Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Supreme Court Continues to Address Patent Concerns

ScuttleMonkey posted more than 6 years ago | from the still-a-long-way-to-go dept.

Patents 78

The Supreme Court has taken on another possibly landscape-changing patent case that will determine if patent holders are able to sue everyone up and down the food chain for a patent infringement. "This case, officially between LG and Quanta, really concerns the question of how many times patent holders can get a cut of any component found violating a patent. Currently, patent holders will often sue up and down the food chain. So, if you happen to have a patent on a component within a motor that is used in automobile wipers, you could sue the motor maker, the wiper maker and the auto manufacturer -- and get all three to pay, even though the same product is used throughout the supply chain. This case will look at whether or not it makes sense to allow for that type of double, triple or quadruple dipping."

cancel ×

78 comments

Sorry! There are no comments related to the filter you selected.

... and sue ... (3, Insightful)

nategoose (1004564) | more than 6 years ago | (#20757123)

the car dealer, the owner when she sells the car, the used car dealer, the shop for replacing the wiper motor when it breaks, and the parts store for selling them the replacement

Re:... and sue ... (1)

idontgno (624372) | more than 6 years ago | (#20757503)

While you're at it.. sue the drivers of the cars with the patent-infringing wiper motor. They're obviously benefiting from the innovation without having compensated the patent-holder.

And the drivers of all other cars which may share the road with the cars which contain the patent-infringing motor. They are benefiting from the innovation too, by virtue of being safer on the road because of the the other driver's infringing use of the patented wiper motor.

Hell, there's no limit to the breadth of (deep or shallow) pocket-selection available if you just truly innovate in patent liability eligibility!

BTW, don't actually try to do this without paying me my license fee, since I've already patented this business process innovation.

No joke, they can. (4, Insightful)

Kadin2048 (468275) | more than 6 years ago | (#20757895)

While you're at it.. sue the drivers of the cars with the patent-infringing wiper motor. They're obviously benefiting from the innovation without having compensated the patent-holder.
They can, actually, do exactly this. "Use" of an infringing device is considered infringement. Generally, patentholders don't bother to go after end users of consumer product, because it's wringing blood from a stone and really terrible PR, but they sometimes threaten it as a way to discourage use of a possibly-infringing product. (Cf. Anti-Ford ads taken out by competitors alleging that Ford's products infringed the Selden patent.)

Re:... and sue ... (1)

Fujisawa Sensei (207127) | more than 6 years ago | (#20758125)

BTW, don't actually try to do this without paying me my license fee, since I've already patented this business process innovation.

I'm going to cite SCO as having prior art.

Re:... and sue ... (1)

Tuoqui (1091447) | more than 6 years ago | (#20757897)

Sounds almost like the RIAA/MPAA tactics...

the only winners in patent disputes... (3, Insightful)

lottameez (816335) | more than 6 years ago | (#20757159)

...are the lawyers.

Re:the only winners in patent disputes... (1)

Applekid (993327) | more than 6 years ago | (#20757581)

Well, lawyers and the few surviving companies after the dust settles. Those smaller upstarts really get to be a nuisance, I imagine.

Perennially hopeless. (1)

Kadin2048 (468275) | more than 6 years ago | (#20758005)

This is not particularly new. People have been saying [wikipedia.org] for a long time now [wikipedia.org] that when it comes to the legal system, sometimes the winning move is not to play [wikipedia.org] .

Re:the only winners in patent disputes... (1)

sconeu (64226) | more than 6 years ago | (#20758397)

As someone pointed out in the Klingons vs. Furries story...

Whoever wins, we lose.

It doesn't... (4, Insightful)

repvik (96666) | more than 6 years ago | (#20757213)

Of course it doesn't make sense to sue the whole food chain. Sue the manufacturer of the specific part, and leave it at that. Imagine how much fun it'd be if someone discovered that Award (or some other major BIOS manufacturer) had violated a patent in their BIOSes. There is no way the rest of the food chain can verify that no patents have been violated. Of course they can sue Award for damages, but imagine 400 companies suing Award. Anyone get any money? Nah. It would be incredibly expensive for a large manufacturer (eg. Dell) to verify that each and every component it uses does not violate any patents or IP. Same way with a car. Car manufacturers manufacture a fraction of the components themselves, and buy eg. wiper motors from Bosch.

Re:It doesn't... (1)

rainmayun (842754) | more than 6 years ago | (#20757379)

Hence why large companies have defensive patent portfolios and "wink-wink, nod-nod" gentlemen's agreements not to sue each other. If you notice, most patent disputes are significantly asymmetric in terms of the size and scale of the parties involved.

Re:It doesn't... (1)

geekoid (135745) | more than 6 years ago | (#20757413)

This case deals with the other side.
I have a patent, award violates it so I sue award, the motherboard manufacturers, and the retailers.

When really, the only group that I should be able to sue is award.

This is no different then going after consumer because the company they bought a product from violated some agreement with someone else.

What does the patent claim? (4, Interesting)

Valdrax (32670) | more than 6 years ago | (#20757487)

The real problem is who do you have to sue based on what your patent claims.

Let's take the example used in the summary of a component used in a motor in a windshield wiper blade. What does the new component do that made it patentable?

- Is the innovation purely in the use in a motor? (Reducing wear and tear?)
- Or maybe is the innovation in its effect on the wiper? (A smoother wiping motion with less noise?)
- Or maybe is the innovation in how the car performs? (Allowing a more aerodynamically friendly wiper?)

