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Patent Troll Tracker
I'm Being Hacked
Several email alerts from Blogger this morning, warning me that people are trying to figure out my password and log into my account. Blogger is not the paradigm of security, so who knows how much time I have left. Even though my password was already strong, to be safe, I changed it to something even stronger. There are 62 upper-case-letter, lower-case-letter, and number choices for each slot, so an 8-character password has, I think, 220,000,000,000,000 different combinations. That's 220 trillion. Good luck. And that's if I limited my password to 8 characters or less.<br /><br />Meanwhile, hacking is a crime. Can anyone tell me whether there are civil or criminal penalties for inducing others to hack?<br /><br />On a happier note, thanks for all the email. I won't be able to respond to it all, or even look at it closely until the weekend.
Innovative Patented Technology Asserts Patent Not Invented By Scott Harris
I reported <a href="http://trolltracker.blogspot.com/2008/01/4-interesting-new-cases-from-last-2.html">here</a> that Innovative Patented Technology LLC, a James Beauregard Parker company, existed solely to assert the patents invented by former Fish & Richardson partner Scott Harris. So imagine my surprise when last Thursday, Innovative Patented Technology, represented by Niro Scavone, sued ICON Health & Fitness on a patent invented by Gary J. Colassi, a different Niro Scavone client. Correction: Innovative Patented Technology exists solely to assert patents it didn't invent, just like <a href="http://trolltracker.blogspot.com/search/label/Acacia">many</a> <a href="http://trolltracker.blogspot.com/search/label/Altitude%20Capital%20Partners">others</a> <a href="http://trolltracker.blogspot.com/search/label/Mondis">are</a> <a href="http://trolltracker.blogspot.com/search/label/Erich%20Spangenberg">doing</a>. Hey - it's the American way. (Yeah, let's not "<a href="http://www.patentlyo.com/patent/2008/01/patent-refom-un.html">cause harm to the current regime</a>" and "destabilize" this wonderful system of ours).<br /><br />Colassi, from Norton, Massachusetts, owns the World Gym in Foxborough, home of the New England Patriots. According to the <a href="http://www.boston.com/business/technology/articles/2005/08/30/cybex_loses_patent_suit_tab_is_25m/">Boston Globe</a>, he sued Cybex International in 2002 on a "Treadmill Belt Support Deck." Three years later, Colassi's lawyers at Niro Scavone won a $2.5 million jury verdict for him ($2.63M including interest). Judge Rya Zobel (D. Mass.) granted a permanent injunction in favor of Colassi. That verdict was <a href="http://www.finnegan.com/news/fedCirDecisions/06-1231%2002-14-2007.pdf">affirmed on appeal</a> on February 14, 2007. The Federal Circuit issued its mandate on March 30, 2007.<br /><br />Curiously, despite this tremendous victory, Colassi wasted no time getting rid of his patent. Before the Federal Circuit even officially affirmed the district court, Colassi assigned the patent (which had been <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6123646">6,123,646</a>, but reissued in 2006 as <a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=RE39180.PN.&OS=PN/RE39180&RS=PN/RE39180">RE39,180</a>). Innovative Patented Technology became the owner of the '180 reissue patent as of February 28, 2007. That's now two Niro Scavone clients who "found" James B. Parker to continue to assert their patents.<br /><br />While the Colassi v. Cybex lawsuit was filed in Boston, and went through an extensive Markman hearing and ruling with Judge Zobel there, along with extensive motion practice, a jury trial, and post trial motions, Innovative Patented Technology sued ICON, a Delaware corporation with Utah headquarters, in West Palm Beach, Florida. That's near where Parker lives, but otherwise has no connection to the case.<br /><br />Why would Gary Colassi, fresh off a $2.6M verdict and permanent injunction, affirmed on appeal, then sell his patents to another Niro client, James Parker? Could it be that Parker is funding the expenses for the probably contingency-fee lawsuit and Colassi gets a cut? For Colassi's sake, I hope so. But it's an interesting strategy, with these Scott Harris and now Gary Colassi cases coming to Parker and then being filed in South Florida. I don't pretend to understand it yet, but there's something about this strategy that just cries for investigation by a real journalist.
Welcome to all the new visitors to my site. Evidently, I was TechDirt'd, Slashdotted, and featured as the <a href="http://www.abajournal.com/blawgs/">ABA Blawg of the Week</a> all at the same time. Pretty cool.
Alexander Poltorak: Check Your Facts
Alexander Poltorak is CEO of General Patent Corp., an IP licensing shop I <a href="http://trolltracker.blogspot.com/2007/10/general-patent-corp-acacia-of-east-goes.html">featured</a> some time ago, nicknaming them "Acacia of the East" (watch out for falling houses). Poltorak has an <a href="http://www.csmonitor.com/2008/0128/p09s02-coop.html">editorial</a> in the Christian Science Monitor today where he decries the impending patent reform that the Senate will soon take up. He claims, without citation, that<br /><blockquote>just a handful of high-tech giants -- Microsoft, Intel, Cisco, Oracle, and Dell -- support the proposed reforms. Small high-tech companies -- the true innovators of this industry -- overwhelmingly reject them as do innovators from other industries.</blockquote><br />Ignoring for now the false and unfounded claim that these companies are not "true innovators," his premise that these five companies are the entire support for the patent reform bill is absolutely not true, and Polotrak should open his eyes and learn the truth. Just last week, over 150 companies and organizations sent a letter in support of patent reform to the Senate leadership, urging passage of S.1145. Those letter-signers included more than just the 5 high-tech "giants" that Polotrak alleges constitute the entire support for patent reform. See for yourself <a href="http://www.patentfairness.org/pdf/CPF%20January%20Letter%20vF.pdf">here</a>.<br /><br />Supporters include members of the financial services industry, like Capital One, Citigroup, and Fidelity Investments, members of the energy industry, like Chevron, venture capital firms like Sternhill Partners, other industries, such as the American Corn Growers Association, plenty of Chambers of Commerce, representing small businesses of America, and even some of the "small" high-tech companies Polotrak claims to unanimously oppose patent reform (e.g., Netflix). No, despite what <a href="http://www.patenthawk.com/blog/2008/01/reminder.html">some people</a> claim, the support for the first meaningful reform to our patent laws in 50 years is far but "narrow."<br /><br />I also take issue with Polotrak's unsupported claim that<br /><blockquote>the proposed changes in US patent law will make it easier for offshore copycats to bring their pirated goods into the US with impunity. More jobs will be lost as a result, with devastating consequences for American competitiveness in the global economy.</blockquote><br />Sorry, I just don't buy the argument that damages apportionment and venue reform will be a devastating blow to American competitiveness in the global economy. Where's the economic support for that? Further, damages reform and venue reform do NOT affect the ITC's jurisdiction and the ability to get exclusion orders there against "offshore copycats." The real opposition from the General Patent Corporations of the country is the fear that a patent will no longer be a lottery ticket, a spin on the wheel of fortune. And I'm sure we will hear an ever-louder parade of horribles from this crew as the Senate approaches its vote.<br /><br />(Note: I realize the biotech industry has a different angle, and their own reasons for opposition. My comments above were aimed at the patent licensing industry's organized opposition, not the biotech opposition. That's for another day).
Global Patent Holdings' JPEG Patent: Back to Reexamination
An anonymous third-party requester,* represented by attorney <a href="http://www.lawyers.com/Illinois/Chicago/Francissen-Patent-Law,-P.C.-4297110-f.html">Vernon Francissen</a> of Chicago (Ray Niro's next-door neighbor!), has filed a request for <a href="http://en.wikipedia.org/wiki/Reexamination">ex parte reexamination</a> of the just-reexamined claim 17 of Global Patent Holdings' U.S. Patent <a href="http://trolltracker.googlepages.com/Reexam_Certificate_US5253341.pdf">5,253,341</a>, <a href="http://www.patentfizz.com/fizzdisplay.php?patno=5253341">the JPEG-on-a-website patent</a>. You can download the request, look at it yourself, copy it as an exhibit for your answer and/or other pleadings, <a href="http://trolltracker.googlepages.com/GPHNewReexaminationRequest21Dec07.pdf">here</a> (very big file, please be patient while it loads). The request suggests 19 new substantial questions of patentability, 3 involving anticipation and 16 involving obviousness.<br /><br />Of course, the best part of the reexamination request is the citation of this blog! See Request at 15-16 & nn. 22-24. Now, this isn't the holy grail of legal journalism, an acknowledgement from Linda Greenhouse or Nina Totenberg (like that's going to happen), but this may be even better. I actually haven't reviewed the entire 61-page request that closely yet, but wanted to get the news before you read a puff piece about it in the Chicago Tribune or ABA Journal. I can see the Trib's headline now: "Pesky Serial Infringers Dare to Challenge The Great and Almighty Niro in What Surely Will Be Futile Act of Desperation." Or, you can read the real news here (click on <a href="http://trolltracker.blogspot.com/search/label/Global%20Patent%20Holdings">this link</a> for all of my posts tagged "Global Patent Holdings" - especially good for those just tuning in who have no idea what I'm talking about - it's a patent, being asserted against the use of compressed data like a JPEG, on a website).<br /><br />Now, who IS Global Patent Holdings? Simply put, it's what TechSearch became after it sold most of its assets to Acacia. TechSearch/GPH is Anthony O. Brown. And who is Mr. Brown? A lawyer, for one. According to <a href="http://www.law.depaul.edu/alumni/dialogue/winter_2001.pdf">this DePaul Law School publication</a> (see page 22), Mr. Brown has a law degree from Case Western Reserve in Cleveland, and was an attorney-advisor with the SEC in Washington. Then he became a partner at Jenner & Block in Chicago. Brown made a <a href="http://www.secinfo.com/dV3p8.z6y.htm">$24 million deal with Acacia</a> in January 2005, obtaining $5 million in cash, $17 million in Acacia stock, and a $2 million guarantee for two years of consulting. Here's a March 2001 <a href="http://ethics.csc.ncsu.edu/intellectual/law/fair/technology/tiny.html">Wall Street Journal article</a> about TechSearch, quoting Brown and his attorney, Ray Niro.<br /><br />More to come, I'm sure.<br /><br />TT<br /><br />* It wasn't me, I swear.
