If You Read Just One Article About The Patent Mess, Make It This One

from the infuriating dept

Steven Levy has always been a great writer covering the tech industry, but his article on “the patent problem” for Wired is a must read, even if you’re familiar with these stories. He does a great job illustrating just how screwed up the patent system is, focusing on a few key trolls, and pulling in some important information and data to support the anecdotal claims. Much of the story is about Mitchell Medina, who took a ridiculous patent that came from an idea about scanning medical documents into electronic format, and turned it into a belief that he held a patent on which practically every website infringed. You really should read the whole thing, but a few tidbits: first off, Medina and the two other people named on the patent never actually could build a working product.

Although the three had never tried to build a working model before they were granted the patent, they now set out to create a business based on the idea. Elias made a prototype, albeit one that Medina would later admit “didn’t work particularly well.” He claimed to have visited “every big player” they could think of in the computer industry to see if they would like to license his patent and build a commercial version themselves. He also claimed that he had attempted to raise venture capital to create a company of his own. But no corporation or VC would put money into it. According to Medina, they were particularly annoyed when, during a meeting, an executive from IBM’s Lotus division rudely dismissed the idea of paying to use the concept. “He acted as if these kinds of patents were somehow laughable,” Lech says.

Eventually Medina cut out the guy who actually came up with the idea of scanning documents, and set himself up as a patent troll. He sued over 100 companies — and realized that as long as the “license” he asked for was cheaper than fighting him in court, everyone would pay up, and everyone did… except one company, Flagstar Bancorp. Levy goes through details of the seven years spent fighting the case, including two separate district court judges who absolutely slammed the lawsuit (one said the case had “indicia of extortion”) and told Medina he had to pay up for filing such a ridiculous lawsuit (in between all that, the appeals court, ridiculously, disagreed and sent it back). Eventually the appeals court agreed with the lower court, and the Supreme Court refused to hear the case, but it was a massive waste of time and energy. Amazingly, the guy who demanded payment from all those companies (and got it from most), for doing absolutely nothing to actually help with the development of e-commerce, claims he’s a “victim.”

Mitchell Medina, who has sued more than 100 companies for infringing his patents, sees himself as a victim. “When Jobs and Wozniak or Hewlett and Packard start in a garage, they’re heroes and captains of industry,” he says. “If you apply for a patent first, you’re a troll.” Via email from Africa, he continues to attack the Flagstar decision, claiming that Martinez ignored key evidence and ruled incorrectly. (Medina felt it best not to talk by phone, because, as he put it, “I tend to speak my mind, and it would be unwise for me to do so without the self-censorship of writing.”)

“We did nothing improper,” he writes. “The judges in this case comported themselves like spectators in a Roman coliseum who wanted to see plenty of blood on the floor in the form of litigant’s money before they considered the show worthy of their interest.”

Really, this is just touching the surface. Even if you’re familiar with the Flagstar case (which we wrote about last year when the final CAFC ruling came down), reading Levy’s detailed piece is worth it. The problem, of course, is that this kind of thing is happening over and over and over again — nearly all of it taking money from productive purposes of building companies and products, and sending it to lawyers. It’s a massive drain on the economy and it’s about time we fixed it.

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Companies: eon-net, flagstar

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Comments on “If You Read Just One Article About The Patent Mess, Make It This One”

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41 Comments
That One Guy (profile) says:

Re: Re:

Simple enough.

If the trolling company can’t actually build a working model based upon their patent, and yet are suing other companies who are using a device that actually works, then it’s pretty obvious that their patent does not in fact cover what they are suing for, because if the other companies were in fact infringing on their patent, their devices wouldn’t work either.

Anonymous Coward says:

I’m a victim just like Mitchell.

I went around a busy park robbing people of all the money in their wallets with a knife. I made over $10,000 from robbing over 100 people.

Then someone I drew the knife on fought back. In our fighting the guy kicked my wallet full of stolen money down a storm drain, and then he left without giving me the money in his wallet!

I demand justice! I demand the courts award me the $10,000 I lost from the man who dared to fight back against me!

Mesonoxian Eve (profile) says:

“Outrage may one day swing the pendulum back from patent madness to something resembling what the Constitution?s framers had in mind.”
Except… many of the framers of the Constitution did not want this added because they knew the provision would be used to prevent innovation, not promote it.

Despite the wording, the provision was still a derivative (infringement!) of British laws. The difference being the very word “promote”, implying (but has always been ignored) patents were not to be used to hinder.

I’m sure the framers are shaking their heads right now, disgusted in both government, for failing to fix the problem, and for Americans who abuse each other over a dollar bill.

Mike Masnick (profile) says:

Re: "it's about time we fixed it."

