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.

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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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The Meaningless WiMax Patent Pool

from the somebody's-missing.... dept

There are some folks who believe that the solution to patent problems is to just have everyone who claims to have a patent on a certain technology throw it into a "patent pool" and then those who use the technology pay up a fee that gets divided up among pool members. It sounds nice, but in practice, it almost never works. Setting up a patent pool actually encourages the wrong behavior: it encourages plenty of other patent holders to claim they deserve to be a part of the pool, and if they're not included, they start suing like crazy. Also, it encourages companies to try to get any kind of patent that might get them included in a pool, leading to all sorts of crazy claims. It's the exact opposite of the type of behavior that should be encouraged.

So, don't read too much into the fact that a bunch of companies in the WiMax space have agreed to put together a patent pool under the amusingly inaccurately named "Open Patent Alliance." The companies involved, Cisco, Intel, Samsung, Sprint, Alcatel-Lucent, and Clearwire are all betting big on WiMax deployments, so they know it's in their best interest to get the licensing out of the way. But you'll notice that there are a lot of companies missing -- including Wi-LAN who has been claiming that it owns all the key patents over WiMax technology for years. The patent pool sounds nice, but it's certainly not going to diminish the number of patent lawsuits that arise over WiMax technology. If anything, it's just going to make all those other companies even angrier.

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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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Smartphones Patented... Just About Everyone Sued 1 Minute After Patent Issued

from the wasting-no-time dept

This past Tuesday, the US Patent and Trademark Office issued a patent on "a mobile entertainment and communication device." Reading the patent, you realize it describes the quite common smartphone. It's a patent for a mobile phone with removable storage, an internet connection, a camera and the ability to download audio or video files. The patent holding firm who has the rights to this patent wasted no time at all. At 12:01am Tuesday morning, it filed three separate lawsuits against just about everyone you can think of, including Apple, Nokia, RIM, Sprint, AT&T, HP, Motorola, Helio, HTC, Sony Ericsson, UTStarcomm, Samsung and a bunch of others. Amusingly, the company actually first filed the lawsuits on Monday, but realized it was jumping the gun and pulled them, only to refile just past the stroke of midnight.

As the link above explains, the patent itself is based on a bunch of continuation filings, which are commonly used by patent holders who want broad patents to cover the latest technologies well after they've already come about in the market. It would seem like the concept itself, merely combining a bunch of things that people were already talking about, should never have been granted based on the Supreme Court's recent KSR ruling that merely combining existing concepts doesn't deserve a patent. Also, as noted in the comments to the link above, it would appear that there's a fair amount of prior art. In fact, Apple even sent over some prior art concerning the patent just before it was originally supposed to be issued last summer -- but somehow patent holder's lawyers talked their way around it. In the meantime, it looks like we've got yet another case of an overly broad and obvious patent being used against a huge number of firms. I'm sure that's exactly what Thomas Jefferson expected when he created our patent system.

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Competitors Response To The iPhone? Can We Talk About Something Else Please!

from the oooh,-look-over-there! dept

Back on June 29th, when the iPhone launched, we had some of the experts in the Techdirt Insight Community give their thoughts on how competitors should respond. There were, as per usual with the experts in the community, some really insightful and interesting responses. From that, we've been able to sign new business helping companies formulate and execute on their latest strategies. However, it seems that not everyone is taking a proactive approach to responding to the iPhone (or, at least they're not willing to admit it publicly). Gizmodo points us to an unintentionally amusing article where Laptop Magazine tried to get four competitors to give their thoughts on the iPhone. Rather than admitting that the iPhone has really shifted how many people view mobile phones and what they can do, all of the companies basically toe the corporate line, look the other way on iPhone questions and make sure to mention their own phones as many times as possible. Given the market response, however, it seems pretty clear that Apple is delivering what the market wanted, while these other guys have not. Insisting that you do have what it takes when the market is shifting elsewhere isn't going to be a winning strategy. Of course, we're here to help. If companies want to formulate a real strategic response to the iPhone, they might want to give us a call.

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Did The Chip Market Flip Around In One Week?

from the flip-chip dept

Just a week ago, there were reports that big PC makers were likely to benefit from low component costs, at least in the short term. But even something as simple as current or recent prices of chips can be difficult for analysts to get a handle on. Now a Wall Street analyst is calling for an upswing in component prices, particularly flash memory chips and LCD panels. Meanwhile, Samsung has also announced that it's seeing a strong pricing environment for its NAND and DRAM chips. While these conflicting reports demonstrate how hard it is to get a handle on the market, the deeper point is that any trend is likely to reverse itself rapidly, as no party will enjoy strong pricing or cheap pricing very long without things balancing out.

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