Robert Dorf and Alexsam
Alexsam first came onto my radar in July 2007, when it sued Evolution Benefits & Humana in Marshall, Texas on an electronic gift card patent, <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6000608">6,000,608</a>. Alexsam is represented by McClanahan & Clearman in that case, which has just had its initial status conference, and discovery is just beginning. In September, Alexsam filed a second lawsuit, this time against IDT Corporation. The '608 patent was also asserted, but so was <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6189787">U.S. Patent 6,189,787</a>. Same lawyers. Pleadings completed in December; still waiting on a scheduling conference.<br /><br />Let's see, July, September, ... November! Yep, in November, Alexsam filed a third lawsuit, against Unitedhealth Group, Exante Bank, and 2 related entities. Again, same lawyers, same 2 patents. This one's also in the pleading stage.<br /><br />What's two months from November, you ask? Why, it's January. And right on schedule, Alexsam filed a fourth case on January 17 against Shell Oil Co., Pier 1 Imports, and Metromedia Steakhouses Company (Ponderosa and Bonanza), against using the same lawyers to assert the same '608 and '787 patents. All because the defendants sell gift cards that practice the invention of the patents, according to the complaints.<br /><br />My first <a href="http://trolltracker.blogspot.com/2007/07/ed-texas-july-9-13-2007.html">post</a> on Alexsam explained that the company was set up in Texas as a shell for the inventor Robert Dorf, and that his wife also appeared to be an officer. An address in Sarasota, Florida was listed. In fact, Robert Dorf also has a non-functioning website, <a href="http://www.alexsam.net/">http://www.alexsam.net/</a>.<br /><br />Alexsam also sued once before: it filed a lawsuit in September 2003 in the Eastern District of Texas against Datastream Card Services, Globetel Communications Corp., Interactive Communications Int'l, Transcend LLC, MBC Direct LLC, ITC Financial Services, American Express, Galileo Processing, One Global Finance, Simon Property Group, FSV Payment Systems, NetSpend Corp., Next Estate Communications, Wildcard Systems, Qwest, and 3 other defendants (18 in total). The patents asserted were the '608 and '787 patents. McClanahan & Clearman of Houston took the lead. There was a claim construction hearing in May 2005, but as far as I know, it settled before any opinion was issued.<br /><br />I did not notice any reexaminations on the '608 or '787 patents.<br /><br />Now who is Robert Dorf? According to his <a href="http://www.linkedin.com/pub/4/634/144">LinkedIn profile</a>, he operates <a href="http://www.gopay.biz/">this website</a> relating to "GoPay." Note that the website is marked with the two patent numbers. That's all I could really find out about him. He either lives in Raleigh, NC, or Sarasota, FL, or both.<br /><br />I don't think many people will find these cases that interesting. But I do think that a bunch of cases filed in the last half-year over these gift-card patents has propelled Alexsam towards the top of the lists of inventor-shell corporations that sue a lot. With that activity will come attention, and maybe a reexam, but who really knows? The priority dates for the patents are July 1997. Was the following representative independent claim really new and nonobvious in July 1997?<br /><blockquote>20. A loyalty card system, comprising:<br />a. at least one loyalty card having a unique identification number encoded on it, said identification number comprising a bank identification number approved by the American Banking Association for use in a banking network, said identification number corresponding to the loyalty card system;<br />b. means for receiving loyalty data from an unmodified existing standard retail point-of-sale device when said loyalty card is swiped through the point-of-sale device, said loyalty data comprising the unique identification number of the card and purchase data; and<br />c. means for crediting an account corresponding to the loyalty card with loyalty points based upon the purchase data.<br /></blockquote><p>So that's Robert Dorf and Alexsam: 5 lawsuits, 28 defendants, and counting, on claims that seem kind-of-broad, to me. Who else has electronic gift cards, prepaid phone cards or loyalty cards that might be targeted?<br /><br />TT</p><p>PS - Nice comments in the <a href="http://trolltracker.blogspot.com/2008/01/j-carl-cooper-and-technology-licensing.html">previous blog post</a>. Thanks for both viewpoints! I do think that if you file a lawsuit, you're a limited public figure. What, it would be wrong for me to comment on something that any person anywhere in the world could find with a few clicks on the Internet? Anyway, thanks for keeping the commentary civil. </p>
J. Carl Cooper and Technology Licensing Corporation
What's a troll tracker to do? I have poor J. Carl Cooper's biography already written, but there are so many other tempting stories. First, there's <a href="http://www.patenthawk.com/blog/2008/01/damages_apportionment_blowback_1.html">this drivel</a>, on how patent reform will ruin society and lead to the crash of our economy, etc. I'll respond in a couple of weeks - closer to the actual debate in the Senate. It sure got the cheering section going, though. Second, there are 37-defendant cases being filed in Texas left and right. Minerva on Tuesday; Source, Inc. yesterday. So I'll add that one to the list. Third, I'm getting a ton of email from people suggesting this story or that story - good leads, most of them. So I now have a backlog of ideas to last me a while.<br /><br />Without further adieu, on to J-Carl. I previously posted <a href="http://trolltracker.blogspot.com/2007/10/acacia-targets-linux-in-new-lawsuit.html">this</a> feature on a case Technology Licensing Corporation and IP Innovation, LLC filed in the Eastern District of Texas against Red Hat and Novell. At the time, I concluded, correctly, that Technology Licensing Corporation was a shell corporation for the inventor, J. Carl Cooper. I didn't really explore too much, though.<br /><br />Now I have. In numerous court filings, Technology Licensing Corp. (not to be confused with the totally separate California patent licensing shop, Technology Licensing Company -- more on them another day) admits it is a shell for J. Carl Cooper. TLC first started working with TechSearch back in the day, and now Acacia since the big Acacia-TechSearch transaction.<br /><br />Who is J. Carl Cooper, anyway? For one, he is a registered patent agent. He also <a href="http://www.ll.georgetown.edu/federal/judicial/fed/opinions/02opinions/02-1032.html">sometimes</a> testifies as an expert in patent litigation. He used to be affiliated with the Los Gatos, California company Pixel Instruments Corp., but now has moved to the Lake Tahoe area. Similarly, Technology Licensing, once located at the home offices of Pixel in Los Gatos, has moved to Carson City, Nevada.<br /><br /><a href="http://www.law.com/jsp/article.jsp?id=1153299926232">This article</a> on Ray Niro (titled, by someone else, "Meet the Original Patent Troll") states that Cooper came to Niro through an introduction made by Anthony O. Brown of TechSearch. The article claims that Niro has netted over $50 million for Cooper.<br /><br />According to <a href="http://cache.zoominfo.com/CachedPage/?archive_id=0&page_id=635978336&page_url=%2f%2fwww.techsearch-llc.com%2fboard%2fcooper.html&page_last_updated=1%2f1%2f2005+6%3a29%3a02+AM&firstName=J.&lastName=Cooper">this cached page</a> from 3 years ago, Cooper was on the Board of Directors of TechSearch before it was vastly sold to Acacia. He had over 43 patents as of that time. Cooper's company submitted an amicus brief in the <em>eBay</em> case re injunctions. His attorneys <a href="http://bromsun.com/media/spring06newsletter.pdf">explained</a> that Cooper could not compete against foreign copyists, "and thus turned to licensing and patent enforcement instead of manufacturing." Cooper recently <a href="http://online.wsj.com/article/SB120044219015792747.html?mod=googlenews_wsj">told the Wall Street Journal</a> that the Supreme Court's decisions have made his enforcement program harder, due to the difficulty of getting injunctions.<br /><br />Technology Licensing Corp. also has a <a href="http://www.tlc-ip.com/">website</a>. On it, they <a href="http://www.tlc-ip.com/AboutUs.html">explain</a> that the amount of money they have made is actually $100 million. We also learn that they have a licensing manager in Pebble Beach, California - Warren E. Small. And now they have over 60 patents.<br /><br />The reason the number jumped from 43 to 60 is that TLC is now not only licensing its own home-grown patents, but is in the business of buying patents of others and suing on those patents to make money. Given the number of lawsuits, the amount of money he has made, and this recent patent-buying-for-the-purpose-of-assertion binge, I'm hard-pressed to call J. Carl Cooper the typical "small inventor." The most recent case that got a ton of <a href="http://www.groklaw.net/article.php?story=20071011205044141">press</a> was the case where Acacia and TLC went halvsies on patents from Xerox, and then sued Red Hat and Novell (after quickly getting a settlement from Apple), and <a href="http://trolltracker.blogspot.com/2007/11/friday-patent-litigation-news.html">then, Google</a>.<br /><br />So let's look at the litigation filed by Cooper and TLC. He started out on his own in 1997, suing Toshiba and Circuit City. In 1998, HP filed a declaratory judgment action against him, and his attorneys were disqualified. That's when he first hooked up with the Niro Scavone law firm and Ray Niro. That second case involved U.S. Patent <a href="http://www.patentfizz.com/fizzdisplay.php?patno=5424780">5,424,780</a>. Two ex parte reexaminations were filed on the '780 patent, and a reexam certificate issued in 2002.<br /><br />In total, Cooper and TLC have filed at least 23 litigations against at least 44 defendants, and have obtained at least 34 settlements. They lost two cases. One involved a dismissal for lack of standing, which was affirmed on appeal. The other was a loss at a bench trial, where the district court found one patent invalid and the other not infringed. That particular case is on appeal to the Federal Circuit.<br /><br />Niro Scavone has represented TLC and Cooper in about 12 of the 23 litigations, although there are a couple others recently filed in Texas where the firm may be behind the scenes but hasn't made an appearance. The three cases TLC filed in 2007, against Apple, Red Hat and Novell, and Google, all involved patents purchased from Xerox, and all three were filed in Marshall, Texas. The Apple case settled quickly, but the other two are still in the very early pleading stage.<br /><br />The most recent litigation was just last Thursday, January 17, in the Northern District of Illinois. Acacia subsidiary IP Innovation & Cooper's Technology Licensing Corp., represented by Niro, sued Mitsubishi for infringement of the '780 patent, as well as U.S. Patents <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6529637">6,529,637</a> and <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6870964">6,870,964</a>. Neither the '637 nor the '964 patents have been involved in any reexamination. The '964 is a continuation of the '637, which is a continuation-in-part of the '780. This is at least the tenth time the '780 patent family has been asserted in litigation by Cooper.<br /><br />Other than the case up on appeal to the Federal Circuit and the 2 cases recently filed in Texas, the only other TLC case pending before last week was one brought by IP Innovation and TLC in Chicago in September 2005 against 9 defendants. The Fourth Amended Complaint in that litigation asserts 11 different patents, including the 3 asserted by IP Innovation and TLC in the Mitsubishi case (the 2005 case also includes co-plaintiffs New Medium/Acacia, and AV Technologies/Acacia. Evidently, each Acacia subsidiary teams with Cooper to assert different groups of patents).<br /><br />So that's one story of the small American inventor at work, buying patents, forming shells, suing hundreds of companies. In both Cooper's case and the earlier story on Ware, they had patents that survived ex parte reexamination -- as many patents do. Nobody has tried to put Cooper's recent patents into inter partes reexamination. More likely, companies look at the vast portfolio, the number of patents asserted, the number of settlements, the high cost of patent litigation, and the chilling estoppel effect of inter partes reexamination (and recent slowness of the PTO Board of Patent Appeals), and decide to do what dozens others have done: settle.
Minerva Awarded Exclusive Right to Cellphones with Wireless Internet and Other Generic Features; Sues RIM, Apple, and Motorola
At 12:01 this morning, Minerva Industries (a Los Angeles patent holding corporation for Los Angeles inventor Ki Il Kim, represented by Los Angeles lawyers at Russ, August & Kabat, and who I featured <a href="http://trolltracker.blogspot.com/2007/07/troll-of-month-june-2007.html">previously</a>), filed 3 lawsuits on recently issued <a href="http://trolltracker.googlepages.com/7321783.pdf">U.S. Patent 7,321,783</a>. The first lawsuit named Research In Motion and Cricket Communications as defendants. I saw this lawsuit appear on January 21, and had a post up about it, briefly. But Minerva caught its mistake, killed that lawsuit, and filed the new one. The now-dead lawsuit will appear on ECF, but clicking through will just generate a message that nothing's there. So problem solved, apparently (RIM still could have seen the mistake and filed a DJ on the East Coast to win the race to the courthouse -- a race that will almost completely be eliminated by patent reform. It would have been useless, though, given the earlier filed lawsuit by Minerva against 40+ defendants in Marshall, including RIM).<br /><br />The second lawsuit was against Apple and AtlanticRT over the iPhone. From the Apple complaint, it appears that the Minerva patent was about to issue in August, Apple waited until a week before issuance, and then sent prior art to Minerva. Minerva pulled the patent from issuance, sent the art to the PTO, interviewed the examiner, and got the issuance over that prior art. Kudos to Connolly Bove Los Angeles for smart prosecution moves.<br /><br />The third lawsuit names 29 defendants: Motorola, Nokia, Alltel, AT&T Mobility, Dobson Cellular, Helio, HP, MetroPCS Wireless, Sprint Spectrum, Nextel of Texas, Nextel South Corp., Nextel of New York, Nextel of the Mid-Atlantic, Nextel of California, Nextel West, T-Mobile USA, Tracfone Wireless, Cellco Partnership, Virgin Mobile USA, High Tech Computer Corp., HTC America, Kyocera Wireless, LG, Palm, Pantech Wireless, Sanyo, Utstarcom, Sony Ericsson, and Samsung.<br /><br />That's a total of 33 defendants sued just minutes after this patent issued. And what a patent it is! The '783 patent has 125 claims. The broadest claim appears directed to a cellphone with a wireless internet connection, a memory card, a microprocessor, a display panel for displaying internet data. So far, so broad. Also required are 1 of the following: voice dialing, wireless earphone, or wired earphone with microphone. OK, then also required are that the phone is capable from downloading one of the following from the internet: videos, music, or videos and music combined. The patent has a little over 4 columns in the specification, but has almost 32 columns of claims! Don't believe me? <a href="http://trolltracker.googlepages.com/7321783.pdf">See for yourself</a>.<br /><br />Priority date: either March 2000 or, if CIP entitled to earlier priority date, then April 1997. I know of prior art predating the 2000 date, but what about April 1997? Does the original specification really support the claims? Is it enabling? I'll leave that to the experts.
Paul Ware and Acacia
OK, people. I'm not dead yet. To the small inventor commentor on the last post, did you even <em>read</em> what I wrote?<br /><br />Since I have gotten so many emails and comments regarding how great the "small inventor" is and how these inventors are unfairly maligned, I thought I'd put the spotlight on a couple of prolific inventors. Well, prolific in the sense of number of defendants sued, anyway.<br /><br />I'll start off today looking at Paul Ware.<br /><br />Paul N. Ware (not to be confused with Goodwin Proctor lawyer <a href="http://www.goodwinproctor.com/People/Ware%20PC%20-%20Paul.aspx">Paul F. Ware</a>) is a former airline pilot who owns a patent <a href="http://www.bizjournals.com/atlanta/stories/2007/07/02/newscolumn4.html">reported</a> to be on "a system that eliminates the need to have a cardholder's name and account number printed on a receipt by numbering the credit card sales," a method that "is used by nearly every retailer in the country."<br /><br />Ware's patent is <a href="http://patentfizz.com/fizzdisplay.php?patno=4707592">U.S. Patent 4,707,592</a>, titled "Personal Universal Identity Card System for Failsafe Interactive Financial Transactions." It was filed in October 1985 and issued in November 1987. In 2003, he granted an exclusive license to TechSearch, LLC -- the company that is now Global Patent Holdings. Later, Acacia acquired that license from TechSearch.<br /><br />Ware has been featured in several news articles as the "face of the small inventor." See <a href="http://www.financialpost.com/story.html?id=1509d361-0144-4432-b6dc-2c14026c98d6">this Financial Post story from January 2006</a>, reporting that how he knew the industry was practicing his invention back in the late 80s, but waited until Acacia called him in 2004 before actively monitizing his invention. See similar insight from Mr. Ware <a href="http://www.law.com/jsp/article.jsp?id=1171360978084">here</a>.<br /><br />In May 2005 and September 2005, two ex-parte reexaminations on the '592 patent were filed. After interviews conducted by lawyers from the litigation firm Friedman, Suder & Cooke, and a response emphasizing the uniqueness of the transaction number, which was alleged to be new in 1985, the PTO issued a reexamination certificate last summer confirming all of the claims of the '592 patent.<br /><br />Ware and Financial Systems Innovation, LLC (a subsidiary of Acacia, formerly a subsidiary of TechSearch, the company now known as Global Patent Holdings) have <strong>filed 10 patent litigations in the last four years, against 144 defendants</strong>. Friedman, Suder & Cooke is representing Ware and Acacia in all of the litigation, most of which are pending either in the Northern District of Georgia or Northern District of Texas. The big filing was one last June against 106 defendants, which I reported on <a href="http://trolltracker.blogspot.com/2007/08/acacia-invades-rome.html">here</a>. While 3 of Ware's cases were settled, the rest were stayed pending the first reexamination. There are motions in each of those cases to lift the stay. Some are being granted, but in other cases, more trouble brews.<br /><br />The reason is that in April and May of 2007, following the Supreme Court's decision in <em>KSR</em>, two other third party requesters submitted ex parte reexamination requests based on other prior art. The PTO granted the reexam requests in each case, and each case is now awaiting a first office action.<br /><br />In fact, in the massive Ware/FSI/106-defendant case in Rome, Georgia, Judge Beverly Martin ordered the one case to be split into four parts and stayed pending this second reexamination. She really seemed to criticize Acacia's strategy of suing everyone in one case, and perhaps her ruling was a bit of a backlash. She wrote (on December 27, 2007):<br /><br /><blockquote>As the court advised plaintiffs' counsel at a hearing on December 17, 2007, the court finds itself utterly unable to manage this case as a single lawsuit. . . . Because of the enormity of the number of defendants accused of infringement in this action, and because each of those defendants will be entitled to be heard from in the claim construction process, this case is particularly appropriate for a stay pending the USPTO's determination as to whether any claims will be cancelled. Cancellation of even one claim could eliminate hundreds of pages of briefing on the subject by the numerous defendants sued in this action. . . . Mr. Ware has made the tactical choice to sue over 100 defendants in this action, and did not file this action until roughly six months ago. As a result of Mr. Ware's decision in this regard, the court must necessarily look for ways to manage this litigation, and waiting for the USPTO's reevaluation of his patent seems an obvious solution.<br /></blockquote><br />So that's where Mr. Ware is today. Having allegedly discovered a great way to combat credit card fraud in 1985, he waited 22 years to sue the industry, and now is having his cases stayed pending reexaminations going on at the PTO. Many defendants allege that his patent should not have been issued at the time, and are thus refusing to pay him. Others have settled. I don't know how much money he has made over this idea, but I'm quite sure that without TechSearch and Acacia, he would have made nothing. It's a win-win situation for Ware and Acacia. He helps Acacia make money and thus satisfy its shareholders; Acacia helps him get money from a patent he had left for dead. It will be interesting to see what happens now.<br /><br />Wednesday*, I'll look at an inventor with even more patents and more lawsuits: J. Carl Cooper.<br /><br />* It was "tomorrow," but I think that I'll spread my posts over two weeks instead, as I need some time off from blogging. Unless something surprising happens, of course.
