Techdirt. Stories filed under "settlements"

Techdirt. Stories filed under "settlements" Easily digestible tech news... http://www.techdirt.com/ en-us Techdirt. Stories filed under "settlements"http://www.techdirt.com/images/td-88x31.gifhttp://www.techdirt.com/ Fri, 25 Jan 2013 18:44:00 PST 'Defendant' In Prenda Law Case Reveals He Agreed To Take A Dive Mike Masnick http://www.techdirt.com/articles/20130125/15575421793/defendant-prenda-law-case-reveals-he-agreed-to-take-dive.shtml http://www.techdirt.com/articles/20130125/15575421793/defendant-prenda-law-case-reveals-he-agreed-to-take-dive.shtml latest tricks (or, rather, a whole bag of tricks) involving using shell companies (who appear to be controlled by Prenda itself, where the CEO may have been faked via identity fraud) to file cases against a single "named" defendant who settles quickly... but part of that "settlement" is that the "defendant" agrees to allow discovery of a long list of "co-conspirators." Prenda argues that those co-conspirators cannot fight back against discovery, because they're not "defendants." And, thus, Prenda gets a big list of names/contact info of more people to shake down.

As we noted, there was some suspicion that the "named" defendants and their lawyers were somehow in on the deal -- and the judge in at least one case flat out asked Prenda's John Steele, and the defendant's lawyer Adam Urbanczyk, if they "were in bed together" to come up with such a settlement. At the time, we pointed out that it was still a big leap to assume that, but now there's a bit more evidence. In one of these cases, involving the likely-Prenda-shell-company Guava, one of the named defendants, Spencer Merkel, has filed an incredible affidavit in which he admits that Prenda had offered him a "settlement" in which he would be "named" in a lawsuit and agree to cough up his BitTorrent log files. And Prenda provided him with the lawyer who would then represent him thousands of miles from his home.

Michael offered me a settlement deal. The deal consisted of the following parts:

a. I would agree to be sued.

b. Prenda would ask for, and I would provide, a copy of the bit-torrent log from my computer. The excuse for gathering this log is that it would corroborate the IP address evidence that they had already gathered through the use of Prenda's sottware.

c. Prenda would, upon receipt of the information, dismiss the case against me.

4. In discussion of the settlement, Michael stated that he did not know of any pro bono attorneys in Oregon, but could provide the name of an attorney who might take my case in Minnesota. Because I cannot afford to pay an attorney, I agreed to be sued in the state of Minnesota. I then retained my attorney, Trina Morrison, based on the information provided to me by Prenda Law.

Now, throughout all of this, he believed that Prenda was representing Hard Drive Productions, one of the porn companies that Prenda used to represent, but whose cases they dropped entirely not too long ago to focus solely on these questionable shell companies they claim to be "representing."

5. Before the start of this case, I had not heard of Guava LLC. I believed that I would be sued by Hard Drive Productions, Inc. I believe that Guava LLC's case against me is based on my admission to Michael that I downloaded the video at issue in the Hard Drive Productions case.

6. Before the case against me was filed, I had not heard of Alpha Law Firm. I believed that opposing counsel was Prenda Law.

7. Afier subpoenas were served in the case against me, I learned of Guava LLC's and Prenda Law's practice of finding one John Doc to be a named defendant, and then discovering the names of and requesting settlement money from other John Does by issuing subpoenas to ISPs.

Oh, and it gets worse. After all of this... Prenda went after him again, which seems to be why he's now willing to speak out about the "deal."

8. Last week, on 01/15/13, I was once again contacted by Prenda Law Firm. I received a voice mail from someone on behalf of Prenda Law stating that I needed to make payment arrangements or I would be sued.

At the very least this raises very serious questions about the conduct of Prenda Law and some of the lawyers who represented these named defendants. Given that Prenda is already dealing with serious questions in multiple courts about possible fraudulent activity, finding out that they may have effectively blackmailed a defendant into taking a dive, for the purpose of "agreeing" to discovery to find another batch of people to go after, can't look good.

