Tag Archives: patent infringement

“Triumph” book reexamines the case that launched 10,000 patent suits

Polaroid v. Kodak, concluded in 1991 after 15 years, was the first “billion dollar” patent damages award ($909 million).  Until this year, it was the largest satisfied judgment in a patent case awarded by a U.S. court. In current value the award would be almost $2 billion.

You could say that it was the case that launched 10,000 patent suits, many by non-practicing entities.

51YbbsBE48L._SX331_BO1,204,203,200_The Polaroid dispute involved patents covering instant photography, which at the time was among the most valuable technologies. But as one observer pointed out, by the end of the long dispute, the Polaroid-Kodak battle was “little more than two aging giants dueling on the decks of the Titanic.” Digital photography would soon eclipse instant photography, and both litigants were on the road to insolvency.

My review of A Triumph of Genius: Edwin Land, Polaroid, and the Kodak Patent War, by Ronald K. Fierstein, a former Fish & Neave attorney, describes it as a timely book, deftly written and useful to anyone affected by IP rights or who invests in technology.

Triumph is about an infamous case, a bold inventor and two innovative companies that lost their mojo at the apex of their popularity.

My review appears in IP Watchdog. Please click here to read it.

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Image source: amazon.com

Family App Developer Says it’s the Victim of a Patent “Troll” — Research Indicates Otherwise

When it comes to invention rights (patents) it is often difficult to determine who is a victim and who is merely promoting its agenda.

Life360, which markets the world’s largest family tracking app, says it is being unfairly targeted by what it calls a patent troll, Advanced Ground Information Systems Inc.(AGIS).  SF-based Life360, which has raised $50 million from security giant ADT, says it wasting its capital on defending itself from AGIS, a company that makes tracking equipment and software for the military and first responders. But that is only part of the story.

In a video interview  last week on Bloomberg News, Life360 CEO Chris Hulls, a former Goldman Sachs banker who spent time in the U.S. Air Force, said that “We believe it to be meritless suit from a troll. Life360 is helping people. Our product is one that saves lives, and its ridiculous that we have to defend ourselves in court.”

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In a letter from Life360 to AGIS, Hulls wrote: “Dear Piece of S***, We are in the process of retaining counsel and investigating this matter… I will pray that karma is real and that you are its worthy recipient.”

In the patent world holders and their patents are not always as good or bad, or right or wrong, as they might appear. The “bad” guys in licensing are sometimes bottom-feeders looking for a quick payout given the high price of litigation, but, more often than not, they are legitimate holders of valid patents that are being used without authorization. Infringers sometimes invent four of five-letter words terms for those who expect to be paid for their inventions. Thus, it may be opportune for a a business edit the story to suit its needs. This appears to be the case with Life360.

The Court of Public Opinion currently is a more powerful ally to a patent infringer than it is to a small holder whose rights have been violated. Patent infringement is not a victimless crime. Unfortunately, it is not always clear who the real victim is.

Inventor-owned Patents

Envision IP, a law firm which focuses on patent research, says that it is unlikely that AGIS is a “troll.”

“The four patents it asserted against Life360 list AGIS as the original assignee – so these patents were not purchased or acquired by the company,” said Maulin Shah, Managing Attorney. “The suit is filed in the Southern District of Florida, apparently in AGIS’s backyard, and does not appear to have pursued an
explicitly patent-friendly jurisdiction like Texas, Delaware of the Eastern District of Virginia.” (The suit lists Jupiter, FL the company’s address.)

Envision IP, which conducts invalidity studies, says that the complaint against Life360 is the only patent infringement lawsuit currently filed by AGIS, and it has not asserted its patents against any other companies. (Life360 is one of 25 defendants sued by an NPE called Remote Locater Systems LLC.) Also, AGIS appears to be an active operating company that has been filing annual reports since 2004. “It does not seem that the entity was formed as a shell used solely for patent licensing/enforcement purposes,” says patent attorney Shah.

Additionally, AGIS is represented by Kenyon & Kenyon, a highly respected law firm known for defending large operating companies, like Bosch and Siemens. Kenyon represents precious few if any plaintiffs, and it is highly unlikely that it would agree to represent AGIS if the case were truly meritless. But, then, you never know.

Life360 to the Defense

Life360 Inc. said last week that it will provide legal support for other small companies sued by Advanced Ground Information Systems Inc. So far, according to Envision IP, it does not appear that any logohave. Jupiter, Florida-based AGIS sued Life360 in federal court in West Palm Beach, Florida, in May 2014, accusing the California company of infringing four patents related to mobile-phone communication.