The Writing Process
When I started this blog, I just wanted to focus on the great many patent cases being brought by companies that make no products, and exist solely to license patents and monetize them. There was a convenient term already out there -- I'm not Peter Detkin, so I didn't coin it. So I used it: patent troll. I guess I didn't expect all the kerfuffle that would cause among those who make a living monetizing intellectual property. Even Ray Niro used the term in his chapter in the book <em>Making Innovation Pay </em>- albeit while arguing that these so-called patent trolls were beneficial to society. Right next to the picture of him with his Ferrari near his Aspen home.<br /><br />Anyway, over the last few months I have begun to transition out the term. It doesn't add anything to the dialogue; in fact, it distracts from the message I'm trying to get across. That message being that patents are not being asserted like they were 20 years ago, that today's American small and large businesses have to navigate a minefield like never before. Whether the plaintiffs are well-deserving individual inventors, their shell corporations, or large licensing entities solely seeking to monetize patents, it adds up for the mom-and-pop businesses and the big corporations alike. All I want to do is highlight who is behind these cases, who is backing them financially, and where these cases are being litigated. And if we can have some fun along the way, and not take ourselves so seriously, all the better, right?<br /><br />This whole "reward" business has obviously created a roadblock in my quest. Mr. Niro claims to be close - he may even know who I am already. So be it. This blog, or others like it, will continue whether I'm unmasked or not. In fact, I won't be surprised if others plan similar types of information-gathering services. For profit, of course. (I knew I should have patented this business method).<br /><br />So I'll continue on for a while, see how it goes. But despite the fact that the vast majority of my readers when surveyed said they aren't offended by the term patent troll, I'm going to cut back on my use, if not stop using it altogether. You can make your own conclusions.<br /><br />Many of you wrote in comments in the survey that you don't see how I get the time to write as much as I do. This post took 20 minutes, including writing and editing. There was no research involved. Most of my posts, including research, writing, and editing, take 30-45 minutes, and I do about 4 a week. I tend to think of my ideas for a post while exercising - and usually desperately scribbling notes when I'm done so I don't forget. Some posts (Fortune 100) take longer than others.<br /><br />My estimate is that over the course of a year, I probably will have sacrificed 200 billable hours to this blog. Lucky for me, I'm a workaholic, so due to the massive hours I have put up in the past, nobody is going to miss those billable hours. I do much of my writing on the weekend.<br /><br />For example, due to the fact I'm definitely crammed with work this week, I already wrote this week's posts. Unless something earth-shattering happens, this week I'm featuring a look back at entities I have featured in the past. On Monday, I have a dream that I'll feature Acacia, and their efforts to make all inventors equal. Well, I'll focus only on Paul Ware and J. Carl Cooper on Monday, but these are impressive inventors, and their litigation is no less impressive.<br /><br />If any new cases are filed this week -- well, they'll have to wait until I extricate myself from this pile of paper.
View my survey results <a href="http://www.surveymonkey.com/sr.aspx?sm=pDTXRBDWh_2fxrqzMErvtbTZ_2bV3ohuvJ2o_2fh_2bCat5Qv8k_3d">here</a>. For those of you who just want the summary, read on and don't click through. Note that I couldn't enable the results with the "other" entries revealed, because a few of you provided personal information, such as phone numbers. It would have been a violation of those people's privacy to enable everyone to see, and there was no way for me to delete any entries. So, instead, below are some typical responses for each of the questions which allowed an "other" answer.<br /><br />The results will remain available for the next week or so, after which the link will be inactive.<br /><br /><strong>1. Are you offended, in general, by the term "patent troll?"<br /></strong>12% of you are offended.<br />88% are not.<br /><br /><strong>2. To which of the following categories should the term patent troll apply?<br /></strong>88% of you said it should apply to "Corporations whose sole purpose is to obtain and assert patents, with little or no connection to the inventors."<br />73% of you said it should apply to "Venture capital or other financial firms who are acquiring IP as an investment to be capitalized through enforcement (e.g., Altitude Capital Partners)"<br />64% of you said it should apply to "Contingency fee lawyers who go around putting bounties on bloggers' heads"<br />58% of you said it should apply to "Shell corporations set up by the patent inventor, who have filed numerous lawsuits against dozens of companies"<br />51% of you said it should apply to "Corporations that make products, but are acquiring and asserting patents with no relationship to their products, as a revenue-generating business model"<br />The other choices got less than majority support.<br />41 of you indicated "other." Here are some of the more interesting ones:<br /><br />--> anyone (including, if the shoe fits, individual inventors and/or university entities) engaged primarily in naked patent licensing without any attendant technology transfer; anyone whose business is inventing patents rather than patenting inventions (though perhaps the latter should be labeled troll facilitators)<br /><br />-->One key feature of a patent troll is the inability of the defendant to assert any patents against patent counterclaims. Corporations that make products take a risk by suing, regardless of the relationship between the asserted patents and their products. Trolls take no risk, and that's what dictates their style of litigating akin to class action securities lawyers.<br /><br />-->Patent attorneys who write up paper patents with themselves listed as the inventor or co-inventor.<br /><br />-->Local and state government hiding behind 14th amendment<br /><br />-->There is no such thing<br /><br /><strong>3. If I decide to stop using the term "patent troll," which of the following choices is the best substitute?<br /></strong>66% of you implore me to keep using the term.<br />17% of you like "non-practicing entity"<br />Only 6% of you liked "patent speculator"<br />21 of you indicated "other." Here are some of the more interesting ones:<br /><br />-->Patent Shark (I got a lot of these)<br /><br />-->"PLEC" - Patent Licensing / Enforcement Company<br /><br />-->patent enforcer<br /><br />-->Patent [insert derogatory term here]<br /><br />-->dirty rotten patent sharks (with hat tip to Monty Python episode on names for Belgians)<br /><br /><strong>4. How do you feel about the mix of serious content and humorous content on the blog?<br /></strong>88% of you said "just right."<br />10% of you said "too serious."<br />2% of you are no fun whatsoever.<br /><br /><strong>5. If you have any suggestions on how to improve/enhance the blog, please let me know here.<br /></strong>I got 48 comments, with a wide range. Here are some of the more interesting ones:<br /><br />-->I got quite a few "don't change a thing" - thanks...<br /><br />-->1. Hold a limerick or "actual rhyme" poetry contest--that would be more fun than haiku. 2. Report more on the patent attorneys with the white hats who fight the big, bad trolls. 3. Solicit other attorneys over the Web to anonymously help you in various projects (e.g., compiling particular kinds of lawsuit statistics; researching and shedding light on the background of certain trolls) to save yourself time and increase effectiveness. 4. Provide an overview of the typical strategies of patent trolls both pre-lawsuit and after a lawsuit is filed. 5. Provide an overview of the typical order of events in a litigation in the various rocket docket jurisdictions (and explain how this differs from non-rocket dockets). [May be a good project to ask other litigators to contribute to, anonymously, one from each of the relevant jurisdictions.]<br /><br />-->If you are getting too busy, consider accepting posts by guest commentators, sort of like this blog does: <a href="http://www.volokh.com/">http://www.volokh.com/</a> (note - I'm considering it)<br /><br />-->More JPEGs<br /><br />-->add a forum for people to discuss the cases (note - anyone want to send me the "Dummies Guide" to adding a forum to your blog?)<br /><br />-->I really enjoy reading your blog. I think you do a great job at uncovering a lot of shady lawsuits. However, sometimes I feel like you view anyone other than a large corporation as a patent troll. I know that you came up with metrics to classify level of troll (or non-troll) but the vibe is still there and I am glad that you have created this survey to (hopefully) remedy this problem. Individual inventors and bankrupt companies should be able to exercise their patent rights. They took a chance, disclosed their technology, and for one reason or another could not make it commercially successful. Those who are able to make the invention commercially successful should respect patent rights of others, as others should respect their patent rights.<br /><br />-->Include nude pictures of the patent attornies involved. Seriously though - Check out <a href="http://www.roughlydrafted.com/">Roughly Drafted</a>. The writer uses some really nice graphics to make his points. (comment - no!!!)<br /><br />-->Be more explicit in expressing the bases for your conclusions. You often assert premises to arguments that are assumed; if you are asserting a particular practice or tactic to be bad or unfair, explain why you think so, rather than simply saying that it is. For example, explain why it's such bad thing to sue multiple defendants if the claims asserted have merit.<br /><br />-->I am offended by the constant mischaracterization of Acacia as a Patent Troll. Acacia has done an outstanding job of enforcing our patents as an exclusive licensee. We are a small company that could not afford to enforce the patents directly. As is the case of many of the patents that Acacia acts as exclusive licensee, ours are encompassed in our technology and actively marketed by our company. This hardly makes Acacia or our company a patent troll. Boo hoo for the big companies that would otherwise infringe our patents and would rather us be roadkill on their way to huge profits and market domination. I think you should get your facts staright before you start your mischaracterization campaign against Acacia or its clients. I find your vetting of the facts to be fairly accurate, however, this is poisoned by your bias. I do not accept that you would like to see inventors or small companies abridged from enforcing their patents to the benefit of large entities. Your blog is intelligent but this bias toward large entities is illogical.<br /><br /><strong>6. Choose the answer below that best describes you:<br /></strong>16% of you chose "associate at law firm"<br />14% of you chose "in-house counsel"<br />14% of you chose "partner at law firm"<br />10% of you chose "small business owner"<br />8% of you chose "inventor"<br />About 5% of you are at a law school (clearly, Dennis Crouch isn't referring enough people to me)<br />About 3% of you are at the PTO/US Courts/other government<br /><br />That's the people who answered. I got 25% "others," with some of the interesting answers as follows:<br /><br />-->I totally forgot about "consultants" - there were a few of you.<br /><br />-->Journalists<br /><br />-->Retired<br /><br />-->Computer Scientist<br /><br />-->Quite a few people identified themselves as "open source advocates" and the like<br /><br /><strong>7. Choose the answer below that you think best describes me:<br /></strong>29% of you think I'm an associate at a law firm.<br />21% of you think I'm a partner at a law firm.<br />13% of you think I'm an in-house counsel.<br />8% of you think I'm at a law school.<br />Only 1 of you thinks I'm an inventor.<br />37 of you chose "other," with some of the interesting answers as follows:<br /><br />-->You are a patent attorney that specializes in defending large corporations that willfully infringe on the patents of small inventors. You started troll tracker as a vehicle to pollute the jury poll against your rivals and potential rivals :)<br /><br />-->someone with courage and insight<br /><br />-->I haven't a clue and I don't care. You perform a public service. Keep it up.<br /><br />-->Bored<br /><br />-->I like this question. It gives a good picture of your motivation. Ego!<br /><br /><strong>8. Where do you live?<br /></strong>23% of you live on the East Coast of the U.S.<br />21% of you live on the West Coast of the U.S.<br />14% of you live in the Midwest<br />10% of you live in Texas<br />10% of you live in Europe<br />5% of you live in Asia<br /><br /><strong>9. Where do you think I live?<br /></strong>26% of you think I live on the East Coast of the U.S.<br />23% of you think I live in Texas<br />18% of you think I work at the Niro Scavone law firm or live on Planet Niro<br />16% of you think I live on the West Coast of the U.S.<br />1 of you thinks I live in India!<br /><br /><strong>10. What is your opinion on Global Patent Holdings' assertion of claim 17 of the reexamined '341 patent against anyone with a website with a JPEG image on it?<br /></strong>46% of you haven't reviewed the claim.<br />27% of you chose "the claim is invalid" (whether you reviewed the claim before choosing that, I have no idea)<br />12% don't care, because it's my problem, not yours. Hey, thanks.<br /><br /><strong>Here's a bonus: the top 10 search terms used to reach my blog in the last week (not including troll tracker or something similar):</strong><br />1. Wiav Solutions<br />2. Erich Spangenberg<br />3. Acacia<br />4. Mondis<br />5. Altitude Capital<br />6. Scott Harris<br />7. silly patents<br />8. contingency fee lawyers<br />9. Jerry Harthcock<br />10. Global Patent Holdings<br />53. "I need a good patent attorney for my ofdm wireless idea"<br />58. "Is there a law to stop patent infringement?"<br />87. "How to troll for fish"<br />98. "Reverse commode"<br />101. "When did Barack Obama work for White & Case?" (it was Sidley, wasn't it?)<br />130. "Your ip address be gone, troll."<br /><br />Thanks for all the feedback, everybody! I do appreciate it. I may be "unmasked" soon, and I'm not sure if I'll keep the blog going after that, or I might transform it into more of a community/collaboration. But until then, other than some dark periods coming up where work will make blogging just completely prohibitive, I'll be back with more interesting news on patent litigation in general, and patent trolls, shell corporations, individual inventors, greedy corporations, "serial infringers" (as <a href="http://www.patenthawk.com/blog/2008/01/deform_ahead.html">Patent Hawk</a> <a href="http://www.piausa.org/patent_reform/articles/pat_choate_06_29_2007">and</a> <a href="http://www.intven.com/docs/NMyhrvoldTestimony052306.pdf">others</a> <a href="http://www.blaserco.com/blogs/?p=88">call</a> them), and everyone else.
