Holocaust History Preserver Shoah Foundation's Patents Being Used To Sue Google, Facebook, Hulu, Netflix, Amazon
from the sad-legacy dept
The details are a little complex, and it took some work to track them all down, since it involves some shell companies and passing things around. As far as I can tell, no one else has yet reported on this story, but it's shameful to see the Shoah Foundation associated with patent trolling. During the 90's, however, the Shoah Foundation did apply for and get a series of patents (listed at the bottom of this story), mostly around the idea of cataloguing and managing a library of digital assets.
In 2010, USC and the Shoah Foundation offered to sell an "exclusive license" to the patents via Ocean Tomo -- the patent auction house that is a goldmine for patent trolls. Ocean Tomo pitched the patents as being useful for companies "designing, using or selling database management systems," but what they probably meant is that they would be useful for non-practicing trolls who wish to sue such companies. Later that year, the deal was done for $7 million, a portion of which went to Shoah -- who still retains ownership of the patents in question.
In discussing the decision to auction off a license, rather than sell the patents outright, USC's John Sweet told the press that the license had been sold to a practicing entity:
"it was a party that would actually use the patented technology, not a company that buys up patents in order to simply sue alleged infringers."He also told the press, "We don't want bottom fishers."
Guess what they got? Fast forward a year and a half or so, and it comes out that it's Altitude Capital Partners who holds the licenses on those patents (for what it's worth, USC insists that the patent license was actually purchased by an operating company, who later sold the rights to Altitude -- but no one seems willing to name this other company). If you don't know Altitude, think Intellectual Ventures before there was an Intellectual Ventures. It calls itself a private equity firm, but it mainly invests in patent lawsuits, which usually run through a series of shell companies. In this case, the license was given to Digital Innovations LLC (a subsidiary of Altitude) who put the patents in its own subsidiary called Preservation Technologies LLC.
And then Preservation LLC started suing. Late last year, Preservation used some of the 11 patents from USC Shoah to sue Google & YouTube, Netflix, Facebook, Sony, Dish and Amazon, Hulu, Dish again and Facebook again. Below I've embedded the specific complaint against Facebook (pdf). As with most patent lawsuits, the complaint itself isn't that enlightening beyond naming the parties and the patents.
But what's really troubling here is the idea that the Shoah Foundation -- an organization designed to do good and help preserve videos and history -- is now closely associated with patent trolling. Yes, there are a number of intermediaries in between the two, in order to provide some buffer, which I'm sure is supposed to "protect" Shoah from the blowback of patent trolling against a ton of internet companies that offer video online. But the complaints even call out the fact that the tech was developed by the Shoah Foundation. And Shoah still owns the patents in question. Shoah may never have meant for the patents to be abused in this manner, but it sold the license without any such restrictions and was happy to take the money, even knowing how the patents could (and likely would) be abused to attack innovative companies. The statement about them not wanting "bottom fishers" looks pretty ridiculous in light of what happened. If they didn't want bottom fishers, they should have made the license conditional on use. That they did not do so is their responsibility -- and thus USC Shoah should shoulder a significant portion of the blame for allowing the patents to now be used in such a fashion.
I asked USC and Shoah for a comment, and after handing me off to a variety of different people, I finally got this non-statement, which refused to answer nearly all of my questions:
USC owns a portfolio of patents for indexing and searching digital video libraries. USC licensed the portfolio exclusively to an operating company, while maintaining the right to use the patented inventions for research and education purposes. Subsequently, the operating company transferred the license to another entity. USC has learned that the current license holder has brought litigation relating to the patents. USC has no say or financial stake in the litigation.In other words, "we don't want to talk about this." They especially appeared to have no interest whatsoever in responding to the query of whether or not such actions fit with the mission of the Shoah Foundation.
What's odd about all of this is why Shoah retained "ownership" here -- and if it did so in any real way. The deal that USC/Shoah did with Ocean Tomo was hailed as groundbreaking, in that they auctioned off a license, rather than selling the patents outright. USC/Shoah claims it kept ownership of the patents because it needed it to continue operating. But that makes no sense. Similar to the transfers of copyrights in cases like Righthaven, "ownership" of a patent is tied to the specific rights: the right to exclude and the right to sue. It appears that Shoah gave up both of those in their entirety, so retaining the "patent" is meaningless. They could have done the identical deal, in which they sold the patent, but included a license-back to Shoah for the life of the patent. I asked USC if among the rights it retained with "ownership" was included the ability to revoke the license and stop such lawsuits. At the time of posting, USC has not responded. Thus, either it does have that right and chooses not to use it -- in which case it has even greater culpability for these lawsuits -- or it really didn't retain any "ownership" of the patents in question at all. In which case the whole "we just licensed" it thing was nothing more than a PR stunt to allow for such patent trolling.
If USC/Shoah wants to proudly retain ownership of these patents, then they also need to take responsibility for how the patents are being (ab)used to shake down companies. They can try to talk a good game about being hands off and having no financial stake in the litigation effort, but that's because they already collected the cash. If the patents are being used for trolling, and USC/Shoah still owns them, then USC/Shoah has to bear the responsibility for how they're being used. That it seeks to distance itself from the lawsuits filed over patents that it still claims to own is an incredibly weak response and shows just how shameful an action this was.
The real shame in all of this, though, is that the legacy of Shoah is now tarnished by patent trolling. You would hope that the organization would think better than to have its good name sullied with such anti-innovation practices. Trying to shakedown companies like Google, Netflix, Amazon and Facebook for building their own digital library platforms... just seems wrong, and against the sharing spirit of the Shoah Foundation. An organization like that should be celebrating platforms that make it easier to preserve video and oral histories, rather than suing them. If Shoah really said that the patents wouldn't be used to sue others, then it should have made that explicit in the license. As things stand, Shoah owns patents that are being used for trolling. If it's not a troll itself, due to the licensing shell game, it clearly knew what it was getting into and enabled such nefarious trolling. It's too bad, as I've donated to Shoah in the past, but there's no way I'd donate again to an organization that has been involved in patent trolling.
USC Shoah should issue an apology in the strongest terms possible for what happened -- and this should be a reminder to everyone that even if patents are granted with the best of intentions, down the road, things may change. Shoah let greed get ahead of its mission and now its reputation will be forever tarnished for allowing such anti-innovation practices to happen with its own patents.
The patents in question:
- 6,199,060: "Method and apparatus management of multimedia assets"
- 6,581,071: "Surveying system and method"
- 5,813,014: "Method and apparatus for management of multimedia assets"
- 6,092,080: "Digital library system"
- 6,212,527: "Method and apparatus for cataloguing multimedia data"
- 6,574,638: "Method and apparatus for cataloguing multimedia data using surveying data"
- 6,549,911: "Method and apparatus for cataloguing multimedia data"
- 6,353,831: "Digital library system"