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.

Filed Under: , ,
Companies: apple, dell, fedex, microsoft, rim, samsung, spansion, webxchange

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Comments on “Patent Battles Focusing On Third Parties To Push For Settlements”

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18 Comments
Ima Fish (profile) says:

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.

Willton says:

Re: 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.”

Dustin says:

“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?

angry dude says:

Re: 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

duane says:

Re: 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.

Willton says:

Re: 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.

kirillian (profile) says:

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.

mxrss says:

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

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