A Note About Civility
It is absolutely unacceptable for people to post threats in the comments. They will be deleted as soon as I see them. I was just made aware of one such threat posted over a month ago, and was appalled. I don't care if the threats are meant to be sympathetic towards me, it will be deleted.<br /><br />Also, please be aware that unless you are using a proxy server, I can obtain the IP address of anyone who leaves a comment on this blog.
Oral Argument in Quanta v. LG
The Supreme Court had oral argument this morning in Quanta v. LG, the patent exhaustion case. <a href="http://www.lw.com/Attorneys.aspx?page=AttorneyBio&attno=00571">Maureen Mahoney of Latham & Watkins</a> argued for Quanta. Thomas G. Hungar, Deputy Solicitor General, gave the United States' views on behalf of Quanta. <a href="http://www.sidley.com/ourpeople/detail.aspx?attorney=123">Carter G. Phillips of Sidley & Austin</a> argued for LG.<br /><br />It's very hard to read Supreme Court tea leaves. In this case, though, I think that Justices Roberts, Stevens, and especially Breyer honed in on exactly the problem with the Federal Circuit's opinion in LG. Justices Alito and Thomas were completely quiet. Justices Scalia, Kennedy, Ginsburg and Souter asked questions, but without really revealing which way they were leaning, although Justice Scalia did seem to discount that LG/Intel's notice meant anything, and Justice Ginsburg picked up on the fact that LG could have expressly conditioned its license requiring Intel to sell products only to licensed companies. So, on balance, I'd say the Court appears to be <em>leaning</em> towards overturning the Federal Circuit, but perhaps only slightly, and I certainly won't be surprised if it's a 5-4 or 6-3 decision the other way. And who knows what the scope of the opinion will be? Should be interesting.<br /><br />That's just my opinion. You can form your own opinions by reading the oral argument transcripts, located <a href="http://www.supremecourtus.gov/oral_arguments/argument_transcripts/06-937.pdf">here</a>. Scroll to the end of this post if you want to see the links to news stories on the case. Meanwhile, these are a couple of highlights:<br /><br />This is what Deputy SG Hungar was able to rattle off before he was interrupted by Justice Ginsburg:<br /><br /><blockquote><p>For 150 years this Court has held that an authorized sale removes the particular item sold from the protection of the patent laws. The [Federal Circuit] erroneously transformed that patent-exhaustion doctrine from a definitional principle that delimits the scope of the patent grant into an optional default assumption that can be discarded at the whim of the patentee. If the rationale of the court of appeals were correct, this Court's decisions in cases like Univis, Motion Picture Patents, Straus, Bauer and Boston Store would have to have gone the other way, because in each of those cases this Court held that the exhaustion principle overrode express restrictions that the patentee had attempted to impose on after-sale use or resale by an authorized purchaser. </p><p>This Court should follow its precedents and reaffirm the principle that the patent-exhaustion doctrine precludes a patentee from employing the patent law to enforce post-sale restrictions on use or resale by authorized purchasers . . .</p></blockquote>I also thought this exchange between Justice Breyer and Carter Phillips was the heart of why Justice Breyer will either write the majority opinion or a strongly worded dissent!<br /><br /><blockquote><p>JUSTICE BREYER: So what I do I go to the shop and I buy this, this mechanism with the pedals on it, and then I insert it in my bicycle. Now, actually I need help in doing that, but I do it. Okay. Now I start pedaling off, and now what is it for all these things here that would stop that original inventor from catching me and hauling me into court, and say, what you've done, Breyer, is you've put my -- my mechanism here in this bicycle and I happen to have a patent on the system. And now you start talking to me about, well, the patent was exhausted on the bicycle -<br />MR. PHILLIPS: Pedal.<br />JUSTICE BREYER: -- pedals, but not on the system.<br />MR. PHILLIPS: Right.<br />JUSTICE BREYER: And you agree that shouldn't happen.<br />MR. PHILLIPS: Right.<br />JUSTICE BREYER: But if I follow you and I write an opinion just for you, what stops it from happening?<br />MR. PHILLIPS: Well, in that -- in that particular context, in the absence of relatively clear notice, I think it would be quite reasonable to potentially find that there was an implied license to use it under those circumstances.<br />JUSTICE BREYER: Then why isn't it in your case?<br />JUSTICE BREYER: Why doesn't it mean that? Why isn't it in your case equally?<br />MR. PHILLIPS: Because the courts below specifically analyzed whether there was -- JUSTICE BREYER: You mean that they just got it all wrong? You mean it should be that they got it wrong?<br />MR. PHILLIPS: No, no. They got it right because there was very specific and explicit notice provided to the purchaser at the time of the purchase that, while this clearly gives you the right to use this particular product, what it doesn't give you the right<br />JUSTICE BREYER: Oh, so if I go in the bicycle shop, I go in the bicycle shop and I buy the pedals and then they give me, you know, one of these pieces of paper that has all of the 42,000 words on it and there in these 42,000 words it says, and now you are put on notice that once you put it in your bicycle and you pedal away, they're going to get you and you're going to be hauled into Patent Court, then -- then that's okay?<br />MR. PHILLIPS: Well, Justice Breyer, we can quarrel about sort of the nature of the notice and what notice is adequate to do that, but the basic point here, which I think is indisputable, is that, one, the notice here is quite clear. It's one page. It's very specific. These are very sophisticated parties and they understood that they were not obtaining an implied license by purchasing the chips rather than going out and purchasing the systems.<br />JUSTICE SOUTER: Okay. But assuming a simple notice, the answer to his bicycle hypo is yes, they can chase me down the road.<br />MR. PHILLIPS: Oh, to be sure. </p></blockquote>I just cannot imagine this court -- the court that issued <em>KSR</em> -- accepting a situation where bicycle manufacturers can chase bicycle users down the road. Again, maybe I'm wrong. Maybe they'll just count on the courts to invalidate "system" patents strongly based on "component" patents.<br /><br />Later, Justice Breyer was back on his bicycle kick...<br /><br /><blockquote><p>JUSTICE BREYER: Then explain -- now this you might know because it's just following up on what Justice Souter said better than I did. I think from these briefs I've gotten the impression that at least some people think that where you invent a component, say, like the bicycle pedals, and it really has only one use, which is to go into a bicycle, it's the easiest thing in the world to get a patent not just on that component but to also get a patent on the system, which is called handlebars, body, and pedals.<br />And since that's just a drafting question, all that we would do by finding in your favor is to destroy the exhaustion doctrine, because all that would happen, if it hasn't happened already, is these brilliant patent lawyers, and they don't even -- they can be great patent lawyers, not just fine lawyers, and just draft it the way I said and that's the end of the exhaustion doctrine. And that's why it is preferable to say it is exhausted. <strong>What is exhausted? One, the patent on this component and, two, the patent on any system involving this component where that system is the only reasonable use of the component</strong>, rather than using the terminology "implied license."<br />Now, I think that's an argument that's being made in some of these briefs, and if so I'd like to you reply.<br />MR. PHILLIPS: Well, I think that clearly understates the role of the PTO in granting a separate patent. I mean, this is not -- these are not things you pick up at the corner drugstore. You have to justify them. And if you look at Section 282, "a patent shall be presumed valid," each claim shall be presumed valid independently of the validity of other claims. And there's an independence that's embedded in this entire scheme. If it's true that the PTO has in fact granted patent rights on something that's fundamentally not different from the other -- from some other patent, the solution to that is a validity challenge. And candidly, I think that's exactly what all of those arguments are<br />CHIEF JUSTICE ROBERTS: Well, then -<br />MR. PHILLIPS: -- is patent validity challenges.<br />CHIEF JUSTICE ROBERTS: That argument didn't prevail last year in the KSR case, right? I mean, we're -- we've had experience with the Patent Office where it tends to grant patents a lot more liberally than we would enforce under the patent law.<br />MR. PHILLIPS: Right, but all -- I'm not --I'm not particularly criticizing the PTO. What I'm saying is that the statutory scheme presumes that there is a separateness when a patent is issued and, therefore -- and which is why -- again, the first -- there's no reason to go to an expansion of the first-sale doctrine in order to deal with the kinds of problems you have here because in general -- in general you can deal with it as a matter of implied license, but that issue has been resolved adverse to the other side in this case, and there's no reason to sort of fill in that void.</p></blockquote>Finally, Chief Justice Roberts identified what is troubling him. I thought Carter Phillips' reply was pretty good:<br /><br /><br /><blockquote>CHIEF JUSTICE ROBERTS: And the way you achieve that result is to condition the sale. What you're trying to do is expand what you get under a condition to what you get under a notice. And the reason that troubles me is because if you had imposed a condition on the sale, Intel wouldn't have paid you as much for it. But you say, all right, we'll take the money because -- additional money because there's no condition, but we want to achieve the same result because of the notice.<br />MR. PHILLIPS: I mean there can't -- there's no serious basis for doubting what Intel knew precisely what it was getting in this. It was getting peace on both sides of the aisle in terms of litigation, and it knew that there were separate patents here and that when it sold the chips it would certainly be entitled to assume that there would be exhaustion. That's the provision you read. But when it sells the chips, it didn't know and it specifically gave notice that it recognized that that doesn't remotely say what the right answer is with respect to the systems and with respect to the methods. And that to me, Mr. Chief Justice, is the fundamental distinction. </blockquote>Here are some links to news stories about the oral argument in <em>Quanta v. LG</em>. I'll update these with additional links as they come in.<br /><br /><a href="http://www.law.com/jsp/article.jsp?id=1200477936686">Justices Skeptical of Patent-Holders' Claim</a> (law.com, subscription required?)<br /><a href="http://www.iht.com/articles/2008/01/16/technology/patents.php">U.S. Patent Case Likely to Redefine Royalties</a> (International Herald Tribune, quoting Bob Krupka of Kirkland & Ellis)<br /><a href="http://money.cnn.com/news/newsfeeds/articles/djf500/200801161413DOWJONESDJONLINE000996_FORTUNE5.htm">U.S. High Court Uncomfortable with LG Position in Patent Case</a> (CNNMoney)<br /><a href="http://biz.yahoo.com/ap/080116/scotus_patent_case.html?.v=3">Court May Limit Patent Owners' Rights</a> (AP)<br /><a href="http://www.patentlyo.com/patent/2008/01/quanta-v-lg-wil.html">Quanta v. LG: Will the Supreme Court Clarify the Exhaustion Doctrine?</a> (Patently-O, guest post by Charley Macedo)<br /><br />Note that all of the above links tend to predict that the Supreme Court will overturn the Federal Circuit. Now, for a contrary view, we have:<br /><br /><a href="http://www.ecommercetimes.com/story/Patent-Exhaustion-Supreme-Court-Fatigue-61175.html?welcome=1200543288">Patent Exhaustion: Supreme Court Fatigue?</a> (e-Commerce News -- the author concludes that the entire patent bar "hopes that the Supreme Court does not overrule the reasonable approach taken by the Federal Circuit." You mean, other than all those members of the patent bar who submitted amicus briefs for Quanta? I guess if Hal Wegner says it, it must be true for the entire patent bar if you're a DC patent lawyer...).<br /><a href="http://www.patenthawk.com/blog/2008/01/exhaustion_exasperated.html">Exhaustion Exasperated</a> (Patent Hawk). Of course there's Patent Hawk on the other side, describing Quanta's attorney as a "spitter" and the deputy SG as a "lapdog." Ever the painter of words, is Patent Hawk. I may not agree with his point of view, but it's refreshing to see the irreverance.
