Slashdot Mirror
Investment Companies Backing Patent Trolls
greenbird sends us to Forbes for an account of billions in investments flowing to US patent troll companies. One example is DeepNines, who is suing McAfee over a patent that covers combining an IDS and firewall in a single device. The patent was filed on May 17, 2000 and issued on June 6, 2006. No prior art for that, no siree. DeepNines is funded by "an $8 million zero-coupon note to Altitude Capital Partners, a New York City private equity firm, promising in return a cut of any winnings stemming from the lawsuit. The payout is based on a formula that grants Altitude a percentage that decreases with a bigger award."
LOL PATENTS RULE LOL
--
LOL I AM A PATENT TROLL LOL
So called patent trolls get a bad rap on Slashdot. I think it's unfair. If there is a hole in the open that can be exploited, you can expect it to be. It's just like when a young man goes to a bar like The Manhole.
This is just free market forces at work. If there was no profit, it wouldn't be viable and nobody would invest in these companies.
Personally I think this whole thing is overblown.
Google this now!
Third post!!!
...to fix the patent system, greed will.
Bloody leeches.
This is exactly why we need patent reform.
Seems like there's money to be made here. Probably google can shed some light on the situation, but where can one find what is needed to apply for a patent as a Canadian? I mean... wtf, RRSPs suck, getting a patent (on everything and anything) seems to be much easier.
And I can still post the fact that I modded you down without the mod-down being undone! Yay, comment abuse! Yay!
Seriously though, this would be a great time for FOSS promoters to come and go w00t. I don't know why.
MOD THE PATENT TROLL DOWN!!!
...you don't feed trolls, you mod them down!
Paleotechnologist and connoisseur of pretty shiny things.
Is there a clearing house for patent threats and corresponding prior art? A GROKLAW equivalent for prior art is clearly needed.
In a decade or two we'll likely see that it's impossible to build a solid economy upon intellectual "property". Unlike manufactured goods, IP has no inherent value. At least the material used to make a tangible product is often of some worth, even as scrap. The same can't be said for a patent, or a trademark, or an industrial design. The only way value can be derived from such things is through the use of artificial monopolies and the threat of civil lawsuits and/or other punishment.
A drive through Detroit, Buffalo, or most of the US midwest clearly shows how the manufacturing capacity of the United States is essentially gone. In such areas you'll see abandoned factory after abandoned factory. What's left is minimal, and even those firms are being squeezed out by foreign manufacturers. On one hand, these investment companies can only really put their money in IP. America has very little left in the way of actual manufacturing. Investing in businesses that no longer exist isn't really useful.
But eventually America will have to face the fact that it produces nothing with intrinsic value. All it takes are countries like India and China deciding to ignore American and international IP law, and the main item of production (ie. IP) of the US drops to a value of nil. China and India will exhibit strong economies, due to their actual production of goods with intrinsic value. The economy of the US, built around goods without any intrinsic value, cannot remain strong.
Now I wanna be a troll! Lemme see...
Macs rule!
Dick Cheney is the most evil person in all history!
Air Supply is the best band ever!
You suck!
If you don't know what Cmd-Shift-1 and Cmd-Shift-2 are for, GTFO.
If you think Firefox is a decent Mac application, GTFO.
If you're still looking for the "maximize" button, GTFO.
If the name "Clarus" means nothing to you, GTFO.
Bandwagon jumpers are not welcome among real Mac users. Keep your filthy, beige PC fingers to yourself.
I'm surprised this hasn't become a Vegas sporting event. It's got to be better than off track betting. I can see the old farts waiting in the Kino lounge for three years for verdict, while the guards are carrying out the cadavers of those who couldn't hold out. What a country!
What?
Newsflash: investments flow to companies that stand a chance at making money.
The problem is with current patent laws and the incompetence of the Patent Office with regards to IP. Companies exist to make a profit within the bounds of the law. The law is what we should be focusing on here, not the obvious fact that investors want to...wait for it...get a return on their investment.
AND HELP US!