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]]> incredible http://www.techdirt.com/comment_rss.php?sid=20130125/15575421793 Mon, 30 Jul 2012 11:09:51 PDT Yet Again, Netflix Class Action Shows That Class Action Lawsuits Are Mostly About Making Lawyers Rich Mike Masnick http://www.techdirt.com/articles/20120730/01264019871/yet-again-netflix-class-action-shows-that-class-action-lawsuits-are-mostly-about-making-lawyers-rich.shtml http://www.techdirt.com/articles/20120730/01264019871/yet-again-netflix-class-action-shows-that-class-action-lawsuits-are-mostly-about-making-lawyers-rich.shtml broken. It makes sense, in theory, that if a large group of people are wronged, they can team up to right that wrong—but in practice it has morphed into a system where a bunch of bottom-feeder lawyers sue just about any company at every opportunity... and then those lawyers end up taking the bulk of the money. The "class" (the people supposedly wronged) rarely get much, if any money at all. Of course, one of the first stories that clued me into all of this involved a settlement in a class action lawsuit against Netflix way back in 2005, in which the lawyers got $2.5 million... and everyone in the "class" just got their accounts upgraded for a month (and if you forgot to manually downgrade after that month was over, you were charged more). As I noted at the time, this seemed more like a promotional stunt for Netflix and a way for a bunch of lawyers to make a ton of money.

So it's interesting to see that with yet another class action lawsuit being settled involving Netflix, there are similar concerns. A whole bunch of folks sent in variations on the fact that Netflix will be paying out $9 million with a grand total of none of it going to the class (unless you happened to be one of the two named plaintiffs -- Jeff Milans and Peter Comstock -- who get to split $30,000). Most of the money is going to a charity. But somewhere around $2.25 million is going to the lawyers.

To be clear, I think the lawsuit itself is a bit silly anyway. It involves the fact that Netflix retained info on customers who quit. Big whoop. But whether or not you agree with the premise of the lawsuit, the end result seems even sillier: those supposedly "harmed" get nothing, but the lawyers walk away with over $2 million? It's this kind of thing that creates incentives for more such lawsuits driven by law firms in the hopes of cashing in.

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]]> not-stopping-people http://www.techdirt.com/comment_rss.php?sid=20120730/01264019871 Fri, 6 May 2011 08:13:31 PDT Why Red Hat Is Wrong That It's Better To Just Pay Patent Trolls Sometimes Mike Masnick http://www.techdirt.com/articles/20110505/15041914171/why-red-hat-is-wrong-that-its-better-to-just-pay-patent-trolls-sometimes.shtml http://www.techdirt.com/articles/20110505/15041914171/why-red-hat-is-wrong-that-its-better-to-just-pay-patent-trolls-sometimes.shtml reasonably upset when it came out that Red Hat had settled one of many patent lawsuits filed against it, this time from patent troll giant Acacia. People were upset both at the decision to settle and then to keep the terms secret. Red Hat, after all, has spoken out many times against software patents and patent trolls. Slashdot points us to the news that Red Hat's CEO has explained that sometimes it's just easier to pay up. It's clear that he really doesn't want to and thinks the whole practice is distasteful, but there are times when he recognizes it's just cheaper to pay up:

"When it's so little money, at some point, bluntly, it's better to settle than fight these things out."

He does say that they fight on bigger cases or cases they feel are especially ridiculous. But, in others, it's just cheaper and easier to settle. I certainly understand the reasoning. And I definitely understand the short-term cost-benefit analysis. If you can pay off the patent holder for less than it'll take to fight the case, even if you win, that seems like a good deal. Except... in the long run, this may be penny-wise and pound-foolish, because as you build up the reputation as a company who will fold as long as the settlement demands are under a certain level, then all you do is encourage more trolling behavior, leading to more new lawsuits with more patent holders demanding a handout.