Patent Exhaustion Takes Center Stage at SCOTUS
I'm pushing the survey results back until Friday because (1) I'm out of the office this week, (2) I haven't figured out how to share my results yet, and (3) I had forgotten that today is the Supreme Court oral argument in Quanta v. LG. I previously posted about the case <a href="http://trolltracker.blogspot.com/2007/09/supreme-court-to-decide-major-patent.html">here</a> and <a href="http://trolltracker.blogspot.com/2007/12/lgs-troll-army.html">here</a>, but for the really best summary, I have two words for you: <a href="http://www.scotuswiki.com/index.php?title=Quanta_v._LG">SCOTUS Wiki</a>!!! Seriously, today is the first I have ever checked out this really cool website.<br /><br />See also <a href="http://www.ft.com/cms/s/0/0533514a-c37b-11dc-b083-0000779fd2ac.html?nclick_check=1">this article</a> from today's Financial Times, which calls LG's position "absurd," and adds<br /><br /><blockquote><p>chips are only useful if combined with other components to make a computer. But in the true spirit of global profit- maximisation, LG wants the people that make computers – and not just people that make chips – to pay for its technology. The Supreme Court must decide whether LG’s patent rights are “exhausted” when it licenses the technology to Intel, or whether it can continue to extract patent royalties all the way up the manufacturing chain.</p></blockquote>Hat tips to <a href="http://howappealing.law.com/011508.html#031441">Howard Bashman</a> for pointing out the FT article and to <a href="http://www.scotusblog.com/wp/uncategorized/today-at-the-supreme-court-11608/">SCOTUSBlog</a> for directing me to the wiki. For more information, see this <a href="http://infringement.blogs.com/philip_brooks_patent_infr/2008/01/is-the-supreme.html">guest post</a> on Philip Brooks' Patent Infringement Updates blog, by a couple of attorneys from Amster Rothstein.<br /><br />While I won't be able to follow the Supreme Court argument in real time, I'll post some observations on it tonight, time permitting.
Troll Call and Other Statistics for December 2007
We reached the end of 2007. All the other blogs are reporting an overall decrease in IP litigation, a cutback from 2006, or are reporting the slightest of increases in patent filings from 2006 to 2007. That's simply not true. By the real count -- the number of defendants sued for patent infringement -- 2007 was a record year. In fact, here's my headline: "<strong>2007 shows a 30% increase in patent litigation over 2006, fueled by a 40% increase in the Eastern District of Texas</strong>." And certainly from the number of patent cases brought by non-practicing entities and so-called patent trolls, it was a year that saw a tremendous increase in both the quantity and diversity of these entities.<br /><br />Before we go on, let's explore statistics for a minute. Say in 2006 there are 25 lawsuits, each against 1 defendant. Then in 2007, there are 20 lawsuits, each against 5 defendants. 25 defendants sued 1 year, 100 the next. The patentees could have filed 100 lawsuits, and in effect, did do so. Why isn't that a 4-fold increase? Yet people look just at the number of cases filed, which gets them to declare a 20% decrease.<br /><br />This month, I'd like to start with the 2007 year-end statistics. Here's what I have compiled:<br /><br />As a disclaimer, these numbers are taken raw from PACER/ECF without my usual investigation to make sure they aren't a transfer/duplicate/etc. But since I'm comparing several years, there needs to be an apples-to-apples comparison, and I'm not about to go look at every case in 2006!One other disclaimer: I didn't actually count every defendant in every case. I took the top jurisdictions, counted them, and extrapolated. The ones I counted constituted over two-thirds of the patent cases, so if my number of defendants is off, it's not off by much. Plus, the same extrapolation method was used for all three years I compare below.<br /><br />With those disclaimers out of the way, this is what the data shows when looking at the national patent infringement statistics:<br /><br /><br /><ul><li>In 1990, there were 921 patent cases nationwide (1 in EDTX), and 1,596 defendants sued (1 in EDTX).</li><br /><li>In 2006, there were 2,822 patent cases nationwide (264 in EDTX), and 6,118 defendants sued (996 in EDTX).</li><br /><li>In 2007, there were 2,953 patent cases nationwide (364 in EDTX), and 8,045 defendants sued (1,402 in EDTX).</li><br /><li>Comparing 2007 to 2006, nationwide there was a 4.6% increase in patent cases (I have read 6% elsewhere), but there was a <strong>31.5</strong>% increase in the number of defendants sued for patent infringement.</li><br /><li>Comparing 2007 to 2006 just for the Eastern District of Texas, there was a 37.9% increase in the number of patent cases, and there was a <strong>40.8</strong>% increase in the number of defendants sued for patent infringement.</li><br /><li>Comparing 2007 to 1990, nationwide there has been over a tripling in the number of patent cases (+221%), and a quintupling in the number of defendants sued for patent infringement (+404%).</li><br /><li>In 1990, the Eastern District of Texas accounted for roughly 1/100 of all national patent cases, and less than 1/100 of all defendants sued.</li><br /><li>By 2007, those EDTX numbers had grown to being roughly 1/8 of all national patent cases and 1/5 of all defendants sued. </li></ul>I say pshaw to the notion that patent infringement increased only 4-6% in 2007. Look at the defendants sued: there was over a 30% increase this past year. That's the number that matters. Now where will 2008 fall?<br /><br />Let's next turn to the numbers from December for the 7 districts I have been highlighting this year.<br /><br /><u>December statistics</u><br /><br />ED Texas: 21 patent cases, 82 defendants sued (11 troll cases)<br />CD California: 21 patent cases, 82 defendants sued (6 troll cases)<br />D New Jersey: 11 patent cases, 20 defendants sued (0 troll cases)<br />D Delaware: 19 patent cases, 40 defendants sued (2 troll cases)<br />ND Illinois: 12 patent cases, 30 defendants sued (3 troll cases)<br />ND California: 4 patent cases, 9 defendants sued (0 troll cases)<br />SD New York: 7 patent cases, 11 defendants sued (1 troll cases)<br /><br />December was the first month this year that another district rivaled the Eastern District of Texas in both cases filed and defendants sued.<br /><br /><u>Non-EDTX Troll/NPE Cases </u><br /><br />There were some interesting non-practicing entity /troll cases filed outside of the Eastern District of Texas in December. Some were very interesting. For the first month since I started the blog, I have more "NPE" cases outside of EDTX than I do inside. A preview of life after venue reform, perhaps? Here are the highlights:<br /><br />1) Document Generation Corp. v. AllMeds, and 18 other defendants (SDIL, December 4). I featured this case <a href="http://trolltracker.blogspot.com/2008/01/acacia-december-2007-update.html">here</a>.<br /><br />2) Action Technologies, LLC v. Avid Technology, Inc. (SDNY, December 4). Action is sub of General Patent Corp., according to the statement it filed with the court in New York. I profiled GPC <a href="http://trolltracker.blogspot.com/2007/10/general-patent-corp-acacia-of-east-goes.html">here</a>.<br /><br />3) Global Patent Holdings, LLC v. ADT, and 6 other defendants (SDFL, December 5). I featured this case <a href="http://trolltracker.blogspot.com/2007/12/acacia-and-niro-file-another-multi.html">here</a>.<br /><br />4) Innovative Patented Technologies, LLC v. Nokia & Samsung (SDFL, December 5). Scott Harris, J-Beau, and Niro. Blogged it <a href="http://trolltracker.blogspot.com/2007/12/ray-niro-and-james-b-parker-assert-four.html">here</a>.<br /><br />5-8) Network Signatures, Inc. v. Bank of America Corp. (CDCA, December 10).<br />Network Signatures, Inc. v. Wachovia Corp. (CDCA, December 10).<br />Network Signatures, Inc. v. Wells Fargo & Co. (CDCA, December 10).<br />Network Signatures, Inc. v. Washington Mutual Bank (CDCA, December 10). You might think by looking <a href="http://networksignatures.com/">at Network Signatures' website</a> that I have incorrectly included these four cases as "non-practicing entity" cases. But there's more here than meets the eye. I'll elaborate more in a special spotlight on these cases next Tuesday. I'll add a forward link <a href="http://trolltracker.blogspot.com/2008/01/is-united-states-navy-latest-patent.html">here</a> once I create that post.<br /><br />9) Guardian Media Technologies, Ltd. v. Daewoo Electronics Corp. (CDCA, December 18). Guardian Media is a Texas limited partnership that bought two patents in 2003, and has sued a bunch of companies. It is in patent litigation all over, and the patent-in-suit is in ex parte reexamination. This lawsuit was filed two months after the PTO issued an 81-page office action rejecting the claims of the patent-in-suit as invalid.<br /><br />10) PSN Illinois, LLC v. Abcam, Inc., Abgent, Inc., Affinity Bioreagents, Inc., Discoverx Corp., Exalpha Biologicals, Inc., Genetex, Inc., LifeSpan Biosciences, Inc., Multispan, Inc., and Novus Biologicals, Inc. (NDIL, December 21). An old troll friend returns! PSN Illinois is a shell. I'm not sure who owns it, but Chicago-area attorney Michael Mazza represented it in 3 prior patent litigations. 2 of the 3 prior PSN Illinois litigations were over pet litter patents, and the other one over porcelain veneer restoration materials. This new case asserts two patents titled "Molecular Cloning and Expression of G-Protein Coupled Receptors." It's safe to say that if you have a single entity asserting pet litter, porcelain veneer, and molecular cloning patent, it's a troll. And in this case, a BIOTROLL. The inventor of the two patents-in-suit is now a <a href="http://mcp.uc.edu/index.php?level2=people&level3=612">University of Cincinnati professor</a>. He evidently sold his patents back in September 2007.<br /><br />11) Fifth Market Inc. v. CME Group Inc. (Del, December 21). 5th Market is a failed startup. I found <a href="http://www.informationweek.com/763/messages2.htm">this</a> article from 1999 interviewing some of the inventors of the now-asserted patent. The inventors generally list 5th Market in their LinkedIn profiles as being a past job. But the first-named inventor, Scott Nieboer, still seems to run <a href="http://www.5thmarket.com/">this website</a> from his office in Nashville, where he also runs a few <a href="http://www.secinfo.com/ds2zp.u37b.htm">other</a> businesses - investment businesses. <a href="http://cache.zoominfo.com/CachedPage/?archive_id=0&page_id=146982620&page_url=%2f%2fwww.5thmarket.com%2fmanagement.html&page_last_updated=3%2f25%2f2005+10%3a24%3a48+PM&firstName=Scott&lastName=Nieboer">Here</a> is the cached "management" page from the old Fifth Market website. My conclusion? A once-company, now a shell being monetized.<br /><br />12) Wall Corporation v. BondDesk Group LLC (Del., December 26). I'm really not sure about this one. The first-named inventor, Webster Hughes of Charlotte, NC, was in upper management at X-Bond, the company that first owned the patent-in-suit. Then in September 2004 the patent was assigned to Wall Corp of Greenwich, CT, a company I can find nothing about. Now Wall Corp lists its address as the same as the law firm that filed the suit - Shore Chan Bragalone, of Dallas. Shore Chan is a firm I have featured as representing Acacia. This one has a general smell of a troll case about it, but I can't say for sure. Since there's nothing about Wall anywhere I can find, I'm putting it at least in the NPE camp for now.<br /><br />13) Zappos.com v. Global Patent Holdings (DNV, December 26) (DJ). See <a href="http://trolltracker.blogspot.com/2008/01/global-patent-holdings-update.html">here</a>.<br /><br />14) Meirav Kesher Hadadi, Ltd. v. Zipcar Inc., Mobility Inc. d/b/a Flexcar, and I-Go (NDIL, December 28). The plaintiff is an Israeli shell corporation set up by the Israeli inventor of the car rental patent. One of the defendants, I-Go, is <a href="http://www.igocars.org/">Chicago's only <strong>non-profit</strong> car sharing service</a>. It actually seems like a pretty cool idea -- the defendants' idea, that is, not the plaintiff's patent, the claims of which seem stretched to be able to capture the accused "product."<br /><br />15) Innovative Patented Technology, LLC v. Motorola (NDIL, December 31). I profiled this case <a href="http://trolltracker.blogspot.com/2008/01/4-interesting-new-cases-from-last-2.html">here</a>.