These lawyers are mining ideas as if they are some kind of intellectual resource to be extracted from the companies that are adding the *real* commercial value -- you know, by actually implementing something.
Oh, wait, I already claimed that intellectual territory ten years ago I have exclusive rights to develop it. You owe me money, and I've signed up a bunch of investors to push the case through the courts. What are you going to do? Tear down all your work now that you've built your business on it? HA! Pay up!
Commerce under these circumstances is like building hotels on beachfront property where nobody knows who owns the land or where the boundaries are. Best not to build there in the first place, even though that wouldn't exactly be good for business ("innovation").
This article actually makes me a little sick, especially this quote: "We are focused on obtaining jury verdicts," he says. "That's why we put our own money at risk, all the way from acquisition through appeal." Sad that an important and inherently useful system like the patent is being used to such evil ends.
Computer software geeks meet the Big Drug companies. If you Google enough you will find that the lawmakers were in bed with Big Drug Companies who wish that Patent rights laws were stronger.
As opposed to software and other user generated innovations that build upon the writings and methods of those who have gone ahead in the discovery game.
Computer development is linear, you can see how each company leapfrogs another and soon the king of the hill pushes everyone off of their mountain.
Drug companies claim that they discover a certain formula and test the hell out of all side effects before coming to market. They spent all that money and want to be reimburst for the money spent on failures and developments.
Two industries with different methodologies and financial successes yet both are in the same patent boat. There ought to be a law but a King Solomon hasn't decided nor is likely to solve it soon.
Yes, a pure idea — without implementation?
If it is worth anything, then it can be sold.
And the more such companies there are, who compete for ideas, the higher the price...
So, in principle, it is good news, that the buyers of ideas are well funded.
It sucks, that, in practice, the patents are often too broad, but the principle is great. One can market a patented idea with possible implementors without fear of seeing it stolen, etc.
In Soviet Washington the swamp drains you.
Mod Parent UP GOD DAMN IT !!! Mod it UP! Do it now!
If too much money from institutional investors or hedge funds gets tied up here, it could be really, really bad. The sort of thing that can make economies collapse. The LTCM mess in 1998 is a good example - there was a massive bailout organized. It couldn't be allowed to fail - it would've taken too many things with it. So, why not? If you're a big enough fund, you get bailed out. If you're not, you're never on the hook for more than a small percentage of what you grabbed. So when I hear about this stuff, it just seems like an amazing gamble. Barely better than investing in lottery tickets, really. Geez, bet people feel good about those 401k/403b fund right now.
Seriously. Investing in these kinds of companies versus millions of dollars in lottery tickets. What's the difference? About the same odds and the same payout.
Save yourself the trouble and the time in court and the lawyers fees - and just buy lottery tickets.
Weaselmancer
rediculous.
... so I could write:
You bastards! You killed US corporate creativity!
Soon you'll be an IP wasteland, completely bereft of innovation as those with ideas seek other countries in which to make their money, out of desire to avoid US patent litigation.
First you export your manufacturing labour. Now you're exporting your brains. WTF do you think you're going to do for business in the future?
--
Don't like it? Respond with words, not karma.
Since I have a single device, a linux box, running tripwire and iptables...
Everybody here has been hyping about how lawsuits are going to become a revenue stream for cooperations. Welcome to 2007, where any lawsuit, as long as your wallet is deep enough, is funding.
Could this be the year when we see patent reform?
I really hope so, but my gut feeling tells me that it's not gonna happen, America. Too bad, so sad.
If I want to move to somewhere that has sane laws, does anyone have any suggestions?
When mad at one, try running a mile in their shoes. That way, not only do you have their shoes, but you are a mile away.
The BlackICE intrusion-prevention system put IDS and firewall on the same device. It shipped in 1999.
I patented the process of investing in companies who patent things.. so now I can shut y'all down and license my process.
Wouldn't it be funny if it turned out that China & Co were actually waging economic terrorism on the states via these investment firm's taste for litigation?
The irony would be delectable.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
These absurd IP Laws and Congresses unwillingness to do anything about it will come back to haunt the What is the status of US IP Laws in China and India and other countries? Copyright is one thing, but US patent law has got completely out of control. If these countries don't sign on to US IP law (the way US client states like Australia have), they will make themselves more attractive centers for IT industry and investment.
