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Patent Cases Hurting Small Businesses
smudge writes "An Information Week article states that multiple small businesses with Web presence are being sued by PanIP LLC. The claims in these patents being asserted in the lawsuits refer to 'a
computerized system for selecting and ordering a variety of information, goods and services' and 'an automatic data-processing system for processing business and financial transactions between entities from remote sites.'"
Web patents are exteremly lame.
- Amazon 1 click shopping for example (I know this is old news, but gawd damn).
While they're at it they should patent, hovering over "a href" tags, or utilizing bold statements for emphasizing a title.
Trying to place patents on web sites / ecom, is about as effective as pothole fixing in NY.
R4NT.com - A great many people think they are thinking when they are merely rearranging their prejudices.
Can you imagine if this lawyering tactic and blatant abuse of an overburdened patent office had taken place 150 years ago. I could patent things like "a way to use electricity for an artificial light source" and then I could have sued Edison or perhaps I could have patented "a method of towing freight along metal rails" and the railroad and locomotives would have been sued into non-existence. Its insane.
And yet another part of the article bothers me...
It seems scarry how some coperation may potentially come after me, for me using a system I invest a mild amount of trust in, just because I -trust- the system. They coming after me, just so they can use me as a stepping stone to attack E-bay is even MORE frightening.
And I was scared using my credit card online.... This may cause much worse damage.
1. one doesn't need to be making sense to get a patent. you can find a patent relates to a algorithm that 'can compress arbitary data by at least 1 bit' (note that this results in compression of anything to 0bit (or even less.) upon recursion.
2. revocation of patent is possible but usually impractical since this requires a lot of time and money (ask your peear who's doing as a law costs draftsman and they'll tell you that.)
3. Somebody would tell you the availability of the overseas outsourcing possibility. this is still vulnerable as your business model does not change. you can help, however, if your company is based on somewhere which is not on the states though.
4. Now, IAPNAL (this P stands for presumably) The heart of the case lies on the word 'automated' with its relationship to prior art.
5. What we can do is write to progress (oh no, congress) to get somebody proposes a new patent system.
It boggles the mind to think about what kind of qualification process would keep letting through all sorts of patents that any semi-competent engineer would recognize as obvious and/or prior art. Maybe it is just easier to rubber stamp the applications so they can get to the bar early.
Why even have patents? Call 'em trade secrets. If someone can figure out what you did and do it better, faster, cheaper, and easier, tough luck, it's their achievement.
Think about it for a moment. What are the long-term results of what we see here? Patents are supposed to foster innovation by offering protection. This innovation, in turn, is intended to support capitalism and all of the nifty inventions we see every day. What we are now seeing is that _abuses_ of the patent system are feeding off of the energy provided to capitalism in the first place! What do you think will happen? Could it reach a point that businesses will be less willing to produce products for fear of litigation (one business already has, according to the article)? If so, what is the threshold of this point, and what forces could we emphasize in opposition to it?
I don't want to see innovation stifled "in the name of IP" leaving us with a modern version of the Dark Ages. With the increasing emphasis of individual or corporate profit (Enron, WorldCom, et. al) to such levels that it tips the balance of capitalism, perhaps it is possible that the contribution of individuals and small business to the GNP could decrease significantly.
Remember what fueled the Dark Ages (AD 500 - 700) - fear of prosecution/persecution. How is that different from what we see here?
There's also the issue of actually defending yourself. If you lose, you still need to pay the bill to the attorneys. In the PanIP defense case, that can take years, meanwhile your attorneys suck you dry until if you perhaps win your case.
Tort reform is not the solution -- it only protects the corporations with big pockets, but doesn't do anything for the small business, as is the case here.
A defense for DeBrand chocolates might take millions of dollars. I know this company -- I live in Fort Wayne, they don't own millions of dollars -- and I don't know of many lawyers who would donate years worth of service without anything to show for it. You might find one, but don't count on it.
And so what if PanIP were forced to put up a bond? They still have the money to do it. And until the case was settled, DeBrand still has the case above.
So even Tort Reform (in this case) wouldn't help DeBrand chocolates.
This Lockwood guy sounds like a real pro. He's been at it for at least 10 years. He sniffs out broad new technological trends in business - the kind of thing you might read about in a Forbes article - and then cynically abuses the weakness of US Patent Law by patenting a vague expression of that trend. He never intends to produce anything with his "ideas"... he just slinks into his hole and waits for the real innovators to come along so he can extort money from them.