Again, I can certainly understand the basic reasoning for settling, and can't really begrudge any company that decides to settle to avoid a lawsuit, but it is a little disappointing that this just perpetuates the problem.

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]]> that's-why-you-get-more http://www.techdirt.com/comment_rss.php?sid=20110505/15041914171 Thu, 17 Mar 2011 08:21:59 PDT Apparently Twitter Will Be Allowed To Mislead Consumers In 20 Years (But Not Before) Mike Masnick http://www.techdirt.com/articles/20110315/12433813505/apparently-twitter-will-be-allowed-to-mislead-consumers-20-years-not-before.shtml http://www.techdirt.com/articles/20110315/12433813505/apparently-twitter-will-be-allowed-to-mislead-consumers-20-years-not-before.shtml settled a complaint from the FTC concerning some of its security practices. That story, by itself, isn't all that interesting: basically Twitter had some problems when it was growing, the FTC slapped them down, and the company is now promising to be more careful , going forward. Nothing too out of the ordinary. However, ChurchHatesTucker points out one odd aspect to the settlement:

"Under the terms of the settlement, Twitter will be barred for 20 years from misleading consumers about the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers."

From that quote, it certainly sounds like Twitter will actually be allowed to mislead consumers about the extent to which it protects the security, privacy and confidentiality of nonpublic consumer information after those 20 years are up. I mean, why even put such a term on something like this?

In the meantime, it seems worth pointing out the contrast here, where the FTC (part of the Obama administration) is slapping down Twitter for revealing nonpublic consumer information... at the very same time that the very same administration has demanded all sorts of nonpublic consumer information about Twitter users. Mixed messages much?

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]]> odd-terms http://www.techdirt.com/comment_rss.php?sid=20110315/12433813505 Tue, 12 Oct 2010 13:53:23 PDT Spying School District Pays Out $610,000 To Settle Lawsuit -- Mostly To The Lawyers Mike Masnick http://www.techdirt.com/articles/20101012/10365311390/spying-school-district-pays-out-610-000-to-settle-lawsuit-mostly-to-the-lawyers.shtml http://www.techdirt.com/articles/20101012/10365311390/spying-school-district-pays-out-610-000-to-settle-lawsuit-mostly-to-the-lawyers.shtml spying on the student in his home with district issued laptops (the kid was disciplined for supposedly using drugs, with the evidence being a photo of him in his room at his laptop -- the kid claims he was just eating Mike & Ikes candy). While the district initially denied it was spying on students, later reports found 58,000 images were taken, including 469 of another student who also sued.

While the feds declined to bring criminal charges, it looks like the school district has now settled the outstanding lawsuits mainly by giving the lawyers a big chunk of money. In total, the school district paid out $610,000, with $425,000 going to the lawyers. The student who brought the first case will get $175,000, and the student in the second case will get $10,000 (the article mistakenly suggests two separate payments of $185,000, but I believe that's wrong). The district, in its announcement admits that, in total, this whole thing is costing about $1.2 million, which is actually being covered by insurance.

The situation is a bit tricky, because, in some sense, taxpayers are footing the bill for the district's ridiculous policy choices (even though insurance is covering the direct cost). I would imagine that this sort of thing will act as a reasonable deterrent to other school districts considering (or already using) similar technology.

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]]> legal-fees http://www.techdirt.com/comment_rss.php?sid=20101012/10365311390 Mon, 11 Oct 2010 15:18:13 PDT The Rise Of Mass Copyright Infringement Filing Shakedown Factories In The US Mike Masnick http://www.techdirt.com/articles/20101011/00084611353/the-rise-of-mass-copyright-infringement-filing-shakedown-factories-in-the-us.shtml http://www.techdirt.com/articles/20101011/00084611353/the-rise-of-mass-copyright-infringement-filing-shakedown-factories-in-the-us.shtml US Copyright Group operation (really an off-shoot of DC-law firm Dunlap, Grubb and Weaver). Since then we've seen more and more such operations set up -- with many focused on the porn industry.

