Patent Lawsuit So Bogus That The Judge Ordered Sanctions And Attorney's Fees Paid

from the about-time dept

There are an awful lot of bogus patent lawsuits out there, but even when the lawsuits are tossed out it's very, very rare for a judge to order the plaintiffs to pay the legal fees of the defendants. However, in Illinois it just happened. Joe Mullin has the story of a patent that was quite clearly limited to an infrared camera linked to a GPS system. The patent examiner required the inventor to include the word "infrared" before declaring the patent acceptable and non-obvious. Yet, that didn't stop the patent holder from suing LG, Pantech and Disney for the Disney mobile phone service that let parents track where their kids were. The product was a huge commercial failure, but those are three big companies worth suing for infringement.

However, the judge noted, sternly, that the patent holder and the law firm that was handling the case (which had also worked on the patent) clearly decided to ignore what the patent actually said about it being for infrared cameras. This practice is more common than it should be. Even when claims are written to be narrowly focused, there's always some wiggle room, and many patent holders bring lawsuits on technologies that are pretty far from what's in the claims -- usually hoping that the accused will settle rather than take the issue to court. In this case, though, the judge pointed out that it was clearly a frivolous lawsuit, and ordered the defendants get reasonable costs and attorneys' fees. If this happened more often, maybe we'd see fewer ridiculous patent lawsuits.

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If That's Price Fixing, You're Doing It Wrong

from the price-fixing-means-prices-don't-drop... dept

There was plenty of news coverage this week of the $585 million in criminal fines against Sharp, LG and Chunghwa for price fixing on LCD displays. LG is paying the largest share at $400 million -- though, in the interest of disclosure, I should note that I'm writing this post using an LG LCD monitor that I got for quite a good price a few months back. And that brings up an issue I haven't seen addressed anywhere, other than by Adam Theirer: if this was price fixing, the companies were doing it wrong. Prices on LCDs were sliding very quickly, and it while there may have been some collusion among these three providers, it didn't seem to do much good. That's partly because there were plenty of other providers in the market, so any attempt at collusion was rather ineffective in stopping the rapid decline in prices. Sure, collusion is a bad thing, but we see this over and over again in antitrust enforcement: regulators keep punishing certain activities without bothering to see if they actually do anything to harm consumers.

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Klausner Continues To Sue Everyone Over Visual Voicemail Patent

from the this-is-innovation? dept

You may recall stories involving a small patent holding firm called Klausner Technologies, which claims to hold patents on the concept of "visual voicemail." It seems to have interpreted these patents pretty broadly to the point that it considers anyone who offers any graphical interface to voicemail as infringing. Over the years, that's meant lawsuits against AOL, Vonage, Apple, eBay, AT&T and others. Apparently, suing one by one was too much trouble, because Klausner has now sued another bunch of companies including Google, Verizon and Embarq. Of course, the company is playing up the fact that all those other companies it sued settled, but we've seen that game before. There's not much new here as this scenario is all too common. We have a company with an overly broad patent on a concept that was a natural obvious progression of the art, suing pretty much every company that actually innovates, thus making actual innovation more expensive.

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When All Else Fails, Sue For Patent Infringement

from the this-again? dept

We've seen it all too often over the years. After a technology company has failed to get anywhere in the market with its products, it decides to sue everyone possible for patent infringement. As has been said: Those who can, innovate. Those who can't, litigate. The latest to join the bunch is a failed multimedia device company, e.Digital, who is suing a ton of companies, claiming to hold a patent on using removable flash drives in portable devices. Seriously. It's already sued Casio, LG Electronics, Olympus, Samsung, Sanyo, Vivitar, Avid and Nikon (all in Texas, of course) and says that's just the beginning.

The patents in question are as follows:

• US5491774: Handheld record and playback device with flash memory
• US5742737: Method for recording voice messages on flash memory in a hand held recorder
• US5787445: Operating system including improved file management for use in devices utilizing flash memory as main memory
• US5839108: Flash memory file system in a handheld record and playback device
• US5842170: Method for editing in hand held recorder

To think that others weren't thinking about removable solid state storage on devices seems rather ludicrous. The real innovation in the space may have been the creation of flash memory, but to claim that using removable flash memory is an innovation worth limiting with patents just doesn't make any sense. But, once again, this shows how the patent system is being used for the exact opposite of what it's supposed to do. The company that failed in the marketplace gets to hold up those who are succeeding because they made a better product.

For additional irony, by the way, it should be remember that one of e.Digital's failed media devices looked almost identical to the iPod, and was named the "Treo 10" -- quite similar to the Treo mobile phone device. I would think that charges of "copying" would apply a lot more to that device than anyone using the fairly obvious idea of using removable flash storage in a mobile device.