He's going to lose any court case--that's almost a given--but in the meantime he's hoping that enough of his small, carefully picked victims cave in and throw him $30k, or at least a few grand to make him disappear.
The key to wiping the smirk off his face is to make sure no more of his victims cave. Sure, lawyers aren't cheap, but the 30 companies have to realize that there is no way they can lose this disgusting and frivolous lawsuit, especially if they work together.
The Patent Office is unequivocal. "All patents are presumed valid once they're issued," says Brigid Quinn, deputy director of public affairs.
This would be funny if it wasn't true, but there decisions are legally binding until challenged, as you say.
I was talking to a friend about a more libertarian or maybe even anarchistic legal system where the government wouldn't be the only entity with the legal standing to represent the public at large. I know, there could be real problems (like SLAPP style prosecutions for any law they can find on the books). He's really much more libertarian than me, since I think there really is a constructive role for government to play, if only they were effective and actually represented the people.
He was telling me that there is a legal mechanism where you can try to force the state to take legal action. I forget the technical legal term, but it basically translates as "do your job", and he was telling me about an example (which I also forgot). Maybe the patent office can be sued under this framework, but you still have the basic catch 22 that they didn't do their job in the first place, so it will be difficult to enforce an effective remedy.
What they REALLY patented was pretty much *ANY* database. It even looks like a series of labelled pictures in a word document would violate the patent as written.
All it'll take is one person to take this to court to get the patents invalidated. They're atrocious.
paintball
> On the other hand, modern consumer lawsuits are so random in application and award that rather than causing good behavior in large corporations, they instead create a climate of uncertainty which serves to sieze up the gears of capitalism through what amounts to a government mandated legal tax across the board, accomplishing little public good except the certain enrichment of the legal class and a lottery type system of enrichment of certain citizens through chance rather than meritorious conduct; structural reform may be impossible, therefore proposed tort reforms seek mainly to reduce the magnitude of the legal tax.
Unfortunately, the only tort cases you ever hear about are the ones with apparently unfair verdicts and/or extreme penalties. Yeah, there are abuses, but I'm not convinced that they amount to more than a small fraction of all cases. Based on my experience with being called out for jury duty, there must be hundreds or even thousands of tort cases in court every day. And most of them are the result of one company suing another, not of some deadbeat playing the courtroom lottery.
Also IMO there is a grave risk associated with capping tort payouts. If we put a cap of, say, $1,000,000 on wrongful deaths we'll end up with corporate accountants trading lives for profits in the most direct manner imaginable. (I suspect this already happens, but the uncertainty of the tort system presumably encourages companies to lean a bit toward caution in the calculation of the profits/lives ratio.)
For instance, I was formerly associated with the petrochemical industry. OSHA had rules for red-tagging valves on pipes when someone's life would be forfeit if the valve were opened. There were still too many accidents, so OSHA wanted to insitute a lock-out on top of the tag-out, to make it physically impossible to open the valve when someone's life depended on it staying closed. The petrochemical industry fought the new rule tooth and nail. Ask yourself why the owners of a $500,000,000 plant wouldn't want a chain on a valve even to protect a human life.
Tort reform is simply a way of saying "your life is worth less than our investment". IMO the reform we need is to institute criminal liability, not to reduce financial liability.
Sheesh, evil *and* a jerk. -- Jade
Sorry. The same guy patented computerized vending machines too, back in 1986...
This sig intentionally left justified.
Actually, there are many patents out there which extend their claims this way. And having come across several patent lawyers myself, it looks like its standard procedure. All patents end with phrases like "experts well versed in this field would know that this invention is not limited to (whatever the patent mentions) but also to related fields". I am forced to believe it now :(
I have a list of such patents here
"Do something man. Right now."
I've got a friend who has a friend that works in the USPO and he was telling me how ridiculous it is to work there. Basically, you're supposed to nail predatory patents like these obviously are, but this guy who works there gets creamed by his boss whenever he tries to deny a patent. His boss is involved in all sorts of payoffs and dirt - I literally couldn't believe the stories he was telling. He later got put on a committee that was trying to track fraud and they figured out that some really high percentage (don't remember exactly, but it was over half) of the patents are frivolous and completely bunk. One tactic lots of patent filers like to use is to send in a 25 page document, and the first 24 pages are garbage designed to lull the reviewer to sleep, then they slip in a couple of paragraphs that involve what they're really trying to patent at the end. So to sum things up, its his opinion that the whole system is completely out of control, which is too bad, and he also thinks its so broken it can't be fixed, which is where things REALLY begin to suck.