In a Feb. 3 statement, Life360 said that in addition to assisting others who are accused of infringing the disputed patents, it has filed a countersuit (click on View Complaint) in federal court in San Jose, California, accusing AGIS of marking all of its products with its patents regardless of whether the patent contains a claim covering the product. Life360 is represented by the Bergeson, LLP, a Silicon Valley law firm, in that matter. It is unclear who is representing it in defending against the patent suit.

According to PandoDaily six-year old Life360 has now raised a total of $76 million from more than a dozen investors that include Duchossois Capital Partners, BMW i Ventures, Facebook, Google, Expansion Venture Capital, DCM, and Bessemer Venture Partners.

Potential for an Injunction

Perhaps Life360’s greatest fear – and hence its high-profile defense – is that if AGIS can show that it is an operating company, and one that supports the military and first responders,  it can potentially use an injunction to stop Life360 from selling its app, effectively shutting the company down. Much of this could be saber-rattling to enhance the parties’ respective negotiating position. But for Life360 its defense in the AGIS suit may indeed be a bet-the-company-matter.

According to the complaint (page 3), AGIS’s founder, Malcolm Beyer Jr, who is named as an inventor on the asserted patents, is a former Marine, and graduate of the US Naval Academy. He developed AGIS’ patented technology “shortly after September 11, 2001.” The commercial product based on the patents is called LifeRing. (The page explains the product features and provides a market comparison.) 

Whatever the outcome, going public with a “damn-the-troll” defense, as Life360 has, is looking old and worn, even if it can still sometimes work. Allegations like those are outside the merits of the case, and from the preliminary research, will be difficult to prove.

Image source: agisinc.com; articleonepartners.com

When NPR Attacks Patents: Stories are Long on Drama, Short on Truth

“When Patents Attack… Part II!” revisits old ground about bad IP actors by relying on half-truths and high drama.

“This American Life,” an entertaining weekly NPR news feature, cannot resist using ill-defined “trolls” as a basis to attack the patent system. A more accurate title might be “This American Knife: When Public Radio Attacks Patents!”

Back in July of 2011 “This American Life” (TAL) spent an hour vilifying patent holders who do not practice their inventions, and attempting to convince listeners that they had uncovered a third-party IP monetization scheme that is destroying innovation. The story was largely focused on Intellectual Ventures, the largest patent buyer. “When Patents Attack!” relies on half-truths, questionable sources and a lot theatrics, which makes for good radio, but shoddy journalism.

On May 31 TAL broadcasted When Patents Attack…, Part Two! This time around, the host, Ira Glass, said, TAL’s reporters were urged on by the logo-v5challenge to complete the difficult investigation they had begun two years earlier. Sadly, this piece is should be required listening, like the previous one, especially for those who want to better understand how patent misinformation gets spread around.

The dramatic conclusion to Laura and Alex’s search for information about Intellectual Ventures, and the inventor they claimed they were helping, Chris Crawford. The story turns out to be different from the one Intellectual Ventures originally told.

Separating the Real Story from the Drama

I would rather not go toe-to-toe refuting each claim in the story. However, I will say that presenting facts and partial-facts with insufficient context is extremely damaging to establishing the truth about the real story: patent theft in the U.S.

If you cannot listen to the entire broadcast, please at least catch to the last five minutes. At approximately 50:30 (you can use the play bar to go right there) there is a statement delivered at the Electronic Frontier Foundation meeting in San Francisco by a young medical device inventor who is moved to tears, literally, because he believes that the big bad trolls are inevitably going to destroy his hard work establishing a potentially life-saving invention.

The young inventor explains how he looked up some patents in the heart device area he was working in, saw how many inventions there are and how broadly they are defined and precisely their claims are worded, and determined that he was doomed from the start. Since he believed that he had no chance he refused to develop his brilliant idea and allowed his hard work to be taken away [presumably by trolls, as opposed to medical device manufacturers].

“When Patent Attack…, Part Two!” may be more scurrilous and insulting than Part One. The U.S. Patent and Trademark Office, while far from perfect, has done a generally good job of identifying and codifying inventions. Due to the USPTO’s lack of resources, in relatively rare instances given the millions of issued patents, it is sometimes necessary for the courts to decide what is novel and unobvious, who is an infringer, and how much must be paid in damages. This system may be inefficient, and benefit some businesses more than others, but it is generally fair, even if the enforcer is not practicing an invention or selling products.

Occasionally, it is necessary for the courts to determine what is valid or infringed, but typically it is left to posterity to determine what is “truly” innovative. This TAL story implies that innovation can be readily identified and classified, belittling those inventions that do not fit its definition.

