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Patent troll claims it invented the Windows 8 and Windows Phone “tiles” (arstechnica.com)
48 points by shawndumas 1845 days ago | hide | past | web | 68 comments | favorite

It sounds like SurfCast owns some pretty valuable intellectual property. Good for them!

Of course, I wonder if they've been paying taxes on that property. If not, then Maine Revenue Services might be interested in the fact that a local corporation has been evading their taxes.

On the other hand, if SurfCast is willing to attest to the Maine Revenue Service that their property has no value and should not be taxed, then I'd like to see Microsoft introduce that into court as evidence that SurfCast can't have suffered financial harm.

So which is it: is SurfCast filing a baseless lawsuit over valueless property or are they tax evaders?

An interesting idea, but which Maine tax would apply? I'm not a Maine tax lawyer, but it looks like Maine has plenty of taxes, including a "Blueberry Tax" [1][2], but there doesn't appear to be a general assets tax. Any corporate income from licensing the patent would be taxed just the same as any other income.

Maine's property tax appears to apply only to "real property" (land) and "tangible" personal property [3] ("tangible" property includes tractors, factory equipment, and other things you can pick up and hold --- patents and other IP are "intangible personal property.")

If you think it's a capital asset subject to capital gains taxation, there's usually no tax on that until the gain is realized by sale. I don't know how patents are taxed in states with general ad valorem taxes, but Maine doesn't seem to be one of those states.

[1] http://www.maine.gov/revenue/othertaxes/homepage.html [2] http://www.mainelegislature.org/legis/statutes/36/title36ch0... [3] http://www.mainelegislature.org/legis/statutes/36/title36sec...

I would be willing to bet that cash-strapped legislatures might be interested in the idea. In fact, I plan to test idea by suggesting it to as many legislators as will listen.

How do you envision this system not placing undue burden on small inventors?

This proposed change would take the patent system, from something that is supposed to promote the progress of science, and turn it completely on it's head. Any small inventor that dared patent something worth-while would be forced to either turn a massive profit on it before tax season, sell it before tax season, or risk it being stolen with few substantial penalties.

Companies with deep pockets would have a field day taking advantage of inventors, they would ignore patents if the inventor declared it worth little for tax reasons. Or, if the inventor claimed the true value of the patent for taxes, they would buy out the inventor at cut-rate prices after taxes had ruined him.

Are you suggesting that IP owners owe (real estate) property taxes?

That would have some interesting consequences. Could I suddenly owe lots of taxes if I get a really great business idea that I think is worth a lot?

Only if you patent it, granting you exclusive right to that idea.

What if I copyright something?

The text I am typing right now is under copyright by default, if I write something particularly brilliant here, can I expect to owe a good deal of taxes?

If not, why not? Both are intellectual "property", and both clearly can have very real value. Why should unpublished books be any less taxable than un-implemented patents?

Good question. Why not, indeed? If you're stating that a property has a cash value, such as by selling it or suing for that amount in real damages, then why shouldn't you have to pay taxes to the government that protects your right to copy it?

Ideas aren't a naturally limited resource. It takes government intervention to declare that an idea is owned by one specific party. It seems only fair that the beneficiary of that intervention should be expected to support the government that makes it possible.

By the way, I have no problem whatsoever with property rights. Although I think software patents are BS, if the government says they exist, then they exist. I just don't think it's fair that these non-practicing entities are paying their fair share to support the system that's netting them a paycheck. Why would I have to pay taxes on a rent house that I lease out, but they don't have to pay taxes on a patent that they lease out?

I don't think that claiming damages implies a worth that should necessarily be taxable. If I am in an automobile accident and my spine is destroyed, I don't think anybody would suggest that since my spine is worth something to me that I should have been paying taxes on it.

Paying taxes to ensure copyright protection would basically have the real world effect of pealing back default copyright. No works would be protected unless the creator went through the trouble of registering^Wpaying tax for that work.

I don't think society would be better off without default copyright, so copyrighted works must remain effectively untaxed "properties".

The problem I am having here is that you are conflating physical property with intellectual "property" just because you want to go after patent trolls. What you are proposing would not be limited in effect to the people you dislike though.

If Bob Handyman were to invent a new type of, say, catalytic converter, in his garage, this would be of immense value to the automotive industry. This would therefore be an incredibly "valuable" patent. (And Bob would of course have to patent his new invention, unless he were a fool.) ..But under your proposal he would then be responsible for a massive tax that he could never dream of paying. And if he didn't pay this tax, automotive companies would then be free to use his invention without giving him anything?

That is crazy.

Yes. It's essentially the same as real estate property in that the petitioner asks the government to state that a given more-or-less well defined area is granted to their exclusive use. In those circumstances, why wouldn't it be subject to taxes by the same government that is giving them the privilege of that sole use?