Ars Technica has a list of just a few of the law firms (and the silly names they've come up with) who have jumped into this game in the US. The more we see of this, the sooner it is that (as in the UK) backlash and hopefully legal sanctions will come as well. There's little indication that any of these attempts have anything to do with actually protecting copyright or preventing infringement. Instead, they appear to be using the court system as a way to scare people into paying lots of money. Yes, it's probably true that many of the people accused did infringe, but there is little effort made to ascertain the reality of the situation. Instead, the focus is on discovering who the people are so they can be hit with a "pre-settlement" offer.

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]]> they're-everywhere http://www.techdirt.com/comment_rss.php?sid=20101011/00084611353 Mon, 11 Oct 2010 04:49:49 PDT Red Hat Settles Patent Case With Acacia... But Won't Share The Details Mike Masnick http://www.techdirt.com/articles/20101004/21311611286/red-hat-settles-patent-case-with-acacia-but-won-t-share-the-details.shtml http://www.techdirt.com/articles/20101004/21311611286/red-hat-settles-patent-case-with-acacia-but-won-t-share-the-details.shtml won a lawsuit from one of Acacia's many, many shell companies (and it won in East Texas too, making it that much more impressive). However, Slashdot points us to the news that, in another lawsuit involving another Acacia shell company (this time, called Software Tree) it looks like Red Hat has settled -- and, unfortunately, it's keeping pretty quiet about what happened. I'm sure that's part of the terms that Acacia negotiated (patent hoarders never want the details of settlements released), but it's unfortunate, because it leaves everyone else in the dark, and lets Acacia continue to shake down others with this patent. The patent in question (6,163,776) covers "System and method for exchanging data and commands between an object oriented system and a relational system," because, you know, without patents, no one would have ever figured that out.

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]]> too-bad http://www.techdirt.com/comment_rss.php?sid=20101004/21311611286 Mon, 12 Apr 2010 23:31:00 PDT Typosquatter Plays Innocent By Casting Microsoft As Big And Mean Dennis Yang http://www.techdirt.com/articles/20100409/0023148948.shtml http://www.techdirt.com/articles/20100409/0023148948.shtml the $500,000 settlement offer that Microsoft has requested from him amounts to "extortion" in his eyes. Microsoft originally sued for $2.4 million, or about $100,000 in statutory damages for each of the 24 domains named.

Typosquatting seems to attract persistently slippery individuals. For example, even after typosquatter John Zuccharini served time and was fined for his typosquatting behavior in 2003, it was not long before he returned right back to his typosquatting behavior in 2007, earning him another $164k in fines.

Temme claims that Microsoft's $500,000 settlement offer is "in effect trying to do is put a small company of eight employees out of business." While the David & Goliath angle might play well, digging a little more deeply into the story casts a different light. Considering that Temme has registered around 1,000 domains that could be considered typosquatting, it's clear that he has made a habit of this deceptive practice. Furthermore, Temme has already lost $130,000 to Dell in a similar lawsuit. So, while Temme claims that he would happily turn over the domains in question, to do so would merely make typosquatting even more profitable than it already seems to be. Likening mistyped domains to prime real estate, Temme equates the practice to buying "some property next to Disneyland."

Though this case may have some slight similarities to the pre-settlement groups that have been set up to deal with copyright infringement, the difference is clear: in this case, unlike the copyright "criminals," not only is Temme in clear violation of typosquatting laws, he has made it an integral part of his business practice to do so. So, whereas the pre-settlement groups use a shotgun approach in an extortion-like shakedown, Microsoft's offer is specific to the Temme case only. Settling potential lawsuits, by themselves, is not a form of extortion. It's just when the potential viability of the actual lawsuits are suspect that questions of extortion-like actions begin.

That said, Temme must be selling a good number of $14,000 exercise machines if he considers these fines to be just a part of his cost of doing business.

