta...](http://www.reuters.com/article/2012/07/30/us-apple-patent-taiwan-
idUSBRE86T0A920120730)

[2][http://www.reuters.com/article/2012/03/26/us-illumina-
columb...](http://www.reuters.com/article/2012/03/26/us-illumina-columbia-
idUSBRE82P0VK20120326)

[3][http://www.reuters.com/article/2012/09/13/us-patents-
faceboo...](http://www.reuters.com/article/2012/09/13/us-patents-facebook-
university-californi-idUSBRE88C00N20120913)

------
rwmj
Considering everything that goes into making a hard drive, the two
patents[1][2] describe such a tiny detail (a tiny incremental improvement on
distinguishing magnetic domains), how can $1.17bn be a just award?

[1] <http://www.google.com/patents/US6201839> [2]
<http://www.google.com/patents/US6438180>

~~~
tzs
One thing to keep in mind is that the alleged infringement has been ongoing
for nearly 10 years. Over that time, they sold over 2 billion of the
infringing chips. A billion dollars sounds huge, but $0.50 per chip doesn't
necessarily sound huge.

I believe that the current standard for figuring out what damages should be is
based on trying to figure out what deal the parties would have made had their
been a negotiated license deal under the constraint that both parties feel
that they MUST come to an agreement. This should take into account royalties
that the defendant has paid to license similar patents before, and the
importance of the patents to the defendants business. There is a whole big
list of factors used to guide this hypothetical negotiation. They were
established in a case involving Georgia Pacific, so googling for that along
with patent damages will get more information if you are curious.

To find out exactly what happened in this case, you'd need to get records from
the trial. Both sides would have had hired experts prepare damage reports that
look at the Georgia Pacific factors and argue for what royalty should result.
It sounds like the jury decided to go with the plaintiffs estimate.

~~~
btian
$0.50 per chip is HUGE. This is not the ultra-expensive Intel Core i7. ARM
makes only $.10 per licensed chip[1]

[1] [http://www.quora.com/ARM-Processor-Architecture/How-much-
doe...](http://www.quora.com/ARM-Processor-Architecture/How-much-does-an-ARM-
processor-design-cost)

------
xmanifesto
Marvell's stock just took a massive hit, 10% down in under 2 hours[1] and will
probably sink a bit more tomorrow. Meanwhile, Carnegie Mellon just doubled
their annual revenue from $909m to ~$2bn[2].

\---

[1]<http://www.google.com/finance?cid=664838>
[2][http://www.cmu.edu/finance/reporting-and-incoming-
funds/fina...](http://www.cmu.edu/finance/reporting-and-incoming-
funds/financial-reporting/files/2011-annual-report.pdf)

------
jeswin
If the US technology sector ever falls behind other countries, one could look
back and see that a fundamentally broken patent system played a significant
role. Pitting companies against each other in courtroom battles with no net
productive output.

~~~
monochromatic
By that standard, every court case has "no net productive output." Should we
disband the legal system?

~~~
praxeologist
Your statement is a strawman. They just mean patent cases, not every case
conceivable between two corporations. I would agree with them because
intellectual "property" qua property is bogus. The essential nature of what is
claimed as property by IP law: patterns, ideas, techniques is that they are
not scarce goods versus things like your body or your car.

How should we define "legal productivity"? I think that it should be measured
by making victims whole and CMU was not deprived of anything by Marvell using
the same pattern. The focus on arbitrary jail time and fines paid to
government versus restoring victims is one thing which needs to be rebooted.

Another is the tragedy of the commons situation with free and open access to
courts. This creates a long queue for trials and simply drawing out a case
which has no merit is used as a weapon itself. If justice was a service being
paid for and we implement a loser-pays doctrine, as has always been the case
in common law, we wouldn't see a lot of these patent cases, besides the fact
that IP cannot exist without a state to grant the monopoly.

~~~
monochromatic
That's not what "strawman" means. And I know that he just _meant_ patent
cases... the problem is that the criticism he used _applies_ to all cases.
That was my whole point.

> CMU was not deprived of anything by Marvell using the same pattern

CMU was deprived of a reasonable royalty under the law. What does being made
whole mean if not being granted what the law guarantees?

> The focus on arbitrary jail time and fines paid to government versus
> restoring victims is one thing which needs to be rebooted.

This has nothing to do with patent cases. Are you saying criminal law also
needs a reboot?

> If justice was a service being paid for and we implement a loser-pays
> doctrine, as has always been the case in common law, we wouldn't see a lot
> of these patent cases, besides the fact that IP cannot exist without a state
> to grant the monopoly.

I have no idea what you're trying to get at here. Loser-pays has some
advantages, but it also has some serious disadvantages. As for IP requiring a
state to grant the monopoly, I don't think anyone has ever claimed otherwise,
and it has nothing to do with loser-pays. I'm just confused by your comment.

------
pi18n
If you read the claims they are apparently infringing upon, it's all math with
a thin veneer of "on a magnetic storage medium". It's literally mathematical
signal processing. I would bet a few dozen bucks that it is obvious to anyone
studying signal processing, since it seems like an advancement on a Kalman
filter.

