Patent Battles Focusing On Third Parties To Push For Settlements

from the trying-to-force-a-settlement dept

Two recent patent battle lawsuits made news this week, and both highlighted one troubling aspect of patent lawsuits: patent holders trying to damage others beyond the company that infringed. Now, before the patent system defenders rush to post angry comments, this is not a new thing. It's been quite common for a while. Nor is it surprising. If you were a patent attorney representing one of these patent holders, you'd probably do the same thing: going after third parties is probably a good strategy to force the other company to settle. However, it does highlight how patent law is used in ways that clearly are outside of its intended purpose. That is, it's being used to punish plenty of innocent third parties by removing innovation from their grasps, rather than encouraging innovation.

The first case involves a patent lawsuit concerning Microsoft's Visual Studio. WebXchange claims it has patents that Visual Studio violates -- but rather than suing Microsoft, WebXchange sued three Microsoft customers, claiming that by using the software, they were violating the patent. This is clearly an attempt to scare Microsoft into settling, out of a fear that other customers won't use Visual Studio to avoid getting sued by WebXchange. Microsoft is fighting back, asking a judge to declare the patents invalid, but in the meantime, WebXchange has been able to drag Microsoft's customers into a patent battle, putting extra pressure on Microsoft to settle.

The second case involves Spansion suing Samsung for patent infringement concerning Samsung's memory chips. In this case, Spansion isn't just going after Samsung, but demanding an injunction that would block US sales of a variety of popular gadgets that use Samsung's memory chips -- including iPods and Blackberries. Once again, while it's unlikely that a court would order such a block, by dragging other companies such as Apple and RIM into the mess, Spansion is abusing the patent system's threat of an injunction to put extra pressure on Samsung to settle.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Ima Fish, Nov 18th, 2008 @ 12:37pm

    It's only a matter of time before patent trolls start suing companies that are not using or violating patents, under the theory of tortuous avoidance of a patented process.

    Let's assume that Patent Troll has Patent-A which covers process X. Let's also assume that ABC Inc's business in no way relates to process X. So of course ABC Inc. avoids any situation wherein it needs to license Patent-A.

    However, ABC Inc should not get off scott-free. Patent Troll's livelihood depends on corporations licensing its patents. By refusing to pay the license it is tortuously interfering with the troll's business model. I.e., getting money for doing nothing.

    I think the patent realm needs a mandatory licensing structure similar to copyrights so companies cannot get a free ride by avoiding paying license fees for processes they have no use for.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    angry dude, Nov 18th, 2008 @ 1:10pm

    freaking techdirt lemming punks

    there are no patent trolls

    One more time: THERE ARE NO PATENT TROLLS

    Get it now, idiots ?

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Anonymous Coward, Nov 18th, 2008 @ 1:23pm

    Re: freaking techdirt lemming punks

    Maybe not, but you have proven beyond all doubt that there are internet trolls.

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Dustin, Nov 18th, 2008 @ 1:25pm

    "rather than suing Microsoft, WebXchange sued three Microsoft customers, claiming that by using the software, they were violating the patent."
    VS
    there are no patent trolls
    One more time: THERE ARE NO PATENT TROLLS
    Get it now, idiots ?
    Remind us again, who's the idiot? Or don't you think maliciously suing third-party customers, who haven't developed or infringed any patents, on the theory it will extort money out of your true target by damaging their bottom-line is "troll" material?

     

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  5.  
    identicon
    angry dude, Nov 18th, 2008 @ 1:53pm

    Re:

    "Remind us again, who's the idiot?

    With all due respect, YOU ARE

    "Or don't you think maliciously suing third-party customers, who haven't developed or infringed any patents, on the theory it will extort money out of your true target by damaging their bottom-line is "troll" material?"

    You infringe a patent by using patented invention, even if you bought it from Mshit
    The fact that is's easier to go after consumers than MShit itself is the unfortunate business reality today for all of the small patent holders

    Now get lost, punky

     

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  6.  
    identicon
    Willton, Nov 18th, 2008 @ 2:11pm

    Re:

    It's only a matter of time before patent trolls start suing companies that are not using or violating patents, under the theory of tortuous avoidance of a patented process.

    Interesting theory, but unless you can show me otherwise, it lacks a basis in law. I'm not sure if you're being serious, but I think you'd be hard pressed to find a court that would buy such a theory. What you or perhaps the trolls would call "tortuous avoidance" the courts would likely call "competition."

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    duane, Nov 18th, 2008 @ 2:13pm

    Re: Re:

    Ah, Mr. Dude, what would we do without your insightful commentary? In one sense you're right though.