What if the patented item does all three and claims all three things? Does a SCOTUS decision ruling that you can only collect once open the door for a finger-pointing exercise between defendants (something the courts like to avoid) in trying assign infringement? Does going straight to the bottom of the supply chain always make sense? (For example, what if it doesn't do anything for the motor itself but only for the higher level functions?)

These are very important balance issues that the SCOTUS will have to consider.

Re:What does the patent claim? (1)

MindStalker (22827) | more than 6 years ago | (#20757833)

Ummm you sue who is actually producing the violating item. Of course with a bit of maneuvering that violating producer could be a shell company out of the courts jurisdiction with physical production in china at which case the issue becomes more complex as you mentioned.

Re:What does the patent claim? (2, Interesting)

Valdrax (32670) | more than 6 years ago | (#20758073)

Ummm you sue who is actually producing the violating item.

That's the bottom of the supply chain argument I mentioned earlier. It seems the easiest argument, but what happens if the innovation is based on the use of the component in a final product and not an intermediary one?

For example, let's imagine a windshield wiper that automatically adjusts its speed to the rate of rainfall. This would require at least two components -- a sensor for the rain and a controller that acts on said information. Assume that we don't have existing parts for each of these.

The patent for this would describe:
A) The sensor for detecting rain.
B) The motor control mechanism.
C) The method of tying the two together to produce the result.

In this case there are at least three parties that could be infringing on the patent:
A) The sensor maker.
B) The motor control maker.
C) Whoever makes the system to tie them together (most likely the auto manufacturer).

If you can only collect from the first people in the chain, then does it become impossible to patent non-obvious ways of combining off-the-shelf parts such as a system to auto-adjust your wiper speed to the rain? If you could only collect from the last person in the chain, then who is the last person in the chain? The auto manufacturer? The auto dealer?

The RIM patents are very similar to this, if I recall correctly. You have the hardware interface portion of the patent, the back-end server portion of the patent, and the service portion of the patent. Who must you be limited to suing, A, B, C, or some combination of them?

While it seems sensible that infringement should only happen at one point in the supply chain for a good or service, coming up with a hard and fast rule for where this should happen is going to be hard and may take decades of future Supreme Court rulings to nail down.

Of course with a bit of maneuvering that violating producer could be a shell company out of the courts jurisdiction with physical production in china at which case the issue becomes more complex as you mentioned.

That's not so much of a problem. You just sue them in federal court, and if they don't pony up the licensing fee, you sue to bar entry of their goods into the country. That's the ultimate (and only) power that a government has over a multinational or extranational entity -- the power to bar them from doing business in their country unless they play by their rules.

Re:What does the patent claim? (1)

profplump (309017) | more than 6 years ago | (#20758277)

You're making this more complicated than is has to be -- I can't imagine a scenario where the first assembly of violating system is a difficult point to find. Someone actually assembled the bits into a violating system and sold it. That's the bottom of the chain, that's who you can sue.

In the case of your wipers example it's just a question of what the patent covers. If it's just the control system, then that component is in violation all by itself, and its manufacturer is at fault. If it's just the practical application of the control system then it's the auto manufacturer, because they put all the bits together.

Re:What does the patent claim? (1)

Valdrax (32670) | more than 6 years ago | (#20758391)

In the case of your wipers example it's just a question of what the patent covers. If it's just the control system, then that component is in violation all by itself, and its manufacturer is at fault. If it's just the practical application of the control system then it's the auto manufacturer, because they put all the bits together.

The problem is that patents are not restricted to only describing one thing. A patent can describe both a control system and an application thereof in its claims; it doesn't have to be purely one or the other, and you can describe multiple novel components. That's where this whole mess originates.

Re:What does the patent claim? (1)

Gr8Apes (679165) | more than 6 years ago | (#20758615)

Actually, that would be at least 3 patents, one for the sensing item, one for the wiper control, and one for the combined parts. And therein lies a problem, because the sensors have been around for a long time, so you can only patent a very very specific feature, same for the wiper control, and for the integration piece.

Re:What does the patent claim? (1)

Ajehals (947354) | more than 6 years ago | (#20758857)

In your example I don't see why you couldn't go after all three, what you couldn't do though is go after whoever is next in line, lest say the company that resells them AND the company that sells the vehicles, AND the company that sells these vehicles used, AND the end user.

The supply chain as I understand it will have a discrete point where the infringement occurs for the first time, if you had a patent for a rear view mirror that included say a method of shaping and coating plastic for a better reflection (WTF?? - but you see what I mean), you could sue the company shaping the mirror and the (different) company coating the mirror, but not the company that installs the mirror.

As a parent said though, the issue then is that all patent infringing work will be done by small shell companies, well in those instances it should be fairly obvious what is going on and there should be the possibility for judges to use a bit of discretion (i.e. if Wangs mirror shop produced 5 million mirrors, all for Ford, but has no cash for legal expenses (As it is intended as a patent avoidance method) then for Ford).

More interestingly would be what to do about products that are imported from one country to another where patent laws are different, would the importer be responsible?

Re:What does the patent claim? (1)

guruevi (827432) | more than 6 years ago | (#20759247)

I think that is the biggest flaw in our current patenting system.

In my thinking, ONE should only be able to patent a single working and finished product that ONE will sell. I can patent the motor that runs the wiper if you want to keep the car analogy so that you can't manufacture the motor all by yourself and sell it for a lower price, but if you want to use the wiper motor in your car or your robotics experiment or in your wife's vibrator, you shouldn't have to pay me extra except for the price that I sell you the motor for. If I think your motor is too expensive, I will have to design my own motor that does the exact same thing (turn the axis around) with my specifications.

