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A New Species of Patent Troll
Geoffrey.landis writes "According to the Wall Street Journal, there's a new species of patent troll out there. These new trolls sue companies that sell products with an expired patent number on them. That's right, it's against the law to sell a product that's marked with an expired patent number. The potential fine? $500. Per violation. And some of the companies have patent numbers on old plastic molds that have made literally billions of copies. Using whistle-blower laws, 'anyone can file a claim on behalf of the government, and plaintiffs must split any fine award evenly with it.' You've been warned."
Who's the troll?
The company that invented the product, got their rightful patent, but their patent rights expired as they should, and is still using old packaging/molds/etc. that display the patent number and are now falsely claiming protection they don't have...
OR...
The lawyer who finds out about this violation of the law, and gets a finder's fee of $250 per product in violation distributed, and raises $250 per product in money for the government who definitely could use some help collecting this fine.
False patent claims can FUD a business away... but we also hate most lawyers here. Editors, please define which side to hate in all arguments. We /. commentators will crash if you execute Story.Comment without the required argument variable "$side".
Forest Group, Inc. v. Bon Tool Co. in 2009 paved the way (rocket docket Eastern Texas, of course) for big fat jerkfaces to go nuts. The AP told citizens it's okay to sue, hell even on Slashdot I submitted an article way back in Feb of Activision's problems with an incorrectly marked patent and because of precedent on incorrect markings we found out in March that this could cost some companies trillions. Expired or wrongly marked could cost you $500 per item sold.
My work here is dung.
Why is this a problem? So what if the patent is expired, it still EXISTS. In fact, the patent numbers are helpful because it leads you right to the source that tells you whether its expired or not, and indirectly, how long you have to wait before you can cash in by making a cheap knockoff.
their patent rights expired as they should, and is still using old packaging/molds/etc. that display the patent number and are now falsely claiming protection they don't have...
Most of these companies are undoubtedly committing these violations unknowingly, but GP does have a point that the law exists for a reason: otherwise people could go on falsely claiming patent protection indefinitely. Don't why the gov't has to split the money with random third parties, though, that's just asking for abuse.
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The emerging case law on this kind of action is putting the damper on a lot of get-rich-quick schemes. First, the potential damages are up to $500 per violation. Courts are not handing down massive damage awards; quite the opposite, in fact. It's likely that most of these cases will end up with damages assessed at some fractions of a dollar or even fractions of a cent per violation. $500 per violation is a cap on damages, not a target.
Second, the courts are setting a fairly high bar for the 'intent to deceive the public' element of false marking. The majority of these cases are the result of typos or failing to retool an assembly line the moment a patent expires.
As others have noted, incorrect patent marking stifles innovation.
Letting the public enforce this is efficient. It reminds me of how certain forms of illegal stock trading were discouraged. Certain stockholders are not allowed to engage in something called "short swing trading". If they do, and are caught, they have to give all their profits from the trade to the company. The brilliant way Congress and the SEC came up with to enforce this was to make it so any shareholder can sue on behalf of the corporation. If the shareholder wins (and he always does, because the people who aren't allowed to do these trades are the same set of people that have to report all their trades to the SEC, and so their illegal short swing trades will quickly come to light), the illegal trader has to pay the shareholder's attorney fees. Finally, in the most brilliant part of all, the shareholder only has to be one at the time of filing the suit--not at the time of the illegal trade.
Net result: law firms get the SEC data, run programs to identify short swing traders, go out and buy one share of stock in the company, and sue.
To make it worse, profits are calculated in a way that is very unfavorable to the defendant. Suppose you bought stock at 100/share, later sold that all at 90/share, then later bought the same amount at 80/share, and then sold that at 70/share. You've had a net loss of 20/share, right? That's what you bank account reflects--but that's not how the court calculates it. The court finds the lowest you paid and the highest you sold for and matches them. Repeat until as much is matched as possible. So, the court would just look at that 90/share sale and the later 80/share purchase, and order you to pay 10/share to the company. The remaining 100/share purchase and 70/share sale are ignored. So in addition to losing in reality 20/share on your transactions, and having to pay plaintiff's attorney fees, you also have to pay 10/share to the company!
