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Cloudflare Declares War On a Patent Troll With a $50,000 Bounty (fortune.com)

Internet security company Cloudflare has declared war on a company called Blackbird that consists of a group of lawyers who file patent lawsuits against tech and retail firms. In a blog post titled "Standing Up to a Dangerous New Breed of Patent Troll," Cloudflare called Blackbird's business model destruction and unethical, and announced a $50,000 bounty to anyone who would help invalidate Blackbird's patents. Fortune reports: "There's no social value here. There's no support for a maligned inventor. There's no competing business or product. There's no validation of an incentive structure that supports innovation. This is a shakedown where a patent troll, Blackbird Tech, creates as much nuisance as it can so its attorney-principals can try to grab some cash. Cloudflare does not intend to play along," said the blog post. While patent trolling has been around for years -- and is a particular bug bear of the tech industry -- Cloudflare says Blackbird's model of trolling involves a new and unethical twist. Specifically, the company says Blackbird's lawyer-executives are violating their professional obligations by buying the claims of potential clients and engaging in questionable fee-splitting arrangements. Here is how Cloudflare, which says it is filing complaints with the state bars of Massachusetts and Illinois, explains it: "Blackbird's 'new model' seems to be only that its operations set out to distort the traditional Attorney-Client relationship. Blackbird's website makes a direct pitch of its legal services to recruit clients with potential claims and then, instead of taking them on as a client, purchases their claims and provides additional consideration that likely gives the client an ongoing interest in the resulting litigation. In doing so, Blackbird is flouting its ethical obligations meant to protect clients and distorting the judicial process by obfuscating and limiting potential counterclaims against the real party in interest."

54 comments

  1. Invalidate . . . with extreme predjudice! by PolygamousRanchKid+ · · Score: 4, Insightful

    Just provide us with the names and addresses of the Patent Troll Lawyers . . . the Intertubers will crowdsource the contract.

    Please donate the bounty money to the EFF.

    --
    Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
    1. Re: Invalidate . . . with extreme predjudice! by Anonymous Coward · · Score: 0

      Unfortunately it's probably legal. This is pretty much the same as how ambulance chasers work too.

      There are probably thousands or even millions of patents ready to be weponized in this mannor too.

      It's time to invalidate all software patents.

    2. Re: Invalidate . . . with extreme predjudice! by Anonymous Coward · · Score: 1

      Better yet just invalidate patents held by companies with no evidence they plan to develop any products or services based on the patent.

      Invalidate patents that were sold to third parties.

      Make the sale of a patent illegal.

      Or just eliminate the whole concept altogether.

      But no fucking law firm should own technical patents, ever.

    3. Re:Invalidate . . . with extreme predjudice! by rogoshen1 · · Score: 1

      careful with that, it could be construed as inciting violence. (which they richly deserve.)

    4. Re: Invalidate . . . with extreme predjudice! by SpammersAreScum · · Score: 1

      What makes you so sure it's legal? Cloudflare is arguing that it's not, and the odds are they've got better lawyers than you. Both Righthaven and Prenda did get into trouble on this point.

    5. Re:Invalidate . . . with extreme predjudice! by Anonymous Coward · · Score: 0

      CONCRETEBOOTSHOOT . Betcha wouldn't take more than 3 days ... and what a better USA would result ! Kidding ... only kidding ...

    6. Re: Invalidate . . . with extreme predjudice! by slazzy · · Score: 2

      As I understand this situation, the law firm doesn't own the patent? They are approaching random patent holders that they can weponize on their behalf - presumably paying them a share of the potential payout. Really a new kind of evil not seen before if this is the case.

      --
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    7. Re: Invalidate . . . with extreme predjudice! by Anonymous Coward · · Score: 0

      In this particular case they do own the patents in questions. They bought them to cut out the middleman so they did not have to share the profit. They should be run out of business and disbarred, and our patent system seriously needs some TLC.