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Supreme Court Says Patent Holders Can't Shake Down Entire Supply Chain

from the big-win dept

The Supreme Court continues to bring a bit of common sense back to the patent system. While most of the tech world was sitting around paying attention to whatever Steve Jobs has to say this morning, the really big news in the tech industry may be the Supreme Court's decision that patent holders can't shake down the entire supply chain, by forcing each level of the supply chain to also license the patent (even if they bought a product from someone who had licensed the patent).

This the LG v. Quanta case that the Supreme Court agreed to hear last fall. Basically, LG had some patents that it licensed to Intel. Intel then sold products based on those patents, which its customers used to build other products. LG demanded license fees from those customers as well, even though they bought fully licensed products from Intel. LG insisted that since its contract with Intel said that the license didn't cover any additional products, then the patents had to be relicensed by each player down the supply chain. To some extent, this question of "patent exhaustion" is similar to questions about first sale doctrine when it comes to copyright, in determining if you have a right to actually resell a product that was legally purchased. And, thankfully, the Supreme Court agrees that patent exhaustion is an important concept.

This is yet another very important limitation on patent holders, preventing them from stifling innovation at every step of the product process, and double-, triple- and quadruple-dipping off a product based on a single use of their patented invention. Hopefully this will lead to the quick dismissal of a bunch of cases that were filed last fall against a ton of companies up and down various supply chains. A lot of patent hoarders, fearing this exact decision, tried to just sue everyone at once, hoping for quick settlements before the Supreme Court stepped in. It's great to see the Supreme Court taking such an active interest in rolling back massive abuses of the patent system. Update: The EFF has a good take on the ruling, noting some of the holes in it, suggesting that it's unfortunate the the Supreme Court wasn't as clear as it could/should have been.

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Columbia Professor Latest To Go On The Patent Offensive

from the very-offensive dept

Over the last year or so, we've seen two disturbing trends in enforcing patents. The first, is seeing patent holders suing a bunch of companies at once rather than just one or two, as used to be standard. They do this because they fear that some type of patent reform is coming, either via Congress or the courts. So they want to get as many patent suits in as quickly as possible. The second trend is that, rather than taking patent infringement cases through the court system (which is bound by the recent precedents set by the Supreme Court that loosen patent rules), they use a loophole: taking patent infringement claims to the US International Trade Commission (ITC). The ITC has the authority, if it believes that infringement occurs, to block the import of infringing goods. The ITC doesn't need to pay attention to what the courts say, and doesn't need to wait for the USPTO to review a patent. It can simply decide infringement occurred and ban the import of the goods. This is, effectively, the equivalent of an injunction against the product (just the sort of thing the Supreme Court said should be used more cautiously).

A Columbia professor has now picked up on both of these trends, getting the ITC to investigate 30 companies for violating her patents on LED and laser technologies. Among the companies investigated: Sony, LG Electronics, Hitachi, Toshiba, Panasonic, Motorola, Nokia, Pioneer, and Samsung. Whether or not these patents turn out to be valid, it's a cheap tactic to use the ITC rather than going to the courts to fight this battle.

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Supreme Court Sounds Skeptical About Suing Up And Down The Supply Chain For Patent Infringement

from the fingers-crossed dept

Last fall, we mentioned that the Supreme Court had agreed to hear yet another interesting patent case, looking at whether companies could sue up and down the supply chain for patent infringement. If you're familiar with the concept of the "first sale doctrine" in copyright law, this case looks at whether or not the same concept applies to patents as well. Basically, if Company A legitimately licenses a patent from Company B and then sells a product based on that product to Company C, who turns around and resells it (perhaps as a component of a larger product), can Company B sue Company C for patent infringement? Or, did Company B "exhaust" the right to control Company A's products once it licensed the patent? That's what happened in the case. LG licensed a patent to Intel, who used the patent to make some chips. Intel turned around and sold those chips to computer makers, such as Quanta, who put them in laptops, which they then sold. LG claims that all those laptop makers also need to license the patents, even though they bought the chips from someone who had already licensed them. Basically, it's LG trying to get paid multiple times for the same patent.

On Wednesday, the Supreme Court actually heard the case, and most of the mainstream press coverage suggests that the Justices were extremely skeptical of LG's position, though others note that Supreme Court Justice tea leaves aren't so easy to read. It does sound like the Justices did focus in on the key issues, though, and were concerned about the absurdity of a situation where a company is still controlling the sale of a product after it's been sold. While we wait for a decision, expect to see a few more patent hoarders try to rush through infringement lawsuits where they sue up and down the supply chain. In the meantime, we're still curious to know why Yahoo sided with LG, while most tech firms sided with Quanta on the other side.

