Twitter Pays $36 Million to Avoid IBM Patent Suit
wired.com
wired.com
Defensive portfolios of garbage patents used to be the key to preventing competitors from suing you with their garbage patents. After the eBay v. MercExchange [0] case in 2006, it's not as dangerous to be sued but defensive portfolios are now much less useful also because you can't threaten to shut down aggressors' businesses with injunctions. The Apple v. Samsung and Microsoft v. Motorola cases also recently demonstrated that vague garbage patents are much more useful in court than technological patents. Juries and judges understand them better and are inclined to award hundreds of times more damages.
Second, IBM is the least awful kind of patent troll. They generally ask for small fractions of revenue or investment in companies that have established themselves. The IPO phase is a favorite time for them to ask for a few million from growing companies. The worst kind of trolls -- such as Microsoft's Intellectual Ventures -- ask for much more money from companies and often go after startups. IBM exercises restraint with the idea that they might have an ongoing relationship with companies someday in some other context.
And IBM, unlike most trolls, actually does real research. Most of the new ideas in Google Search were first published in an IBM research paper that Larry and Sergei read. IBM didn't patent those ideas, though; they mostly seem to accumulate scattershot patents at random. I think IBM's primary goal is to top the list of prolific grantees every year.
[0] http://en.wikipedia.org/wiki/EBay_Inc._v._MercExchange,_L.L.....
I don't think that I agree with this part especially if you are equating Standards Essential Patents with "technological patents" and all other patents as "vague garbage patents". If that wasn't what you meant I misunderstood.
The reason that SEP are worth less (than other valid patents) and not entitled to injunctions is because commitments were entered into by their owners to enable them to be included in the standard. And some SEPs are pretty low grade too and alternative approaches are often only prevented by the standard itself.
Actually, almost no patents are entitled to injunctions since the eBay decision made courts apply the same standard to patent cases as to other injunction requests, and we all owe many thanks to the Supreme Court for that.
some SEPs are pretty low grade too
Indeed, the Microsoft v. Motorola patents were particularly lousy. One Motorola patent was on the use of a particular number as a key in an error correcting code. The code itself was prior art but any two devices needed to use the some identical arbitrary key to communicate. It's embarrassing that the PTO allowed that one, but the court is making Microsoft pay for every device shipped now. Fortunately the price is small.
The Apple v. Samsung case involved a few Samsung radio channel efficiency patents that the jury found not infringed even though Apple did infringe them. They were probably as invalid as all the utility patents in the case but they failed to be useful probably because they were complicated and juries don't pay much attention to technological patents or discussions of them.
Apple's garbage patent about bounce-back was much more effective. Juries can measure that.
Now SEP (standards essential) patents are much less useful because judges are not inclined to allow them to be used defensively. And arguably valid patents are slightly more powerful than clearly erroneous ones. But simple garbage patents focused on non-technological UI and superficial means of doing business are much more effective in all litigation than actual technological patents independent of SEP status or validity.
I'm not sure the bounce back patent is inherently garbage (although it may be invalid due to prior art) but that sort of patent is entirely possible to work around. I'm not saying it is great patent but it does strike me as somewhat inventive, novel (AFAIK). I do understand what you mean about the likelihood of juries putting too much weight on what they understand.
I'm not aware of the details of the Samsung radio channel efficiency patents but I wonder why Samsung didn't bring them to (or didn't win with them) at the ITC where there isn't a jury. I'm not actually disagreeing here but it would be something ai would want to understand before completely agreeing with you about the lack of value in true technological patents (I'm in a don't know state rather than disagreement at this point).
It seems quite unlikely, though, that an iconic American company like Apple will ever see an ITC action that really harms its interests sustained. It is especially unlikely to happen in favor of an Asian competitor company, given American trade politics.
Apple's ITC bans against Samsung phones don't face similar barriers so far.
In any case, since particular phone models are seldom sold for longer than two years and both district court and ITC cases take longer than that, it has almost always been obsolete phones targeted by injunctions. Until the companies get more clever about targeting broad classes of devices, that is some small relief for the industry from the insanity.
ITC bans include devices that aren't explicitly listed if there is no colourable difference in the infringement.
[0] I'm British so nationally neutral.
I worked at IBM for 7 years, leaving many years ago. I am an IBM Master Inventor, having 36 patents filed with the USPTO with my name on them (some are still winding their way through the system). I worked heavily on patents for 3 years, and the last 2 years I was there, I was on the Patent Review Board. I'd also estimate during my active time with patents, I submitted 250-300 patent ideas to the board.
The Patent Review Board is organized along technologies - so, mobile would have its own Patent Review Board. People on the Patent Review Board tend to be Master Inventors and others who are active in the patent process. Once a week, about 3-4 hours of presentations are made to the Board (which includes the patent lawyers as well). After a 5-10 minute presentation, they are asked to leave the room, and the Board votes whether it should continue to the lawyer, or whether to close it. Most obviously are closed at this step with prior art. If it's voted to go to the lawyers, in my background, there was a pretty good chance it was going to get filed.