    8. Re: Invalidate . . . with extreme predjudice! by HumanWiki · · Score: 1

      Declaring a bounty against a particular group is effectively putting out a hit on someone.

      We are already there at the violence part. It's just not transpired yet.

    9. Re: Invalidate . . . with extreme predjudice! by budgenator · · Score: 1

      The bounty was for invalidating the patent, not the patent's owner; but sooner or later some defendant is going to be driven to such desperation that such thoughts will be entertained. These patent trolls frequently steam-roller several entities unable to defend themselves to build precedence before going after someone with real money. The results is often a life's work destroyed.
      Janis Jopilin wrote "Freedom is just another word for nuthin' left to lose"; these trolls will eventually set the wrong man free, it's just a matter of time.

      --
      Apocalypse Cancelled, Sorry, No Ticket Refunds
  2. Prenda Law 2: Patent Troll Boogaloo. ~nt~ by OverlordQ · · Score: 1

    ..

    --
    Your hair look like poop, Bob! - Wanker.
    1. Re:Prenda Law 2: Patent Troll Boogaloo. ~nt~ by Dynamoo · · Score: 1

      I looked at it and though the same thing. Remind me, how did Prenda Law end up for it's principals?

      --
      Never email donotemail@WeAreSpammers.com
  3. WWE by turkeydance · · Score: 1

    Cloudflare vs. Blackbird on PPV. Live from MA and IL

  4. WANTED, Dead or Alive by Anonymous Coward · · Score: 1

    They should also offer an addition $100 reward, to whoever LAWFULLY causes the most amount of financial harm to Blackbird's equity holders. Repeated stress that the harm must happen legally, and that if any laws are broken, you get nothing.

    (Would that work? Hey, lawyers...)

    1. Re: WANTED, Dead or Alive by Anonymous Coward · · Score: 0

      That would be about as successful as asking to legally cause a person physical harm.

    2. Re:WANTED, Dead or Alive by mysidia · · Score: 1

      should also offer an addition $100 reward, to whoever LAWFULLY causes the most amount of financial harm to Blackbird's equity holders.

      IF someone posted such a reward, And someone followed through and claimed the bounty, the harmed company can actually sue the bounty poster for tortuous interference with their business relationships.

      It doesn't matter if the way they were harmed was a 100% LEGAL act. If you Induce some other person or entity to act for the specific express purpose of causing harm to the company, Then the person inducing the harm can be held responsible for the damages.

    3. Re:WANTED, Dead or Alive by Guybrush_T · · Score: 1

      Except "lawfully causing harm" means "making the company respect the law". You can't sue someone for the "harm caused by justice against you".

  5. Prenda by Anonymous Coward · · Score: 0

    How much different is this from the fraud Prenda was found guilty of? https://www.techdirt.com/articles/20170318/00521636943/things-looking-even-worse-prendas-paul-hansmeier-bankruptcy-fraud-deck.shtml

  6. $50K? Pff! by Gravis+Zero · · Score: 3, Insightful

    Cloudflare is a multi-million dollar company and they are only willing to pay $50K for someone to make all their problems go away? Pff! Come back when you are serious.

    --
    Anons need not reply. Questions end with a question mark.
    1. Re:$50K? Pff! by CanadianMacFan · · Score: 1

      They are even cheaper than you think. But at least they are giving more money if you solve another persons problem.

      From the article:

      Under the terms of the bounty program, Cloudflare will award a total of $20,000 to those who can provide so-called "prior art" to show the patent Blackbird is using to sue Cloudflare—which dates from 1998 and is titled "Providing an internet third party data channel"—is invalid. Prior art can be anything from a journal article to a web page to a slideshow, and can invalidate a patent if it shows the invention is not new or is obvious.

      Meanwhile, Cloudflare is setting aside another $30,000 to pay for prior art that can invalidate any of Blackbird's other patents, which it has listed on a dedicated website.