This has made short swing trading so scary that among those who have to report their trades it virtually stopped shortly after these rules went into effect.
I wonder if the wording was changed. "This product is protected by patents ######### until they expire"
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I look at this from a slightly different perspective.
If we step back and take a look at what's happening, we must remember that a patent is a government granted monopoly on an ostensibly "innovative" process or method of doing something. Patenting processes or methods and then stamping the patents on molds or whatever has become so commonplace because getting a patent has become so commonplace. Government-granted monopolies should not be given out lightly and yet a coffee cup lid has umpteen million patents covering it.
The law seems to be a little outdated, but what the molds and such hint at is that patents are being seen as rights rather privileges.
They should simply pay $250 one time. Quickly you would see these "well intentioned" lawyers disappear.
That sort of fine means nothing to someone who makes MILLIONS of packages for their products and it may well lead to then knowingly using old patent information to both ward off other potential competitors - and in the worst case, pay a one off $250 fine. The whole concept of the $250 PER OFFENCE (meaning per item showing the false patent information) was to ensure that once it expired, you did no longer actually use it - opening the avenue for competition.
These "well intentioned" lawyers as you so callously put it are in fact doing what the patent offices/government should be doing to encourage diverse competition.
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Once your patents expire I'm gonna sue you for this post.
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Live by the Sword, Die by the Sword.
Bullshit.
/seriously/ interested in a product would simply look at it and give up. The company would certainly look up the patent to try to "get around it" and see that it had expired.
If a company was really interested in making a product, they'd check the relevant patent numbers online (which is pretty easy to do) and see that they had expired. No company that is
Stop making up scenarios that make no sense.
Taxation is legalized theft, no more, no less.
I actually blame the company. Packaging should have an expiry date built-in at a minimum. It's not like this is difficult to do: there are expiry dates on all dairy foods, and for good reason. Society benefits when people don't eat or drink food that's past expiry on a regular basis. Similarly, society benefits when the expiry date of a patent monopoly is clearly marked.
Companies still using an old mold which doesn't have an expiry date is just greedy. They should have put the date in when they went to the trouble of putting the patent number in, or they should bear the cost of a new mold if they're still selling new products from it.
An expired patent number on a product has positive social benefit. If anything, we should require the manufacturer to continue affixing the patent number to the product for a period after the patent expires. This lets you know how to reproduce the product, which you now have the right to do.
I don't know about the rest of you, but whenever I see a patent number on something interesting, I think, "OK, I can look that up and see when it expires". If they aren't allowed to keep putting the number there, the answer will always be "sometime in the future" as opposed to "x number of years ago".
In other words, if they aren't allowed to put the expired number there, it'll be harder to get the good news.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Stop making up scenarios that make no sense.
I am making a simplistic scenario.
/. are frothing at the mouth when companies use false DMCA takedown notices but apparently have no such anger directed at other companies using false patent information, we even defend them because of the "evil lawyers"?.
Why is it that we here at
Hypocrisy. You can't have your cake and eat it with this argument.
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Why not make a label saying the patent number and the expiration date of said patent? Then there is no misinformation, all of the benefits of patent marking, and no need to remake molds. Everybody wins
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Better check any patent numbers in those .C files and .H files for expiration.
I know i've seen patent numbers mentioned in source code before.
I'm not quite sure how the courts would deal with "possibly unlimited numbers" (of copies distributed), uncounted free downloads.
Perhaps it could be the first time a patent troll gets an unlimited damage award? "The court finds in favor of the plaintiff. The defendant is hereby order to hand over all their money, worldly possessions, and all money and worldly possessions they obtain for the rest of their natural live(s)?"
An expired patent number on a product has positive social benefit. If anything, we should require the manufacturer to continue affixing the patent number to the product for a period after the patent expires. This lets you know how to reproduce the product, which you now have the right to do.
Yes. I think the law should be changed, so it's OK to affix an expired patent number, as long as you print the expiration by the number, for example "Pat No 1,234,567. Expires XX/YY/ZZ
Should not incur a fine, as long as the expiration date is included and truthful.
Stop making up scenarios that make no sense.