If your patent got filed with the USPTO, you got a point. IBM is very generous with their patent bonuses. You get $750 per patent filed. You also get an additional $1500 on your first patent filing, and $1500 every 3 after that. So, effectively, about $1000 per patent.
Patent ideas could be anything and everything. If they could patent it, they would. I remember from my time on the board seeing ideas on everything from dog doors to server optimization techniques to music devices. Given the people who work at IBM, most tended to be tech related, but it definitely was not a requirement at all.
The stuff people have asked about royalties makes me laugh as well - I never got the feeling once they cared if your patent would make them $1B or $1. And they certainly didn't care about compensating us for an idea that could make $1B. I was awarded the Software Group Patent of the Year one year, and other than an email denoting that fact, nothing was different than some of the lame ones I had filed.
Overall though, I thoroughly enjoyed every aspect of the patent process at IBM - it was one of the few outlets that rewarded creativity and hard work at the company.
Stop the presses!
Now what?
[1] http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=H... [2] http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=H... [3] http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=H...
It would be interesting for a company to take an alternative route and threaten to go out of business, or, say, publicly announce that they can't implement certain features, because it would require them to purchase their freedom to do so. [Insert your own slavery metaphor here]
However, now Twitter will have to say that their position on a given technical controversy is "complicated" and "nuanced" and imply that we rabble just don't understand the real world of business.
Yeah, 36Mi is not a lot to Twitter, but it's more fuel to the extortion racket
Another reason to buy nothing from this company
I wonder how many people could take medical care, buy food (mind goes to Africa), etc with that amount of money that apparently was given to a patent troll (IBM).
Just sad.
ps. Nothing against twitter, or IBM. They are just exploiting rules made by humans.
I wonder how many people's lives have been made better by technologies created, sold, and serviced by IBM.
http://en.wikipedia.org/wiki/IBM_and_the_Holocaust
(And by Goodwin's law corollaries I've lost this debate)
Anyway, the point was, things are not always black and white. IBM has certainly done some bad things, but it has also had a tremendous positive impact on society, medicine, techology, etc easily; more than 36m.
"As the Nazi war machine occupied successive nations of Europe, capitulation was followed by a census of the population of each subjugated nation, with an eye to the identification and isolation of Jews and Gypsies. These census operations were intimately intertwined with technology and cards supplied by IBM's German and new Polish subsidiaries, which were awarded specific sales territories in Poland by decision of the New York office following Germany's successful Blitzkrieg invasion."
This is capitalism. If you want a free market, you must live with unethical corporations.
You mean in a real-life market.
Every social movement has two sides: a theoretical and a real one. When studying. If we have to accept that China, Cuba and Stalin's Russia what applied Communism looks like, we have to accept for coherence and mainly because it seems to be the truth that what we're seeing (wall street, monopolies, free market not auto-regulating, etc) as applied Liberalism.
After a modest bit of negotiation, Sun cut IBM a check, and the blue suits went to the next company on their hit list.
Patently Absurd, Forbes, 2002: http://www.forbes.com/asap/2002/0624/044.html
Reforming patent law could be part of the solution against this type of thing, but the bigger problem may actually just be that IBM is run by assholes.
They had (and everyone has) the option to simply not file this kind of suit (or even go hog wild in the patent field). But they consistently choose to. I understand that it'd be fairly irresponsible for a large company to ignore patents, or to ignore actual, real infringement that affects its bottom line, but it is and has been blown so far out of proportion that no one in IBM's position gets a pass.
Bingo. This is a corporate organization and your needs, or really anyone's needs but the company's, are not in its best interest to consider. From the perspective of profits, playing the patent ransom game is the best decision, especially for entrenched business giants like IBM.
Creating / getting a patent at IBM is comical. Sort of like a game. All you have to do is document something, pass it to their patent lawyers ... and they fill it with so much verbose lawyer language and fluff that any normal person can't read and interpret it. Then it gets submitted and ... voila ... patent pending (and quite typically a couple years later, patented).
(Source: Me, a former employee of IBM (Indian Business Machines)).
Curious, did you submit any yourself? Did they provide incentives for you or staff to come up with these 'documents' ? Do they have a monthly quota for # of new patents per week/month? In addition to staff submissions, did they have special division specifically their to conjure up new patents fulltime? Feel free to indulge, I find it fascinating to hear it from someone who has been in the belly of the beast.
For example, my good friend had to submit and modify his idea 3 times because the lawyers were not quite happy with the novelty of it. Documenting your idea is a bit more involved then just slapping a few paragraphs down and sending it off to the legal team.
As an IBMer, I've refused to participate in patents because they are a net negative for society. IBM does however reward you for filing patents.