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]]> pot-meet-the-kettle http://www.techdirt.com/comment_rss.php?sid=20100409/0023148948 Fri, 26 Mar 2010 16:09:08 PDT Fixing Class Action Lawsuits Mike Masnick http://www.techdirt.com/articles/20100324/0358238689.shtml http://www.techdirt.com/articles/20100324/0358238689.shtml marketing for the company that was sued. One of the worst such cases we can remember involved Netflix, which "settled" a class action lawsuit by giving current customers a "free" one-month upgrade -- but if you didn't manually downgrade your account, they started charging you the higher price the following month. That's not a "settlement" so much as a way to get a bunch of customers to upgrade. If I remember correctly, that settlement was actually thrown out.

Eric Goldman points us to an interesting profile of Ted Frank, a lawyer who is focusing on trying to stop such bad class action lawsuits and settlements by objecting to the settlements when they seem so far over the line. While, as the article notes, there have been a bunch of "professional settlment objectors" in the past, most have been doing it for money (getting some of the attorney's fees). Frank, however, hasn't taken attorney fees (though he says it's a possibility in the future), and is funded by a charity:

"The whole reason I started this is because there is a high probability of district courts rubber-stamping settlements," Frank says. "I think these are very bad settlements that the [9th U.S. Circuit Court of Appeals] will ... provide guidance for when judges should or shouldn't approve settlements."

Again, the concept of a class action lawsuit isn't bad, but it's definitely been widely abused -- so it's nice to see someone pushing back from within to try to stop the worst abuses.

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]]> objecting-to-settlements http://www.techdirt.com/comment_rss.php?sid=20100324/0358238689 Fri, 19 Jun 2009 14:03:49 PDT Woman Who Owned No Computer, But Got Sued By The RIAA, 'Settles' Mike Masnick http://www.techdirt.com/articles/20090619/1255415291.shtml http://www.techdirt.com/articles/20090619/1255415291.shtml has "settled" her case with the record labels with neither side having to pay anything. We had written about this case earlier in the year. She did not own a computer on the dates she was accused of file sharing, and then when she got the legal threats from the RIAA she thought it was a joke and ignored them. Finally, some law students took up her case, and it appears they've worked out this "settlement." While Roy suggests this is a "victory" in that she didn't have to pay anything, she's right that it's not that much of a victory when the recording industry is still able to bring such bogus lawsuits to court with no penalty:

"I am still unsettled that the record companies are able to treat upstanding American citizens in this way. Invading people’s privacy and accusing people of things that don’t even make sense. It is such a sad waste of the courts time."

While it's great that she was able to get out of it without having to pay off the labels, nothing about this result provides any incentive for the labels to make sure they have actual evidence before filing future lawsuits.

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]]> some-kind-of-victory http://www.techdirt.com/comment_rss.php?sid=20090619/1255415291 Wed, 11 Feb 2009 14:00:54 PST Increasing Concerns Raised Over Google's Book Search Settlement Mike Masnick http://www.techdirt.com/articles/20090204/0248153640.shtml http://www.techdirt.com/articles/20090204/0248153640.shtml very troubled by the implications of the settlement. It seemed clear to us that Google had a strong argument for why its actions were perfectly legal. Settling did a number of dangerous things. It failed to clear up the legal issue at all (effectively making it cost prohibitive for anyone else to work on a similar project). It set in permanent place a business model which seemed hugely bureaucratic and inefficient. That business model is basically set in stone and set by the terms of this agreement, rather than any real market mechanism. Finally, it signaled (loudly) to the world that Google was plenty willing to pay a few million dollars to settle with opponents, even when it had a strong legal position, knowing that it would make life more difficult for competitors.

It appears that as the details have come out, more and more people are troubled by what the settlement actually will mean in the long run. Robert Darnton, the head of the Harvard library system (which had already complained about the settlement) has written a thoughtful piece, detailing his worries about how this creates an effective monopoly, and the many, many downsides that this causes.