~~~
wmf
Yeah, it's so obvious that it was published in IEEE Transactions on
Information Theory and the author got a PhD from CMU for it.

~~~
Brashman
I agree. Since this is coming out of research out of a university, I would be
more inclined to guess that (at the time at least) this was actually
innovative and new work. The fastest way for a paper to be rejected is for it
to have been done already, or even for it to be "obvious to anyone" with basic
knowledge in the field.

Also, I don't see why the fact that it's advancing existing techniques or that
it's just math somehow makes it less important. There are whole fields that
are just math, such as computer science originally.

~~~
pi18n
I don't want to make math and computer science sound unimportant -- it's an
important distinction because pure math is not supposed to be patentable. But
for whatever reason if you include a hypothetical machine it is suddenly
patentable.

------
jennichen
Looks like the real winners are Douglas B. Greenswag and Patrick J. McElhinny
of K&L Gates ... Carnegie Mellon's lawyers.

~~~
monochromatic
Why does the winning litigant not count as a real winner?

~~~
uvdiv
Another commenter wrote an interesting reply to you. It got censored by
friendly robot overlord, so I'll reproduce it:

 _«Perhaps jennichen was suggesting that since the appeal has already been
filed and the verdict might be overturned, the lawyers win either way. In the
end CMU may get nothing out of it after having spent millions on the
lawyers.»_

 _«Quoting from the article shared:»_

 _«"As Brian Love, a professor of patent law at Santa Clara University,
pointed out, most universities end up net losers
(<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2019190>) in the game of
"patent roulette," with their patents costing them more money than they
make."»_

(Thank you 'accountswu', that is an interesting find.)

------
aaronbrethorst
Hmm, I was wondering if there was a good stock buying opportunity here, and
then I started reading employee reviews on Glassdoor
([http://www.glassdoor.com/Reviews/Marvell-Technology-
Reviews-...](http://www.glassdoor.com/Reviews/Marvell-Technology-
Reviews-E11761.htm)). So much for that :-\

------
linuxhansl
Universities should teach, research, and publish. What the heck are they doing
in patent litigation?!

Also, is CMU partially tax funded? If so, do they really own these patents to
begin with? Should they?

~~~
tingletech
In the process of research, professors and graduate students (and sometimes
non-academic appointment staff) make discoveries and inventions that can be
patented. The University owns part of every patent, because the University
often provides the infrastructure yadda yadda, but usually the academics are
the ones who start companies to exploit the patent. Technology transfer
officers who manage the University patent portfolios will negotiate licenses
if you call them up, but these offices are often dealing with grant compliance
issues as well and are dealing with so much data it seems like they can hardly
keep track of all the research going on in the academy, let alone look for
patent violators. I don't think a University ever owns 100% of a patent, so I
have to believe it is the inventor's company that is really going after
people; and the university is just a co-plantif because they own part of the
patent are are legally compelled to take part in the patent defense / plus
they want to get their slice of the pie.

~~~
Brashman
If the professors and graduate students involved in this didn't start a
company to exploit the company, then I'm guessing the university still owns
100% of the patent (I don't know if that's the case in this situation or not).
I think this is similar to in industry when employees may have their name on
patents but the company they're working for will own the patent.

This case gets me thinking a bit because they are probably involved in this in
part so that they can get money to do more research. It's not like they're
doing this as a power play to grab more market share.

~~~
tingletech
> If the professors and graduate students involved in this didn't start a
> company to exploit the company, then I'm guessing the university still owns
> 100% of the patent

That is not consistent with how I personally interpret
<http://www.cmu.edu/policies/documents/IntellProp.html> but I am not a patent
lawyer

> so that they can get money to do more research.

Some research requires massive public and private investment, and the rational
for the technology transfer function of a university is to recoup the costs of
R&D from commercial products that are legitimately derivative from these
investments, so as to reinvest in the facilities and create more original
knowledge that can lead to more commercial products.

