Visto Founder Blogs about Microsoft Lawsuit

neelm writes "Reported a few days ago, Visto is suing Microsoft over patent infringements. David Cowen, a founder of Visto (and Verisign) has made a recent blog post about the patent involved. He clears up what exactly the patents involved are, but what may be a more interesting read is the patent itself - issued in March of 2004. It might be nice to see Microsoft defending itself from patent litigation I admit, but I'm not sure I want to give validity to this patent."

Comments

Blog Excerpt

[Stan Vassilev]

"Today I woke up and started preparing for work as usual. Brushed my teeth, shaved, took a shower. But you could sense the tension in air. Today I'm filing patent violation suit against Microsoft.
During the years, we've had the chance to sue the hell out of a lot of companies for all sorts of patented ideas we came up while picking our noses, but this is my first big project.
Needless to say, I'm pretty nervous and excited to work with the legal department of such a big and popular company. I've met with them couple of times, and they appear to be a bunch of great guys, so I hope we'll do a great job together."

Re:Patent?

[a_n_d_e_r_s]

Actually someone tried to patent addding 1 and 1 elektronically!

They luckily did not get a patent. But this was many years ago when patent examiners had time to actually read a patent!

Re:David versus Goliath?

[I!heartU]

They can be patented: These rules changed in July 1998, when a federal court upheld a patent for a method of calculating the net asset value of mutual funds. State Street Bank & Trust Co. v. Signal Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998) cert denied 119 S. Ct. 851 (1999). The court ruled that patent laws were intended to protect any method, whether or not it required the aid of a computer, so long as it produced a "useful, concrete and tangible result."

Maybe this will cheer MS up

[kalel666]

It looks like the fifth patent NTP was suing RIM over has been overturned by the USPTO: http://www.linuxelectrons.com/article.php/20051221 150546394

The article seems upbeat about patent reform coming, but I doubt it. I think the prevalence of Blackberrys in D.C. probably had more to do with this being overturned.

Re:How did that get a "patent"?

[Christian Engstrom]

[P]atent clerks screw up (possibly even more than most people since I hear being a patent clerk is a crappy job).

The main problem is not that the patent clerks are stupid or incompetent or anything like that. In fact, most of them probably aren't.

Instead it is the economic incentives built into the system that ensure that the patent office will continue to grant more and more obvious patents.

Nowadays most patent offices around the world are already "self funded", so the fees go back to the patent office. This means that the patent office has an incetive to grant as many patents as it possibly can.

A look at the USPTO fee list [uspto.gov]USPTO Fee Schedule explains the underlying math.

The basic application fee for a patent is $300, but you also have to pay a "search fee" of $500 and an "examination fee" of $200, making it a total of $1000 for making an application. But in order to collect that money, the patent office has to do quite a lot of work: set up a file, do an initial formal examination, perform a novelty search, and quite often engage in correspondence with the applicant to sort out various issues. It seems reasonable to assume that initial applications "as such" do not cover their own costs for the patent office.

But once a patent has been granted, nice things start to happen to the patent office's profitability calculations.

At the moment the patent is granted, the proprietor has to pay $1400 in "issuance fee". Then, in order to keep his patent valid, he has to pay maintenance fees at regular intervals. $900 is due at 3.5 years after it was granted, $2,300 due at 7.5 years, and $3,800 due at 11.5 years.

For a patent that is renewed throughout its full term, the post-allowance and maintenance fees add up to $8,400, compared to the $1000 for the initial application.

And the renewal fees are the good part of the patent office business, since the PTO doesn't actually have to do anything for the money, except make a note in the file that the fee has been paid. So for those patent offices around the world that are funded in whole or in part by the fees they collect, there is a direct incentive to let the standards slip to the lowest level they can possibly get away with.

The result can be seen at a patent office near you.