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U.S. Supreme Court Deals a Blow to Patent Trolls
Anonymous Coward writes "Forbes is reporting that the Supreme Court has just limited the power of patent trolls to obtain permanent injunctions against infringers as a matter of course. The court has ruled that the principles of equity apply, meaning that a court considering slapping an injunction on the infringer must consider how much damage is really being done ... which in the case of EBay's Buy It Now feature, isn't much, since the company that owns this so-called patent only has it for the purposes of suing other people." From the article: "The high court's decision deals a blow to patent trolls, which are notorious for using the threat of permanent injunction to extort hefty fees in licensing negotiations as well as huge settlements from companies they have accused of infringing. Often, those settlements can be far greater than the value of the infringing technology: Recall the $612.5 million that Canada's Research in Motion forked over to patent-holding company NTP to avoid the shutting down of its popular BlackBerry service."
If they can't get simple terminology correct, how can we trust their reporting?
For those who're not following me, consider the following quote from the article:As they've written "owners of intellectual property" rather then "patent owners", the sentence actually means:This is clearly not true.
There are shills on slashdot. Apparently, I'm one of them.
...Creative just filed a lawsuit against Apple regarding the iPod.
Doh!
Apple lucked out. Creative can't get an injunction "just because" which could have been a serious blow to Apple's sales even if Creative ultimately lost the case.
This is yet another example of the upcoming "patently" evil Supreme Court, now stacked with far-right extremists and corporatists by BushCo. No checks and balances, controlling all three branches of govern...
Hmm? What's that? This is a good thing, and slashdot likes it?
Oh.
Hooray, Supreme Court!
(The decision was unanimous, by the way.)
Now let's watch until the big coorporations (I'm looking at you, Bill, and your adopted son Darl to!) ask the American Federal government to change this situation.
No really! This is just theft of income for some companies!
Positive things in the patent war never last. Mark my words.
Free beer is never free as in speech. Free speech is always free as in beer.
The problem with the "patent trolls" idea is that it's all but indistinguishable from the "small inventor with few resources" one in many cases.
This ruling does mean that if you're a small-time inventor that couldn't afford to implement your idea yourself, you can freely be ripped off by large corps that can, with impunity, since you wouldn't have made a lot of money without a major partner in any case.
Tell me again how patents are protecting the inventor against large corporations?
Trust the Computer. The Computer is your friend.
I guess this means my recently granted patent on "a method of maintaining a patent portfolio for the purpose of litigation and licensing" is never going to work out too well given I won't be able to the sort of injunctions I'd want against my targeted patent houses.
Well... back to the drawing board.
Help Brendan pay off his student loans
I keep seeing comparisons of how RIM was "abused" in this manner. However, RIM is no stranger to using the courts to extort licensing fees either.
Granted, I think professional patent trollers ought to be shut down, but using RIM as an example of a "victim" in this process is a bit disingenius.
Won't this ruling hurt the garage inventor that doesn't have the business accumen to bring a product to market, but has the creativity needed to make new stuff?
Is the ruling, in essence, "patents were made to protect products, not ideas"?
Although I certainly regard this as good news in general for small businesses, it does bring up a concern.
Recently there seems to have been a rise in "patent trolling", I hope that this ruling does not cause "patent exploitation". I worry that, big business being what it is today, will use this as an excuse to further exploit other's patents without recourse.
If someone has a legitimate invention that they patented, they should be able to stop others from unlawfully using their work.
Not trying to disagree with the ruling, just saying that there are two sides to this coin.
But doesn't the ruling also hurt bona fide inventors, not to mention the many universities that fund their research and own the patents? To be sure, it plainly erodes the power that has been typically bestowed by a patent. Patent law unambiguously grants owners of intellectual property the same rights as regular property holders, including the right to exclude others from using their property. But the law also clearly states that injunctions "may"--not "shall"--be issued "in accordance with the principles of equity."
The interpretation of one word does not necessarily hurt a patent owner. It simply means the court has discretion to order an injuction, not that it is required to. If you're a legitimate inventor and you have a clear-cut case of infringement then this does not apply to you, but if you're a patent troll, only in it to bilk companies out of money enforcing patents you'd left mouldering in a drawer, then you may be out of luck unless you can prove your case. Frankly, this is the best thing to happen to the patent system in a while.
GetOuttaMySpace - The Anti-Social Network
This is positive even if it hurts the small inventor. This person I know works as a copyright lawyer. Coincidentally for Microsoft. Her job is to find vague ideas that have not been patented and patent them in as many countries as possible with the broadest most vague wording that could possibly hold up in court. Microsoft's idea is that 20 years down the road each patent will pay off itself 100 fold. So why is it okay to do something that hurts the small investor? Because now the small investor can't be sued when they come out with a breakthrough product simply because it infringes upon some BS patent held by a company with zero intentions of ever doing anything with it... well, except for using it to hold a small inventor hostage and take all his/her possessions.