That would also do away with a lot of software patents. If I want to use a piece of your code, then you can sell me a piece of text with the code or a binary that I can then use or integrate in my program. You shouldn't be able to patent any wild idea that comes through your mind, if I later think of doing the same thing, I should be able to either a) write my own implementation or b) buy it from you if it's better.

Now, if I steal your design, blueprints, code or binary then that is called theft and/or copyright infringement, not something a patent will protect you from.

Re:What does the patent claim? (1)

sjames (1099) | more than 6 years ago | (#20763877)

Your reasonable argument shows a fundamental problem in the patent system.

First, it is unreasonable to hold a company responsable for the use someone else makes of their product. Any one of the 3 suppliers might have chosen not to produce an integrated system to avoid patent problems. It's not reasonable to drag them back in. It's even possible that by not knowing the internal details of the componants, even the integrator didn't know the whole would violate the patent.

It's also unreasonable to hold customers responsable for the misconduct of a seller.

If those two principles are ignored, the court will be rubber stamping the concept of civil courts as a bizarre lottery rather than a system of justice maintaining order in society. It would LITERALLY be imnpossible to avoid liability. If a court can't manage to disentangle the mess, how could any of the defendants be expected to do so pre-emptively? Patents are far too much like landmines now without making it worse.

Next, if so many managed to ACCIDENTALLY violate the patent, that's strong evidence that it shouldn't have been a patent in the first place.

Re:What does the patent claim? (0)

Anonymous Coward | more than 6 years ago | (#20759393)

You damn Slashdotters with you mumbo-jumbo acronyms! What the hell does SCOTUS mean?

Re:What does the patent claim? (-1, Troll)

macdaddy357 (582412) | more than 6 years ago | (#20759441)

SCOTUS (n) A highly sensitive patch of skin between the legs running from the genitalia to the anus.
usage: Yo bitch! Lick my scotus.

Supreme Court (0)

Anonymous Coward | more than 6 years ago | (#20761595)

SCOTUS

Supreme Court Of The United States.

Most people figure this out from context.

Kudos to the Roberts court (1, Offtopic)

einhverfr (238914) | more than 6 years ago | (#20757489)

IANAL, etc.

I think that the Roberts court has done an admirable job of tackling real legal issues and helping to make the law consistant, just, and effective. For example, they have addressed:

1) Can religions use otherwise illegal drugs in their ceremonies? Yes (interestingly, as a matter of statutory rather than constitutional law). See UVD v. Gonzalez.

2) What constitutes a patent being "obvious?" An obvious innovation is now defined in a way which is meaningful and can be meaningfully used as a defense.

Now if we can only get a few more questions answered such as:

Are exclusive copyright licenses divisible? (9th circuit says no)
Under what circumstances can a non-exclusive copyright permission (such as the BSDL) grant given to all third parties be changed (i.e. in the Atheros incident)?

Parent is NOT offtopic (0)

Anonymous Coward | more than 6 years ago | (#20761739)

Come on mods, don't be stupid. Or are you being partisan? I can't tell which. Neither is excusable.

This post is exactly on topic. If you wish to argue facts, accuracy, or politics then that's something entirely different than Offtopic.

This "article" is about the Supreme Court (SCOTUS, aka "the Roberts court") dealing with a "real legal [issue]". This post is arguing that they have "[helped] to make the law consistent, just, and effective". It implies that they will do so IN THIS CASE TOO! This is simply not offtopic. Whatever else it is, it is NOT offtopic.

Meta-mods, would you please (electronically) whack these idiots down so they don't get mod points in the future? Thanks.

Re:It doesn't... (5, Insightful)

Kjella (173770) | more than 6 years ago | (#20757551)

Well, that was my first thought. But when I reversed it "Should you never sue anyone but the closest in the chain" it wasn't really that clear. I'm sure there are ways to construct some sort of shell company that'll be the the actual infringer, while others are turning the real profit. A classic example are all the cafes and restaurants that go bankrupt, but the building owners which are often the same, never do. Legally they have one company owning it, and one renting and operating it. Or some sort of transit company which buys legally produced goods abroad, then sells them in the US violating US patents. It can be basicly massless with no money to collect. But yes, in the general case where they've bought it at normal rates then the original producer should be the one paying.

Re:It doesn't... (1)

dgatwood (11270) | more than 6 years ago | (#20758015)

That will always be a problem. That's why we need changes to our legal framework that make it easier for business owners and management to be held legally liable for damages caused by the company if those people were aware that the damage was happening. Case in point, the idea that people can quite literally commit murder with malice aforethought (e.g. tobacco companies) and get away with it without any individual liability is breathtaking (no pun intended).

Such changes to the laws would make shell companies essentially a non-issue, as the appropriate executives could still be held personally liable, and thus would be less likely to risk such egregious wrongdoing.

Re:It doesn't... (1)

rainmayun (842754) | more than 6 years ago | (#20758113)

If you can prove murder (or as a more relevant example, fraud) in a court of law, the limited liability protection afforded by incorporation won't protect the defendant.

I don't see tobacco companies as murderers, because it takes a willful act to smoke a cigarette. That's like charging the CEO at Ford for vehicular homicide because someone ran over the victim with an Explorer. You might call them exploiters, and find plenty of ethical issues therein, but murder (to me) isn't one of them.