    It is easier to go after consumers and in this one, very, limited, isolated, and otherwise, I hope to never see repeated instance, I applaud it. This is very similar to what Microsoft is always threatening to do about Linux.

    Their whole FUD campaign is based on this very premise. If you use Linux in your business, you're violating the patents Microsoft "has" and Microsoft will come after you...some day, maybe.

    I hope Microsoft enjoys the sickeningly sweet cherry taste that is their own medicine.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Willton, Nov 18th, 2008 @ 2:24pm

    Re:

    Remind us again, who's the idiot? Or don't you think maliciously suing third-party customers, who haven't developed or infringed any patents, on the theory it will extort money out of your true target by damaging their bottom-line is "troll" material?

    Actually, the "troll," or in this case WebXchange, may be the idiot. By not going after its true target (Microsoft), WebXchange allowed Microsoft to take control over the situation by filing a declaratory judgment ("DJ") action in a jurisdiction that's likely unfavorable to WebXchange.

    Microsoft and its customers can then attempt to get the courts to consolidate the cases in Microsoft's DJ action, as each case likely involves the same sets of facts as that of the DJ action. It may not work, but it's a good way for MS to please it's customers while sticking it to WebXchange.

     

    reply to this | link to this | view in thread ]

  9.  
    icon
    Woody (profile), Nov 18th, 2008 @ 2:31pm

    Where is Microsoft's indemnity clause?

    Did not Microsoft use the whole "get sued as a customer" against Linux users? Their claim was than Linux companies would not and could not afford to indemnify their customers. So where is Microsoft? Should they not be bearing the weight of these lawsuits against their customers as part of their indemnity clause?

     

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  10.  
    icon
    kirillian (profile), Nov 18th, 2008 @ 3:22pm

    Trolls

    I think we have a new troll! Angry Dude sounds a little different today. For all of you literary people out there, he has a different tone of voice.

    @ Woody - I think you've missed the whole point. Microsoft IS stepping up to the plate for its customers. The difference is that Microsoft is doing this in a manner that it can control and possibly win rather than just caving in to WebXchange and just dishing out some money to wash everything over.

     

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  11.  
    identicon
    Norm, Nov 18th, 2008 @ 3:35pm

    Re: freaking techdirt lemming punks

    [citation needed]

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Lawrence D'Oliveiro, Nov 18th, 2008 @ 4:40pm

    Re: angry dud

    angry dude foamed at the mouth:

    there are no patent trolls...

    Is this supposed to be apropos of something? The article never mentioned any "patent trolls".

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous, Nov 18th, 2008 @ 6:24pm

    Re: Re: freaking techdirt lemming punks

    That's terrible trolling. Not even funny. Asshole, yes, but an asshole on the Internet a troll does not make.

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Yep, Nov 18th, 2008 @ 6:54pm

    Moral of the Story

    So ... I should avoid the purchase, ownership and/or possession of anything which is patented, conains a patented component or maybe patented in the future.

    Guess that means I'll not be purchasing anything except water in a jug and stuff at the farmers market.

    Too bad, because the economy need people to spend their money.

     

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  15.  
    identicon
    dinnerbell, Nov 19th, 2008 @ 7:48am

    stop the shilling!!!

    Patents give one the right to exclude others from making, using, or selling the invention. Going after users is not therefore “outside of its intended purpose”. Before you write you should learn. As Confucius once said, “too little learning makes one a rustic”...and a poor reporter.

     

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  16.  
    identicon
    angry dude, Nov 19th, 2008 @ 10:11am

    Re: stop the shilling!!!

    Come on dude

    Mikey is an honest dude on CPF and BSA payroll

    His Corporate Masters must be happy about his performance

    Mikey should definitely ask for a raise

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    angry dude, Nov 19th, 2008 @ 10:15am

    Re: Trolls

    that's not voice, idiot

    Just a bunch of keystrokes in a shitty little window of Mikey's shitty inet blog

    taking coffee, beer or hard liquers can affect your typing

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    mxrss, Nov 20th, 2008 @ 11:25am

    Is angry dude high

    I read the patent basically what they are saying is that they invented a way to exchange data over the web using channels specifically they are saying that they "invented" a stack protocol to send data to and from third parties when dealing with financial transactions. There is no "inventiveness" to this patent as systems have existed for a long time to do similar things. Also the user base for thier idea and site seems to be 0, also angry dude yes there are people who invent stuff that is so broad spectrum with little or any plan to go to market. Or patent an idea that is so simple that it lacks any orginality, computer patents are hard, hopefully 2009 is year where they reorganize it to actually deal with patents that use computer systems.

    I think its funny the guy wants people who know .net.

    - Mike

     

    reply to this | link to this | view in thread ]


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