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MSNBC Looks At Patent Abusers' Victims

Camel Pilot writes "Patent claims have reached a new low when "inventor" Witold Ziarno sued the American Red Cross for using the web to accept donations. This MSNBC article discusses this case and how it was beat using web archives and prior art! Also Pangia Intellectual Property has given up hope on extracting fees from small e-commerce websites for its supposedly patent on e-commerce. The only problem with the PanIP case is that they got away without having to pay for the legal fees for the defense in an obvious abuse of the system." (See this previous post for more on PanIP's dropped case.)

26 of 231 comments (clear)

  1. Very strange by thing2b · · Score: 4, Insightful

    "...saying he had patented the electronic process by which the donations were made. Ziarno demanded a licensing fee from the non-profit agency for infringing on his patent, which he applied for in 1993 -- before most people had even heard of the World Wide Web."

    This seams strange (in 1993?). For some reason, I do not think I understand US patents.

    --
    Webmaster of Infoweb
    1. Re:Very strange by inode_buddha · · Score: 5, Insightful

      There is a difference between the date applied for and the date granted - often measured in years. None of those facts alters the poor ethics of suing a charity (for purposes of the current discussion).

      --
      C|N>K
  2. Maybe this is where tort reform should start by eclectro · · Score: 5, Insightful


    If the patent holder loses it's case in court, it's forced to pay the legal fees of the defendant.

    Oh yes, they get kicked in the nuts afterwords.

    Also, the patent office needs to be held accountable as well. Maybe they could fire the examiner that issued the patent.

    I'm not saying that this is the difinitive answer, just some ideas to change things for the better.

    --
    Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
    1. Re:Maybe this is where tort reform should start by Anonymous Coward · · Score: 4, Insightful
      > ... Also, the patent office needs to be held accountable as well. Maybe they could fire the examiner that issued the patent.

      That's a #%$@$ dumb idea.

      You want to hold the patent OFFICE to account by firing the patent EXAMINER? How would you feel if your boss told you to do something, then fired you for doing it?

      First step is to provide the patent examiners with the resources and guidance to properly examine each patent, then sack the boss of the patent office if things don't improve.

    2. Re:Maybe this is where tort reform should start by skifreak87 · · Score: 4, Insightful

      A lot of stuff isn't so cut and dry though. Especially w/ the speed at which technology moves now, something can become commonplace very quickly and maybe not seem patentable when 6 months ago no one had ever even conceived of it and it was a great new idea worthy of a patent.

      We also have the unintended consequences. Your proposal, which I agree with in many cases, discourages companies from trying to defend their IP. What if a small firm tries to attack M$ or a huge corporation. Suppose they lose. Suppose M$ also had 10 lawyers working on the case, w/ a combined total of 500 man-hours billing out at $300 an hour. Now your small firm trying to defend a patent is now out $150k in legal expenses because that's what this big corporation spent. If our system was perfect this might be ok. But even if your patent should be upheld w/ 99% probability, is it worth it to challenge if in that 1% chance of failure you would owe a very substantial sum/portion of your small firm's income?

      The issue as I see it is that a patent should require some sort of innovation, if it's something that anyone can easily dream up (such as one-click ) it doesn't deserve a patent just because you filed your application first and we're having too many of those sorts of patents. A patent is supposed to grand a temporary monopoly in exchange for sharing your idea/design w/ the world. If the idea/design could EASILY be thought up by any group of computer scientists sitting in a room, it shouldn't get a patent. Problem: requires patent examiners to spend more time examining patents when they're already backlogged.

      Good to see some mainstream press address the issue of frivolous patents that exist.

    3. Re:Maybe this is where tort reform should start by FrYGuY101 · · Score: 4, Insightful

      It means that you couldn't go around sueing people to extort settlement fees out of them, just because the cost of fighting would be greater...

      --
      "If we let things terrify us, life will not be worth living."

      - Seneca
    4. Re:Maybe this is where tort reform should start by archevis · · Score: 3, Insightful
      If something is commonplace and obvious only a short 6 months after, is it then really worthy of a patent? Methinks patents were to ensure that your inventions are legally "yours alone" to exploit financially for a limited amount of time. But only because it's your invention, after all!

      Now, if your "invention" turns out to be nothing more than a fairly good prediction at what's inevitably to come, should it then be considered "yours" at all? IMHO: Definitely not.

  3. Screw patents by pubjames · · Score: 5, Insightful


    The main argument behind patents is that without them, nobody would have motivation to come up with new ideas and no research and development would be done.

    I say bullshit.

    Patents are holding developments back. If you have an idea for a better mousetrap build it and sell it. If someone else copies your idea then you'll just have to improve it, or find a way to make it cheaper than them, or whatever. You'll have to act quicker to make money on your ideas, and innovate faster. I think that's a good thing.

    1. Re:Screw patents by thing2b · · Score: 5, Insightful

      I think that the speed that the patent office takes holding developments back. Personally I would like to see patents recevied and processed within a month and all small time I.T. patents expire in 5 years.