Re:It doesn't... (1)

dgatwood (11270) | more than 6 years ago | (#20761259)

It isn't the same thing at all. A Ford Explorer, if used properly, does not kill people. A cigarette, if used properly, does; the intended purpose of a cigarette is to smoke it, and doing so directly results in death. They are providing a product that was designed to hook people with the knowledge that its use would be fatal to a substantial percentage of its users. I see no difference between that and designing razor blade packages to appeal to emo kids for wrist cutting....

If you want a Ford example that would rise to the same level, it would be more like holding the Ford executives responsible if they decided to put the gas tank right next to the engine, then decided that it was too expensive to fix the design even after being told that it posed a serious risk of explosion during normal operation.

Re:It doesn't... (0)

Anonymous Coward | more than 6 years ago | (#20758205)

Perhaps the standard of proof should be higher the further up the food chain you get. For the actual infringer, the standard would be lower (or the same as the current standard). But for those up the food chain, it would be necessary to prove that the infringer did not have a reasonable expectation that they product they used was either free of patents or fully-licensed. This would be similar to the standard that the court applies to award treble damages in current infringement cases.

This would prevent the type of abuse that you're talking about while still protecting companies who choose to use products they believe are royalty-free. The two prime examples I can think of would be Linux and Ogg.

Microsoft has asserted that Linux violates some of their patents, but they haven't yet specified which patents have been violated. If companies could legitimately claim that Microsoft had plenty of time to hash the issue out with the FSF rather than waiting to sue Linux-using companies, there would be more incentive for the patent holder to be pro-active in asserting their patents and it would allow other companies to safely use products that could possibly infringe on some patent since the patent issues would be settled earlier rather than later.

In the case of Ogg, there have been some companies that have used it, but most have done so in a surreptitious manner to avoid becoming the target of a lawsuit. While many here on Slashdot like to trumpet Oggs patent-free status, I think most people with knowledge of digital audio know that it's almost impossible to produce a reasonably well-performing codec without treading on at least a few patents. The problem is that it seems that the patent holders are waiting until someone with pockets deep large enough to pay a large settlement to come along and use the codec before they sue. That is just as much an abuse of the system as the shell company would be.

So I say let companies hide behind "a reasonable expectation" defense that the Judge could interpret, on a case-by-case basis and based on guidelines that are either codified in law or are part of some SCOTUS decision, to avoid the situation you raised.

Re:It doesn't... (1)

bidule (173941) | more than 6 years ago | (#20758845)

Well then sue for the real amount. If the shell company goes bankrupt, sue the next ones down the supply chain for the residual amount. That seems fair to me.

Re:It doesn't... (1)

ExE122 (954104) | more than 6 years ago | (#20757627)

While I agree with you for the most part, the solution isn't quite that simple. The problem is that the current patent laws don't make it so clear. I'll use your example of an Award chip that violates a patent (lets say from Pheonix). The issue is that Dell would probably have a patent out for their computer which clearly lists the use of the violating Award BIOS chip. Because of this, the Dell patent is a violation as well. Sure Pheonix can sue Award, but that doesn't mean that Dell's patent is now valid. I agree that this shouldn't mean law suit for Dell. This should mean that they should have a chance to re-work/recall their patent. However, either way it still ends up costing them a lot of money.

Re:It doesn't... (1)

absoluteflatness (913952) | more than 6 years ago | (#20757989)

The issue is that Dell would probably have a patent out for their computer which clearly lists the use of the violating Award BIOS chip.

Dell doesn't go get patents for every one of their computers, or each configuration of parts. Any parts which they make I'm sure they have patents on, like their case with the hinges (assuming they build it.) Getting a patent for every amalgamation of parts they assemble is 1: impossible, since I would think this fails the test of novelty, and 2: ridiculous. Even assuming the patents would be granted, the products wouldn't be offered anymore by the time the patent process was over.

that's a bit confusing... (1)

slew (2918) | more than 6 years ago | (#20758049)

IANAL.

In any case, I'm pretty sure Dell doesn't patent a computer design using an Award Bios chip (since a bios is software and generally flashed into a commodity rom device).

But for arguments sake, if Phoenix had a patent on a method and apparatus for combobulating a XYZ-Bus device which they reduced to practice in their Bios code and Award implemented this in their Bios and licenced their bios to Dell. If Dell had another patent on a method and aparatus for discombobulating a ZYX-Bus device using a XYZ-device combobulator, Dell's patent doesn't need to be reworked or recalled at all even if some other Phoenix won some patent suit against Award. Although it might be tough for Dell to implement their patent withough infringing on an XYZ-device combobulator patent from Phoenix, but then again, no competitor of Dell could implement their patent for discombobulation on a ZYX-Bus device either using Phoenix's XYZ-device combobulator without violating Dell's patent (which is why Dell probably wouldn't re-work/recall their patent even if Dell couldn't work out a deal with Phoenix to be able to implement their own patent. They would just keep the patent to screw Phoenix's other customers).

Even if Phoenix doesn't sue Dell, it probably does cost Dell some small money to work around this, but it doesn't mean Dell's patent is worth less money or would have to be invalidated and/or need to be reworked, though. Dell or Award would just find some way to implement ZYX-Bus device discombobulation that didn't violate Phoenix's patent, patent this new thing and Dell would just carry on. As it stands today, Phoenix could sue Dell, but some might argue that this is unfair and they should just be able to sue Award.

Having said all that, there's no way in hell that Phoenix would ever sue Award (since they are the same company now). AMI on the other hand might consider it ;^)

Your milage may vary of course...