One example is DeepNines, who is suing McAfee over a patent that covers combining an IDS and firewall in a single device. The patent was filed on May 17, 2000 and issued on June 6, 2006. No prior art for that, no siree.
Is there? I've never seen a combination device like this prior to 2000. Can anybody cite an actual example instead of just saying "no siree" and assuming we'd all just get in the mob and believe there's prior art?
Comment of the year
Up to now only the big guys could enforce patents. Patents were ignored in new designs. Portfolios of patents were accumulated to use as cross-licensing bargaining chips when another big player squalked.
This innovation - financing the suit for a cut of the potential payment via a bond - lets anybody with a patent play in the enforcement game without putting the rest of their operations at risk. A little guy can enforce a patent on a big guy. The investors take the loss if he loses, a cut if he wins. Meanwhile his capital is safe and his ongoing operations (if any) can continue. Risk is assumed by people with enough money to survive losses and experience in spreading it appropriately and balancing risk and reward to achieve reasonable investment income and security.
Of course that will change the game entirely: A player financing his suit this way has little incentive to agree to a payoff in the form of a cross-license. And the less operation he has for a counter-suit to disrupt the less opportunity there is for counter-blackmail. (Limiting case is for a "patent troll", of course. But for a small enough operation taking on a big enough opponent it might be a better deal to respond to a counter-claim by folding the actual operation and living off the proceeds of the patent suit.)
The result, of course, is that a large number of patents held by little guys that are being blatantly infringed by big guys will now become enforcible and trigger an explosion of such suits.
Possible fallout:
- The big guys have to pay all the little guys for all the patents they've been blatantly infringing for years.
- Companies (ESPECIALLY large ones) will have to start paying attention to patented prior art.
- IP law gets rewritten to abort this scenario.
All of these - except SOME forms of the last - seem like they might end up being a good deal for the little guys.
Meanwhile the little guys have shallow pockets and aren't at significantly more risk from this than they already were from the big guys and the existing patent trolls.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
so purely intellectual goods will replace tangible goods. I predict just the opposite of parent. As China and India develop research regimes, they'll want the same IP protections that the US and Europe demand; they are violating IP now because it is expedient. As long as there is scarcity at all in our economy, IP will be with us.
"IP" laws are designed to create scarcity and the laws enforcing them will always be oppressive. A country that tries to build an economy on, "you can't do that because I say I thought of it first" is doomed. There will always be morally repugnant cases like life saving medicines that other nations will use as an excuse to exercise their freedoms. The "IP" nation will be forced to ever more hysterical and anti-social enforcement. Don't even bother with China and India as examples, first world nations want their freedom too.
The easiest example is software. M$ and other US companies would like to shut down or tax every other software company on Earth. They intend to do this with bogus patents and DRM'd hardware. If you think the rest of the world will allow themselves to be subjugated that way, you need to think some more. The US can threaten trade embargo and other measures, but it's not going to work.
Even in the most cynical case, where every country has it's own oligarchies, the competition between companies and industries will ruin any kind of "IP" empire. Such an arrangement would be devastating to the world economy and I can only hope we go towards free competition and away from government granted monopolies. The IP world you envision will be a dark age, where news is censored, history lost and technology stagnates for centuries. Taken to it's limit, you get a Byzantine system where everything is obsessively regulated but utterly lawless and a few constantly squabble for control of an ever shrinking pie. It is the death of civilization.
Friends don't help friends install M$ junk.
Newsflash: investments flow to companies that stand a chance at making money. The problem is with current patent laws and the incompetence of the Patent Office ...
People who invest in greed are more often robbed than the intended victim.
Friends don't help friends install M$ junk.
Such is the confusion of Intellectual Property. You can't talk intelligently about all of the specific protections created by government for Trademarks, Patents and Copyright at the same time, though each embodies original "ideas". Each protection is created to encourage a specific part of the economy and each has strict limits.