<br /><br />16) Harvard Label v. Advanced Card Technologies LLC (CDCA, December 31) (DJ). According to ACT's <a href="http://www.advanced-card.com/">website</a>, it is a subsidiary of <a href="http://trolltracker.blogspot.com/2007/10/general-patent-corp-acacia-of-east-goes.html">General Patent Corp.</a><br /><br /><u>Cumulative Statistics for 2007</u><br /><br />Here are the cumulative statistics for all of 2007, comparing the various "big 7" districts.<br /><br />ED Texas: 364 patent cases, 1,402 defendants sued (151 troll cases)<br />CD California: 272 patent cases, 729 defendants sued (23 troll cases)<br />D New Jersey: 187 patent cases, 349 defendants sued (13 troll cases)<br />D Delaware: 147 patent cases, 350 defendants sued (18 troll cases)<br />ND Illinois: 137 patent cases, 261 defendants sued (26 troll cases)<br />ND California: 131 patent cases, 249 defendants sued (19 troll cases)<br />SD New York: 102 patent cases, 255 defendants sued (14 troll cases)<br /><br /><add>That's one patent case filed a day in the Eastern District of Texas. 28 defendants sued a week! Twice as many as any other district. Over 150 troll cases (41%).<br /><br />Here is my last "troll call" for 2007 - the December cases. I'm planning a little bit of a change for 2008, by the way. While EDTX still drives the troll cases, I no longer plan to track EDTX and non-EDTX troll cases separately. Starting with January's troll call, everything will be merged. Hopefully that will make this sort of post more readable.<br /><br /><u>Troll Call for December 2007 in EDTX</u><br /><br />141) Klausner Technologies v. Apple, AT&T, AT&T Mobility, CSC Holdings, Comcast, eBay, GotVoice, Simulscribe (Marshall, December 3). Dovel & Luner filed this lawsuit, which I blogged about <a href="http://trolltracker.blogspot.com/2007/12/new-360-million-apple-iphone-patent.html">here</a>.<br /><br />142) epicRealm Licensing, LLC v. The Macerich Co. (Texarkana, December 3). epicRealm made my original blog post, at #6, from way back in <a href="http://trolltracker.blogspot.com/2007/05/eastern-district-of-texas-january-2007.html">January</a>. This case is one that Judge Folsom ordered to be bifurcated from the original one.<br /><br />143) Typhoon Touch Technologies, Inc. v. Motion Computing, Inc., Dell, Inc., Nova Mobility Systems (Tyler, December 5). This looks like a <a href="http://biz.yahoo.com/bw/071129/20071129005166.html?.v=1">once-company</a> that has gone over to the <a href="http://www.typhoontouchtech.com/">dark side</a>.<br /><br />144) Tessera, Inc. v. A-DATA Technology Co., A-DATA Technology USA, Acer, Inc., Acer America, Centon Electronics, Elipida Memory, Elipida Memory USA, International Products Sourcing Group, Kingston Technology Co., Nanya Technology Corp., Nanya Technology USA, Peripheral Devices & Products Systems, Powerchip Semiconductor Corp., ProMOS Technologies, Inc., Ramaxel Technology Ltd., SMART Modular Technologies, Inc., TwinMOS Technologies Inc., TwinMOS Technologies USA (Marshall, December 7). Some people consider Tessera to be a research institution. Some people consider it to be a patent troll. It's hard to decide, but if you sue 18 companies in one lawsuit in Marshall, Texas, you inch towards that troll line.<br /><br />145) Coronary Stent Visualization Corp. v. Philips Electronics North America Corp. (Marshall, December 17). Acacia, as I described <a href="http://trolltracker.blogspot.com/2008/01/acacia-december-2007-update.html">here</a>.<br /><br />146) Trover Group, Inc. v. Regions Bank (Marshall, December 18). According to <a href="http://www.setexasrecord.com/news/205530-recent-patentcopyright-infringement-cases-filed-in-u.s.-district-courts">this article</a>, Trover Group was previously known as Dozier Financial Corp. Indeed, Trover is run by Charles Dozier, one of the inventors of the patents-in-suit. This appears to be an inventor's shell.<br /><br />147) Beneficial Innovations v. AOL, Google, IGN Entertainment, Morris Communications Co., Dallas Morning News, Tribune Interactive, Yahoo! and YouTube (Marshall, December 20). I discussed Beneficial Innovations and inventor Sheldon F. Goldberg <a href="http://trolltracker.blogspot.com/2008/01/4-interesting-new-cases-from-last-2.html">last week</a>.<br /><br />148) Parallel Networks, LLC v. Netflix, ATA Airlines, E*Trade, John Wiley & Sons, SkyMall, and The Finish Line (Marshall, December 28). The funny thing about this case, is that it asserts U.S. Patents 5,894,554 and 6,415,335 -- the same two patents asserted by epicRealm in its prior litigations. Same attorneys, same principals seem to be involved. Perhaps Parallel Networks is just a new name for epicRealm.<br /><br />149) Media Technologies Licensing, LLC v. Tristar Productions, Ace Authentic, Bench Warmer Int'l, Press Pass, Razor Entertainment Group, Razor Entertainment LLC, SA-GE Collectibles, and Stellar Collectibles (Marshall, December 28). Media Technologies Licensing is a California LLC (in Beverly Hills) formed by the inventor of the patents-in-suit, Adrian Gluck. Those patents are 5,803,501 and 6,142,532. The patents are titled "Memorabilia Card" and had been previously asserted against The Upper Deck Co. in the Central District of California. In fact, Media Technologies Licensing filed another case just last week in CDCA. So it's strange seeing them in Texas, but there they are.<br /><br />150) American Microsystems Ltd. v. WIAV Solutions, LLC (DJ) (Sherman, December 28). For more on this new case involving new troll WIAV, see <a href="http://trolltracker.blogspot.com/2008/01/4-interesting-new-cases-from-last-2.html">here</a>.<br /><br />151) Mondis Technology Ltd. v. LG Electronics, LG Electronics USA, Hon Hai Precision, and Innolux (Marshall, December 31). And you can go to that <a href="http://trolltracker.blogspot.com/2008/01/4-interesting-new-cases-from-last-2.html">same post</a> for information on Mondis, too.<br /><br />TT
Is the United States Navy the Latest Patent Troll?
Network Signatures, LLC of Rancho Santa Margarita, California, is the exclusive licensee of U.S. Patent <a href="http://www.patentfizz.com/fizzdisplay.php?patno=5511122">5,511,122</a>, a patent which is owned by the U.S. Navy. This patent relates to secure communication and authentication methods involving the use of public and private keys. Thanks to the plaintiff filing their agreement with the Navy publicly, we learn that the Navy gets 30% of any litigation proceeds.<br /><br />Well, Network Signatures has now sued Bank of America, Wachovia, Wells Fargo, and Washington Mutual, all in the Central District of California (Orange County), hoping to start monetizing the Navy's patent. The U.S. Navy is not practicing this invention, but their exclusive licensee told the Navy that it was. Is that so? Check out <a href="http://networksignatures.com/">their website</a> and decide for yourself. One could argue it is practicing something - using a cell phone to authenticate so you don't have to carry around a VPN password-generating device. But that's not what Network Signatures is suing over, if you read the complaint carefully.<br /><br />While I am not making this conclusion, there is certainly room to argue that in this case, the United States Navy is authorizing the filing of some very patent troll-like lawsuits. At the very least, the Navy has authorized patent infringement lawsuits against the financial services industry, and stands to make money off of those suits. Unbelievable.
New York Times Article Sets the Stage for Upcoming Patent Reform Debate Renewal
The New York Times had an <a href="http://www.nytimes.com/2008/01/13/business/13stream.html?ex=1357966800&en=7ffb4c155919a6c2&ei=5124&partner=permalink&exprod=permalink">interesting feature</a> on the soon-to-be-renewed fight in Washington over patent reform. The reporter, John Markoff, highlighted that the big corporations were for patent reform, and that certain individual inventors are against it, and summarized some of the reasons given for the positions of both sides (e.g., huge NTP-RIM damages award out of proportion to the inventiveness and validity of the NTP patents in one corner, the chance that patent reform will change the incentive for inventors in the other). Unfortunately, the article seemed to miss the third wheel here: the biotech industry's opposition.<br /><br />The individual inventors featured in the article were Dean Kamen and Steve Perlman. There is no doubt that Kamen and Perlman are not "patent trolls," despite that the article seems to improperly lump them with the trolls. There are extensive quotes from Perlman. I have a few problems with Perlman's conclusions about how the proposed patent reform will impact inventors like him.<br /><br />First, Perlman claims that patent reform is unnecessary in light of two recent Supreme Court cases: <em>eBay v. MercExchange</em> and <em>KSR v. Teleflex</em>. This makes little sense. Sure, the threat of injunction has been greatly reduced for trolls. But that won't stop the Acacias and Global Patent Holdings of the world from suing massive amounts of defendants. Further, many patent trolls are simply conducting "research" to take advantage of the "CSIRO loophole" to eBay. In addition, <em>KSR</em> is of little help in jurisdictions that rarely if ever grant summary judgments. Patent holders will still be able to sue on clearly invalid patents, get no stay pending reexamination, and put tremendous pressure on defendants to settle or face massive verdicts.<br /><br />The proposed patent reform addresses these problems. In the words of Mark Lemley, quoted in the article, "I have to say I'm frankly astonished that apportionment has been this controversial. I can't think of a straight-faced argument that you as a patent owner are entitled to more than your invention has contributed to a product."<br /><br />Perlman also is concerned because in the computer industry, innovation reduces cost. According to Perlman, under patent reform, if you reduce the cost of your device, then your apportionment becomes less and less. Huh? I sure hope he was misquoted there (the problems with newspaper interviews - I'm sure there's a 1,000-word explanation that makes his point better). But if you invent a tremendous improvement in computers, that drives the market, the current patent reform bill will allow you to get the entire market value. And if you just invent a tweak that's very useful, you can still use experts to prove how much your improvement is worth as a percent of the overall invention. What's controversial about that?<br /><br />Finally, Perlman opines that under patent reform, "Microsoft will clone a crummy version of one of [his] inventions, and [he]'ll be bowled over." Yes, and if they do that, then under patent reform, you still will be able to get an injunction and enhanced damages for Microsoft's willful infringement.<br /><br />To be sure, there's more to the current patent reform bill than damages apportionment and venue reform. Some of it I support, some of it, well, I could live without it (first-to-file!). And I'm sure there will be many changes ahead. But I sure hope that the individual inventor community does better than "damages apportionment will lead to the end of innovation as we know it" and "let the Supreme Court fix it, and don't touch the laws, Congress."<br /><br /><strong>Update</strong>: The following blogs are also covering the NYT story:<br /><a href="http://immodestproposals.blogspot.com/2008/01/this-congress-might-get-something-right.html">Immodest Proposals</a> has a blog titled "This Congress Might Get Something Right?!?"<br /><a href="http://www.leveragingideas.com/2008/01/14/patent-reform-boring-but-important/">Leveraging Ideas</a> has a story titled "Patent Reform: Boring But Important"<br /><a href="http://government.zdnet.com/?p=3603">ZDNet</a> has a Government Blog titled "Patent Reform: Stopping the Insanity or Inventor Ripoff?"<br /><a href="http://www.techcrunch.com/2008/01/14/patent-reform-act-focuses-on-the-wrong-problem/">TechCrunch</a> has a blog titled "Patent Reform Act Focuses on the Wrong Problem" (the real problem is poor patent quality, says the blog.
Global Patent Holdings Sues Boca Raton Resort & Club
Check out all of those JPGs on the website at the <a href="http://www.bocaresort.com/">Boca Raton Resort & Club</a>. I guess somebody had a bad stay there or couldn't get a good tee time, for on Tuesday 1/8, Global Patent Holdings asserted its JPEG-on-a-website patent in SDFL against the Club. If you don't know what I'm talking about, click on the Global Patent Holdings label below. Niro Scavone, of course.
