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How to Beat a Patent Troll (avc.com)
55 points by wslh 8 days ago | hide | past | web | favorite | 35 comments

I am a fan of Fred's work/blog but I'm not sure how this is a "how to" AKA a guide, rather than a regurgitation of someone else's guide, meant only for well-financed companies.

For those of us bootstrapping, this will unfortunately not work. We are stuck settling with these parasites.

This is probably not a viable strategy for any startup without significant financial resources and time to dedicate to it.

From the post itself:

> It is tempting to settle with patent trolls if you can settle for less than litigation costs. Our portfolio companies do it all the time and it is rational behavior.

That precisely is the trolls' business model - make settling with them the rational way to go. The system is broken and needs to be fixed so that this business model is no longer viable.

Exactly, we need legal changes. The changes aren't even hard, just require enough political will.

The patent system is broken but SV is full of goons who made billions off of "do it on a computer" patents and they will never allow their cash cows to be legislated away. Patent trolls are really bad but they are just one symptom of a system that is built on huge patent portfolios. The big companies are just as bad IMHO.

I'm teaching myself the law and have assertively put a bully attorney in his place.

Like all people bullies go after easy targets. Don't be one.

Make it cost them more than it's worth to fight you.

In the original cloudflare posting, they said this - "As we have explained previously, patent trolls benefit from a problematic incentive structure that allows them to take vague or abstract patents that they have no intention of developing and assert them as broadly as possible."

It seems to me that the real problem is patents being issues for "vague and abstract" things in the first place. You're not even supposed to be able to patent a mere idea anyway. It is supposed to be something specific and well-defined (and also usually pretty narrow). The patent office sounds like the real source of the problem, not the system/structure surrounding the legality of patent application and ownership.

As a patent creator that can’t get any message returned from potential licensees, what options are there aside from selling the patent to a troll or sending letters with my own lawyers

The market can’t seem to distinguish validity of claims, but a letter from Esq. LLP seems to change that notion quickly.

These discussions don’t factor in that companies never want to willingly exchange value for a royalty. There is no IP acquisition department. Everyone just wants to skirt around litigation, and lawyers fix that.

There’s also a conception of thinking it’s viable to create everything you’ve considered patenting

> The market can’t seem to distinguish validity of claims

I can't discern the validity of claims and wonder if we would be better if the whole system was abolished.

Can anyone give an example of a patent that was necessary for its intended purpose? According to the U.S. Constitution, the purpose of patents was to encourage inventors to reveal their inventions (to "patent" means to "open up"). Without protection, the thinking goes, geniuses would hide their ideas or give up inventing altogether. But the whole premise is wrong in my experience.

First of all, useful advances are made by highly specialized people working on specific problems in their field. These advances are usually small and cumulative. Every "invention" depends upon a thousand preceding discoveries. Finally, whatever is found is often found independently and concurrently by others.


https://sivers.org/multiply - Ideas are just a multiplier. They're useless without execution.

https://www.everythingisaremix.info/watch-the-series - Art and science are replete with copying all over the place, by everybody. No one is exempt!

Can anyone give an example of a patent that was necessary for its intended purpose?

The entire drug development market would collapse without patents.

What you can do is just focus on building your own product instead trying to seek rent from others.

If it's not something you create, it's not something you should be patenting.

>If it's not something you create, it's not something you should be patenting.

So if the company outsources the actual production to an assembly line in China, no patent?

Are you arguing that Apple does not make iPhones because Foxconn does?

The question at hand is, are you? You were the one to say he shouldn't hold a patent of he's not personally on three company manufacturing the product ... at least if you weren't saying that, could you break down what you were saying.

It seems like you're happy for corps to hold patents and use third-party manufacturers but not for individuals to do that?

I'm not a fan of any kind of patents because they create a tax on a market that newcomers have to pay to established parties. I'm even less of a fan of patents that are just paper vapourware that only exist to extract value from companies that actually produce value.

The only valid case for a patent, in my opinion, is someone making a unique product, investing in it, providing there's a market for it, and wanting to protect this investment from a better funded competitor trying to swoop in and take over the market without having invested anything in it. Patents exist to protect real investment, not to seek rent from parties who are doing real investments.

No doubt there's some grey area in there, but if you're not somehow involved in serving that market, you've got no business claiming that those who do are violating your paper monopoly that you're not even using. Go use it, then you might have a case. If it's actually innovative and others are clearly taking advantage from your investment.