      --
      Webmaster of Infoweb
    2. Re:Screw patents by cdavies · · Score: 5, Insightful
      Oh come on, just because a few people abuse patents you think they should be abolished?

      Your idea is merely a recipe for the rich getting richer. John Q. Inventor invents a new improved foo, then Big Foo Corp. comes along and reverse engineers his foo, and begins manufacturing them on a scale poor old John can never compete with. Economies of scale ensure the small business can never win.

      So John either has the option of going honourably bankrupt, or of selling his idea to Big Foo Corp. in the first place to save them the reverse engineering costs. Either way, its a waste of his time.

      Patents work. Its just that the US patent office is incredibly lax in investigating patent applications. This is easily solved by means of a massive cash injection. Though god knows where tha t money will come from.... (Further rant on republican fiscal policy clipped)

    3. Re:Screw patents by __aagctu1952 · · Score: 5, Insightful

      Getting rid of patents altogether isn't the answer - the mousetrap analogy only works for low-R&D items. High/extreme R&D cost industries like medicine and aerospace on the other hand would simply collapse, or at least stop innovating with a no-patent system (it would create an entire system of free riders). Instead, we should get rid of bad patents. Sticking "on the web" at the end of an existing invention or trivial implementation is not, I repeat not patent-worthy.
      We should start with a working patent review process and go from there...

    4. Re:Screw patents by pubjames · · Score: 4, Insightful

      John Q. Inventor invents a new improved foo, then Big Foo Corp. comes along and reverse engineers his foo, and begins manufacturing them on a scale poor old John can never compete with.

      As opposed to, John Q Inventor invents a new improved foo, and finds that some aspect of his invention is already patented by Big Foo Corp...

      Take a look at who files patents and how benefits from them. (Hint - it's not John).

    5. Re:Screw patents by nacturation · · Score: 5, Insightful

      That's all well and good for internet inventions where somebody slaps a cookie and a database together and you suddenly have 1-Click payments. But what about in the real world where companies can spend billions building a better "mousetrap" as it were? Have a team of 50 people doing R&D, with an average cost of a conservative $200,000 per year for each employee to cover salaries, benefits, overhead, materials, etc... and suddenly you've spend $10M for one year of R&D. If you're developing something really high-tech, you might put 5 years into it. So it's a $50M R&D bill at the end.

      But that's okay, you've gone and built some new technology... maybe a better medical scanner or something. You expect to be able to sell 1,000 of these scanners to high-end facilities in a 10 year period, and each one costs you $25,000 in materials and engineering costs. Factoring in your R&D cost, each scanner had $50,000 worth of R&D invested into it. So you need to charge $75,000 just to break even and make no profit. So factoring in profit as well as marketing, insurance, and legal fees, etc. you'll likely charge maybe $200,000 for each one.

      Along comes some other company with only 2 employees, they purchase your scanner, reverse engineer it, send it to China and have a couple thousand manufactured costing them $25,000 each. Subsequently, they release it into the market for only $50,000 because they didn't have to invest the additional $50,000 per unit in a major R&D program. Too bad the company investing in all that R&D couldn't protect their invention from copycats.

      For trivial e-mousetraps, yeah... the Ayn Rand compete-at-all-costs-and-screw-government-interfer ence approach would serve you well I guess. But for any non-trivial mousetraps, patents protect those who invest the time and money into developing them.

      --
      Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
    6. Re:Screw patents by Idarubicin · · Score: 3, Insightful
      Take a look at who files patents and how benefits from them. (Hint - it's not John).

      Take a look at who is spending billions of dollars and employing millions of people trying to invent things worth patenting. (Hint - it's not John).

      Yes, large companies file a lot of patents. Some of them are bogus--we all read Slashdot. Perhaps it would be appropriate to reconsider the scope of what can be patented (*cough* software *cough*). Most patents are meaningful, and legitimately advance science and technology. Individuals and corporations that see fit to carry out this reseach are deservedly rewarded.

      --
      ~Idarubicin
  4. Re:no conscience by thryllkill · · Score: 5, Insightful

    What I don't get is people who are shocked at how low other humans will go for money. Like no one ever tried to take advantage of do gooders before.

    --

    Note to self: No more arguing with the faithful.

  5. Re:no conscience by Anonymous Coward · · Score: 5, Insightful

    what does it take to chase a charity for alleged patent abuse. How does he sleep at night?

    Probally the same malfuction that gets the RIAA to request license fees from the Girlscouts to sing *puff the magic dragon*.

    In reality, a charity isn't immune to license fees. It's good PR and good on your taxes to donate the license fees, but you are not required to do so. I wouldn't blame anyone for charging the Red Cross for legit license fees. I would however blame the US patent system for allowing jarheads to patent trivial things like donations on a god damned website, as if this is a new and unique idea.

