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Appeals court hits largest public patent troll with $1.4M fee (arstechnica.com)
186 points by solveforall on Oct 12, 2015 | hide | past | web | favorite | 49 comments

I was hoping for Intellectual Ventures.

Ha ha, exactly. Just like there are a few baseball umpires who are so bad you learn their names (Angel Hernandez, Phil Cuzzi, Joe West), Intellectual Ventures is one of the "companies" that most developers know of for all the wrong reasons. I remember when they sued every maker of "todo list" software.

> I remember when they sued every maker of "todo list" software.

Hmm, I must have missed that one. Link?

Turns out I was mistaking Angel Hernandez for Phil Cuzzi...so to speak. It was Channel Intelligence not IV that I was thinking of.



Ah I see, thanks. I've been following IV for a while and this didn't seem familiar, so was wondering.

Randomly, I met one of the founders of Intellectual Ventures today. I wasn’t sure if I was resolving the name right and, unfortunately in retrospect, I didn’t ask, ”Oh, the massive patent troll?”

Are you in Bellevue? One of them lived in my building.

No, in Palo Alto. I guess this founder is based here.

Depends on how sloppy and bullheaded they are. In this case, the defendant had already paid to license these patents, and the troll evidently dragged its feed in dealing with its mistake. A bit akin to The SCO Group v. The Universe, in which they didn't have the rights to UNIX(TM).

No way is a good judge going to let this off with a "mistakes were made" attitude.

It may not have been IV, but I doubt they missed this story. Or this one http://arstechnica.com/tech-policy/2015/10/east-texas-judge-...

$1,025 per hour for partners, $750 for associates, and $310 for paralegals.

Those are kind of high. Did they actually charge those rates? Or retroactively bumped up the rates once they knew the case was dismissed?

Those are fairly standard fees for a big law firm defending these kinds of cases. It's why most companies settle rather than fight cases.

$310 seems high for a paralegal, even at a big firm.

That's what the paralegals are billed at. The firm keeps most of that as profit.

Exactly, that's the most profitable line-item. Paralegal's take-home pay varies considerably, between $15/ and $30/hr, with a few commanding much more. And do most of the work and get paid the least.

But someday, you'll make partner! does the downward cowboy arm swing fist thing

Well, there are also a lot of real costs over and above salary. Benefits, office space, computers, telephone, utilities, toilet paper, expenses of all sorts, really.

Oh, I know how that works. I'm a lawyer, although not at a big firm, so I'm not sure how much they bill their paralegals out at.

Out of curiosity, is this the fee for just one lawyer or there are more than one?

Think of them like AWS instances, with a partner being an XL and an associate being an M. Big firms can spin up a lot at once to hammer the other side with legal paperwork, but it starts costing you quite a lot per month. Sometimes there are jobs you really need an XL for for maximum concentrated firepower (like negotiating in person, where someone even slightly better can be worth millions/hr in outcome), but oftentimes a M can be a better fit for the task (paperwork, legal motions, almost everything else).

A case like this, you'll have several doing research, poring through contracts, writing motions, etc. It's part of the reason why the judge gave such a big award. The other being that judge's really don't like being jerked around, and withholding evidence like this is just wasting everyone's time. Had Acacia provided the documents when they were requested, the case would have been settled years ago.

Each attorney billes their rate. So ona conference call with 5 attorneys you might get billed 3k an hour. M

Junior and mid level associates (400-650 an hour) do most of the heavy lifting. Partners are more supervisory, but will be do a lot for depositions, hearings, negotiations and trials.

Even a relatively small case against Acacia costs like 1.5-2 mil.

Each partner hour costs you 1 kUSD. If you have two partners working one hour each, or one partner working two hours doesn't matter.

I'll second that. MBB consultants run significantly more.

Sounds about right: 2000 working hrs in a year * 1000 $/hr ~ $2mm

Quite often partners in big firms make more than that

Those are standard - we pay up to $1400/hr for the top partner in a region from a major firm.

Depends on what you need done. Legal work is expensive but you have to look at the leverage/productivity multiplier of their output.

The title alone makes me all "Yissssssssssssss".

Good, but I was hoping for Intellectual Vultures to be busted.

A good start.

>$1,025-an-hour partners.

TIL some people make literally a 100 times what the average person makes.

That's what they charge for partners. Normal people easily get charged out for 50 USD per hour. Try calling a plumber to see for yourself.

That doesn't mean that they actually get that much money for every hour worked, since the billed hours have to pay unbillable costs like office rent, admin overhead, taxes etc.

If you are willing to look beyond the rich world: world average GDP per capita is something like 10k USD. At 2000 hours worked per year, that 0.5 USD per hour.

Your `average' person already makes 20 times as much as the actual average person.

(Keep in mind, that the median is lower than the average. Check out http://www.bbc.com/news/magazine-17512040)

> If you are willing to look beyond the rich world: world average GDP per capita is something like 10k USD. At 2000 hours worked per year, that 0.5 USD per hour.