All you need now is a new law, allowing patents to be annulled early if they are being misused. Physical property can be confiscated if it is misused, and proponents of the term "intellectual property" like to think that ideas can be owned like physical property, so why the hell not?
Je fume. Tu fumes. Nous fûmes!
I was under the impression that EBay's Buy It Now was something users had been clamoring for from day one. I know I always thought, "It'd be nice to let someone pay immediately instead of dragging this out". It's basically an extension of "$XXX.XX OBO" into the online world.
Obviously, that's a bogus patent. Appending in the context of an online system shouldn't make it automagically patentworthy. Perhaps we should not allow ANY injunctions until the patent has been further reviewed by the USPTO. If the USPTO decides to revoke or invalidate a patent before the case goes to court, wouldn't that be better than letting it go to a high-profile court case and then having to read 35 stories about it on Slashdot?
True science means that when you re-evaluate the evidence, you re-evaluate your faith.
the company that owns this so-called patent only has it for the purposes of suing other people.
Why else would you own a patent?
Social scientists are inspired by theories; scientists are humbled by facts.
"This subtle change doesn't destroy the shackles of our broken patent system, but it certainly loosens the bonds that tie innovation down. And perhaps most importantly, it demonstrates that the Supreme Court understands how oppressive the current legal system has become with respect to patent litigation. This decision is, perhaps, a portent of how the Court might feel about several other important patent issues it is schedulued to hear."
From Right to Create
Won't this ruling hurt the garage inventor that doesn't have the business accumen to bring a product to market, but has the creativity needed to make new stuff?
Is the ruling, in essence, "patents were made to protect products, not ideas"?
No, the ruling doesn't in any way change what is or is not protected by a patent... it just changes what sort of immediate business-ruining action (through injunction) a patent holder can take while trying to get things sorted out. For someone that only holds on to patents for the purpose of suing productive parties actually making money on the technology/idea in question, it's a poke in the eye (good!). For someone that can legitmately demonstrate that another company is running around making money on their patented idea... well, this doesn't stop them from still forcing a change and collecting damages as appropriate, just as they'd always have done.
Now, the only reason I can see the ol' injunction still having merit would be when the patent holder can show that, say, every day the Bad Guys are doing business with the other company's patented idea, the other company is losing out on a future market that may just never come back their way. Some ideas only have a certain useful life, or once another company has made a market entry with it, it's the end of the opportunity, no matter what happens in court later. The ruling here provides courts with an opportunity to still review and act on such things, but not to reflexively grant an injunction just because someone says they should. They have to actually think about the situation. It's a good thing.
Don't disappoint your bird dog. Go to the range.
Well this is good news. It means that there is less opportunity for RIM jobs.
yeah yeah, mod me down for the horrible-punned-to-death-already.
"I have great faith in fools: Self confidence my friends call it." ~Edgar Allan Poe
Could read either way. On balance, the abuse of the patent system is harmful and needs to be addressed. That should be handled, however, by legislation, not litigation. Allowing the common law to change the patent system may briefly serve the greater good, but it is ultimately a bad thing, m-kay. Sadly, we're sort of left with no other options. Our esteemed reps in Washington are utterly obsessed with winning votes and power so they can ... enact policies to further secure their votes and power. One begins to wonder if term limits might have been a good idea after all.
"I have never won a debate with an ignorant person." -Ali ibn Abi Talib
Many companies hoard pools of patents without ever having the intent of suing people, but only using them as self defense if they get sued. All and all, this limits the power of the defenders just as much as the patent trolls, but doesn't solve the fundamental problem with patents. If 10 million people own patents, and everybody uses those patents, then each person get's the value of one patent, but has to pay the license of 10 million patents. On the other hand, if there were no patents, then each inventor would loose royalities over one patent, but gain the value of 10 million patents. It is stupid to treat petnets like they have the natural limits of physical property. Patents simply won't work in a world of 5 billion people where everybody is nickeling, diming, and suing each other to death. That is, except to reward big large giants at the expense of killing off small innovators.
If the Blackberry service wasn't worth $612.5 million to RIM, they wouldn't have paid, but rather shut it down. So that actually is an example where the value of the technology was more than the settlement - it would have made no sense for RIM to agree to pay more than the technology was worth.
... it's still a $1k car. You're just going to be paying 5 times that. The value has been artificially increased, and only in relation to you.
I think you're a bit confused on the concept of "value".