$45 per U Colocation Special
is what comes to mind when I read "a computerized system for selecting and ordering a variety of information, goods and services"...
These small businesses should be able to defend themselves sans lawyer.
J
Caps on punative damages help prevent 'lawsuit bingo'.
All companies doing real risk analysis do have to put a price on human life. They never advertise the fact, but its the only way to do it properly.
Anarchists never rule
businesses were doing web sales for a few years before these yokels said "hey that sales system is not patented..."
Even the article states:
DeBrand, literally a mom-and-pop shop in Fort Wayne, Ind., has been selling its homemade chocolates over the Web "practically from the beginning, probably seven, maybe eight years...
and several paragraphs later:
The patents PanIP bases its lawsuits on were granted-the first in 1996...
This makes no sense. The shop has been selling stuff online since 1994-95. USPTO, with its head buried in the dumpster, approves and hands the patent to PanIP in 1996 on the obvious prior art stuff that had been going on by thousands of companies/individuals for years before. PanIP turns around and sues small companies that can't afford to defend against patent infringement and would probably rather pay $5k.
Note the following:
1. To PanIP: the company that you are suing has prior art to your patent if your accusation is correct that they are infringing in the first place. They have been in business longer and actually *doing* what you patented couple of years later.
2. I hope the judge sees (a) the obviousness and numerous prior art of the patents, (b) the ill intent of PanIP, LLC, (c) the frivolous and wrongful lawsuit brought by PanIP, and dismisses the lawsuit, awards legal expenses plus punitive damanges to the defendants, and orders to close down PanIP, LLC, put all its patents in public domain, and orders its founders/owners and laywers to spend 3 months in community service and 9 months living with GNU/RMS at their own expense!
3. USPTO will approve any patent claim that contains the word "apparatus". It seems like this is one of the qualifying criteria for approval. I can probably get an approval for a patent for an "apparatus that hammers the nails in the wood", or an "apparatus that can roll in a circular motion on any surface". Hey! why not - check out the infamous method of swinging on a swing granted on April9, 2002?
4. This has got to stop! Write to your local corporate representatives in DC and tell them this is devastating for local small and medium size business!
5. USPTO database and website should be turned into a comedy and satire website and public entertainment source (Ok... done already), but remove most of their entries' legal implications. On a side note, when you are bored and have nothing to do try searching patents on your favorite activity. How about a tub for bathing granted on June 25, 2002 solely from the drawings?
Biotech companies have been submitting patents of 140,000 pages in length. These may take some time to examine thoroughly.
I was implementing EDI 15-17 years ago.
I wouldn't be surprised - our (very small) company has been fighting a huge company over the violation of one of our patents, and they're using the strategy of delaying the reviews of our patent so that we can't go to court (and they are hoping that our little company will eventually die).
We've fought off their challenges to our patent FOUR times (now going on a fifth reexamination), taking over 4 years now. Each time, the primary examiner has revalidated our patent - and then his boss overrides his conclusion & throws our patent out (the same boss each time), usually without a reason.
Needless to say, we've got some questions about the motivations of the patent examiner's supervisor - but there isn't anything we can prove, and due to the rules of the Patent Office, we can't get anyone else to look at the case.
For prior art see the Internet Shopping Network (now part of HSN) which was operating in '94, Also the UK Prestel system which operated in the early 80s.
I don't doubt that we could have got a patent for HTTP, but it is only a more efficient transport than ftp. There used to be quite a few sites that used ftp to serve HTML.
This type of extortion should be punished. In the UK you would be hit with a crippling legal bill for the defendant's costs if you lost so there is little point in filing vexatious patents. Also prior review means that the probability of getting a vexatious patent is much lower.
The problem with the USPTO is that it speaks with a forked tongue. When it is justifying its racket it claims that a patent has to be 'novel', when justifying the actions of its franchisees it claims that their legal definition of 'novel' is 'anything at all, even something completely obvious'.
Actually cases like these are the ones that might lead to reform. A corrupt senator bought by USPTO franchisees can ignore the complaints from the likes of Microsoft or slashdotters, but it is harder to ignore small business owners. And no, the judgemet against Microsoft on the disk compression patent was not any more justified than the present scam. What was being claimed there was not LZW but the idea of a compressed disk.
Don't you think Amazon would be well served to help these little guys squash this thing in the first round before it gets any momentum.
They have their own problems in this area, there are something like 2000 odd patent extortion scams going on and Amazon have their fair share.
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