Prior to this settlement, we had been one of the bigger defenders of Google's book scanning program against those who worried that it was creating a de facto monopoly. That's because there were no exclusive agreements. However, with the new settlement, while again others could enter in theory, Google has effectively priced the rest of the market out. Prior to this, there was a reasonable argument to be made that anyone could scan books and create an index, so long as they weren't displaying too much of the books. Now... Google has set a market price of $115 million, plus a set-in-stone business model, as the entry price. It's pocket change to Google, but it's a big barrier to others.

This is definitely raising concerns from a variety of other sources, who were at least cautiously optimistic when the deal was announced. The EFF now points us to James Grimmelmann's worries about the deal (pdf). While Grimmelmann does support the deal and say it will be net positive for society, he then goes through a pretty detailed list of problems with the deal, almost all of which go back to the idea that this deal gives Google effective monopoly power over digitized books.

Finally, as for my initial fear that this would signal something of an "open season" on Google, with demanding money from Google for Google daring to provide the service of helping others find their works, we're already seeing some of that in the early stages. Some in the newspaper business are using the book settlement as a template for how Google should pay them too.

In the long run, I think Google is going to regret this deal. Yes, in the short term it handed Google a monopoly and removed a distracting lawsuit from the table. But, it did some very dangerous things that will harm Google in the long term. It signalled Google's willingness to pay up even when it shouldn't have to. It set in stone a business model way before anyone knows what the best business model is for online books. And, finally, in knocking all competitors out of the market, Google has taken away its own best incentive to continue innovating and serving customers at the best of their ability in the book search realm. The end result may be a worse product that isn't nearly as useful (and revenue generating for Google) as it would have been if it had real competition in the market.

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]]> a-bad-deal-for-everyone http://www.techdirt.com/comment_rss.php?sid=20090204/0248153640 Tue, 18 Nov 2008 12:11:02 PST Patent Battles Focusing On Third Parties To Push For Settlements Mike Masnick http://www.techdirt.com/articles/20081118/0120372861.shtml http://www.techdirt.com/articles/20081118/0120372861.shtml
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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]]> trying-to-force-a-settlement http://www.techdirt.com/comment_rss.php?sid=20081118/0120372861 Tue, 28 Oct 2008 13:13:00 PDT Short Term Profits Over Long Term Principles; Google's Caving On Book Scanning Is Bad News Mike Masnick http://www.techdirt.com/articles/20081028/1218012674.shtml http://www.techdirt.com/articles/20081028/1218012674.shtml Google has settled the lawsuits from authors and publishers over its book scanning project. Google is paying $125 million, and will be changing some of how its book search system works. Authors and publishers will allow books to go online, but it locks Google in to a specific business model that might not be the most reasonable and, most importantly, it does not answer the legal question concerning the overall legality of book scanning. Pretty much any way you look at it, Google caved here -- and this is unfortunate for a variety of reasons.

Two years ago, there was a story in the NY Times about how Google's legal department saw all of these lawsuits against the company as a way to stand up on principle and make better law. Specifically, the company positioned itself as being willing to fight certain lawsuits on principle in order to get precedent setting rulings on the books in support of openness, fair use, safe harbors and many other important issues. The company suggested that, rather than settle, it would fight these lawsuits knowing that it alone, with its big war chest of money, could fight some of these battles that tiny startups could never afford.

It may not be surprising, but it's safe to say those days are long gone. We've been seeing it time and time again, from Google's decision to pay off entertainment companies not to sue YouTube to the decision to pay off the Associated Press for including its headlines in Google News. Perhaps one of the biggest legal battles, however, was over Google's book scanning project. Google took it upon itself to scan numerous books and make the results searchable online. The company put significant restrictions in place, such that it's almost impossible for someone to do a search and read the entire book that way. You can only see a few consecutive pages. You can't print. However, you can search and find new and interesting books that you might want to buy. I know I've bought dozens of books this way.

