
Standing Up to a Dangerous New Breed of Patent Troll - jgrahamc
https://blog.cloudflare.com/standing-up-to-a-dangerous-new-breed-of-patent-troll/
======
jawns
Cloudflare says that it is willing to spend up to $50,000 to award people who
dig up prior art that invalidates Blackbird's patents ($20,000 for prior art
related to the lawsuit and $30,000 for prior art related to Blackbird's other
patents).

BUT (and it's a big but, Sir Mix-a-Lot) ...

> These opportunities remain open as long as Blackbird's case against
> Cloudflare is still active.

So, what will likely happen is that as soon as Blackbird spots this blog post
and realize that Cloudflare has no intention of settling, they withdraw their
suit, and that means Cloudflare doesn't have to pay anybody a prior-art
bounty.

That would actually be in keeping with a patent troll's M.O. They don't want
to waste their time actually pursuing lawsuits against companies that are
willing to push back. Instead, it's much more lucrative for them to shake down
easy targets and reach a quick settlement.

~~~
jogjayr
For smaller companies and orgs, or individual software developers, I wonder if
it now makes sense to pay into some sort of common "patent troll insurance
pool" (I'm sure someone's suggested this already). If any member of the pool
gets sued, the pool puts out patent invalidation bounties on the troll's
entire portfolio and (for an additional premium) covers part of the legal
defense in case there's a trial.

a) it can be structured like a credit union or something and owned by its
members (reduces incentives for it to grow beyond what's necessary)

b) make it retroactive i.e. you don't have to already be a member to get
protection. you can choose to buy in after you've been sent a letter

c) a protection pool of sufficient size and resources might do enough to
invalidate so many patents that trolling simply becomes unprofitable. EDIT:
Especially if suing a pool member poses an existential threat to the troll in
the form of invalidating their entire portfolio. As Cloudflare have shown, you
only need one party to stand up for themselves and contest the patents. In
that case, premiums go down long-term

This is obviously different from patent pooling and cross-licensing agreements
companies use to defend themselves against other practicing entities.

~~~
knodi123
> make it retroactive i.e. you don't have to already be a member to get
> protection. you can choose to buy in after you've been sent a letter

So why would anyone buy in before they get a letter, or maintain their
membership once they're no longer in court?

~~~
jogjayr
> So why would anyone buy in before they get a letter,

Plenty of people have already gotten a letter; if they all pooled their
resources they'd have a decent defense fund already.

> , or maintain their membership once they're no longer in court?

This one, I agree, is harder. Best I can propose is a minimum 5 year
membership once you've been sued. Or tweak it some other way so that
membership is slightly cheaper, or about as much as, settling.

~~~
kbutler
Or, incentivize membership by having the group own a bunch of patents, and
then sue people who don't pay their membership!

The ultimate protection racket! "You've got a nice product here, shame if a
lawsuit happened to it..."

Wouldn't you know, it already exists:
[https://en.wikipedia.org/wiki/MPEG_LA](https://en.wikipedia.org/wiki/MPEG_LA)

~~~
jogjayr
Yeah it's a fine line between "insurance" and "protection".

The key distinguishing factor here is the protection pool actively seeks to
invalidate bad patents. It could also lobby for patent reform. By doing so, it
makes patent trolling less profitable and thereby, reduces the need for itself
in the future. It's like a health insurance company funding research into
perfect health and immortality (but more achievable).

------
Ajedi32
Woah, looks like this patent troll picked the wrong company to sue. Cloudflare
is going after them _hard_:

> Step 1 — Cloudflare will fight this case in the courts

> Step 2 — Cloudflare will fund a crowdsourced effort to find evidence to
> invalidate Blackbird’s patents… all of them

> Step 3 — Cloudflare will investigate Blackbird’s operations to develop facts
> that support our arguments in the litigation and expose how patent trolls
> really operate

> Step 4 — File complaints against Blackbird attorneys by bar association
> disciplinary counsel in Massachusetts and Illinois

~~~
Nadya
Step #4 is going right for the throat: their ability to practice law _at all_.
That's a big "and fuck you too" on top of the other stuff which is only meant
to shut down Blackbird's operations as a patent troll.