  6. But... by DuranDuran · · Score: 3, Insightful


    I know this may sound like a troll, but it isn't. If the US legal system is so good, shouldn't the American Red Cross win in the end?

    --
    "You can justify anything by putting it in quotes, adding a famous name and making it a sig" - Albert Einstein
    1. Re:But... by MoonBuggy · · Score: 4, Insightful

      The US legal system isn't so good. If it worked as it should then companies would not be scared into declaring that 'coffee is hot' or 'cape does not enable wearer to fly' in order to avoid getting sued. If the legal system worked then cases based on things that obvious wouldn't even be brought up.

  7. Re:Charity should not matter by MoonBuggy · · Score: 4, Insightful

    I would think any half decent human would not want to take a charity to court unless it was a major issue that was affecting them negatively. I don't think that the Red Cross accepting donations is really a great loss of income to the patent holders, so despite the legalities and even ignoring basic compassion shouldn't PR dictate that it's not right to sue?

  8. Pathetic by Wolfbone · · Score: 5, Insightful

    "Something can be simple, but we shouldn't be deceived by this," said Jack Slobodin, another patent attorney. "If no one has done it before or thought of it, it deserves a patent. Like the paper clip, or the Post-it note." And the inventor deserves compensation, Slobodin said."

    Protecting the rights of inventors is a necessary part of the research and investment fields, said Slobodin.

    Otherwise, he said, there would be little incentive for taking risks: "The inventor should have a key to the courthouse. There's a long, sordid history of big companies stealing the work of private inventors."

    The same old hopelessly flawed logic and a very good example of it: To make paperclips available to the World, which is what you are expected to do in return for the exclusive rights to profit from doing so, you need to invest in a paperclip factory, it's workforce, distribution network and all the other expenses associated with manufacturing investment. There lies the risk - a very great financial risk and rightly addressed by the patent system. If you consider an equivalently simple software or business method idea, where is that risk now? Just what exactly is it that needs to be protected? The only investment risk that needs to be protected in this case is the investment in the patent application itself and the litigation expenses required to extort money from legitimate and honest businesses and organisations.

    Just who do the legislators think they're protecting when they engineer a system that enables worthless parasites like PanIP to persecute small businesses and others even to gratuitously attack charities?

  9. Idea? by t_allardyce · · Score: 4, Insightful

    Why not directly base a patent on the ammount of R&D done and some 'market time' value: eg a stupid web patent such as donations on the net which obviously took someone back in the early days of the net all of 3 minutes to figure out would have a very low 'R&D value' and a very low chance of being granted or upheld aditionally the internet/computing industry moves very fast, so the patent would only be granted for say 1 or 2 years if it was granted at all.

    If a company had spent 5 years and billions in R&D of an innovative new type of engine it would get a high R&D value (dont ask me how thats calculated :P ) and because the car industry moves abit slower (lots of people still drive cars from the 90's) it would get a value of say 8 years and the R&D value would be taken into consideration in upholding its patents and charging royalties.

    The patent system is to give incentive and it does that by giving just enough time for someone to use a patent as an advantage before its open to everyone.

    --
    This comment does not represent the views or opinions of the user.
  10. Re:no conscience by jkabbe · · Score: 4, Insightful

    How about an overly complex, ambiguous, highly exploitable system of law? (in other words, big government)

    For the record, the patent system is not ambiguous. It is true that patents that are ambiguous or overly broad can slip through the system. But the system itself is well defined.

    And it may not have occurred to you but every system is exploitable, just in a different way. If there weren't patent protections, people would be stealing legitimate inventions willy-nilly.

  11. That's not true at all... by AzrealAO · · Score: 4, Insightful

    As I said, losing a lawsuit does not mean that the Lawsuit was frivolous.

    There is a difference between a Frivolous lawsuit (suing McDonald's because I'm fat), and a Lawsuit with merit, that is lost (suing Ford for negligence relating to SUV Roll-Overs).

    What 'loser pays' means, is that you must have an absolutely air-tight, 100% case before attempting a lawsuit as a private citizen or small firm. And if it's 100% air-tight, there really isn't any need for a trial now is there?

    The whole point to a trial is to determine the facts when they are in dispute. 'Loser pays' removes that option from the private citizen, and makes corporations nearly untouchable, since a private citizen can't risk failure without facing bankruptcy.

  12. Re:no conscience by Kardamon · · Score: 4, Insightful

    If there weren't patent protections, people would be stealing legitimate inventions willy-nilly.

    If there were no patents, nobody would even think of calling it "stealing"...

    --
    -- Qu'est-ce que la propriété intellectuelle? It is thought control.
  13. Re:no conscience by jkabbe · · Score: 3, Insightful

    And if there were no concept of the ownership of physical property no one would ever think of calling it "stealing" either.

    Did you have some point to make?

  14. Re:no conscience by cherokee158 · · Score: 3, Insightful

    I'm glad people are shocked. I was shocked. When people stop being shocked by this sort of thing, we really are in trouble...