Re:It doesn't... (1)

ILongForDarkness (1134931) | more than 6 years ago | (#20758809)

Absolutely. The secondary purchaser takes it for granted that what is being sold to them, the seller holds appropriate patent/license to manufacture. The onus shouldn't be on the customer, but the manufacturer.

As a side point, anyone know if you "have" to do a patent search? I mean if your planning on patenting your invention, you have to make sure that there isn't a patent already. But say you sit in your office come up with a great idea, and just want to sell the goods. If you don't want the patent yourself, are you still forced to make sure that no one has patented the idea? I think you are, but it is a strange situation. Someone not interested in owning the rights to their idea, is forced to do a patent search anyways, to make sure someone else doesn't already hold a patent on the idea.

Too bad we can't trust that if manufacture Y uses the same technique as manufacture X but says they didn't steal the idea, that they are actually telling the truth. Instead, the civil courts force you to prove your innocence, rather than the other company prove your guilt.

more billable hours.. awwww yeahhhhh (1)

User 956 (568564) | more than 6 years ago | (#20757417)

This case will look at whether or not it makes sense to allow for that type of double, triple or quadruple dipping.

That depends. who's asking? It always makes sense if you're a lawyer.

Re:more billable hours.. awwww yeahhhhh (1)

onemorechip (816444) | more than 6 years ago | (#20759519)

Right, even the defending attorneys make out. Whatever lawyer is bringing this to the Supreme Court must stand to make so much on this case that his future loss of revenue pales in comparison...

Patent Laundering (5, Insightful)

Nymz (905908) | more than 6 years ago | (#20757433)

If you deny legal redress, with exception for 'first sale' defendants, then you could certainly expect to see shady companies simply subcontracting out for any possible patent infringing items.

1) Setup a puppet company
2) Infringe all you want
3) Profits!!! stay safe (safely stolen) from patent holders

Re:Patent Laundering (3, Funny)

morgan_greywolf (835522) | more than 6 years ago | (#20757619)

I hope you contracted out your post. Because you just violated my patent on patent laundering! Not to mention the Unix code in your post! I'm suing!

-- Darl McBride

Re:Patent Laundering (3, Interesting)

Applekid (993327) | more than 6 years ago | (#20757631)

1) Setup a puppet company
2) Infringe all you want
3) Profits!!! stay safe (safely stolen) from patent holders
Wouldn't discovery expose a shell company like that? RICO covers that sort of thing, doesn't it?

Shell Company (2, Informative)

Nymz (905908) | more than 6 years ago | (#20757927)

Wouldn't discovery expose a shell company like that? RICO covers that sort of thing, doesn't it?
A shell company is not an active bussiness, often holding zero assets. A puppet company would be a real company, that passes on cheap (patent infringing) items, but not passing on the legal liability.

Re:Shell Company (1)

e4g4 (533831) | more than 6 years ago | (#20758135)

Good point. Makes me think that it might be a possible way for start-up companies to avoid being destroyed by patent litigation. Say for example, some relatively small startup company (this could apply to both software and hardware) is manufacturing a product that has a component that could maybe-kinda-sorta infringe on another company's patent. Said startup could spin off a (very) small company with very few assets, and contract with it to produce said component - if the patent holder sues and the component is found to be infringing - the spin-off company can be liquidated to settle the legal debts, with only minor losses sustained by the startup. Employees of the spin-off return to the mothership and a new, non-infringing method is developed. Repeat as necessary.

Sure, there's ample room for abuse, but it would prevent small startups from being obliterated before they get on their feet (or into the black) and ultimately allow for more innovation in the market. The lawyers would still get rich, but the patent trolls would not.

Re:Patent Laundering (1)

kebes (861706) | more than 6 years ago | (#20757987)

Wouldn't discovery expose a shell company like that? RICO covers that sort of thing, doesn't it?
But in many cases the main reselling company and the base manufacturer might not even be in collusion.

The problem is that if it's always the base manufacturer that is liable, then being such a manufacturer is not very attractive. Investors may specifically keep such companies small to limit their own potential losses. The end result is the same: damages to resellers and companies "higher in the food chain" are minimized in favor of "throw-away" companies. (And all without collusion.)

To say nothing of the possibility that the base manufacturers will all simply relocate to foreign countries...

Re:Patent Laundering (1)

ivormi (1106139) | more than 6 years ago | (#20757637)

The patent laundering question is certainly valid, but I would think in those cases that there should be some reasonable cause to believe that the downstream company knew the component to be infringing. e.g. If I'm making a product and am simply choosing components based on price and performance, I shouldn't be held liable for patent infringement unless I'm aware of problems with the components I'm purchasing.

At least that way there would be *some* onus on the side of the prosecution to prove wrongful intent on the part of the downstream products.

Re:Patent Laundering (1)

Monchanger (637670) | more than 6 years ago | (#20758361)

Doesn't your argument make a case against so-called "puppet companies", rather than patent laundering?

Still, as another poster suggested, the profiting company would be an accessory or involved in conspiracy to infringe. Perhaps not as big a fine, but would jurors give two bits about your legal setup?

I don't think it's conscionable to expect the seventh company down the food-chain (say Johnnie fixing the neighborhood computers) to pay for Award infringing on someone else's patent. If Award goes bankrupt, that's what they deserve for breaking the rules. Johnnie can't choose what BIOSes he works on, and can't afford to higher a patent lawyer to run countless patent checks on any component he may encounter.