In the Patent case, what you are seeing is exactly the opposite of the intent of patent laws. Patents are granted so that people will share their inventions! People will always improve their craft in a free society. Patents grant an exclusive franchise to specific inventions - non obvious techniques for doing specific things. It's not just an idea and it should always be practical for it to be granted. Without the franchise grant, people would keep their improvements to themselves and the state of the art would stagnate. In theory, paptens encourage people to share what they know, so everyone is more productive. Patent trolls are taking out franchises on obvious inventions, or even methods, often with prior art to rob others. At the very least, they will encourage people to keep their methods secret. People abusing patents rob real inventors of their livelyhoods and cost all of us. At wost, they will destroy what's left of US industry and convert the country into a parasitic empire.
Ownership of ideas is a very dangerous and oppressive thing.
Friends don't help friends install M$ junk.
A company called Alteon Websystems Inc (acquired by Nortel in 2000) had a capability called WCR (Web Cache Redirection) which could be applied with a filter, that does EXACTLY what this patent claims. The feature had been in the product since 1998, maybe early 1999 at the latest. I deployed several web farms with this technology in early 1999, so I know its valid prior art. The WCR feature could be used to redirect ANY traffic, after it was passed through a set of firewall rules, a final firewall rule would forward it to a server.
Trolls with a high gloss, shiny finish? I thought of that years ago ! !
"M$" is getting nailed by the very system you claim they enjoy.
They not only enjoy patent nonsense, they helped make it so awefull to begin with. M$, though freely violating other people's work, has been a major backer of laws like the DMCA. Vista and the genuine disadvantage of XP should be enough to show you where they want things to go. Why you want to be dragged along and defend them at every step is beyond me. Like so many non free software schemes, software patents are so toxic and anti-social that they also harm those who sought to use them in the first place.
I'd really appreciate it if you showed us a single instance of Microsoft (oh, "M$") using a patent offensively.
I'd say the above linked rants of Mr. Balmer are terribly offensive. The SCO lawsuits are an example of M$ abusing copyrights by proxy. In the patent case, I can agree with some of the things a younger M$ said about patents and losers. They may not have meant those things when they said them, but they were fine words all the same. Those that can't innovate, litigate before they go out of business.
Friends don't help friends install M$ junk.
You8 replies rather
The US economy is moving towards the only area which has longterm viability - IP.
With the inevitable invention of machines capable of fabricating any item at a molecular scale, the US is fortunate that its economy has already started to transition away from the soon-to-be-obsolete area of manufacturing.
Not going to happen quite yet, but I bet we have Diamond Age type manufacturing long before we ever see an end to IP law.
This sig all sigs devours
"Investors of weapon industries want return on their investment". So because the world is naturally moving towards world peace, lets call the arabs evil, start a few wars with a couple of countries and take their oil while we are at it. Because the investors want return on the stocks they bought from "Machineguns & Missles Ltd". Why Not? And lets lobby that on president Bush.
Despite enormous international pressure, software patents aren't enforceable in most countries and (cue gasps of astonishment from US slashdotters) there's actually a huge IT industry outside North America. Unless the whole world introduces software legislation, this is how I see the future:
In the next decade, a huge tranche of software will be developed that can't legally be used in the USA. Meanwhile, US software will become less innovative (due to fear of legal reprisals) and more expensive (due to legal costs and licensing fees) than software available in the rest of the world. Costs to US businesses will rise, as they'll be denied access to the most economical and innovative software. Often, two versions of critical business software (databases, operating systems, CRM systems, etc) will be produced - the full-featured world version and a crippled, feature-deprived US version. Mainstream US businesses will realise that they're at a competitive disadvantage and will begin lobbying against software patents. Finally, patents will be removed and the cheaper, better foreign software will flood the US market. US software companies will be as helpless as bowling pins and will drop even faster.
The process will take 10-20 years, so sit back and enjoy the show. Europe, India, Russia and China, please note: patents are the US software industry's suicide note.