    2. Re:$50K? Pff! by Anonymous Coward · · Score: 0

      and its not even per patent invalidated.. stupid games, stupid prizes, but hey free advertising from slashdot.

    3. Re:$50K? Pff! by parkinglot777 · · Score: 1

      Well, it depends on how they reward the bounty. If they set the $20k as the TOTAL amount of the reward, then they are very cheap because they will divide the money to each evidence they get. For example, if they accept 10,000 submissions as relevant, then the average reward for each submission is $2 (could be much lower or higher depends on how they value the submission). And I believe they do that... CHEAP!

      Cloudflare’s experts and attorneys will review each submission for its value in invalidating each patent. Again, the money will be awarded based on relevance and usefulness.

  7. Pffft. by Frosty+Piss · · Score: 3, Insightful

    $50k is peanuts. Nice PR, but really not enough to scare a bunch of lawyers.

    --
    If you want news from today, you have to come back tomorrow.
    1. Re:Pffft. by Anonymous Coward · · Score: 0

      If you can spend an hour or two just pointing them to (for example) some 'prior art' or something they can weaponize, then $50k is a pretty good payoff.

  8. $50k? by 110010001000 · · Score: 2

    That is what I earn per year doing government IT in Silicon Valley!

    1. Re: $50k? by Anonymous Coward · · Score: 0

      I certainly hope you're joking.

    2. Re: $50k? by Anonymous Coward · · Score: 0

      He works for ULA.

    3. Re: $50k? by Anonymous Coward · · Score: 0

      I'm pretty sure this is a troll post intended for creimer.

  9. That's one year of Creimer's salary!! by Anonymous Coward · · Score: 0

    Yawn.

  10. Not saying it's illegal by SeattleLawGuy · · Score: 2

    What makes you so sure it's legal? Cloudflare is arguing that it's not, and the odds are they've got better lawyers than you. Both Righthaven and Prenda did get into trouble on this point.

    Actually, If the summary is accurate, Cloudflare is saying it is unethical, not illegal. Which means the lawyers may be sanctioned or may be disbarred and prevented from practicing law, not that they will be criminally sanctioned.

    I would need to review more than the summary to be sure. However, a lot of the ethics rules like the one Cloudfare is identifying (as opposed to some of the more important ones, like the ones preventing conflicts of interest) are antiquated rules that primarily make problems for people. They actually prevent people from getting justice because they make it harder for people who need to sue (e.g. because they were hurt by a powerful corporation) to find financing for it, to get money to cover how they were harmed, and to incentivize the corporation to improve its behavior.

    Just because alleged patent trolls are doing something bad doesn't mean that the rules they get attacked with make sense.

    Law is overregulated in some ways (a lot of the ethics rules should be improved) and underregulated in others (you run into a lot of real jerks who never get so much as a warning from the bar).

    --
    Real lawyers write in C++
    1. Re:Not saying it's illegal by silentcoder · · Score: 1

      So what do you think of the particular ethics rules that CloudFlare is citing in this case ? Do you agree that it's a good rule ? That there should be a distinction between the attorney and the client ? It seems to make sense to me that a lawyer should not buy a stake in his client's case - for various reasons.
      Some types of trade should, rightly, be restricted - just like it shouldn't be legal for me to be allowed to take out fire insurance on your house, it would create too great an incentive for me to burn your house down.

      But then, you're the lawyer so I'm interested in your views. If you think this particular rule is bad, I would love to know why you think so, and how you would imagine it could be improved ?

      --
      Unicode killed the ASCII-art *
    2. Re:Not saying it's illegal by SeattleLawGuy · · Score: 1

      So what do you think of the particular ethics rules that CloudFlare is citing in this case ? Do you agree that it's a good rule ? That there should be a distinction between the attorney and the client ? It seems to make sense to me that a lawyer should not buy a stake in his client's case - for various reasons.
      Some types of trade should, rightly, be restricted - just like it shouldn't be legal for me to be allowed to take out fire insurance on your house, it would create too great an incentive for me to burn your house down.