I have no sympathy for patent trolls any more than I do other extortionists -
whether "technically it is legal" or not.

~~~
nojvek
If they can truly bar them from practicing that would be the ultimate win. It
would also send a message to new wanna be trolls that life is a troll isn't
lalaland.

------
kbutler
The "new breed" is described as:

"""Blackbird combines both a law firm and intellectual property rights holder
into a single entity. In doing so, they remove legal fees from their cost
structure and can bring lawsuits of potentially dubious merit without having
to bear any meaningful cost. """

Prenda Law already patented that breed. Expect infringement suit shortly.

~~~
dragonwriter
Prenda Law were copyright trolls, not patent trolls.

(Also, Prenda Law were actively inducing the infringement that thhey were
prosecuting, and inventing shell companies as fake clients to conceal their
own interest in the litigation.)

~~~
kbutler
Your effort at being pedantic falls rather flat, as the "new breed" was
described as "combines both a law firm and intellectual property rights holder
into a single entity". The description did not specify patents.

Clearly, the Prenda-Structure patent reads on this infringing Blackbird
organization.

(Also, it was a joke.)

------
zitterbewegung
We need more companies to do this. Hopefully Cloudflare and Newegg will set an
example for other companies . But, what we really need is proper reforms to
the patent system .

~~~
napsterbr
Yes and yes! Mitigations like these are completely impossible to go through if
you do not have a _really good_ amount of money lying around (and that you'll
never have it back), and even individuals (not only big corps) are subject to
trolls. I remember a guy posting videos explaining how he was being sued for
infringement because he downloaded something from the app store which was an
infringement within his state (I don't remember exactly which one, but my
guess is Texas).

Really hope these new tech companies can "disrupt" this kind of practice, but
they do have to get together and agree on some sort of action. Newegg and
cloudflare fighting back is great, but if facebook, Netflix, Apple, Microsoft
& co join the cause, I'm sure trolls will have a good reason to, well, not
troll.

------
stcredzero
_Blackbird combines both a law firm and intellectual property rights holder
into a single entity. In doing so, they remove legal fees from their cost
structure and can bring lawsuits of potentially dubious merit without having
to bear any meaningful cost._

If there is a place where government regulation can do some good, this might
be it. The combination of these two kinds of company represents a moral
hazard. There is a precedent for this kind of regulation, which mandates the
separation of certain kinds of companies:

[https://en.wikipedia.org/wiki/Separation_of_investment_and_r...](https://en.wikipedia.org/wiki/Separation_of_investment_and_retail_banking)

EDIT:

 _increasingly in the world of software or tech patents, the trolls rely on
the broadest possible interpretation of vague or generalized patents to sow as
much uncertainty as possible._

I've run across people involved with patent law here and on reddit, and they
seem to get triggered by laypeople ridiculing the vague and abstruse nature of
patents. (Really, go and read some! Try searches for video on the Internet!) I
find that also weird, in the same way that a lot of legal stuff is weird.

 _And about 70% of all patent infringement claims are filed by patent trolls,
a share that has more than doubled in recent years. It is estimated that
litigation initiated by patent trolls in U.S. courts cost companies as much as
$30 billion in direct costs, a number that has increased more than four-fold
over the last ten years._

Interesting statistic. If the preponderance of patent claims run counter to
the original intent of the mechanism, then something is clearly wrong.

~~~
toast0
Without addressing the validity of patents or the appropriateness of NPE
suits, which is being covered elsehwere in the thread...

Are "legal fees" that much more expensive than the cost of actually doing the
legal work required?

A lot of companies have in-house lawyers, what's the difference between a NPE
with in-house laywers to file patent suits, and a law firm that acquires
patents to file patent suits? Or even, the difference between that and an NPE
hiring an outside law firm which charges a very low margin (possibly with a
contingency fee as well)?

------
bfe
Most patents are probably not valid, and most patents used in licensing offers
/ threats are probably not strong enough to avoid being invalidated or found
not infringed if litigated, but the would-be licensor / troll counts on the
threatened party to settle rather than pay millions of dollars for litigation.

While there aren't any easy tactical solutions and a policy fix is a dim hope,
we should be able to at least partly solve the problem by training an AI to do
automated and thorough prior art search and analysis relevant to a patent, so
a lot of the legwork of a patent litigation threat becomes orders of magnitude
faster and cheaper, and it becomes vastly easier and less intimidating for a
trolling target to respond to a patent threat like this, and quickly get their
focus and resources back to developing their technology. Software eats patent
attorneys, and reduces the burden of patents on the technology community.

(disclaimers: I am a patent attorney and I'm currently working full-time on
coding a patent search & analysis AI service, this is not legal advice, etc.)