Why is it that we here at /. are frothing at the mouth when companies use false DMCA takedown notices but apparently have no such anger directed at other companies using false patent information
Because the first causes real damage in practice, whereas the second causes none.
Nobody cares about a company's lying if it causes no actual harm.
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This is a silly question.
An IP troll is someone who leverages the power of IP law as a means to turn a profit. IP laws are intended to protect creativity in Arts and foster ingenuity in Science and Engineering. The ideal is to protect and nurture those who seek the betterment of all Humanity through the enrichment of our culture or expansion of our knowledge. Anyone who profits from patents and copyrights solely as a consequence of the laws that back the IP and not because of their own creativity and ingenuity of the creation itself is a parasitic troll engaging in abuse of tort.
The road to tyranny has always been paved with claims of necessity.
" possible compromise is to have products also list the year the patent will expire, and remove all ambiguity."
Until Congress extends or otherwise changes patent terms, as is its wont.
Also, from the summary:"it's against the law to sell a product that's marked with an expired patent number."
Do I smell legislatively forced obsolescence? Does this mean I can't sell old tools in a garage sale, without the mentioned patent trolls coming after me?
"National Security is the chief cause of national insecurity." - Celine's First Law
Not greedy, lazy. Most companies don't realize just how inexpensive it can be to get old molds modified.
Depending on whether the patent number is a boss or not determines how easily it can be corrected. In some cases, a skilled machinist can remove the patent markings from the mold with nothing more than a file and a polishing stone set. And yet, most mold shops buy their molds from someone else and don't have the skilled person to do the work.
It's a conundrum to be sure. Companies need to stop marking products as patented when the patent expires, but what these "trolls" are doing isn't socially beneficial.
You can't legislate goodness. Let each to his own destiny, by will of his freely made choices.
They aren't profiting from patents, they are profiting from abuse of patents, although you could argue that this abuse is generally small. There is some degree of public benefit from this and the only thing this discourages is improper patent labeling, which isn't really a good thing. This could make printing expiration dates the standard, which would actually be beneficial to the public.
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All these suggestions of "print an expiration" miss one thing: utility patents in the US require maintenance payments, so the expiration date is not set in stone; if a company were to produce goods marked with the latest possible expiration date, then through malice, neglect, or simply a change in business plans, fails to pay a maintenance fee? Now you have products explicitly stating an expiration date some years after the patent has gone out of force.
Why is it that we here at /. are frothing at the mouth when companies use false DMCA takedown notices but apparently have no such anger directed at other companies using false patent information, we even defend them because of the "evil lawyers"?
Filing a false DMCA takedown notice is intentionally committing perjury. In order to avoid committing such a crime, you only have to do nothing.
Selling a product that's marked as being covered by a patent that expired a month ago is probably just a retail store selling existing stock. In order to avoid committing a crime, the manufacturer would have to recall every store's stock on the day the patent expires and destroy every piece, potentially costing a large amount of money and wasting a large amount of resources.
If a manufacturer continues to produce items marked with patents that expired 5 years earlier, then sure, they should be fined, since it's pretty reasonable to check the production lines once per year, but going after them the day after the patent expires would be ridiculous.
A very simple solution is a sticker with all the patents. Since a bunch of stickers are usually applied to some product anyways, it's trivial to apply another sticker with the current patents that are still valid. Those that aren't valid anymore are either inked out, or a new set of stickers are commissioned (cheap).
The question is, though, at what point does it it count to be invalid? If I made a product, and it sits on a shelf for 5 years before it sells, at which point the patent expired, am I infringing? The patents in question were valid when it was manufactured, just it sat in some warehouse for an extended period of time (my warehouse, retailer warehouse, etc). Or what happens if it's the day before the patent expires? Technically it's still patented, but it won't be tomorrow...