      But then, you're the lawyer so I'm interested in your views. If you think this particular rule is bad, I would love to know why you think so, and how you would imagine it could be improved ?

      The specific ethics rule varies by state.

      It already happens as a practical matter--lawyers in many fields can take cases on contingency. If a law firm is making 33% of the amount that a plaintiff recovers, it is almost indistinguishable from purchasing the claim outright. Either way you are incentivizing the law firm in the same way, the only difference is that actually purchasing the claim will make the law firm able to recover more, which makes smaller cases worth fighting, which in turn forces companies to internalize the negative externalities of their economic activities.

      If you prevent that from happening through both contingency and claim purchasing, you basically start requiring a person to be able to pay out-of-pocket, which will hurt access to justice even more than it is hurting right now. Lawsuits are expensive.

      The one thing I would put in is a procedural safeguard that people have to be represented by counsel when they sell their claim to a lawyer--and maybe even that the person still keeps at least some small interest in their claim. Both rules would be to help limit the risk of someone being taken advantage of by an attorney. I would also need to think through how it should interact with health insurance.

      --
      Real lawyers write in C++
  11. The patent troll is the inventor insurance by Anonymous Coward · · Score: 1, Interesting

    The article states the patent troll offers nothing to the inventor or to innovation. I disagree.

    When I went to present my POC to a tech giant, I did not fear of my invention being stolen. I was covered by the "patent troll insurance".
    Sure, I had filed a provisional patent, but what good is a patent when you face a tech giant legal department with its deep pockets?

    Suppose patent trolling was banned and only companies making products were allowed to take legal action. Would another company be making my product taking on the giant tech? Probably not.
    For one, it is risky and costly. Secondly, it will ruin their relationship with the tech giant and thirdly, the tech giant may have patents which can risk their own products risking getting counter sued.

    In other words without the patent troll, inventions by small inventors and even medium sized companies become worthless.

    To be clear, I'm not protecting the patent troll tactics or way of conduct.

    1. Re:The patent troll is the inventor insurance by molarmass192 · · Score: 1

      You actually are protecting the patent troll tactics, but I digress. If you can't MAKE a product, then you have no RIGHT to the patent. See what I did there. Otherwise, I'm patenting time travel, sub-quantum computers, and 1 nanometer ASICs. My ideas, my inventions. Now, I have no fucking clue how or the means to build 'em, but that part of the concept is mine. If it's actually worth something, keep it hush hush, get a company to buy it from you under contract, and profit. If nobody wants to buy it from you, and they can figure it out on their own, then it wasn't novel enough to not be independently discovered and thus had no market value to begin with.

      --

      Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws-Plato
    2. Re:The patent troll is the inventor insurance by Anonymous Coward · · Score: 0

      No, you are just talking about patents. This is how they work for inventors. Patent TROLLING is abuse of that system by people who are not inventors and don't plan to actually build anything.

    3. Re:The patent troll is the inventor insurance by rholtzjr · · Score: 1

      In other words without the patent troll, inventions by small inventors and even medium sized companies become worthless.

      Then I think they would not be called patent trolls, but instead just an ethical attorney. I think the two are very different.

    4. Re:The patent troll is the inventor insurance by Anonymous Coward · · Score: 0

      This makes no sense. I know exactly how an internal combustion engine works but I lack the skill, time and money to develop a working model. In your world, I would never share my wonderful invention with the world because someone with more resources would just take my idea and get rich because "I can't make it."

    5. Re:The patent troll is the inventor insurance by Maritz · · Score: 1

      In other words without the patent troll, inventions by small inventors and even medium sized companies become worthless.

      To be clear, I'm not protecting the patent troll tactics or way of conduct.

      If by protecting you mean defending, it really looks like you are. With weird logic.