~~~
xg15
Seems to me, the same technology could be used by the NPEs too, though, to
find new troll targets.

~~~
bfe
Patent owners could use it too, but overall it would make invalidating patents
and resolving patent disputes faster, easier, and cheaper.

------
tpatke
1\. Everyone who gets sued by a patent troll is going to complain about the
validity of the patent. Even when the patent is, in fact, completely valid.

2\. Patent troll + Law firm is not a "dangerous new breed". This has been
happening for a long while now.

3\. It seems strange to complain about the being sued for patent infringement
while owning '150' patents. Do you agree with patents or not? If you agree,
then being sued for patent infringement is part of it. If you disagree, why
invest so much? I understand the argument of patents being defensive, but,
does that really help in a world of patent trolls? More likely, a company
eventually goes under and the patents are acquired on the cheap - by a troll.

4\. I think the "we will pay you a bounty to help make our problem go away"
approach is interesting and I hope it works. ...but it's very self serving.
Maybe just pay a law firm $50,000 to invalidate the patent rather than making
a contest out of it.

To be fair, I really don't understand the concept of a software patent. If I
can implement it then it is fair game.

~~~
billyvg
1\. That is another issue, the USPTO issuing patents that shouldn't be issued.

3\. They don't seem to be against patents, just against non-practicing
entities. Did you even read the article?

~~~
placebo
I hate patent trolls with a passion, but these non-practicing entities are are
just another negative by-product of what has devolved to be a negative system.
Patents originally existed to protect inventors. Today, like in other legal
systems, they have very little to do with justice and a lot to do with
"whoever has the gold makes the rules". As such, while I definitely side with
CloudFlare, it does seem like a complaint of "not fair, they are manipulating
the rotten system better than us"

------
hxegon
> As explained later in this blog post, we plan to (i) contest the patent
> lawsuit vigorously, (ii) fund an award for a crowdsourced search for prior
> art that can be used to invalidate Blackbird patents, and (iii) ask the
> relevant bar associations to investigate what we consider to be violations
> of the rules of professional conduct by Blackbird and its attorneys.

Interesting. Seems to be more of a long term solution than just "We'll stand
up for ourselves because we can"

------
lordnacho
If patents help society, then patent trolling is not always a destructive
process. In fact it's how things ought to work, if you accept the premise
(which I don't). And if it's sometimes a good thing, actually it's not
illegitimate to hold in an otherwise unproductive company. It's just like
owning a bar of gold: does nothing for anyone, but it's an asset for the
owner.

~~~
gregmac
But it's not like gold. Gold is physical - it requires that you do something
to obtain it somehow, and it's (generally) clear who rightfully possess that
particular piece of gold at any given time.

Patents are ideas. Two (or more) people can independently come up with exactly
the same idea, sometimes in very different contexts. The patent system rewards
the person who files a patent for it first, and in fact, for the patent troll,
it's particularly lucrative when _other_ people execute successfully (which
generally means they've actually contributed something of value to society).

~~~
lordnacho
Well, yes. I did mention that I don't believe in the premise.

------
PatentTroll
Just want to provide a contrarian view here: patent assertion and 'trolling'
is not necessarily a bad thing in theory. It can create a secondary
monetization route for inventors, instead of asserting it themselves. Now,
that's all predicated on the validity of the patent and the degree of
infringement, but it's not always a bad thing.

~~~
everybodyknows
Can you cite an example of a firm operating along Blackbird's structural
business model -- except adhering to a policy of asserting only patents that
carry a plausible claim to validity?

------
napsterbr
Man, if I were a millionaire I'd gladly spend a good chunk of my money and
time to fight back those trolls. (Maybe someday :)

In all seriousness, good move on fighting back and actually standing against
those bullies. Naming the individuals and companies involved could maybe get
you in legal trouble? Anyway, surely you've already discussed this internally
and decided to name them. Honestly, I like it. It's probably the only way to
stop patent trolls: Get their names dirty on the Internet, which never
forgets.

I wonder if moves like this are known to people outside legal and tech. My
guess is the public in general has no idea of these practices, which makes it
harder to fight against because there is almost no reaction / backlash. (I'm
not from the US, maybe people do know about them).