I'm not asserting that IP owners currently owe property taxes. I am asserting that if they've asked the government to declare that the property is theirs, and they're asking the government to help defend their granted rights, then they should have to pay for the operation of that government.

In short, if you want to have it both ways and receive the patent without paying taxes, fine. Just don't expect to use my taxpayer-supported court system to help you enforce your rights on it.

> I'm not asserting that IP owners currently owe property taxes.

Except you did when you called them tax evaders.

I presume you're familiar with conjecture, such that "if these hypothetical conditions were really true, then this would be a consequence".

If patents were appropriately labelled as taxable property, then they would be tax evaders (unless they chose to value that property at $0.00).

There was a piece of DOS software in the late 80's called HyperPad which had tiles and used them to display status and launch applications. I can't find a single screenshot of it though unfortunately.

I'm sure that is probably slightly "more prior" art.

Never shipped a product, only started describing its tech as "tiles" in 2011.

The word "tile" is used prominently in the patent.

I think we all agree that software patents just gotta go (specially the ones regarding UI). The real question is how to make that happen. Perhaps having a big player like Microsoft targeted by a troll will help.

They have been targeted many times, and paid quite some millions (billions?) over the years [1] [2]. The thing is, the big players like Microsoft all have large patent portfolios and are using them to keep up the oligopoly, they have no interest in abolishing the system.

[1] http://arstechnica.com/tech-policy/2009/10/company-that-won-...

[2] http://www.inquisitr.com/112717/microsoft-loses-i4i-patent-l...

Prior art: Windows 1.0.

Microsoft even once gave a demo of how fast QuickBASIC compiled code was by writing a program that split the screen into quarters and showed different real-time data displays into each quarter. You could call that prior art, even if it weren't for Windows 1.

Is it possible to sue a patent troll for time and legal fees if you win the original case?

I know they are basically shell corporations, but it would be great to see these patent cases incurring some risk for the trolls.

What is the risk to a company whose only asset is the patent which, should they fail to win their case, is probably useless anyway?

Welcome to the problem of limited liability corporations in general. You think it's irksome to win a judgment against a shell that has no assets in the patent troll context, imagine it in the environmental damage, shareholder fraud, etc, context.

On the other hand, imagine losing your house, car and savings because somebody finds a bug in your product and sues you...

Presumably if you're designing products that could cause that much damage if they malfunction, you can buy insurance against any resulting problems. Limited liability is a public subsidy for big business--it reduces the cost of inherently risky business activity by shifting those costs to the injured public rather than to the business owners. It's really arguable whether such incentives are needed and whether liability insurance wouldn't be a more appropriate measure.

Most LLCs have assets and thus require liability insurance anyway.

The tech sector is a small slice of the business space. Lets phrase it another way - you get a bad shipment of chocolate from a supplier, and your cookies send a handful of kids into allergic shock from the peanuts tainting the chocolate. One of them dies. You're likely going to be sued, and your liability insurance is likely a drop in the bucket (enough to cover your business assets). Do you still deserve to lose your house?

Could it be possible to pierce the corporate veil in these cases and go after the people actually running them? Seems like the correct response, if these people are using corporations as throw-away legal weapons.

As a business owner, I like my corporate veil case law just as it is, thank you.



"Under Section 285 of the Patent statute, courts have discretion to award reasonable attorneys’ fees in patent infringement cases that are deemed “exceptional.” 35 U.S.C. § 285. The Federal Circuit noted that while the threat of enhanced damages for willful infringement under 35 U.S.C. § 284 deters bad faith conduct on the part of the accused infringer, the threat of attorneys’ fees under Section 285 is “the only deterrent to the equally improper bringing of clearly unwarranted suits on invalid or unenforceable patents.” Mathis v. Spears, 857 F.2d 749, 754 (Fed. Cir. 1988). Section 285 provides:

    The court in exceptional cases may award reasonable attorneys’
    fees to the prevailing party.  35 U.S.C. § 285."

Additional fee shifting information from a recent federal circuit ruling here:


For those interested in the actual patent here is a link: http://www.surfcast.com/images/pdfs/US6724403.pdf

I particularly find the following quote interesting from the last line on the first page: "The present invention is intended to operate in a platform independent manner."

In that they are interested in suing as many platform developers as possible?

No, in that a claim can be so specific and so vague at the same time.

Gee, waiting until Windows 8 releases before filing a lawsuit rather than before hand when the damage to your "company" could have been avoided. I wonder why that is...

Seriously though, even disregarding any previous prior art, Microsoft already did stuff like this back in 98 when it was called Active Channel.