Wednesday Miscellany, 1/9/08
A bunch of tidbits today, mainly thanks to reader tips. Before I get to them, if you haven't done so already, you have two days to <a href="http://www.surveymonkey.com/s.aspx?sm=JwW_2btP6igiM5Qf49W3zHug_3d_3d">take my Patent Troll Tracker Blog Survey</a> before it closes. I'll provide the results next week.<br /><br />1) My post last Friday on Mondis prompted Inpro to take Dechert off of its "extended team" on its website. But thanks to a reader tip, you can still see Dechert featured as part of the Inpro team in <a href="http://inprolicensing.com/patents/Partners.pdf">this Inpro document</a>.<br /><br />2) A reader (who I am keeping anonymous for now) compiled for me a list of recent patent litigations where the inventor(s) of the patent(s)-in-suit were patent attorneys. I know there are more than are on the list, but these are mainly the cases I have featured on this blog. If anyone knows of any other patent-attorney-as-inventor cases, let me know. Meanwhile, see the current list <a href="http://docs.google.com/Doc?id=dc4gxznc_1tdh4vndd">by clicking on this link</a>. Note this list doesn't include the case brought yesterday in Texas (see #8 below). <strong>Update, 1/10/08</strong>: now it does, plus it includes another case sent my way.<br /><br />3) Not many interesting cases from last Wednesday-Friday, but one did catch my eye. After Burst.com got a reported $50M settlement from Microsoft, and a reported $10M from Apple, RealNetworks decided to file its own declaratory judgment case against Burst, in the Northern District of California. An eager Burst.com investor has evidently been posting evidence of several companies' infringement on YouTube (see <a href="http://www.youtube.com/profile?user=jhwardjr">here</a>), including RealNetworks. Unfortunately, the complaint is not available online yet.<br /><br />4) I don't usually post about Federal Circuit decisions, but I have to take issue with the CAFC's 2-1 opinion in <em>SRI Int'l, Inc. v. Internet Security Sys., Inc.</em> (January 8, 2008). The majority (Rader, Mayer) acknowledged that the prior art Live Traffic paper invalidated the four patents-in-suit, if publicly available, but reversed a summary judgment of invalidity because it was doubtful that putting a paper on an Internet FTP Server constituted public availability. They likened it to the thesis, sitting in the library, without an index so people could find it. Anyone who has ever used an FTP server knows that this conclusion is just not true. And Judge Moore, in dissent, picked up on the exact issue in footnote 1 and surrounding text:<br /><br /><blockquote>The majority concludes without any evidence or support in the record that the FTP server "did not contain an index or catalog or other tools for customary and meaningful research." The majority bases this conclusion on a number of "facts" not supported by the record or even argued by the parties. First, the majority implies that a sophisticated computer security researcher would need a "README" file to find a file in an FTP server. There is no support in the record for this suggestion and the parties never argued it. The majority also states, without record support, that "it is doubtful that anyone outside the review committee looking for papers submitted to the Internet Society's Symposium would search a subfolder of an SRI server" and "it is also doubtful that anyone outside the review committee would have been aware of the paper or looked for it at all in early August 1997." Neither of these "doubts" are supported by any record evidence. Moreover, the relevant inquiry for public accessibility is not whether a reference is available to people looking specifically for that reference, but rather whether the reference is publicly available to someone looking for information relevant to the subject matter. Given that the EMERALD subdirectory was publicized to the cyber security community as a source of information related to projects on intrusion detection, this paper, like everything else in the EMERALD subdirectory, was publicly accessible to anyone interested in material on intrusion detection.</blockquote>Right on, Judge Moore! This is actually an important issue: there haven't been many published cases if any at all that attempt to meaningfully extrapolate the CAFC's library indexing law to specific areas of the Internet. This is important enough that I hope the whole court considers the issue <em>en banc</em>. But somehow I doubt it.<br /><br />5) Acacia has struck again. Its subsidiary, Credit Card Fraud Control Corporation, sued six companies (Full Spectrum Telecommunications, National A-1 Advertising, Network Telephone Services, SPG Solutions, Utel Networks, and Teligence), on U.S. Patent No. <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6282276">6,282,276</a> ("Method of Billing a Value-Added Call"). Acacia alleges it is the exclusive licensee of the '276 patent. The patent itself seems to be owned by Fraud Control Systems.com, a Boca Raton, Florida company owned by the inventor, David Felger. The fascinating thing about this is that if you go to Fraud Control Systems' <a href="http://fraudcontrolsystems.com/">website</a> (and you should do it before they change it, which they always do to TrollTracker), it says for more information about the "patented fraud-control solutions," contact Rick S. Nathan of Pricewaterhouse Coopers. Is PWC somehow involved in this Acacia litigation? Somehow, I doubt it.<br /><br />6) Speaking of Acacia, I profiled <a href="http://trolltracker.blogspot.com/2007/11/acacia-conquers-cleveland.html">here</a> a 23-defendant case Acacia subsidiary Autotext filed in Cleveland. I thought the case was frivolous and should be dismissed immediately. I guess Acacia listened, for yesterday it did dismiss the entire litigation. No reasons given, of course.<br /><br />7) Further speaking of Acacia, it has moved to transfer its own case! Really. Acacia subsidiary Refined Recommendation Corporation sued Netflix in New Jersey. Netflix moved to transfer the case to the Northern District of California, where it is headquartered, and where significant prior art is located (not to mention it's close to the Portland, Oregan patent attorney inventor, Gary Odom a/k/a Patent Hawk - see <a href="http://trolltracker.blogspot.com/2007/10/acacia-sues-netflix-is-patent-hawk.html">here</a> for my prior post explaining that one). Take that, said Acacia. Not only will we oppose your motion, but we'll cross-move to transfer the case - to the Central District of California. The reasons? There's infringement there. But there was alleged infringement in New Jersey, right? What makes CDCA <em>more </em>convenient than NDCA? According to Acacia, it gets cases done faster -- 7.2 months to 7.4 months. Not kidding. Acacia wants the court to transfer the case to CDCA to save 6 days. Their cross-motion seems like a bit of a waste of the court's time. If you're going to send the case 3,000 miles across the country, why not send it to where the defendant and all the documents are located?<br /><br />8) And speaking of meaningless shells, venue ridiculousness, and patent-attorney-trolls, we turn to Traffic Information LLC, a company formed by yet other Portland, Oregon patent attorneys Bruce DeKock and Kevin Russell to assert U.S. Patent No. 6,785,606. "Traffic" made my <a href="http://trolltracker.blogspot.com/2007/10/troll-call-and-other-patent-stats-for.html">September Troll Call</a> at #103 when it/they sued Honda. Yesterday they/it struck again, suing Alpine Electronics (CDCA), Magellan Navigation (NDCA), and Sanyo North America (SDCA) in Marshall, Texas. Parker Bunt & Ainsworth leads the 3-Texas-firm contingent representing Traffic Information/DeKock/Russell. 42% of ALL complaints filed in Marshall so far in 2008 have been patent infringement complaints (3 out of 7), and 100% of the EDTX patent cases this year have been filed in Marshall. The statistic is meaningless now due to the early date, but I'll be checking back with it periodically throughout the year.<br /><br />Back on Friday with December's Troll Call.
Number of Utility Patent Claims Issued By USPTO Per Year Has Quintupled in 30 Years
Rembrandt's Interesting Injunction Strategy (Possibly)
There is one patent troll case (that I know of) going to trial this month in the Eastern District of Texas: Rembrandt v. Ciba Vision. Rembrandt may be up to something interesting.<br /><br />Besides Rembrandt's foray into high tech patents, Rembrandt also bought contact lens patents, and put them in a shell named Rembrandt Vision Technologies, L.P. Rembrandt sued Bausch & Lomb and Ciba Vision in Marshall, Texas back in October 2005. Eventually, Bausch & Lomb settled, and Ciba decided to take it to trial. The parties agreed to have Magistrate Everingham preside over the case (or, as several friends in Texas call him, "Magistrate Chad"). Jury selection was supposed to have been January 3, with trial beginning January 15 (<strong>update: I am informed jury selection is January 30, with opening statements to begin immediately thereafter</strong>).<br /><br />In the pretrial order, Ciba asserted that Rembrandt settled with Bausch & Lomb, whereby in exchange for money, not only did Rembrandt dismiss B&L (and maybe give it a license), it also gave its injunction rights to B&L. According to Ciba, Rembrandt did this in an attempt to skirt <em>eBay</em>:<br /><br /><blockquote>CIBA wishes to bring to the Court’s attention the serious issues that arise from the Master Agreement (the “Settlement Agreement”) settling the dispute between defendant Bausch & Lomb Inc. (“B&L”) and Rembrandt Vision. In addition to dismissing all pending claims between B&L and Rembrandt Vision, the Settlement Agreement will effectively cause B&L to switch sides in this litigation – from being CIBA’s co-defendant (and sharing privileged defense strategies with CIBA under a common interest agreement) to pursuing an injunction against CIBA under the Chang patent. While the Settlement Agreement is lengthy and complex, in effect it purports to split the beneficial ownership of the patent such that Rembrandt Vision’s parent companies keep rights to virtually all monies flowing from this action, but B&L obtains the right to seek an injunction against CIBA under the patent in the event that Rembrandt Vision prevails against CIBA at trial. This assignment of the right to seek an injunction is a transparent attempt to circumvent the guidance of the Supreme Court’s eBay decision, in which a plurality of justices counseled against granting injunctions to non-practicing plaintiffs. <em>See eBay, Inc. v. MercExchange, LLC</em>, 126 S. Ct. 1837, 1842 (2006). Neither Rembrandt Vision nor its parent companies practice the invention of the Chang patent. By purporting to transfer the right to seek an injunction to B&L, Rembrandt Vision hopes to improve its chances of obtaining an injunction. CIBA believes there are serious problems with this arrangement in addition to those concerning injunctive relief that could affect the trial of this case and intends to raise these issues at the appropriate time, including, but not limited to, an opposition to any post-verdict motion by Rembrandt Vision for an injunction. CIBA expects that discovery on the circumstances underlying the Settlement Agreement and the timing of B&L’s decision to switch sides in this litigation will be necessary. CIBA also anticipates that B&L’s new alignment with Rembrandt Vision, given the confidential, strategic information governed by the Common Interest Agreement between CIBA and B&L, may give rise to separate issues regarding the conduct of counsel for Rembrandt Vision and B&L. CIBA may also take separate action against B&L and Rembrandt Vision for breaching the terms of the Common Interest Agreement between B&L and CIBA.</blockquote>Of course, Rembrandt disagreed, stating that Ciba mischaracterized the Rembrandt-B&L agreement and that Rembrandt would be happy to explain at the court's convenience, but it did not flat-out deny it wouldn't use the agreement to aid in its seeking an injunction. If true, and that's what Rembrandt is really trying to do, then it's a very interesting strategy. Side with one of the co-defendants and induce them to switch sides to improve their chance of an injunction. Fish & Richardson represents Rembrandt, along with a host of local counsel, including Parker Bunt & Ainsworth, Ireland Carroll & Kelley, Brown McCarroll, and Jones & Jones. Banner Witcoff appears to represent Ciba, along with Sidley Austin and Potter Minton, and perhaps others. Note's Ciba's veiled threat to go after Fish & Richardson. Just what Fish needs!<br /><br />The other case that was going to go to trial in January was Mobile Micromedia Solutions LLC v. Nissan. Just last week, however, Judge Folsom granted a motion continuing the trial until May 2008, due to the "numerous pending motions for summary judgment, Daubert motions, voluminous motions <em>in limine</em>, and a plethora of exhibit issues and deposition designations," along with the unavailability of a key plaintiff's witness. Judge Clark's cases slated for January 2008 trial appear to have settled. I don't know of any Ward or Davis cases going to trial, so Rembrandt may have center stage this month in EDTX.
4 Interesting New Cases From Last 2 Weeks of December
Well, what do we have for you today? How about the Rothschild family investing in a Eurotroll, and suing in Marshall, Texas? How about an ex-Fish & Richardson <em>associate</em> buying patents for millions of dollars (while an associate) and being D/J'd in Sherman, Texas after trying to shake down an EDTX company? How about a couple of lawsuits by a guy who, with related patents, has made the Electronic Frontier Foundations' 10 Most Wanted Invalid Patents? How about yet another Scott Harris/J-Beau/Ray Niro lawsuit? Yeah, you could read those other <a href="http://www.abajournal.com/magazine/aba_journal_blawg_100">ABA-nominated</a> <a href="http://patentbaristas.com/">patent</a> <a href="http://www.patentlyo.com/">blawgs</a>, but I've got your <em>juicy</em> patent news right here!<br /><br /><u>WIAV Solutions: Choongsoo Park</u><br /><br />Let's start off with the D/J case of American Microsystems Ltd. v. WIAV Solutions, filed in the Eastern District of Texas on December 28. Now why would anyone file a D/J case in the Eastern District? Well, in this case, perhaps it makes sense. The accused infringer is a company located smack dab in the middle of EDTX. It received letters from WIAV Solutions, a company of unknown origin (so unknown that AML had to plead WIAV was not from Texas on "information and belief"). Actually, the letters came from Sidley Austin-San Francisco.<br />Since AML couldn't figure out who is behind WIAV Solutions, I decided to dig around to see if I could figure it out. It wasn't too hard. WIAV asserted U.S. Patents <a href="http://www.patentfizz.com/fizzdisplay.php?patno=5400338">5,400,338</a> and <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6480497">6,480,497</a> in its correspondence with AML. These patents, prosecuted by Townsend and Townsend and Crew in San Francisco, were originally assigned to Metricom of Los Gatos, CA. From there, they went to Ricochet Networks, which became part of Terabeam, of San Jose, CA. They show no further assignment.<br /><br />But Google and the USPTO Assignment database shed more information. The USPTO Assignment database shows WIAV Solutions buying a boatload of patents from Skyworks Solutions. In the transaction, executed in September 2007, WIAV listed an address in Reston, Virginia (which appears to be a home address). If you search for "5400338 6480497 Terabeam," you get one result: a Terabeam SEC filing showing the sale of these patents. A couple more clicks, and you get <a href="http://www.secinfo.com/dRSs2.u15t.d.htm">this SEC filing</a> -- the actual assignment agreement transferring patents from Terabeam to SPH America, a Virginia limited liability company, located at the same address as WIAV. All in all, SPH America bought 4 patents from Terabeam for $5M, including the two now-in-suit.