The technology wasn't necessarily worth $612.5 Million. The ramifications of being shut down by an injunction were. This is called extortion in many cultures.
If I tell you you're going to pay $5000 for car with an actual value of $1000 or else I'm going to break your legs so you can't walk to where you need to go
- Roach
Well, it depends what you do with it. If you develop a working, stable product from your invention, it sounds like the supreme court will uphold your patent. However, if you aren't selling anything either because 1. Your invention had horrible flaws or 2. You really never intended to develop a product from your invention : then you aren't really out any money for someone else stepping in and making the better product. And unfortunately, today's patent laws encourage people to play "squatter" with inventions, claiming them years ahead of when they can actually develop them, ultimately leading to very useful ideas being caught in the red tape of a "I had it first!" game.
You can get 15 minutes of fame, but you can go down in history for infamy.
Your question implies that the goal of patents is to protect small inventors against competition. Let's not lose sight of the fact that this is NOT the goal of patents. Their goal is to increase the number of useful inventions to which the public has access. It is only incidental (i.e. a means to an end) that the method being tried to achieve this aim happens to be granting a temporary monopoly. Interpreted one way, this ruling by the supreme court says it's not right to create an idea and then simply sit and goal tend it... I don't know the court's reasoning (haven't read the article or the ruling) but this would seem to align with the idea of making useful things available to the public.
- First they ignore you, then they laugh at you, then ???, then profit.
There are many other possibilities, but overall they're all a little brighter from the inventor/innovator's point-of-view (heck, I might even dust off some of those old ideas I've been figuring someone'd been sitting on the patent for...and I'm a classic cynic!)
**I know, I know, this is assuming a fairness that in all probability won't actually show up in court...
This space intentionally left (almost) blank.
I thought the whole point of getting a patent was so that you were the only one that could legally create instances of your invention. Now it seems you can get a patent, and your competition can go ahead and use it anyway?
If you read the article, you'll find this has nothing to do with the validity of patents or eventual compensation.
What it does mean is that you can't extort an inflated price for your "technology" by getting the infringer shut down while the legal proceedings take place if you are not somehow actually suffering damages by its use.
The legal process still occurs, and if you have a valid patent that is being infringed upon, you will win. The difference is that if your never-implemented-obvious-idea gets tossed out, the "infringer" didn't have to cave in to your demands or suffer huge business losses while the proceedings occured.
Makes perfect sense to me.
- Roach
I always wondered.
Man, you really need that seminar!
So they got one right this time.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Patent laws need a change. People shouldn't get away with patenting ideas like MercExchange just did. "buy it Now" is an idea. It is not technology. Amazon.com's 1-click does the same exact thing.
Patent Law should be changed so only physical and exact things are patented. One should not be able to patent ideas. This includes software patents.
\
For the most part it is a pretty cut and dry decision stating that a 4-part based on the principles of equality should be applied before an injunction is granted. Specifically:There is an interesting part of Thomas opinion:This basically lays out that just because a patent owner has no intention of selling or making the product does not mean that they automatically fail the 4-part test. Presumably if they also have no intention of licensing the patent to someone they would fail the test, but this isn't specifically said in the decision. Might be something to watch for in the future.
Off to read the two concurring opinions.
"I have a porkchop, you have a porkchop. I have a veal, you have a veal".
Pamela Jones has posted an article on Groklaw written by Theodore C. McCullough Esq that does an in-depth analysis of this case based upon many of the amicus curiae briefs. I've not read it in detail yet, but it looks highly interesting.
Gee, I would have thought that /. would have posted a story about the fact that the PTO granted a rexam of the Amazon one click patent on Friday, but I guess I'll have to wait...
Disclaimer: IANAL (let alone an IP or Constitutional law Lawyer)
I have nothing to add to the details of this particular case, but I think it is at least interesting that this appeal, from the Court of Appeals for the Federal Circuit (CAFC) was a UNANIMOUS REVERSAL. Over the past 30 years or so, the CAFC (and predecessor Court of Customs and Patent Appeals) has pretty much been the interpreter of US Patent Law. But for a few, scattered reversals by the SCOTUS, what sayeth the CAFC, rules. And the CAFC has been, over this time period, the best friend that patent applicants and owners could ask for, oncluding, beyond this question of injuctive relief, lowering the bar on what is needed to overcome a determination of obviousness (you have to show "motivation" to combine two or more references), or expanding the scope of subject matter that might be patented (software and business methods).
This is an indication that at least some of the antics of the CAFC will not be rubber stamped by the SCOTUS. Of course this is not to say that the SCOTUS won't ratify these other CAFC expansions, but it goves some hope that this judicial loose cannon might have its muzzle plugged, at least a bit.