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Patent That Cost Microsoft Millions Gets Invalidated (arstechnica.com)
An anonymous reader links to a report on Ars Technica: One of the oldest and most profitable patent trolls, Uniloc, has been shot down. Its US Patent No. 5,490,216, which claims to own the concept of "product activation" in software, had all claims ruled invalid by the Patent Trademark and Appeals Board (PTAB). The process through which PTAB eliminated the patent is called an "inter partes review," or IPR. The IPR process, created by the America Invents Act, is an increasingly popular and effective way for defendants to challenge patents outside federal courts. It was Uniloc's lawsuit against Microsoft that provided the company with its original headlines. Uniloc said that Microsoft's system of checking software licenses -- in other words, type in a key number and have your software validated violated -- the patent. That case led to a $388 million jury verdict against Microsoft.
Don't like the sound of that.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Shouldn't:
One of the oldest and most profitable patent trolls, Uniloc...
read:
One of the oldest and most profitable patent trolls, Microsoft...
Uniloc must look in envy at the revenues from Microsoft's Android patent shake down. It's clear from this case who has the better legal team, and we all know you need a good legal team if you want to use bullshit patents to extract billions from legitimate companies.
Microsoft's patent trolling legal team probably walking out the court room saying, "Pfft, amateurs!"
I can't decide who to root for.
Well, who to congratulate, now.
Microsoft actually have products
Uniloc too: it's actually one of the oldest software company operating in the security and product activation technology area.
While normally such a case would have been expected to drag on for generations, this one was wrapped up surprisingly quickly. Uniloc filed suit in 2003, received the $388 million jury award by 2009. The judge overruled the award. However, in 2011, the Appeals Court reinstated but with the proviso that a new trial was needed because the basis under which damages were calculated were flawed. Thus far, all very normal. Then, in March 2012, Uniloc and Microsoft agreed a confidential settlement! Personally, I cannot imagine what the lawyers were thinking. The settlement cost them a fortune.
Anyway, the net result is that invalidation of the patent helps Microsoft not one bit. They already capitulated years ago.
Uniloc OTOH is a total NPE. They produce nothing of value.
They produce something. And they've produced security and DRM related stuff since 1992.
This doesn't necessarily mean the original holding was wrong--remember that probably *most* software patents have become invalid in the last fifteen years. The Supreme Court has made software patents much harder to get, so old ones that issued are often shown invalid after review. That doesn't mean you can violate them without being subject to damages (because they are issued and therefore have a presumption of validity)--but it does mean that if you trigger a review or fight them, eventually many of them will be shown invalid.
Microsoft doesn't even have the guts to say which patents Linux, Android, whatever violate. They operate on pure FUD. That's worse than a patent trolls.
So nothing a value then.
These guys should give it back, no?
“He’s not deformed, he’s just drunk!”
Microsoft doesn't even have the guts to say which patents Linux, Android, whatever violate. They operate on pure FUD. That's worse than a patent trolls.
Their stated reason being that the patents might be challenged and invalidated. They are patent trolls IMO.
You make a good point. However, the Supreme Court doesn't make the law. When SCOTUS makes a decision, not based on a new law passed by legislature, they are decreeing what the correct interpretation of the (old) law is. In other words, they ARE saying that any decisions to the contrary were wrong. There just wasn't a clear way to KNOW they were wrong until SCOTUS said so.
A century or more from now, people are going to look back at software patents the way we do at indulgences, serfdom and other medieval stupidity.
Rule 35 of the internet: "If it can be hacked, it will be". - Charles Stross
The Appeals Court entering a simple decision, finding for or against the Plaintiff, would have ended proceedings (actually, not quite: there are additional games that can be played should such a mistake occur). This is not in the best interests of the litigation industry. The Appeals Court is supposed to find any reasonable excuse to draw out the proceedings.
This doesn't necessarily mean the original holding was wrong--remember that probably *most* software patents have become invalid in the last fifteen years.
Most are never challenged, but you are right that those few which get challenged are frequently invalidated.
I've learned from various discussions with my legal department friends there are many changes in patent agreements over the past few years.
(Liberally using "we" and "you" to represent the sides:)
* Indemnity rules are slightly changing. If we are licensing your patents, if someone else comes after us about your patent, companies are making it more likely you pay the costs.
* Payment is more often gradual over time rather than once-off. Patent rules don't allow for 'refunds' after using a patent. (Mostly to stop someone for using a patent for many years, then after getting enormous benefit, challenge the patent and try to get a refund.) But they do allow payments to be held in escrow for a short time, allow temporary holding of payments during a challenge, and allow termination of payment if the patent is invalid or unenforceable. To hedge the bet they may pay a little more money for the patent license but spread it over the full duration, or make payment based on milestones hit (such as getting a successful clinical trial, or having the product available in stores, or reaching a financial threshold), or making balloon-style payment with moderate size payments over time plus a large final payment.
* Licensees are making explicit the existing requirement for repayment in events of fraud or material misrepresentation, including if the fraud was against the patent office. This makes it a little easier to enforce one of the rare ways to get money back from a bad patent license.
* Licensees are focusing more on the description of use rather than the patent numbers. This helps in cases where there may be several closely related patents. Already the courts have ruled that you cannot add new patents that block us from using a patent we already licensed. But this protection is that if we licensed specific patent numbers with the intent to do a certain thing, and you have other patents related to doing that thing, the license covers those too.
So yes, businesses are adapting to a world with an increasing number of patent invalidation and certain troll tactics.
//TODO: Think of witty sig statement
You make a good point. However, the Supreme Court doesn't make the law. When SCOTUS makes a decision, not based on a new law passed by legislature, they are decreeing what the correct interpretation of the (old) law is. In other words, they ARE saying that any decisions to the contrary were wrong. There just wasn't a clear way to KNOW they were wrong until SCOTUS said so.
Actually, no--the Supreme Court does make law. It's called "case law." It interprets other laws to do that, and clarifies what those laws means--but the decisions of the court are still law.
5,077,660
5,199,066
5,291,598
5,509,070
5,956,505
The Appeals Court entering a simple decision, finding for or against the Plaintiff
Which they cannot do. They can settle/correct questions of law, but only an original jury, or judge if no jury, can settle questions of fact and degree of guilt, and these were affected by the errors in the original trial so much that their verdict needed to be set aside and a new trial held.
Technically, an Appeals Court is legally not competent to state that the Sun rises in the East and sets in the West, except as commentary on their decision.