I'm just trying to understand the full proposal. "Designed in California": contracting out production of the design is ok, but licensing it out wouldn't be? If they mix in enough hands on in setting up the production, that process engineering work is ok to be protected with trade secrets but not patents unless they get hands on with the assembly?

Is it ok to patent inventions from hired contractors? Or do they have to be in-house employees? Isn't it the same thing as licensing from a third party, just done after the fact instead of in anticipation of getting some inventions out of a contractor?

Why would licensing not be okay? If someone designs a thing and someone else wants to pay them to build that thing, that's totally fine.

What's not okay is if someone designs and builds a thing, and then a complete stranger comes by and claims to have designed it based on some questionable similarities to a vague description of an idea on paper.

The big issue is: did you actually design the thing, or are you merely trying to extract money from those who did?

> What's not okay is if someone designs and builds a thing, and then a complete stranger comes by and claims to have designed it based on some questionable similarities to a vague description of an idea on paper.

What about the case where it isn't a simultaneous discovery, and instead is a copy? Are you saying the patent should only be restricted from applying to independent rediscoveries, but that otherwise patents can go to people who don't build the thing or contract someone else to build the thing? And people who build the thing and patent it can also sue people who independently come up with it, because they invented it and then built it rather than just invented it? During the ramp up of the build process do you have to swear everyone to silence because if someone copies it before it has yet been built they are in the clear, or is there a "intend to build it or contract someone else to build it" standard?

Can you expand on that thought?

So if I receive a patent for something financial I should spend the next decade acquiring licenses in 50 states and multiple countries, some of which have multimillion dollar bond requirements, getting product market fit for my new financial service just to prove that the “locked down IP” has legs? Ignoring any other pursuit I might imagine in the mean time?

Or just letting the market stay in its current unimproved state just in case maybe someone else independently comes up with the idea

did you have something more practical in mind that fits your criteria which I didn’t consider?

just disclosing the idea publicly as loud so others can build from it?

Patents, at their best, are for IP that requires significant capital investment like drug development or wireless modem chips or things like that. You have to pay a bunch of talented and expensive people a bunch of money for a long time how to figure out how to make the thing.

But once they figure it out, replicating the thing is fairly easy and cheap. In this case patent licensing is great because it allows for there to be some companies that do the invention and others that do the manufacturing. The patent license is the bridge between these two things.

Patents are at their worst for IP that is just "I had an idea." Because, honestly, ideas are easy. Lots of people have ideas. Most ideas aren't original. When patents get issued for this sort of thing they mostly just cause problems. The lawsuit in the original link here is a good example of that. Someone had an idea to "provide an internet third party data channel" which is....kind of silly. A bunch of people had that idea. The idea had so little value it got sold for $1 but then it got turned into a series of annoying lawsuits that just cost a bunch of people a bunch of money with no good outcome for anyone.

Based on your comments, it kinda sounds like the patent you have falls into the latter category and not the former which is why other commenters are skeptical of you. Maybe they're wrong though, but unless you are willing to talk about your patent (or link to it!) it's hard to really judge.

> The idea had so little value it got sold for $1

Public assignment records often state that a thing was sold for “$1 plus other good and valuable consideration” to keep the actual sale price confidential. The $1 is there to ensure the contract is enforceable and there’s no rule that says the other good and valuable consideration isn’t a whole lot of additional dollars.

Ah, interesting. I stand corrected on that subpoint. Thank you.

If you're inventing something financial (remember: patents are for inventions, not mere ideas), then you're probably already working for a bank that is invested in using your invention.

If you just had some idea and hope to lock it down so people have to pay you if they want to do something in that area, then you're not doing much to improve the market, are you?

This is particularly an issue with many software patents, which often are really just a fairly obvious idea, and not the result of a serious investment in research and development.

Bad assumptions.

Patents are made more general by patent lawyers

They do this because the market tries to circumvent ever paying patent licenses or anybody else’s IP

This is more pronounced in software due to the short time span of relevancy coupled with the narrow outcome of the protocol ratification process (ie there is no market if you deviate from protocols like tcp/ip)

People want to be compensated for their ideas in exchange for publicly disclosing them

Do they? Have you asked the people who created TCP/IP what they think about software patents?