<br /><br />But who is behind Virginia LLCs SPH America and WIAV Solutions? According to Virginia corporate filings and Terabeam/Proxim SEC documents, it was <a href="http://cache.zoominfo.com/CachedPage/?archive_id=0&page_id=1458718632&page_url=%2f%2fwww.fr.com%2fdirectory%2fdirectory.cfm%3faid%3d782&page_last_updated=10%2f30%2f2007+12%3a25%3a49+PM&firstName=Choongsoo&lastName=Park">Choongsoo Park</a>, who, at the time of the purchases, was a lowly associate in the D.C. offices of Fish & Richardson. TrollTracker does not understand how an associate can afford to spend $5M on patents (more, actually, if you include the 88 patents bought from Skyworks). But apparently Park knew what he was doing - he has an advanced degree in Electrical Engineering.<br /><br />Park is no longer on the F&R website (as of sometime between Halloween and now), so apparently he no longer works for F&R. Question is whether he's happy or not litigating his patents in Sherman, Texas against a company that actually employs people in the District. More on the case <a href="http://www.setexasrecord.com/news/205753-texas-company-seeks-judgement-to-stop-potential-patent-suit">here</a>. More on the technology behind the original Metricom/Ricochet system <a href="http://ricochet.wikispaces.com/RoutingProtocol">here</a>. Metricom, the original technology developer, was a victim of <a href="http://www.isp-planet.com/investor/2001/aerie_011106.html">the tech bubble bursting</a>. The Ricochet technology is a good example of what others described to be exciting technology that generated a lot of <a href="http://www.slate.com/id/2074905">buzz</a>, but never got off the ground due to a bad business model.<br /><br />It would be nice to hear that Park has left F&R to form his own company to commercialize the Ricochet technology, rather than, as American Metrosystems alleged, making money only "by suing alleged infringers of [the] patents and negotiating license fees from its victims." Time will tell. You have to admit: it's a bit strange, a law firm associate spending multi-millions on patents that are then asserted in an attempt to gain licensing revenue. It's one thing to be Scott Harris, and invent your own patents. It's quite another to be, well, Acacia, or Erich Spangenberg. You have to wonder whether Park is fronting for someone else.<br /><br /><u>Mondis Technology Ltd.: Inpro Licensing SarL</u><br /><br />IPEG had an <a href="http://ipgeek.blogspot.com/2008/01/patent-trolls-statistics-will-europe.html">interesting post</a> about how Europe has generally escaped the patent troll problem. But Europeans have been rumored to be gobbling up US patents to sue in American courts. This case is a perfect example. On New Years' Eve, Mondis Technology Ltd. of London sued Korean manufacturer LG, and Taiwanese manufacturers Hon Hai and Innolux (both related to Foxconn), in Marshall, Texas (on 5 patents). Dechert-Philadelphia filed the complaint, with help from Otis Carroll.<br /><br />Who is Mondis Technology? According to UK corporate documents, it is Inpro Limited. Inpro is a EuroTroll, apparently. Mondis was originally formed at 160 Queen Victoria St. in London -- home of Dechert's offices there. Then it was moved to 19 Perrin Lane in Hampstead, London. That is the same address as a company known as Inpro IP Services. Inpro IP Services and Inpro Limited appear to me to be related to Inpro Licensing, a Luxembourg company that bought the IP portfolio of once-company Elonex, of London. And Inpro's mission? <a href="http://www.inprolicensing.com/">To make money off of intellectual property</a>. Other ties between Inpro-Luxembourg and Mondis? Inpro considers Dechert to be part of <a href="http://inprolicensing.com/team.html">its extended team</a>. The same Dechert lawyers who represented Inpro in patent litigation against RIM appear to be representing Mondis in this case. My conclusion: Mondis is an Inpro company.<br /><br />Oh, and then there's this: click on "DDC Patents" on Inpro's "Current Projects" <a href="http://www.inprolicensing.com/current-projects.html">web page</a>, and you get 3 out of the 5 patents in suit. So I guess that's more circumstantial evidence.<br /><br />Another fascinating tidbit: RIT Capital Partners, a publicly traded company on the London Stock Exchange that is about <a href="http://miranda.hemscott.com/servlet/HsPublic?context=ir.access.jsp&ir_client_id=1874&ir_option=MAJOR_SHAREHOLDERS">25% owned by the Rothschild family</a>, owns more than 10% of Mondis. You know, <a href="http://www.rothschild.info/finance/default.asp?doc=articles/cfin3-1">related</a> to the <a href="http://www.rothschild.info/wine/">winemaking</a> Rothschilds? Other directors of Mondis include David John Morrison, who owns Prospect Investment Management, a London private equity firm. This is a well-funded EuroTroll. What's it doing slumming in Texas?<br /><br />I may have the answer: It looks like "Mondis"/Inpro bought the five patents in suit from Hitachi on October 30, 2007. I'm sure LG and Foxconn will send a big thank-you to Hitachi for that.<more> Of course, LG and Hitachi already have 4 patent litigations pending between them in the Eastern District. So could it be that Hitachi is hitting back at LG not just with a suit brought by itself, but with a troll lawsuit? I have no idea, but if true, it would be interesting....<br /><br /><u>Beneficial Innovations: Sheldon Goldberg</u><br /><br />Beneficial Innovations is a Nevada company owned by patent inventor Sheldon F. Goldberg. He is suing companies on U.S. Patents <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6712702">6,712,702</a> (Method and System for Playing Games on a [Computer] Network) and <a href="http://www.patentfizz.com/fizzdisplay.php?patno=6183366">6,183,366</a> (Network Gaming System). He was noted four years ago on <a href="http://games.slashdot.org/article.pl?sid=04/02/03/1516237">Slashdot</a> for threatening a bunch of companies that he owned the rights to games played on a computer network. Jason Schultz, a/k/a LawGeek, called the '366 patent his <a href="http://lawgeek.typepad.com/lawgeek/2004/01/silly_internet__3.html">Silly Internet Patent #4</a> a ways back. Sheldon Goldberg made the EFF's "<a href="http://w2.eff.org/patent/">Most Wanted</a>" poster for "Crimes Against the Public Domain, Willful Ignorance of Prior Art, and Egregious Displays of Obviousness." (oh, hello, Acacia!). According to Ted Frank's <a href="http://www.overlawyered.com/2004/02/patents_out_of_control.html">post</a> on the wonderful blog, Overlawyered, Goldberg's other patents claimed computer solitaire, on-line game rankings, and pop-up advertising. Goldberg first sued a bunch of defendants in June 2007, and it hardly rated a mention here. But given this second suit and my additional research, this certainly falls under the patent troll category, in my opinion.<br /><br />16 defendants have now been sued in Marshall: Blockdot, CareerBuilder, Cnet Networks, Digg, Ebaum's World, Jabez Networks, The New York Times, The Washington Post, The Weather Channel, and The Washington Post.Newsweek Interactive Company were sued in June on the same two patents. The latest suit named AOL, The Dallas Morning News, Google, IGN Entertainment, Morris Communications, Tribune Interactive, Yahoo!, and YouTube. Dovel & Luner, a firm that is challenging Niro Scavone for the most contingent-fee multi-defendant cases, represents Beneficial Innovations.<br /><br /><u>Innovative Patented Technologies: James B. "J-Beau" Parker/Scott Harris</u><br /><br />Speaking of Niro, he filed his own New Years Eve case, in Chicago, on behalf of Innovative Patented Technologies. The first IPT case filed was in South Florida, in early December, as I reported <a href="http://trolltracker.blogspot.com/2007/12/ray-niro-and-james-b-parker-assert-four.html">here</a>. James "J-Beau" Beauregard Parker owns Innovative Patented Technologies, a company that does nothing other than hold patents invented by Scott Harris, a former Fish & Richardson principal who is in a dispute with his former firm (and litigation in Chicago). IPT does nothing other than assert patents and try to collect licensing fees. The latest company to be sued was Motorola, on the same 4 patents as the South Florida litigation. Since Motorola has a big facility in South Florida, why not sue them there and/or add them to the other case? Anyway, Motorola's popular RAZR phone and its Q smartphone were listed as accused products.<br /><br />To recap, at least the following 5 lawsuits against 10 defendants are now pending involving the Scott Harris patents now owned by James Parker -- all brought by the Niro firm:<br /><br />Memory Control Enterprise, LLC v. Honda, LG Electronics, Motorola, Oakley, and US Cellular (NDIL, August 2007)<br />BarTex Research, LLC v. FedEx (EDTX, August 2007)<br />Illinois Computer Research v. Google (NDIL, September 2007)<br />Innovative Patented Technology v. Nokia and Samsung (SDFL, December 2007)<br />Innovative Patented Technology v. Motorola (NDIL, December 2007)<br /><br />There were other troll cases filed in the second half of December in EDTX and elsewhere, but that's enough for today! The rest can wait for the December Troll Call, coming sometime next week.<br /><br /><u>Survey reminder</u><br /><br />Don't forget to <a href="http://www.surveymonkey.com/s.aspx?sm=JwW_2btP6igiM5Qf49W3zHug_3d_3d">take my Patent Troll Tracker Blog Survey</a> if you haven't already.<br /><br />(Update: hey - welcome to all the visitors from <a href="http://www.nytimes.com/pages/technology/index.html">The New York Times</a> - my first link from "traditional" media. Wonder if it's because I mentioned they are a defendant in the Goldberg lawsuit. This is a disappearing link, though - after Saturday, January 5, it will likely be gone).
Acacia December 2007 Update
Turning to our busiest patent troll in 2007, Acacia, it kept up momentum in December with new lawsuits.<br /><br />Acacia's new subsidiary Coronary Stent Visualization Corp., established in Delaware on 11/19/07 with a principal place of business of 500 Newport Center Drive, 7th Floor, Newport Beach, CA, filed a lawsuit less than a month after formation. Acacia sued Philips Electronic North America Corp. on 3 patents owned by Cedars-Sinai Medical Center (Los Angeles) and allegedly exclusively licensed to Acacia. The exclusive license likely happened at some point just prior to February 2007, when Cedars-Sinai (represented by Jones Day-LA) told the PTO it had lost its small entity status. The 3 patents are 5,054,045; 5,457,728; and 5,822,391. The lawsuit, involving a Los Angeles patentee, Los Angeles inventors, a Los Angeles exclusive licensee/plaintiff, a Los Angeles prosecuting attorney/law firm (well, now-defunct Lyon & Lyon, anyway), and a New York defendant, was filed in Marshall, Texas on 12/17/07 by DiNovo Price Ellwanger of Austin.<br /><br />Acacia also filed a big case on December 4, in the Southern District of Illinois (East St. Louis) - the second case they have filed there. This time the sub was Document Generation Corp., and Acacia used Simon Passanante of St. Louis. Patent asserted was 5,148,366. Again, Acacia said it is only the exclusive licensee. 19 defendants were sued, all in the medical software field. GE Healthcare and McKesson are the big ones, but 17 small-to-medium business were sued, too:<br /><br />1. AllMeds, Inc. (Tennessee-based corporation)<br />2. Allscripts, LLC (Chicago, Illinois)<br />3. Cerner Corp. (Missouri)<br />4. Healthport, Inc. (South Carolina)<br />5. eClinicalWorks, LLC (Massachusetts)<br />6. Sage Software Healthcare, Inc. (Florida)<br />7. AMT Solutions, Inc. (Texas)<br />8. iMedica Corp. (California - Northern)<br />9. McKesson Corp. (California - Northern)<br />10. MediNotes Corp. (Iowa)<br />11. Misys Healthcare Systems, LLC (North Carolina)<br />12. NextGen Healthcare Information Systems, Inc. (Pennsylvania)<br />13. Noteworthy Medical Systems, Inc. (Ohio - Northern)<br />14. Infor-Med Medical Information Systems, inc. (California - Central)<br />15. Pulse Systems, Inc. (Kansas)<br />16. SSIMED, LLC (Connecticut)<br />17. Physician Micro Systems, Inc. (Washington)<br />18. A4 Health Systems, Inc. (Chicago, Illinois)<br />19. GE Healthcare (New Jersey)<br /><br />So, let's get this straight. Acacia, a California company located in CDCA, is an exclusive licensee who has sued 19 defendants, who are located in 17 different judicial districts (including CDCA). The original assignee and inventors were all from Minnesota, then the patent was transferred via merger and relocation to a company in the Southern District of Ohio, and finally has ended up with I-Think, LLC, an Ann Arbor Michigan corporation which appears to be a subsidiary of the original Minnesota assignee, now called <a href="http://www.documed.com/index.htm">DocuMed</a>. That's about 20 different judicial districts that make sense in terms of venue, yet Acacia chose the Southern District of Illinois. Why, exactly? What's in East St. Louis that appeals to Acacia?<br /><br />According to <a href="http://www.manta.com/coms2/dnbcompany_d8r1tw">this website</a>, DocuMed itself has only 2 employees, one of which is presumably the VP, Secretary and Treasurer of I-Think, Douglas Kassab. This looks like a once-company, looking for a cashout before one of its remaining assets, a patent that expires in 22 months, is no longer useful.<br /><br />Back tomorrow with some highlights of the last couple of weeks in the Eastern District of Texas.
Global Patent Holdings Update
Let's start the new year off with an update on our #1 patent troll from 2007, Global Patent Holdings.<br /><br />To recap, it filed another patent infringement case on the <a href="http://patentfizz.com/fizzdisplay.php?patno=5253341">JPEG-on-a-website patent</a> (5,253,341) on <a href="http://trolltracker.blogspot.com/2007/12/acacia-and-niro-file-another-multi.html">December 5 in Florida</a>. Then while I was on hiatus, Nevada company Zappos.com filed a declaratory judgment complaint in Las Vegas on December 26, seeking a declaratory judgment of invalidity, noninfringement and intervening rights on the GPH '341 patent. Parsons Behle & Latimer of Salt Lake City filed the DJ complaint on Zappos.com's behalf.<br /><br />The DJ complaint, available <a href="http://trolltracker.googlepages.com/GPH_Zappos.pdf">here</a>, has some nice insights into the Niro firm's method of trying to collect on behalf of GPH. Evidently, on August 14, Mr. Niro sent a claim chart to Zappos, explaining how the Zappos website infringes the reexamined claim 17 of the patent. I'm a bit miffed by that, because Mr. Niro refused to send me a claim chart as to my website. Zappos did not attach the claim chart to its complaint. Nor did it attach the "royalty schedule," which Niro also sent to Zappos. The Niro firm wrote to Zappos again on September 27, notifying it of the Green Bay Packers lawsuit, and then on December 12, notifying it of the Florida lawsuit.<br /><br />With four litigations now pending in three districts against 17 companies, MDL seems like an increasingly likely option.<br /><br />Back tomorrow with an update on Acacia.
Happy New Year
I thought the last half of December would be quiet in terms of patent troll activity. Well, not really. Happy New Year to everyone, and look for the following stories this week and next:<br /><ul><li>Global Patent Holdings and Acacia updates</li><li>News about a bunch of patent troll cases in the Eastern District of Texas, including one involving yet another Fish & Richardson attorney?</li><li>Is one of the newest patent trolls . . . the US Navy?</li><li>Wrap-up on 2007 statistics, including December's list.</li></ul><p>Meanwhile, nothing starts the new year like some humor. Thanks to a reader, we have these two comic strips by James Turner, about patent trolls (click <a href="http://www.oreillynet.com/wateringhole/blog/2007/12/strip33.html">here</a> and <a href="http://www.oreillynet.com/wateringhole/blog/2007/12/strip34.html">here</a>).</p>