Amusingly, they use screenshots from Windows Explorer in their patent drawings.

See Fig. 1 in the first patent (pg 3) http://www.surfcast.com/images/pdfs/US6724403.pdf

The pictures has some funny Drive names: Bambam, Fatbelly, Bigboss, Hulk.

I am glad that a patent troll has directly attacked one of the software giants. Now hopefully Microsoft with its deep pockets and legal team can crush this troll.

Microsoft lose in such cases surprisingly often. Smart Tags in Office, onclick activation of plugins in IE...

The Smart Tags lawsuit had some merit to it. They adopted the idea only after it was shown to them, and they refused to license it.

The Eolas case was BS though. The patent was based on rewording the description of existing technology. If memory serves me correctly. Microsofts own OCX technology was prior art for the concept. Eolas claimed that by applying their concept to the web, it was novel and non-obvious.

Yup. Fuck, they lost their right to use "Metro" to describe their now "Modern-UI style." MASSIVE fuck up in my opinion. Microsoft should have raided the coffers to protect using that term.

Agreed it was a massive SNAFU. Metro AG is a huge corp, based in Germany, that wasn't interested in licensing the 'Metro' trademark to MS in a settlement. I don't think any dollar amount was mentioned for continued use of Metro.

And wasn't click activation of plugins the change they had to make to avoid the Eolas patent on automatic execution of embedded content (going back to the 90s here)?

It doesn't actually do much good to "crush" this company, right? They started this company around one set of patents. They can start other companies for other patents. The act of incorporating shields them from losing much in the case of having to cover legal costs for the defendant.

Theyll just license it for an undisclosed amount and empower the troll to go after someone else.

They will probably just pay them off, it's simpler.

It's doubly in Microsoft's interest to settle. First, the troll goes away without a more expensive a jury trial to invalidate the patent.

But more importantly, the troll will take that intact patent and its now overflowing coffers and go off after Microsoft's competitors. So it's a twofer.

Bet on it.

Don't the sales reps in the MS stores claim "No other mobile OS has live tiles"?

I know there has been a spat of these recently, but I always think about Robert Kearns and his lifelong battle against Ford for his intermittent windshield wiper patent.

As much as we hate patent trolls, once and a while, there is an exception to rule which proves us all wrong.

Is an intermittent windshield wiper really worthy of a 20-year monopoly?

Depends on how much you have invested in it.

And even then, I could spend the rest of my life on digging holes and refilling them.

I might have invested countless hours in such effort, but that does not grant it any inherent value.

Did Ford try to infringe on your patent for hole digging?

The value of a patent is not in whether it is infringed, but whether it is both novel and non-obvious. Many software patents are neither, as evidenced by the recent spate of lawsuits over patents that largely amount to "regular expressions, but on a PHONE!!111."

If my theoretical competitor wants to spend their time and resources on an inherently fruitless endeavor, all the more power to them.

How much you spend to invent something is irrelevant. The criteria revolve around usefulness and non obviousness.

It's completely relevant.

Ensuring distribution of costs for new technology is one of the primary reasons for having patents in the first place.

Are you proposing patents should be granted for those who spend tons of money, regardless of how innovative or useful the results of their inventive process are?

I'm proposing that patents encourage the production and disclosure of new technology, and that the inventor has a temporary monopoly with which to re-cooperate the costs of doing so.

Still, how much you spend inventing something is not related to how useful (or obvious) your invention is. If you spent US$ 10 million developing something obvious, you still don't deserve a patent on it.

>If you spent US$ 10 million developing something obvious, you still don't deserve a patent on it.

That's up to the USPTO to decide, not you.

Exactly. And how much money you spent developing your invention should not be taken into consideration. If you do it, you reward inefficiency.

Resource Efficiency is not a criteria for the USPTO, that's your own personal, subjective opinion.

rbanffy wasn't suggesting otherwise. It was your comments that seemed to suggest that inefficient, expensive research should be more worthy of patents by virtue of being expensive.

Ford thought it worthwhile enough to steal the design from him when he came to show it to them and fight him in court for years for the right to use it without paying, so it might well be "worthy of a 20-year monopoly".

I imagine "worthwhile enough to steal the design" and "worthy of 20-year monopoly" are mostly independent variables. There are plenty of ideas worth "stealing" that aren't worth a patent.

But the question of "does the small guy ever benefit from patents" tells us nothing useful. Only the proportion of cost to benefit matters here.

People sometimes win the lottery. Does that provide reason enough to start buying tickets instead of groceries?

I have now realized that anything can happen in the world of ...

I am REALLY pissed off. Idiotic patent trolls. GAH

I thought this was an article from The Onion.

Stop the madness

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