It's mostly companies who want to profit from other people's ideas.

This might be prejudice, but you using terms like "patent creator" and "considered patenting" over "inventor" and "invented" makes it sound like you're not creating anything.

Sorry for the off topic, and if that's inaccurate, but it was my gut reaction.

They were specific intentional word choices because the general population does not have a nuanced distinction

I am the sole named inventor on what I am discussing assigned to my own holding companies (compared to an employer)

I’ve done many patent searches on many potential ideas to see if there was room to being the sole named inventor on other patents that I then chose not to pursue writing

Odd prejudice you have as I dont consider this new disclaimer useful or productive to the conversation

One thing people need to realize is that patents are not a protection by themselves.

Patents are little more than a ticket to file a lawsuit at some future date.

Moreover it is an expensive ticket -- you are required to both reveal the essential elements of your invention (to the extent that requires 'no undue experimentation to reproduce') and prosecute the patent process for several years with specialized attorneys at a typical cost of $tens of thousands.

Then, if someone infringes, you'll have the option to pursue your own federal lawsuit at a cost of $hundreds of thousands, or find an attorney willing to pursue the suit on contingency -- which is likely only if the infringer already has deep pockets.

Oh, and good luck if someone in China decides to infringe your patent.

The requirement to reveal key technology in the patent process is why Elon Musk decided to use Trade Secret protections (vs. patents) for SpaceX -- his assessment is that the Chinese would simply use his patents as a how-to guide.

Although it can be worthwhile, I've decided against it several times. If you do pursue it, I hope it goes well for you.

Patents as a thing in and of themselves are of dubious value, arguably negative value. Patents documenting inventions might be better, but patents without the inventions seem like a huge part of the problem with the patent system.

My personal, bitter, experience is that patent holders always view their claims as the sole reason for the success of a given product (that they target for licensing or litigation or both). They ignore the years of trials, failures, risks taken, and other intellectual property that go into a product. So you end up with the absurd scenario of a group of patent holders each demanding a 1% royalty on the total revenues (not profits) of a product, well after the product has launched and the market established. The product developer can then either succumb to the litigation or succumb to the market forces, but it's not going to continue as a viable business if you're expected to pay out over 100% of the revenues in licensing schemes.

Potential licensees are not taking your calls or messages because by even acknowledging that you have a patent they open themselves up to litigation, regardless of the actual value to their product.

As a developer I've been reprimanded both for reviewing existing patents relevant to an area I was working in, and for not reviewing existing patents for how they may impact something I've launched. On balance, the penalty was far worse for reviewing patents that may cover something I was working on (there is no way to compel a patent holder to license a patent, so the company decided to kill the product instead of taking on the potential liability).

Everyone wants to skirt around litigation because it's cheaper, that's all.

So my only option is to begin the conversation with a Cease and Desist letter from Esq. LLP?

Is there a more friendly and collaborative approach I could take that also gets results?

Aside from abolishing the whole system people need to realize that patents are quite expensive to file and maintain too, which promotes trying to monetize them

If the patent has value, develop it. That's the single best way for others to learn it has value. I'm not saying it needs to be a company, with VCs and funding and what not, but develop it into something demonstrating the value. You already have the patent, so if some one “steals” the implementation without licensing you could resort to litigation. Write about it, blog it, etc.

Patents are abstract solutions to a problem.

The claims are written to be as wide and generically applicable as possible. Which means that the patent library is useless as a repository of solutions to problems. And it's a minefield if you admit in court that you reviewed a patent and determined that it did not address or solve your problem, because every IP attorney in Marshall, TX will say “See, judge? there was malicious intent to steal my client’s intellectual property!” So then no one who's ever experienced the sharp end of the patent litigation system ever looks into the patent library ever again, because treble damages are never fun.

The way things used to work was: you invent a thing, you use it to solve your own problem and/or bring it to market in a larger solution or product. In parallel you patent the invention to prevent your competitors from leveraging your invention, and in return get a limited exclusive license to market and sell your solution.

Now it seems all one needs to do is to add "by using the Internet" or "via SMS" or "with Bitcoin" to an existing patent and voila you have a new income stream and litigation cudgel.

There's not much reason to sell to a patent troll if you're one yourself. Simple ideas (like pegging a crypto-currency to a fiat currency) should never be awarded patents. That's the core of the problem.

Oddly specific

What did you create?

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