In the case of a mold used to make plastics, stamp metal, ect., its incredibly expensive for a company to get a new mold made. I used to work at a CNC shop as a lowly peon preparing and finishing parts for military contracts, movie cameras and manufacturing molds. The company I worked for routinely charged big bucks for molds simply because it takes a large amount of skilled and unskilled man hours to produce it. An engineer typically did the initial design in some sort of CAD or other program, then the CNC machines were programmed to prepare the part. Then the part typically went through several CNC machines before being finished. After this the part's measurements were rigorously checked to see if there were within specifications. Then little turds like myself (I was a freshman in college) de-burred the sharp edges, put it through various chemical baths and polished the shit out of it before cleaning it one final time. The aforementioned is still a simplification of the process. Generally manufacturing molds were ordered only once. Suppose a patent expires. If a manufacturer chooses to have the patent number included in the mold at the get go, then they need to either modify the mold without decreasing the functionality of their product or they need to get a whole new mold made. A lot of times a company may only have one mold for a particular part, so the cost of any mistake in modification is large since it may mean totally replacing the mold. The point is that the company is not doing anything inherently wrong in using the mold to produce a product that they have been selling under a patent they either owned or licensed if the patent expired. It still references a patent number that can be looked up online to determine if its expired or not if someone chooses to spend the time. My point is ethical considerations need to be taken into account in enforcing this law, because the lawyers are only looking to score some cash at someone else's expense. To be unfair and use a logical fallacy, "Do you think this law is unjust or do you hate small businesses?".
That brings me to an interesting point, / . is just "the ramblings of socially-inept, technology-literate news-mongers".
Nothing, because the law applies to "making a product that blah blah blah" not "selling a product".
ASCII stupid question, get a stupid ANSI
Why not? "A foolish consistency is the hobgoblin of little minds," according to Emerson. Life is not a computer program. It is not necessarily important to get identical output when given the same sets of input, much less only similar sets of input.
Why is it wrong to denounce people who claim to own your work when they know they do not, who remove it from the public consumption you have decided for it and threaten to cost you thousands of dollars in legal fees to defend your own property? Why is it wrong to be unconcerned when a product has an expired patent number that hurts no one and may actually be a public benefit in that it allows you to look up the patent information, see it is expired and duplicate it if you so desire--an outcome that seems perfectly in line with the original vision of patents?
A product unmarked with patent information is not protected by patent (probably--is it a legal requirement to display patent numbers? I'm not sure). If you want to duplicate it, you're left to reverse engineer it. Displaying an expired number allows them to look the patent up and see exactly how it works. Which do you find a greater public benefit? How do you see an illegal or erroneous DMCA takedown as a public benefit of any kind, by any stretch of the imagination?
Both things are technically illegal; no one disputes that. One is best-case beneficial and worst-case indifferent, the other is best-case disruptive (they take it down, you put it back up and nothing more comes of it) and worst-case outright harmful (they take it down and, despite being in the right you leave it down for fear of the consequences of fighting). We're supposed to be ashamed to treat them differently? Because you say so? No, I don't think so.
I don't find it hypocritical at all but if it is, I'm perfectly content to be so on this one.
TFA mentions 50 years, about 49 years and 364 days short of your "day after". Additionally, the law is on the manufacture of goods with incorrect patent labels, not the sale, so it doesn't matter how long it was in the store. What matters is if you are still making them.
ASCII stupid question, get a stupid ANSI
Note that the law only specifies that the penalty is a maximum of $500 per violation, with the government getting half and the relator (a member of the general public suing on behalf of the government) getting the other half.
It's not really clear whether a "violation" is per product or per some larger unit of production. It's also not clear what the appropriate damages are for these cases. The courts have wide discretion to assign damages between the maximum of $500 per violation and an infinitesimal amount of money per violation. So, if the court says so, some company that manufactures a billion units of a product could end up paying out a billionth of a dollar each for a grand total of a dollar.
There are very few of these laws - called "qui tam" laws - on the federal books in the US. The most commonly seen one is the False Claims Act, an old old law meant to allow private citizens to sue government contractors on behalf of the government when those contractors perpetrate fraud on the government, with the relator getting a small portion of any damages awarded to the government.
When this law was written, looking up the patent likely meant somebody taking a horseback ride to Washington D.C. to the patent office and paying a patent clerk to locate the patent and bring it out for inspection. At the time, the law made perfect sense. However, technological progress has rendered the law unnecessary and absurd.