Not surprisingly, authors and publishers sued Google over this, and went around claiming how awful it was -- even though it was really not all that different than creating a much better card catalog for books. The purpose was to help people find more books that were useful, rather than to break any sort of copyright. And, in fact, studies showed that books that showed up in Google's search improved sales. In other words, it should have been a win-win situation all around. But, like so many content providers, authors and publishers falsely overvalue the content and undervalue services that make that content more valuable.

However, more important that was the simple principle of the whole thing. Last year the New Yorker ran a fantastic article explaining how having authors and publishers quibble over copyright issues while preventing the widespread archiving and sharing of information may turn out to be one of the most ridiculous arguments ever, while our culture get locked up and fades away.

So, it's quite upsetting to see Google cave on this. The settlement does not establish any sort of precedent on the legality of creating such an index of books, and, if anything pushes things in the other direction, saying that authors and publishers now have the right to determine what innovations there can be when it comes to archiving and indexing works of content. Unfortunately, this was really inevitable. As was the case with Google caving on YouTube and the Associated Press, it becomes a situation where Google realizes it can throw a little cash at the problem to make it go away -- while also creating a large barrier to entry for any more innovative startup. From a short-term business perspective this might make sense, but from a long-term business perspective (and wider cultural perspective) it's terrible.

It will only encourage more lawsuits against Google for trying to innovate, as more and more people hope that Google will settle and throw some cash their way. Furthermore, it greatly diminishes the incentives for making books more useful, and that's damaging to our cultural heritage. While it was always silly to believe that Google ever really operated on a higher principled stance, rather than a short-term business focus, this settlement is tremendously disappointing.

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]]> unfortunate-reality http://www.techdirt.com/comment_rss.php?sid=20081028/1218012674 Wed, 27 Aug 2008 19:35:00 PDT Immersion Settles Up With Microsoft: Hands Over $20.75 Million Of Money It Got From Sony Mike Masnick http://www.techdirt.com/articles/20080826/2359192108.shtml http://www.techdirt.com/articles/20080826/2359192108.shtml settled and now it's settled an ongoing lawsuit with Microsoft as well. We wrote about the details back in May. It's a case that highlights just how wasteful some patent lawsuits can be.

In this case, Immersion had sued both Sony and Microsoft for violating its patents, and it offered them a deal that's becoming all too typical: giving competitors a chance to settle first in order to join the other side of the case. It's a neat trick. Basically, you tell both sides that they can just pay up, and close out the case, while also getting the chance to claim some of that money back if Immersion wins against their competitor. Of course, Immersion took it to another level after Microsoft agreed to this deal, originally handing over to Immersion $26 million. After it got Sony to pay $130 million, it told Microsoft that the deal wasn't technically a "settlement," and thus it was excluded from the terms of the deal it gave Microsoft. Hence the lawsuit from Microsoft.

This latest settlement has Immersion apparently realizing it was never going to win the case, and forking over $20.75 million back to Microsoft, ostensibly from its winnings against Sony. It makes you wonder what's up that Immersion seems to be rushing to settle its various cases. Either way, it shows another aspect of how the patent abuse game is played these days, with patent holders pitting competitors against each other to pressure companies into settling.

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]]> patent-dealing http://www.techdirt.com/comment_rss.php?sid=20080826/2359192108 Wed, 2 Jan 2008 04:14:00 PST Quick! Who Else Has A VoIP Patent That Vonage Can Settle Over? Mike Masnick http://www.techdirt.com/articles/20071231/142458.shtml http://www.techdirt.com/articles/20071231/142458.shtml settle the various patent lawsuits filed against the company. Of course, rather than settle matters, that simply opened the door for other companies to go searching through their patent portfolios to see if there was anything they could sue Vonage over. Indeed, following those settlements it didn't take long for AT&T to dig up a patent and sue -- which was quickly settled as well. Thought things were over? No such luck. Nortel just showed up last month to sue and it took all of about a week and a half for Vonage to settle that case as well.