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Things To Like And Dislike In The Plan To Build Netflix Directly Into Your TV

from the good-for-netflix,-but-for-everyone-else? dept

Various authorized movie download sites have been flopping lately due to various reasons -- but one of the big ones is the continued difficulty in actually being able to watch the downloaded movies on your television. In many cases, part of the problem is the DRM that many movie download sites use, but an even more fundamental problem is that there still isn't a decent link between most household computers and household televisions. Apparently, Netflix is trying to solve this. Late Wednesday, the company announced plans to get various consumer electronics firms, starting with LG, to build technology directly into TVs or other set-top boxes that will allow Netflix subscribers to download and watch movies directly on the TV. Netflix had considered building its own branded set-top boxes, but wisely reconsidered. Given the proliferation of set-top boxes, and the dismal failure of other companies that have tried to go that route, it makes sense to get consumer electronics makers to build the tech directly into their own offerings.

Initially, from Netflix's perspective, this plan makes a lot of sense. It's already been experimenting with streaming movies to subscribers on their computers (at no extra cost) for about a year. Netflix also has the name recognition and clout to get consumer electronics firms to go along with this plan (and it wouldn't be surprising to see a few other CE companies fall into line quickly behind LG). However, that doesn't mean this is the best result for consumers (or even for Netflix in the long run). By building in a proprietary solution that effectively only works with Netflix, buyers won't have much of a choice. They won't be able to compare other movie streaming/downloading services via their TVs and will have to effectively make a choice and stick with it for the life of their TV. What would have been a lot more interesting and better for everyone (perhaps other than Netflix) would have been for the CE companies to agree to a standard by which various movie distribution firms could have streamed movies directly to TVs, and then allowed those companies to offer competing services. I don't want to buy a DVD player that only plays movies from Netflix, so why should my TV only play streaming videos from Netflix?

While it may initially seem like a win for Netflix to lock out the competition this way, that may not be the case. If Blockbuster is smart (a big "if") it's currently running around trying to get CE companies to align with it, instead. Then we have another standards battle situation, where people decide not to buy any such solution until everyone agrees to play nice (witness the HD DVD standards battle that has greatly slowed the growth in next generation DVDs). If there were a standard that others could plug into, then it would encourage more people to upgrade. However, if the competition is between a "Netflix" device and some other device, it may make people wait to see how the market really shakes out.

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Why Is Yahoo Siding With Patent Hoarders?

from the something-yahoo-wants-to-share-with-us? dept

Back in September, we noted that the Supreme Court was going to hear a rather important case concerning patents, determining whether or not it's possible for a patent holder to "double dip" and get license fees up and down the supply chain. The anonymous Patent Troll Tracker alerts us to the fact that a ton of organizations and companies have now filed amicus briefs in support of one side or the other (or neither, in a few cases). While the Troll Tracker's post focuses on the fact that most of the briefs filed in support of LG's position appear to come from patent hoarding firms (and their attorneys), at the end he does mention in passing that Yahoo! sided with LG as well. While he doesn't name them, the Troll Tracker notes that most of the firms filing against LG's position come from the tech industry. This is the usual breakdown. Companies that rely on patents to make a living tend to want stronger patents (no surprise there). Companies that tend to focus on business models that don't require intellectual monopolies tend to favor weaker patent laws. That said, it seems quite odd that Yahoo! falls in with the former, rather than the latter. While it has been involved with some patent lawsuits (most notably, the dispute with Google over paid search patents), Yahoo tends to be more focused on providing useful services rather than focusing on its patent portfolio. Hopefully, this isn't a sign of things to come. We've certainly seen other formerly successful companies turn to patent lawsuits after they failed in the marketplace. Perhaps Yahoo is signaling to the world where its future lies.

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Yes, Calling A Phone The Black Cherry May Confuse People Into Thinking It's Related To The BlackBerry

from the no-argument-here dept

While we're often quite critical of frivolous trademark lawsuits that are clearly designed to to shut someone up or to try to squeeze money out of someone, there are times when trademark lawsuits are quite well justified. As we've said repeatedly, the real purpose of trademark law isn't about "intellectual property" at all -- but rather, it should be viewed as a consumer protection law. That is, it's really designed to keep Bob's Cola from packaging its bottles up so that people are tricked into thinking they're buying Coca Cola. So, with that in mind, it would seem that RIM has a pretty strong trademark case against handset maker LG, who has been trying to sell new phones with names like Black Label, Strawberry and Black Cherry. The "Black Label" one is more borderline -- as it's hard to see that RIM should be able to control the use of the word "Black" as it relates to any mobile device. However, it's not hard to see people hearing names like Strawberry and Black Cherry on a mobile device and simply assuming that they're somehow related to RIM's BlackBerry. Even worse, LG had apparently wanted to call one of its new devices the BlackPearl -- which is really sketchy, seeing as RIM is offering a device called the BlackBerry Pearl. On this one, we'd say that even the moron in a hurry test suggests that people would be confused into thinking that some of these LG phones were from RIM.

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