And this, friends, is a perfect example of why EVERY law should be required to have a sunset clause after which time it is abandoned if not explicitly renewed. The fact that all these archaic laws are still on the books is embarrassing. Important laws will, of course, be renewed. Unimportant laws won't. This would also effectively cap the number of laws that can exist at any given time, which would be a good thing.
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Is it really a problem though? A patent on a product just lists a number. You have to look up that number to see what the actual protection is, and there you will see quite easily if it is expired.
Falsely listing copyright would be a big thing because it covers all aspects of the product. But patents just apply to one technical aspect that you have to look up anyway.
The ______ Agenda
Does the law also apply to resellers? If it does I can see how this would be good for certain company strategies.
:).
There are many companies that have no intention of still selling the same product for 3 years and certainly do not intend to be still selling the same product for 20 years. So put a suitable patent number on say an iPhone and voila customers can't even legally resell their old iPhone by the time the new one is out, if you want an iPhone someone has to give it to you for free or you'll have to buy the new one
Also, from the summary:"it's against the law to sell a product that's marked with an expired patent number." Do I smell legislatively forced obsolescence? Does this mean I can't sell old tools in a garage sale, without the mentioned patent trolls coming after me?
Tis why you don't make business decisions on a comment on a summary of a summary.
To answer your question: no. This is similar to legislative bounties on other business practices that the state doesn't like, such as the ADA. I'm not going to get in to whether or not it is a good idea, but the notion that grandma selling dead gramp's tools is going to be hauled up on patent charges at her garage sale is silly. This is about claiming false "ownership" of IP.
There may be good policy reasons why we don't want to put a bounty on people who falsely claim to be in possession of state-sponsored idea rights. But it is important to cast what is going on here correctly: it is about (mostly, as in any IP, this is complex) about companies falsely claiming to own IP that they don't.
Some complaints in the original article ring true - manufacturing from an old mold, simple forgetfulness, etc.
Well, those arguments don't work well for most categories of business (try the "I forgot" argument in your next contract dispute). I don't see why there should be a difference for people claiming government protection on objects they sell.
Some of the hinted arguments I've seen (to be fair, not so much in that article) are even more bullshit - this should be allowed because they were true at one time, so we should be able to keep claiming it.
Bite me. Insofar as using a state-imprimatur for a monopoly on something should be allowed at all, it has to be honest. Even hippies should like this - state ain't gettin' no (or at least suboptimal) rent.
Libertarians should be much more up in arms. I guess anarcho-capitalists should applaud the chumming of the waters.
Anyone who live in the present world, however, should think this a good thing. It is pretty narrow: don't claim you have a government monopoly that you don't, and we're enabling bounty hunters to fuck you up if you do. Real producers with a problem on their etching molds will fix it; those that are exploiting it won't.
And for anyone who wants to claim "ZOMB, this will raise costs!", get back to me when you've come up with accounting that internalizes the overall cost of patents, before you start worrying about the costs of correcting lies about patents.
I forget what 8 was for.
Except the laws on validity periods could change during the lifetime of a product.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Expiry dates on food are there for a reason; it goes off, and when it goes off it's bad to eat.
This is not true of ethernet crimpers, the first thing that came to hand with a patent number on it. They'll still be good in twenty years time.
Also, expiry dates are not molded on, for reasons that even you can probably work out. Hence the comparison is totally invalid.
Nope, it's just common sense: if it ain't broke, why replace it? That's just wasteful.
What if there wasn't room? What if the validity period changes in the meantime? What if it wasn't foreseen that the product would be in production for so long? What if this dumb law was passed after the tooling up had been done?
You seem to like telling other people how to spend their money. What are you, some kind of communist?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
When I hear words and phrases like "simple", "trivial" and "a small matter of" it's usually a good indication that these minor trifles will be done (or paid for) by someone other than the writer.
-- Henry Ford
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
> It make it easy for other people to do a full check by just looking up the number that's stamped on the side of the product.
That's the thing. It does nothing of the sort. I still need to do a _full_ check as there is no guarantee that this list is exhaustive. I gain _nothing_ from this list while the manufacturer gains a chilling effect. Thus, both the time limit and the extra work in removing the stale numbers is more than justified.