No it isn't. It's $5 an hour, barely under the US minimum wage.

Thanks for catching that! Sorry, I obviously can't do arithmetic.

Interesting that the global gdp is that high, actually.

Comparing to the minimum wage is still a bit misleading, since the wage share of GDP is far from 100%.

They make roughly 500k-3 million if they bill that rate. Potentially more if they have huge clients but that's rarer.

Firm partners are heavily compensated based on how much work they bring in, at most firms. But it varies.

And what's the value of a law firm partner who helped set up and oversees an operation that saves you from a patent troll?

This firm was diligent enough to question the very basis of the lawsuit and ferret out evidence that evidently neither of the parties realized they had that the patents had been properly bulk licensed. I've worked with some very good corporate lawyers, and learned from them and other sources that such diligent competence is by no means a given.

Some Americans make literally tens of millions of dollars per day

They can also lose $100m+ in a single hour. The math is so incredible, it's really difficult to get one's head around.

My friend plays a lot of competitive poker. He'll show up after months of being off the grid muttering about being in the middle of a $50,000 downswing, and disappear once he's mentally refreshed enough to make another minor fortune.

online poker ?

Yes, a few games at the same time. It's pretty impressive to watch.

i had a friend in a similar position a few years ago (but living in the US) - he ended up having most of is money locked up when poker stars and the other major players we out of business - im not sure if he got it back ...

Except most people are paid a pittance, when there is plenty of capital to go around. Just look at the income distribution of the 1950's compared to now.

You really should be more educated about reality and acfual statistics.

Go watch the Park Avenue (2012) film on PBS.

They don't make that. That's what you're charged for having them. Some of that goes to their salary, or however they're compensated by their firm. The rest of it goes to operating the business/partnership. Same for the juniors and paralegals.

Most partners don't really see all that money, but they still probably take home a significant percentage of it. IP litigators have very specialized knowledge, that's why they charge so much.

$1.4 million seems small in comparison to the billions[1] that Microsoft was fined by the EU for bundling certain software with Windows.

Acacia did something that would be considered illegal and exploitative in almost every jurisdiction, whereas bundling a browser straddles a legal gray area. Apple does it OS X and iOS, Google does it on Android & Chromebooks, and nearly every Linux distro does it. On iOS, you can't even use a browser engine other than Safari's WebKit. And none of these companies have gotten into trouble.

It just seems unfair to me that when a company does something slightly unfairly competitive (like Microsoft) they get hit with huge fines, but when a company like Acacia does something that's outright evil and illegal, the fines are a joke.

I do think Microsoft should be paying even bigger fines for patent-trolling Android manufacturers with false patent claims. And a judicial decision or executive act ordering Apple to allow users to install their own software on iOS, and removing the ban on interpreters/browser engines/etc on the App Store would be appropriate.

[1] $794 million in 2003, $449 million in 2006, $1.44 billion in 2008, and $765 million (€561 mil)in 2013 -- a total of over $3.4 billion, all for bundling standard software with Windows that all other OSes also bundle. And this money paid in fines to the European Court goes back into the EU budget. (TBH, this smells strangely as a revenue-generating move by the Commission.) See: https://en.wikipedia.org/wiki/Microsoft_Corp_v_Commission

Yes, this number does seem small compared to some other completely unrelated number.

Saying that Microsoft was fined for "bundling a browser" is like saying that the Feds went after Al Capone because of tax evasion. I hope this was a joke post!

There were plenty of other cases pending against Microsoft, but they were all dropped when George W. Bush came into power. If Gore had won, Microsoft probably would have been broken up, like AT&T before it.

Since technology did what it does by enabling unexpected competitors to pass Microsoft, would there have been a purpose beyond the purely political? It's hard to say they have a monopoly on anything now, not even the badwill of the geeks.

Microsoft is still as profitable as ever and they have a ton of money and patents. There is still no real competition on the desktop. Linux is used by a tiny number of hardcore enthusiasts. Apple was financially propped up by Microsoft in the early 2000s to maintain the illusion of competition, but their market share is under 15%. The next generation of hardware is going to take away the option of even using Linux... Microsoft has locked down the bootloaders on ARM devices, although they continue to allow Linux to be installed on Intel devices (for now, at least.)

Microsoft may not dominate the areas of cloud computing or smartphones, but those are separate industries from the desktop. And Microsoft continues to pour money into those industries by investing in Azure and Windows RT. They may yet come to dominate those industries if Amazon or Google make a mistake.

Microsoft has also added mandatory spyware (essentially) to their new Windows 10. Some of it can be disabled, but other parts can't. They are also pushing their Windows Store thing. It's still possible to install desktop software without paying Microsoft, but for how much longer?

HN has a real blind spot when it comes to how harmful Microsoft was and continues to be.

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