      --
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    6. Re:The patent troll is the inventor insurance by Anonymous Coward · · Score: 0

      Then maybe you should start a company and hire someone who can build it. If you refuse to act on your patent is some way (proper documented research, or actual production) in a specified amount of time, you lost the right to your idea. Patents were meant to be time limited anyway, and software does not belong in the patent system.

    7. Re:The patent troll is the inventor insurance by Anonymous Coward · · Score: 0

      You sound like a patent troll. The only idiots that defend patent trolls, are patent trolls.

      The article, nor Cloudflare, is disputing the value of patents. They are speaking out against greedy asshats who abuse the legal system to make a quick buck.

  12. They patented a MiTM network attack-as-a-feature? by Anonymous Coward · · Score: 0

    Sigh...

  13. No patents, ever by Anonymous Coward · · Score: 0

    There should be no patents on technology. Period.

    1. Re:No patents, ever by ausekilis · · Score: 1

      There should be no patents on technology. Period.

      This is an RMS statement, pure and simple. Life would be simple if anyone could say "hey, great idea, i'm gonna branch off that" without fear of litigation. However, no patents means floods of copycats and no reward for the original.

        Patents were made to enable an inventor to make money off of an invention. What the patent office *should* do is hire people that actually know what the patent is about (or pay some folks that do, that are not invested in or related to the patent applicant). Then we would have far fewer "yes, but on a computer!" or "just like this other patent, but with rounded edges" kinds of nonsense.

  14. Transparent Proxy by Anonymous Coward · · Score: 0

    Isn't the patent in question (US6453335) simply describing a transparent proxy?
    Shouldn't it be enough to search for a text that describes to use ipchains/ipfwadm to setup a transparent web proxy?
    Squid 1.0.0 was released in 1996. When did it start to support transparent proxying?

  15. The 335 Patent by Anonymous Coward · · Score: 0

    The 335 patent clearly describes a man-in-the-middle attack. It has legitimate uses though.

    https://www.google.com/patents/US6453335

    -HTTPS filtering requires a local certificate to decrypt and re-encrypt a TCP stream. Proxy filters have used this method for over 20 years.
    -Local television affiliates have used this method to inject local advertisements into national broadcast content for many decades.

    Others can add many more examples.

    If Cloudflare likes this explanation, they can donate the money to the EFF.

  16. Righthaven? by Anonymous Coward · · Score: 0

    This reminds of Righthaven, just substituting copyright for patent, i.e.

        $blackbird = ($righthaven =~ s/copyright/patent/g)

    or something. May they burn in hell. I'll remember to privilege Cloudflare should I ever need a service they provide.

  17. Problem is other way round by kvishalk · · Score: 1

    Big companies have always used patents for revenue and I do not think all their moves have been ethical. Now that small time patent inventors have a way to make money out of their patents, why not?

    1. Re:Problem is other way round by Anonymous Coward · · Score: 0

      Because they should be making their money in a legitimate way by, you know, actually producing stuff based on their patent.

      They should be starting a company and hiring people who can build it. Or sell it to someone who can. If they refuse to act on their patent in some tangible way (proper documented research, or actual production) in a specified amount of time, they should loose the patent. Patents were meant to be time limited anyway, and software does not belong in the patent system.

  18. Re:Oh, they declared war did they? by stealth_finger · · Score: 1

    The rewards for this shall be great and bountiful.

    Unless the rewards are at least substantial you can forget it.

    --
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  19. Easy as 1-2-3 by Anonymous Coward · · Score: 0

    Easy as finding "Oliver Kaufmann" and make him talk, where did he get idea to make patent? https://www.google.com/patents...

  20. Re:They patented a MiTM network attack-as-a-featur by Anonymous Coward · · Score: 0

    If it is obvious to anyone skilled in the art, it is invalid. We just need to make the system follow their own rules.

  21. And yet.. by tirnacopu · · Score: 1

    Our technology is innovative and different, and Cloudflare’s technology has about 150 patents issued or in process

    love the smell of irony in the morning