Reasonable Protection (1)

Nymz (905908) | more than 6 years ago | (#20758599)

I don't think it's conscionable to expect the seventh company down the food-chain (say Johnnie fixing the neighborhood computers) to pay for Award infringing on someone else's patent.
And a jury would agree with you, if someone brought a case against poor Johnnie. There is no guarantee of a winning case (against Johnnie), just as there shouldn't be a guarantee of a lost case (against criminals) due to a 'first sale' legal loophole.

Test for Obviousness (3, Insightful)

king-manic (409855) | more than 6 years ago | (#20757529)

I propose a axillary test for obviousness. If two or more companies already implemented your patent before your initial application date then your invention was too obvious to patent. This seems like a common sense idea. That if someone is already using your proposed idea you ought not to be able to patent it. This would drastically cut down on patent trolling.

Re:Test for Obviousness (1)

ween14 (827520) | more than 6 years ago | (#20757779)

This is already how the patent process is supposed to work, in the USA at least. We have a first to invent patent process here, which is supposed to mean that you can not get a patent on something that another person has already invented and been using.

In most other countries however, they have switched to the first to file method, and there is pressure on the USA to switch as well.

The problem is that it is very difficult to determine who invented/implemented/developed something first. This is one of the reasons that it can take years for a patent to move from the pending status to granted. I personally believe that this delay is worth it for the benefit of a proper investigation, however I could see how someone would disagree.

Re:Test for Obviousness (1)

king-manic (409855) | more than 6 years ago | (#20757945)

This is already how the patent process is supposed to work, in the USA at least. We have a first to invent patent process here, which is supposed to mean that you can not get a patent on something that another person has already invented and been using.

I do know it's a first to invent system but why are ridiculous things like patents for "1-click" shopping lawsuits happening? Amazon and a few others had that feature before the patent was filed?

Re:Test for Obviousness (1)

InvalidError (771317) | more than 6 years ago | (#20757959)

They already have such a "test", it is called PRIOR ART.

The only problem with prior art is that the patent offices are pretty slow and often do half-assed jobs at evaluating prior art when people point it out. The proposed USA patent reform is supposed to make it easier to invalidate patents by submitting prior art to reduce the amount of patent trolls.

Prior art (1)

einhverfr (238914) | more than 6 years ago | (#20761319)

There goes my patent for using a gas turbine to power a ducted fan for the purpose of generating thrust for aircraft.

Re:Test for Obviousness (1)

petermgreen (876956) | more than 6 years ago | (#20765237)

IMO prior art doesn't go far enough, if two people independently invent something within a short time window then IMO there was nothing particularlly inovative about the first one.

I believe there are a LOT of "inventions" that are the result of the obvious soloutions to a new problem or the obvious uses of new technology.

Re:Test for Obviousness (2, Interesting)

kebes (861706) | more than 6 years ago | (#20758057)

I'm not a patent expert, but isn't this already the case? Prior art is indeed a valid defense against patent claims.

The problem is that proving prior art is difficult. Even if you are in the right, and can provide evidence to that effect, it becomes a long and expensive court case, which many cannot afford (especially the small-time inventors that patent law ostensibly promotes).

Patent-happy companies will continue to throw as many patents at the system as they can. Whatever sticks is ammunition, regardless of whether or not the patent is valid. Even patents that may be invalidated can be used as threats.

We really need to decrease the number of patents granted, so we need "early detection" of prior art. Frankly, I think patent applicants should be liable in some way if their application is shown to be invalid due to prior art or obviousness. It should be treated as a very serious offense, akin to perjury. We need to make it so that there is an incentive to scour the literature for prior art, and a penalty for making false claims.

Lawyers (3, Insightful)

db32 (862117) | more than 6 years ago | (#20757537)

Ever wonder why lawyers write the laws? And no this isn't about some vast conspiracy by the megacorps to make people hate lawyers. A lawyer acting in your best interests involves you not being in court anymore and protected in the future, which is entirely counter to their best interests of being in court and continuing to bill someone. The common man can do nothing until the laws are written by common men, common men cannot write the laws so long as people attempt to exploit them. The folk clever in manipulating the law for exploiting are lawyers, so you must hire another lawyer to defend yourself against that, and the cycle continues forevermore. The underlying desire of men to exploit eachother lead to the creation and continuation of lawyers. The best you can do is get a lawyer from out of town so that the opposition's lawyer isn't his golfing buddy and he might actually do a decent job of representing you.

Re:Lawyers (1)

Valdrax (32670) | more than 6 years ago | (#20757851)

A lawyer acting in your best interests involves you not being in court anymore and protected in the future, which is entirely counter to their best interests of being in court and continuing to bill someone.

Not really. That's a common misperception, but the rules of the courts are strongly tilted to force people into some form of non-judicial settlement. Of course, big corporate lawyers have many, many other things that they can bill over outside of the courtroom, so your point isn't entirely moot there.

The best you can do is get a lawyer from out of town so that the opposition's lawyer isn't his golfing buddy and he might actually do a decent job of representing you.

Not really. Acrimonious relations between opposing council can often lead to cases being unnecessarily drawn out and in you getting billed a lot more. People who know each other are likely to to realize the strength of the others' case given the history of the local courts and push towards a settlement instead of a protracted court battle.

Plus, you might find that someone from out of town doesn't know the local rules and practices and irritates the judge by doing something that considered a waste of the courts' time.

Re:Lawyers (1)

db32 (862117) | more than 6 years ago | (#20758071)

All lawyers bill for many many other things outside the courtroom. To include drawing up the papers based on the agreement in the courtroom and then billing your ass when you have to send it back 5 times for corrections. The only tilt involved is towards the person with the least funds settling out of court, the other end is the person with the most funds dragging it out until the person with the least funds cannot afford a lawyer and must show up in court alone or settle with bad terms.