OKAY, college boy Mike, been on the problem for 10 years, it’s your time to SHINE! How do we fix it?

But, wait: as ever you’ve signaled a pulled punch: “it’s about time we fixed it”. … ABOUT time, eh? — Ya got nothin’ but more complainin’.

Yes, that’s right, we’ve never, ever suggested possible solutions… oh, wait:

http://www.techdirt.com/articles/20120712/18322919680/judge-posner-mission-to-fix-patents-we-have-some-suggestions.shtml

Anonymous Coward says:

Why Bad Patents

The less someone knows about a subject area the easier it is for them to come up with and invention. This does not mean that it is actually a new idea. Failure to build a reasonable prototype suggests insufficient knowledge of a subject area, and therefore of prior art. This difficulty convinces the ‘inventors’ that they have made a worthwhile invention.

The Infamous Joe (profile) says:

Re: Re:

I tried to build a working time machine, but it didn’t work very well. As far as I could tell, it jumped me forward in time 0.000000000000000000000000000000001ns. (Margin of error, +/- .01 seconds.)

Luckily, I’ve now got the patent I deserve for my hard work, so when someone else actually makes it work, their money all belong to me.

Anonymous Coward says:

Re:

That is one possible answer. Perhaps in the context of the full article that sequence would have been clearer, but it wasn’t clear to me from the excerpt.

On a related note, am I the only one who finds the use of “now” when discussing something that happened in the past annoying/jarring?

“They then set out to…” sounds a lot better to me.

iambinarymind (profile) says:

Zero Sum

It is only a “Zero Sum” game when force/coercion is employed (i.e. the State granting temporary monopolies called “patents” backed by force/coercion).

However, if individuals engage in voluntary exchange then said individuals are able to produce more than if they worked alone. In economics this is called “comparitive advantage” and it is how wealth (and more jobs) are created.

For further explanation of this, I highly recommend reading the short book “Not a Zero-Sum Game: The Paradox of Exchange” by Manuel F. Ayau which can be downloaded and read for free [HERE].

Ruben says:

"it's about time we fixed it."

Abolish software patents. Greatly reduce the scope of what is patentable. Hire actual experts as patent examiners. Allow for an independent inventor defense.

I think that would be an excellent start.

Personally, I’d like to see patents abolished altogether, but I know that would never happen.

Of course, your M.O. is to move the goalposts or somesuch, or say my post is invalid because I’m not Mike. Anything to avoid addressing the actual content of my post. Have a nice life. May you live forever.

Richard (profile) says:

"it's about time we fixed it."

Personally, I’d like to see patents abolished altogether, but I know that would never happen.

Actually I don’t think it is impossible. You only have to look at the exponential increase in the cost of patent litigation to realise that:

1) It will inevitably stop at some point. (Or it will bring down civilisation.)

2) The only effective way to stop it is to abolish it completely. See how difficult it was to kill just one smallish patent troll when you had them already bang to rights.

The consequence is that sooner or later it will be abolished.

Anonymous Coward says:

A common argument asserted by the deluded pro-patent people is: “If patents are so bad, why haven’t any modern countries reversed course and abolished their IP laws?” Discuss – any takers to answer this assertion?

See the little snippet from Patentlyo below:

“Patent Bobo said…
http://www.techdirt.com/blog/innovation/articles/20130201/16463921862/bad-economics-confusing-correlation-causation-when-it-comes-to-patents-innovation.html

Reply Feb 25, 2013 at 06:38 AM
anon said in reply to Patent Bobo…
Patent Bobo,

Techdirt? Consider the source and please supply that short (very short) list of one modern advanced country that has seen the light and eliminated all IP laws.

Just one.

Please.

If there were even just one, then that cause-correlation claptrap you are so fond of might, just might, be more than dust-kicking.

Come back and c_rrp again real soon.”

Gene Cavanaugh (profile) says:

Easy one to answer.

“Techdirt? Consider the source and please supply that short (very short) list of one modern advanced country that has seen the light and eliminated all IP laws.

Just one.

Please.

If there were even just one, then that cause-correlation claptrap you are so fond of might, just might, be more than dust-kicking.”

The answer is the same as for any vital area of our lives. Illustration: Automobiles at one time were a leading cause of death in this country. Did we eliminate autos? No, we worked to fix; well, reduce; the problem.
Faced with appalling IP laws and usage world wide; should we just opt out, thereby giving the bad guys the victory? Hardly! If all the world would come to their senses and fix or abandon IP (I favor fix, but I AM an IP attorney (a good one, I might add, and appalled by IP laws as they exist).

If you had been actually listening, that is the message I get from Techdirt. Don’t ignore the problem by opting out, FIX it!

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