“Too Many” Patents

The patent attorney introduced in Part Two who claims that there are “too many patents” confuses the issue. (Are there too many parcels or real estate? Perhaps he means that they are too easily granted?) Who is in the position to judge that the owner of an invention that meets the appropriate tests of patentability should not receive one because it lacks sufficient meaning? “When Patents Attack, Parts I and II” plays directly into the hands of businesses that would benefit from a weaker patent system with fewer patents that can potentially be used to undermine their leadership. The exclusivity afforded to patents can provide inventors, SMEs, and in some cases investors, the leverage to challenge traditions and provide the kind of positive destruction that stimulates competition and creates jobs. Heck, Apple, Microsoft, Disney, Google, H-P, Xerox and Amazon all were founded in garages or dorm rooms. America needs to encourage other companies to follow in their footsteps.

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“When Patents Attack, Parts I and II” does little to enlighten listeners about how the patent system really works. It does, however, make it easier for companies to justify practicing others’ inventions, while laughing all the way to the bank. God bless (this) American life.

Image source: thisamericanlife.org

Bill Introduced to Criminalize Purchase of Counterfeits in NYC

Legislation would make NY the first U.S. city to prosecute buyers of fake goods with jail terms of up to one year.

The New York City Council has introduced a bill to make the purchase of counterfeit goods a crime punishable by a fine of up to $1,000 and as much as a year in jail, which would make buying a fake Rolex watch a Class A misdemeanor.

The most stringent punishments would be applicable to people who buy in bulk, often to resell to friends back home, said NYC Councilwoman Margaret Chin, who introduced the legislation. In those particular situations it is difficult to argue that buyers merely got lost on the way to purchase authentic products. Chin’s district, which is comprised of lower Manhattan includes Chinatown, as well as flagship stores for Gucci, Prada, Louis Vuitton, Rolex and other luxury brands.

Golden Rule 

Teaching respect for others’ intellectual property should be the Golden Rule of the digital age. It does not matter if the property is intangible, like copyrights on recordings, or patents that cover inventions, ideas and creative output are not there for the taking. Real estate lines are clear cut; not so with the rights to intangible assets. Some consumers may require help understanding how brands work and the importance of upholding a trademark, but many would rather remain uninformed.

luxury_brandsPeople can be taught the importance of respect for other people’s’ property not only because IP theft violates the law, but because it has serious implications for American jobs and businesses. When items such as pharmaceuticals and air plane parts can be counterfeited, there can be life-threatening consequences, too. 

The speed and accessibility of information makes it feel as if everything is within the tap of a smart phone or click of a mouse. But because images and content (and inventions) are easier to access does not mean that they are up for grabs. Lines of demarcation need to be more clearly delineated and consistently enforced.

A hefty fine or jail term for buying counterfeit goods may seem harsh, but that’s only because we’ve gotten used to accepting IP crimes as business as usual. Many believe that IP is a basic right, like air and water. It is not. Just as a “John” enables prostitution, in the eyes of the law and is in part responsible for it and criminally liable.  Similarly, those who buy counterfeit goods must be held accountable for their actions. Pleading ignorance is a sorry excuse. Parents, schools, and law enforcement agencies, need to do a better job of educating audiences about IP rights.

IP Theft is a Serious Problem

It is difficult to determine whether or not consumers who buy products from companies that violate other business’ patents are breaking the law. The fact remains that invention theft by technology companies is rampant. If more consumers were aware of the problem and its impact, they may care enough to do the right thing and encourage others to. (Awareness of child labor in developing nations has changed attitudes if not consumer preferences.) Consumers, not just the courts, are responsible for reinforcing good business  behavior.

Trademark, copyright and trade secrets are all protected to some extent under criminal law. If the counterfeit legislation is voted in, those who participate in brand or trademark counterfeits in NY will be subject to much harsher treatment than in the past. Patent violators escape criminal penalties, in part because infringement can be unintentional and wilfulness very difficult to prove. It will be interesting to see under what conditions criminal penalties for patent violators will become viable.

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Councilwoman Chin said at a public hearing that counterfeits deprive the city of at least $1 billion in tax revenue annually that could otherwise support community improvements. The Democratic lawmaker expects a vote sometime in the coming months.

France already has the toughest counterfeit law.In France, everyone seems to know that buying or carrying fakes is a crime,” says Valerie rolex-watchesSalembier, a former publisher of Harper’s Bazaar magazine who planned to testify at the NYC Council hearing. She runs the nonprofit Authentics Foundation dedicated to consumer education of the counterfeit industry. Air France warns tourists to stay away from fake goods, because anyone in the country risks fines of up to 300,000 euros’ (more than $478,000 USD), and up to three years in prison for the mere possession of a counterfeit item.

‘‘It’s why they don’t have a big problem with counterfeits in France,” Salembier says.

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“Protecting the trademark of manufacturers is in the city’s interest and the country’s interest, otherwise people wouldn’t come here and sell things and create things,” Mayor Michael Bloomberg told reporters during an appearance in the Bronx.