------
shdon
It may be small potatoes, but I'm voting with my wallet by upgrading my
Cloudflare account from free to paid. Not because I need the additional
features, but to support this fight.

------
monochromatic
Many (most?) patent troll suits are on contingency anyway, so this isn't
really particularly "dangerous."

------
Kliment
About the claim that the patenterrorists here have offered a contingency to
the previous patent holder in addition to $1, wouldn't it be much more
plausible that they threatened said holder with a patent lawsuit which they
would not bring if they paid their extortion fee, in the form of the rights to
the patent?

~~~
matt4077
That wouldn't be "extortion" in the legal sense, which (typically) requires
the thread to be something illegal, or otherwise unusually damaging to the
victim. Simply saying "give me X or I will sue you" is just how it works.

------
comex
I submitted a few different examples of (what I think is) prior art for the
335 patent. My favorite is this one, a multi-user shared annotation system
based on an HTTP proxy:

[http://web.archive.org/web/19970606225031/http://www.osf.org...](http://web.archive.org/web/19970606225031/http://www.osf.org:80/www/waiba/papers/grpannot/grpannot.html)

Basically, you could submit annotations to be placed at any point in the
document, and you and other users of the annotation server would see them
(literally inserted into the HTML file). It was a crude and slow system, but
the authors planned to replace it with a Java applet in the future. According
to them, “since it is expected that the Java run-time system will be an
integral part of all future web clients, this remains a pan-browser solution.”

So many failed dreams… not just Java, but the whole idea of a user’s browsing
experience being theirs to command and design, with the server’s response only
a suggestion. Maybe I’m being overdramatic. Browser extensions, custom CSS,
user scripts, etc. can do the same things today – and of course they’re far
more capable, in terms of the range of functionality exposed, and indeed far
more popular – but I still feel like there’s something missing. Semanticity,
maybe. So many pages these days are just blobs of minified JS and CSS that
(intentionally or not) prevent you from understanding the structure of the
document without extensive reverse engineering.

…anyway, I’m getting off topic. I think it’s prior art because it satisfies
all the conditions of at least some of the claims:

 _1\. A method for providing an internet third party data channel, said third
party data channel being established within an existing data channel between
an internet server and an internet client, said third party data channel
connecting a data source distinct from said internet server to said internet
client, said method including the steps of:_

existing data channel: the HTTP connection

internet server: original website; internet client: user’s browser

data source: annotation server’s repository of data

third party data channel: connection between proxy and annotation server

 _a) using a processing device distinct from said internet server for
monitoring said existing data channel for a data communication having a
predetermined property, said data communication having an intended recipient
of one of said internet server and said internet client,_

processing device: HTTP proxy (in the paper, it’s separate from the annotation
server, one of those trivial details that can make a big different w.r.t.
patents)

data communication: HTTP response

predetermined property: various; probably it checks the HTTP status code,
though I haven’t checked the implementation

 _b) upon detection of said data communication, performing:_

 _b1) the step of accessing said data source to obtain third party data,_

(querying the annotation server)

 _b2) a step selected from the group consisting of the step of modifying said
data communication in response to said third party data and the step of
replacing said data communication in response to said third party data to
obtain a resultant data communication, and_

(modifying the response to add annotations)

 _b3) the step of sending said resultant data communication to said intended
recipient._

(returning it to the user)

Though, while writing this up, I realized there’s one potential problem. At a
literal level, the proxy does not “monitor” packets waiting for a HTTP
response to the browser. Rather, it receives requests and makes its own
request to the server; arguably that is not an “existing data channel”, and
arguably the site’s response is directed towards _the proxy_ , not the
browser.

Luckily, the patent’s description seems to explicitly disclaim this
interpretation:

 _For example, a proxy can be thought of as an application level router, not
contributing to the data stream being transported through it. This logical
transparency of a proxy is maintained even if the proxy, in fact, forwards
cached copies of requested objects to a client._

------
AnthonyMouse
> Of course, the patent troll system attempts to shield Mr. Kaufmann and his
> companies’ operations from the lawsuit by having Blackbird become the owner
> of the patent — even if Mr. Kaufmann maintains an interest in the
> litigation.

Can't Cloudflare still have their lawyers go look at the original patentees
for possible infringement and file a suit against them?

------
bogositosius
>Make no mistake, Cloudflare is a strong supporter of the patent system.

Well this is pretty rich.