The Nortel case is slightly different because Vonage actually already had a patent infringement lawsuit going against Nortel, but it wasn't really initiated by Vonage. Instead, it had been initiated by a patent holding firm that Vonage bought in 2006. The end result of the settlement doesn't involve money changing hands, but just a cross licensing agreement for the patents. So what's the big lesson that Vonage and others have learned from this? It's certainly got nothing to do with innovating. It's to hoard as many patents as possible so that you have your own nuclear stockpile for when someone else sues you. Want to know why the USPTO is overwhelmed? It's not because there aren't enough examiners (as some will claim) or that there aren't enough funds. It's because the way the system now works is that you are supposed to file patents on every tiny little advancement so you can use it to protect yourself against lawsuits from everyone else. That's not about innovation. It's about waste. In the meantime, since it's still open season at Vonage, who's going to be next? There are a ton of other patents in the VoIP space that can surely be used in a lawsuit, right?

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]]> sue-and-settle! http://www.techdirt.com/comment_rss.php?sid=20071231/142458 Thu, 15 Nov 2007 13:36:40 PST Garmin, TomTom Settle One Fight, In Order To Concentrate On A Different Fight Mike Masnick http://www.techdirt.com/articles/20071115/025454.shtml http://www.techdirt.com/articles/20071115/025454.shtml really nasty intellectual property battle over the past few years, involving multiple lawsuits over multiple issues in multiple locations. It really was a case of patent nuclear war, where both sides were throwing whatever they could think of at each other. However, now that the two sides have something more concrete to fight over than market share, it seems they've decided to settle all of their intellectual property battles and simply focus on fighting over who gets to own Tele Atlas. Of course, as some people are beginning to notice, this may be a pointless battle, as both companies are going to face increasing competition from the mobile device arena -- especially from the likes of Nokia who forced Garmin to bid for Tele Atlas after announcing the acquisition of Tele Atlas competitor Navteq. So it really might not matter who wins the battle for Tele Atlas, as the market for standalone navigation devices may start to disappear.

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]]> just-merge-and-get-it-over-with http://www.techdirt.com/comment_rss.php?sid=20071115/025454 Thu, 30 Aug 2007 18:11:00 PDT Microsoft, Eolas Settle: It's Still Cheaper To Pay Up Than Fight Bogus Patents Mike Masnick http://www.techdirt.com/articles/20070830/150400.shtml http://www.techdirt.com/articles/20070830/150400.shtml lawsuit for many years. Eolas claims a patent on the concept of embedding other applications within browsers -- basically for the concept of plugins. This patent was questioned by many people who note that plugins are a pretty common concept and it hardly seems reasonable to give a monopoly over that idea to one company. In fact, none other than web inventor Tim Berners-Lee showed prior art for browser plugins, and the Patent Office suddenly started saying that it may have made a mistake in granting Eolas the patent. Unfortunately, due to the ridiculously complicated process to get the USPTO to review a patent, it was eventually ruled that the patent could be valid. However, it recently had agreed to review the patent again.

Of course, as we've learned time and time again, since this process is so long, and the risk of losing gets costlier and costlier the longer you wait, it appears Microsoft has given up invalidating this highly questionable patent and has simply paid off Eolas in a settlement. The amount isn't defined, but Eolas is gleefully telling its shareholders to expect a dividend shortly. Once again, this highlights nearly everything wrong with the patent system and why it needs to be changed. A very broad and vague concept with plenty of prior art gets patented by a small firm that doesn't actually do anything. Then it holds up a large company that is actually offering a product to the market, and forces them to change their product, taking away functionality, while trying to collect hundreds of millions of dollars that could have gone towards further innovation. On top of that, it highlights how difficult, slow and convoluted the patent review process is that makes it so difficult to actually contest these questionable patents. In the end, it's often just cheaper to pay up, diverting money from actual innovation into the legal system. What a shame.

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