I would rather have my first case drawn out rather than having two golfing buddy lawyers draw up crap full of stupid exceptions and vague wordings that is just going to keep the parties fighting.

When you have spent thousands of dollars trying to settle something and it goes to court and the lawyers are chatting about going golfing you tell me how comfortable you are with having your interests represented.

Re:Lawyers (1)

Oddster (628633) | more than 6 years ago | (#20763961)

Ever wonder why lawyers write the laws?
No. Lawyers do not write laws. Politicians do.

You elected the politicians to write laws, but that's another topic.

Re:Lawyers (1)

db32 (862117) | more than 6 years ago | (#20766769)

Most of which are graduates from law school. Coincidence? The farther away from the law field a politician is the more likely they seem to not be asshats. Ron Paul is a doctor.

Of longer term concern (3, Insightful)

starseeker (141897) | more than 6 years ago | (#20757661)

While it is refreshing to see an outburst of sanity from the Supreme Court, remember that Congress can proceed to pass new laws (a point made by the blogger.)

If the commercial interests in the patent system in its current form are able to purchase enough political influence, Congress may take the steps needed to make software and friends explicitly patentable under the law.

The only answer to something like that would be to vote in people who would change the law back to something sane. Will it happen? Who knows. It doesn't seem too terribly fantastic given the current system...

Of course (1)

Dunbal (464142) | more than 6 years ago | (#20757711)

Of course it makes sense to sue as many people as you can, because after all, each lawsuit makes money for lawyers. More law suits means more work for litigation experts, and after all, keeping the lawyers and judges employed is what this is all about REALLY.

Re:Of course (1)

mikey07 (1162587) | more than 6 years ago | (#20759211)

You do realize it isn't up to the lawyers to file the lawsuit... it's up to the patent holders (who generally hate to pay lawyers as much as anybody). The patent system is not about "keeping the lawyers employed," it's about encouraging technological progress (which it definitely does, despite what slashdot nerds say). And patents definitely are not about keeping judges employed... they have plenty to do with all the criminal cases and insurance companies screwing people over.

Re:Of course (1)

nagora (177841) | more than 6 years ago | (#20760831)

The patent system is not about "keeping the lawyers employed,"

That's true: the legal system as a whole is about keeping lawyers employed.

it's about encouraging technological progress

Well, that's the excuse. The reality is that it's just a way to protect market dominance, which is the general purpose of any monopoly, state-granted or home-grown, and always has been.

TWW

Re:Of course (1)

mikey07 (1162587) | more than 6 years ago | (#20772279)

The reality is that it's just a way to protect market dominance

Yes, but it is a temporary way to protect market dominance. And giving someone a temporary and limited monopoly encourages people to invent (so they can get that limited monopoly for their inventions) and it encourages people to innovate around the patented invention.

Re:Of course (1)

nagora (177841) | more than 6 years ago | (#20779933)

Yes, but it is a temporary way to protect market dominance.

Not when you're filing 2000 patents a year it's not. The patent system protects the market leaders far more extensively than it does their challengers who can rarely even afford to find out what's already patented in the field of interest.

TWW

Another /. totally BS patent story (3, Informative)

Anonymous Coward | more than 6 years ago | (#20757713)

First sale doctrine already does apply to patents. More commonly referred to a patent exhaustion. The linked to -> linked to "patently o" reference explains it:

"Exhaustion - also known as the first sale doctrine - serves as a default rule in both patent and copyright laws. Under the principle, a license fee is only be charged one time per object. Thus, a rights holder controls the first sale of a protected object, but does not control subsequent sales. The copyright rule is codified in Section 109. The patent rule, however, is only based on case law."

You can ignore this if you prefer hysteria and misinformation to reality.

Re:Another /. totally BS patent story (1)

KiahZero (610862) | more than 6 years ago | (#20758263)

Yet LG only licenses its patents with a clause preventing exhaustion. If such clauses are allowed, the first sale doctrine is meaningless, because patent-holders who want to "dip" multiple times will simply include similar language in their contracts.

Re:Another /. totally BS patent story (1)

wronskyMan (676763) | more than 6 years ago | (#20758321)

I think the subsequent sale issue is referring to the idea that liability would be extended to "users" of the product (for example, Microsoft claiming patents on areas of Linux and suing not just developers but also companies that use the software). The issue between Intel and LG involved patented chips that had been *legally* licensed and sold to one company who then sold them to another company. LG wanted to collect revenue from the second buyers but was smacked down since they had already been paid for and therefore could no longer be controlled by LG. This case deals with patent infringement (i.e, products that were never licensed under a patent and if, using these as an example, LG could sue a PC maker for using patented chips made by an unlicensed manufacturer or whether the liability only extended to those doing the actual manufacturing of the patented items (chips).

Re:Another /. totally BS patent story (1)

KiahZero (610862) | more than 6 years ago | (#20760043)

Your summary of this case isn't correct. In this case, Quanta purchased licensed chips from Intel. The question presented to the court is whether a clause in LG's license prevents the patent rights from exhaustion when Intel sells the chips to others.

Re:Another /. totally BS patent story (0)

Anonymous Coward | more than 6 years ago | (#20759685)

The parent is right -- a patentee can only recover once for any particular item. Of course, the interesting part is picking who to sue that one time.