Although I agree, that the current implementation of the Patent system in the US is buggy, the above-quoted statement is non-sense. Although buggy, the patent system works — and worked for centuries — driving innovation. As making things becomes easier and easier, designing becomes more and more valuable. An idea deserves no less protection, than physical goods or real estate.
In Soviet Washington the swamp drains you.
To re-iterate the GP, patents are not there to protect ideas, but inventions. Patent law explicitly forbids the patenting of ideas, even though the USPTO seems to ignore the law (viz. one-click patent). As for ownership of ideas, try to think this one through. If one can patent ideas, any random thought can be owned. So I can patent time-travel, more fuel-efficient cars than currently exist, mi's next twenty comments on slashdot, the cure for cancer, etc., etc. As I would own these ideas, anybody that actually invents one of these should pay me money, as the ideas are rightfully mine.
...welcome to the age of litigation.
"purely intellectual goods will replace tangible goods."
Think so? What's the nutritional value of IP?
If you want your life to be different, live it differently.
Imagine if Henry Ford could have patented the concept of a 4-wheeled vehicle powered by an internal combustion engine. How about if Sam Morse owned the rights to the concept of sending intelligible messages over a wire? GM wouldn't exist and we wouldn't have had telephones until the 1930s.
Patents exist for the protection of innovation. Putting two programs on the same machine is not an innovation.
For example. Lets say I were a really damn good Theoretical Mathematician.
Lets say I come up with a Compression Algorithm that just screams. I mean its blazingly fast and can compress a 10 gig JPEG file down to say 10K in about 1 minute and on top of all that its lossless. Hand it an Oracle or MS SQL database and it can achieve 99% compression in mere seconds.
Now I have spent the last 10 years perfecting it, in utter and complete secrecy. My wife and kids barely see me because I am devoted every spare waking hour to this monumental achievement.
Now I can copyright the code that I have written, lets say its 10K lines of really solid C code. But as we all know there is more then one way write a given algorithm, and there are over a dozen languages to write it in. So anyone that has reverse engineered my binary, can re-create my program in another language, using different techniques, would be pretty much free of my copyright protection.
So now what am I to do? I have invested 10 years of my life to come up with this. I want some return on my investment. How can I achieve that when someone else will simply re-engineer my code to circumvent copyright? If I cannot protect the methods and structures I have created, what am I to do? What is my recourse to own my own work and control its distribution? What would be my incentive to make it better? What would be my incentive to work another 10 years creating something like say, the hottest gaming engine ever?
Hey KID! Yeah you, get the fuck off my lawn!
promising in return a cut of any winnings stemming from the lawsuit
I really have to wonder how this is legal. Yes, I'm sure it is (lots of stupid things are), but a business based entirely on the principal of suing others seems to be a flagrant abuse of the court system. In fact, I wonder if that would be strong grounds for having cases dismissed, as defendants could argue that the plaintiff and it's patents exist not for any purpose of enriching society, but strictly for the purpose of restricting the growth that patents were supposed to promote. Didn't the judge in some recent RIAA cases basically state that the intent of the system was, in fact, being circumvented?
And to clarify, having a business based on suing people is a bit different from being a lawyer, etc. The lawyers exist as intermediaries to provide legal support, but do not actually make claims themselves (unless defamed/libelled/etc), so while their business is based around lawsuits, they are based around others' lawsuits which may, in fact, have solid foundation.
don funding a hijacking operation?
"promising in return a cut of any winnings stemming from the lawsuit. The payout is based on a formula that grants Altitude a percentage that decreases with a bigger award."
This sort of thing - creating "nuisance patents" and bringing nuisance lawsuits for a cut of the winnings - should be illegal.
Richard Steven Hack - This sig is TOO GODDAMN SHORT TO DO ANYTHING USEFUL WITH! MORONS!
If you have something great, charge people to use it... don't sell the idea, sell the service. Let them log on to your servers... where you compress the data, and let others access it as needed. You now have the ability to do something your competitors don't...
This is how business works. If you can do a better job than others, you should be able to make money doing it. You should not be making money because you THOUGHT of a way to do a better job. People pay for results.... Sell them something that is valuable... a service, not something that they can make valuable (the idea).