Legal Issues

by Mike Masnick




NTP Co-founder Finds New Patents To Threaten Companies With

from the fun-fun-fun dept

Soon after RIM decided to settle their lawsuit with NTP for over $600 million, just as most of the NTP patents were being rejected by the patent office, we noted that other patent owners would be emboldened to go on similar fishing expeditions. Apparently, at least one of them decided to hire the NTP lawyer himself to do so. Mousky writes in to point out that a Canadian company, Belzberg Technologies, has hired Donald Stout, the lawyer who teamed up with Thomas Campana to form NTP as a patent holding firm. Belzberg looks like a similar situation. They hold a broad patent that they believe covers all electronic stock trading -- and they now want everyone to pay up. This again highlights a problem with the patent system. If, as Mr. Belzberg claims, "without that technology there wouldn't be any electronic trading," then that suggests that, without such a patent, no one else would have figured out how to trade online -- which seems highly questionable. Yet, with the way the patent system works, he now gets to tell other companies that they need to pay up -- most likely for something they came up with entirely without Belzberg's patents. As the internet took off trading online became an "obvious" next step of the technology -- but because one guy filed such patents, he now gets to waste lots of people's time and money on such patent threats. Again, we wonder how this promotes innovation.

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  1. identicon
    Mr. Wizard, 22 May 2006 @ 3:04pm

    Speaking of fun-fun-fun

    Here's a neat experiment, try the following: replace phrases like "patent office" with "TechDirt" and replace phrases like "bad patents" or "questionable patents" with "breathless and baseless articles."

    "no one else would have figured out how to trade online -- which seems highly questionable" - this is breathless paranioa. A patent does not have anything to do with whether someone WOULD HAVE figured it out. Someone apparently DID figure it out and PATENTED IT. Besides, if someone figures out a differnt way to trade on line they may not have anything to worry about. The patent will cover the patentee's way of trading on-line.

    And the problem with Mike's statement that the patentee will require a royalty "most likely for something they came up with entirely without Belzberg's patents" is another failure of proof. Because of how development often works, its impossible to tell who really had it first.

    Mike also argues against the fundamental notion that the first to develop should win the rights to the monopoly based on some vague notion that this prevents "innovation" (pirating). However, Mike never considers the economic loss of two companies trying to make two versions of the same thing and then one of them going belly up at the end of the day (think VHS vs. Betamax if you can) or at least neither reaching a good economic critical mass. Its called a Nash equilibrium or market coordination problem for wannabe economists (and wannabe lawyers) like Mike.

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