Say you have a patent on a system for placing travel reservations. Do you sue the vendors of reservation software for a percentage of the software revenue? Heck no! You sue the hotels, airlines, and car companies for a percentage of all their bookings. This is a well-known tactic among patent trolls -- sue as close to the retail consumer as possible. The damages base will be larger.

One section in most of the recent "patent reform" bills is designed to forbid this practice. Perhaps the Supreme Court, with its newfound pro-business agenda, will rule on this issue without new legislation.

YIIAPL,BIANYPL.GYOGDPL.YMNO.

Re:Another /. totally BS patent story (4, Informative)

DRJlaw (946416) | more than 6 years ago | (#20759955)

"First sale doctrine already does apply to patents."

True, but the article summary and your response both gloss over the interesting issue in favor of something that's irrelevant. Patent exhaustion exists. Caselaw preventing double dipping for infringement damages already exists. This situation is different.

The decision in the Federal Circuit [fedcir.gov] holds that a patent is exhausted by an unconditional sale, p. 7, in line with Supreme Court precedent, but also holds that a patent rights are not exhausted by a conditional sale, pp. 7-8, in line with about 20 years of Federal Circuit precedent.

The interesting problem here is that the LGE patents do not cover the products sold by Intel. They only cover those products when combined with additional components. It appears that in the absence of a license, LGE could only have sued Intel for "contributory infringement" because Intel would be making products specially adapted to implement LGE's invention when combined with other components, see 35 U.S.C. 271(f) [uspto.gov] , but not the patented combination itself. In essence, LGE and Intel negotiated a license that makes Intel a component source/supplier. Now those who purchased the specialized components and combined them in a manner that would infringe the patents are arguing that a license to manufacture a non-infringing but specialized component without fear of a patent lawsuit also conveys to the supplier's customers the right to practice the entire invention. That's not a clear cut question.

One of the axioms of property law is that you can only sell that which you yourself possess. If Intel has a license that merely permits it to manufacture and sell a specialized component, then arguably the purchasors have the right to resell the specialized component (that fraction of the patent right is exhausted), but do not have the right to manufacture or sell the patented invention because not even Intel has the right to manufacture and sell the patented invention. If Intel has a license to manufacture and sell the patented invention using its own components, with LGE getting a percentage of the revenues for the Intel components, then arguably neither Intel nor its purchasors have the right to manufacture or sell the patented invention when manufactured using non-Intel components -- LGE would be deprived it its rightful revenues, and Intel would infringe the patent for those combinations made with non-Intel parts.

The decision is unclear on the license structure, and I don't have time to dredge up the District Court decision, but there are potentially valid reasons for dividing up patent rights and royalty rates in this manner that cannot be reasonably described as double-dipping. For example, the Intel chips may still have value when combined with non-Intel chips in ways that do not produce the patented invention, but it may not make economic sense to manufacture two types of chips, one with the specialized aspect and one without. A licence with a modest royalty that is less than the entire royalty, whatever that is, benefits Intel by simplifying its product line and securing it from the potential of being sued as a result of the actions of its customers.

Get ready to bend over (-1, Flamebait)

PingXao (153057) | more than 6 years ago | (#20757889)

If you're a sole inventor or small business, that is. Even though the Constitution starts with "We, the people", you can bet your last dollar this Supreme Court will rule in a way that is favorable for big business, and not "the people" at all. My prediction: if you're a big business and your patents get infringed upon, you will have every legal recourse available to you including jail time for the offender. If you're a little guy and big business infringes your patents, they will get their wrists slapped at best. At worst, they will be able to use the "we didn't mean to do it" defense. Either way you'll pay through the nose to even get that far.

Re:Get ready to bend over (1)

mikey07 (1162587) | more than 6 years ago | (#20759289)

Fabulous display of ignorance Ping. The sole inventors and the small businesses are the groups that stand to lose the most by a weakened patent system If patents are weakened, the biggest bullies... i.e. those with the most money... always win. Patents give the little guys a boost. And who do you think all the "patent trolls" are? Right, they're little companies who have nothing but patents and sue big companies for royalties or injunctions. Remember the "Blackberry Scare" last year. Who owned the patent that almost brought down everyone's Crackberries? Why it was a tiny little company.

In fact lawyers don't support excessive IP rights (0)

Anonymous Coward | more than 6 years ago | (#20758023)

...the good ones actually mount insightful arguments [oxfordjournals.org] against abusive patent strategies.

Maybe Next... (1)

Nom du Keyboard (633989) | more than 6 years ago | (#20758235)

Maybe next they'll look at how many people the RIAA can sue over the P2P distribution of the same song. They've settled with Napster, KaZaA, some sort of deal with the major ISP's, and are now after normal consumers and college students.

Re:Maybe Next... (1)

Microlith (54737) | more than 6 years ago | (#20758781)

Considering that each redistribution is itself a copyright violation, as many as they can afford to.

Patent problems (1)

belunar (413142) | more than 6 years ago | (#20759831)

Hey look at this, I found the origional patent for fire. Guess I get to sue anyone that uses fire for infringing on my family patent. Anyone who makes lighters, firewood, fireplaces, stoves, ovens, cars, planes, etc. Im rich man Im rich!

eh I can dream anyway

Another reason Fianl Sale is important (1)

0x1b (979991) | more than 6 years ago | (#20799611)

The Principle of Final Sale should act as a firewall against this kind of touring lawsuit - justice is based in intent. Punishment should not derive from ignorance.
Check for New Comments
Slashdot Login

Need an Account?

Forgot your password?

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>