Image source: counterfeitchic.com; beingdutchinasia.com; http://ryklim.wordpress.com/ 

Dilbert: “I think we can win this patent infringement”

Beating Big Technology with a Good Attitude

Scott Adams’ Dilbert is one unique comic strip. In it Adams regularly regards innovation, technology, and (mis)management, and is not afraid to occasionally take on IP rights, especially, patents.

First published in 1989, Dilbert is known for its satirical office humor about a white-collar, micro managed office featuring the engineer Dilbert as the title character.

The strip has spawned several books, an animated television series, a computer game, hundreds of Dilbert-themed merchandise items and numerous awards.

Dilbert appears in 2000 newspapers worldwide in 65 countries and 25 languages.

Dilbert portrays corporate culture as Kafkaesque — a world of bureaucracy for its own sake in which office politics stand in the way of productivity, where employees’ skills and efforts are not rewarded, and busy work is praised.

From time to time IP CloseUp will draw from Adams’ droll IP insights.

©2011 Scott Adams, Inc., Dilbert.com

Patent Reform in the Senate

Bill Language “Little Improved”

Patent reform is back in the news and those who are watching developments say there have been few. The bill now before the U.S. Senate is still riddled with problems and, if passed, they say will weaken capital investment, innovation and U.S. competiveness.

Former Apple, National Semi and Medtronic chief IP counsel, and former USPTO examiner, Irv Rappaport weighs in on the latest developments.  

Dear Colleagues, 

Patent Reform for the Gang of 15 (and the rest of America’s companies be damned) has reared its ugly head again yesterday, March 4, 2010.  It is more important than ever that you let your Congressman and Senators know your views on this “Patent Deform” legislation as I like to refer to it.

Attached [below linked] are several items discussing the “improved” language being worked in the Senate. Below also is a highlighted summary of the major “improvements,” as they are being called.  As you can see, not much has changed other than some minor wording.  None of this deals with the problem that if passed, the USPTO will bury patents because they will be more overwhelmed with work than ever with the post-grant opposition proceedings. The ever-present apportionment of damages favorite issue of the patent infringement community persists.

Best regards,

Irv
Irving S. Rappaport, Esq., CLP

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Outside Perspective

Patents: Use Them or Lose Them

Russell L. Parr, President of Intellectual Property Research Associates, Inc. (IPRA), is at the top tier of the IP valuation field. In addition to English, his eight books are published in Japanese, Korean, Italian, Chinese, Romanian and Russian. They are a pleasure to read for their insight and clarity. Russell has served and as an expert witness on more than 50 occasions, opining on everything from patents to content. IP INSIDER is honored to have Russell contribute its first Outside Perspective piece, “Patents: Use Them or Lose Them.”

Patent infringement damages just got much more interesting. It turns out that if you don’t optimize the implementation of your intellectual property you might just lose it. A recent decision in Arizona District Court regarding Bard Peripheral Vascular, Inc. v. W. L. Gore Inc. (No. CV-03-0597-PHX-MHM) denied Bard a permanent injunction because Gore made a better product using Bard’s patented technology than Bard.

Bard argued that Gore sells two types of infringing products. The first group are products for which Bard sells an alternative, nearly identical counterpart. These products are referred to as “Counterpart Products.” The Counterpart Products include PROPATEN grafts, INTERING grafts, cardiovascular patches, and other variations of those grafts and patches. The second group of products is made up of items for which Bard does not currently offer an alternative in the marketplace. These are referred to as “Non-Counterpart Products.” The Non-Counterpart Products include Gore’s VIABAHN stent-grafts, EXCLUDER stent-grafts, TAG stent-grafts, VIATORR stent-grafts, ACUSEAL patches, as well as other products.

Bard asked the Court to permanently enjoin Gore from making and selling the Counterpart Products, the Non-Counterpart Products, and from any further development of infringing products, including products for which it lacks or is presently seeking FDA approval. The Court heard testimony from surgeons telling about the superiority of Gore’s implementation of Bard’s patented technology. As a result, the Court decided not to enjoin Gore.

Bard was awarded lost profits for the Counterpart Products made and sold by Gore and also received a royalty on sales of the Non-Counterpart Products. What now remains to be decided is how Gore will compensate Bard for future use of Bard’s no longer exclusive patent rights. The parties will likely reach some agreement on the future royalties Gore will pay Bard for Non-Counterpart Products. The difficult question will be how to compensation Bard for Gore’s future sales of Counterpart Products, where Bard will directly compete. Bard will lose future sales and future incremental profits. A typical royalty rate will not be sufficient to compensate Bard for future lost incremental profits. Currently, a Plaintiff may win a patent infringement case but lose exclusive use of its own patented technology.


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