In the USA, it's like $1000 for your first file and then royalties from the patent in some cases (I've heard 1%, but this is just a rumor) if it is granted. Beyond filing your first patent there are different tiers for the number filed & accepted that provide extra monetary reward.
As far as I am aware, there are no divisions at IBM that just sit around and come up with new patents. Novel ideas come as a product of working on other things, so a team doing nothing but patents would probably quickly run out of inspiration. There are however monthly meetings with "Master Inventors" who have been through the process several times and are willing to help mentor you through the process. As an employee, management regularly has asked (2-3x a year) if anything we've done we thought was patentable.
On one occasion at a meeting of a second-line managers entire org (4 or 5 teams), an employee questioning the utility of making patent submissions a numbers game (e.g, everybody better submit some) was told - with limited paraphrasing - "Hey, 1,000 people on the street want your job and will do the work plus publish technical reports plus submit patents for less money. You should keep that in mind."
I suspect, but didn't really know enough people in other software group divisions to verify, that this particular managerial mindset may have been more tied to our specific division than IBM "in the large."
Particularly the case since it's patent portfolios that are valuable more than individual patents. If they had a regular policy of small-percentage royalty share, a company could well end up with a portfolio of 10,000 patents that has maybe 15,000 or 20,000 royalty-share agreements attached to it. That would be hugely more risky to manage than just 10,000 patents owned by the company with no riders attached. For example, say the company wants to sell this portfolio. A sale of the portfolio could potentially be held up by any of those 15,000+ people objecting that the terms prejudice their contractual agreement to a share of revenue. A share of a patent's revenues is a valuable quasi-ownership interest guaranteed by some contract terms, so any sales or other dealings that might impact it could be challenged by the contract holder. Even if any challenge is ultimately unsuccessful, having your portfolio encumbered by tens of thousands of people with some kind of claim on it is undesirable.
Here is an example of one that is not exactly it (for reason stated above), but similar enough to illustrate absurdity: Think of a Firefox plug-in that would let you right-click at a certain point on a long web page (e.g. on a word, a highlighted paragraph, anyplace .. that is a couple pages down on a long news article) and choose "Bookmark". This would save a "Bookmark" to your toolbar that you could later click and it would not only take you to the web page, but also scroll you to the exact spot you were at before on the page.
This type of stupid simple functionality ... would actually be patented by IBM. Yes .. that functionality had already really existed in one form or another, from multiple methods, yet ... no other company had the absurd gall and audacity to try to actually patent it. You would now search this patent # on USPTO.gov and read it and be amazed at how absurdly abstract and broad this vague function would be described. I would guess it would take you 10-15 minutes of reading and deciphering to even begin to realize what it was for (and would be as stupid simple as what I mentioned above). This is IBM's patent machine.
I can't speak for IBM's research divisions, but I know of no quota for other IBM practitioners (say in one of their services divisions). It is a "badge of honor" in someways (or so they think for some of those folks that submit this stupid crap) as you do have a "Patents" section on the internal profile intranet where it lists if you are a (co)-creator of any patents. Of they hundreds I've seen on people's profile, I don't recall seeing anything meaningful. Mostly of the type that we talk about in places like this as "Patent Troll" material.
http://en.wikipedia.org/wiki/List_of_top_United_States_paten...
1. If a developer co-own a patent with his former employer (IBM), does this developer have the right to use his patent technology later at Google? I don't know how IBM handles patents with his or her employees.
2. Developer does not own any patent but being the person who invented the technology does he have the right to invent a similar technology like his earlier invention at Google? People carry knowledge with them!
Regarding #2, since I really have zero idea how companies handle patent (except patent filing process), I think maybe patents have something to do in this deal (http://www.theverge.com/2013/1/23/3906310/the-no-hire-paper-...). Maybe, maybe 1%.
However, companies usually just get the patent assigned to them by the employee, in return for some token compensation (varies, sometimes it's really token, like $1, other companies will pay employees $100-$1000 per patent).
One place where it can sometimes come up is that a co-inventor who was omitted from the patent application can later try to get him/herself retroactively added. Trying to dig up such people, get them added, and then buy a license from that person is one strategy for defending a patent lawsuit. E.g. if IBM bought a patent from a university spinoff, you could try to dig up a grad student who can document he/she co-invented the relevant technology but wasn't listed on the patent, get them added, then license it from them. Since they now co-own the patent with IBM, you only need to license it from either them or IBM, so IBM's suit fails. I think doing this successfully is pretty rare, but there's a fairly famous case: http://scholar.google.com/scholar_case?case=8929550350181055...
2. This is a grey area that will ALWAYS be open to legal interpretation (enter the lawyers). There are different things involved in your question: Are there non-competes in your employment contracts?, are they actually enforceable legally?, will they be enforced legally?, what specifically is the "technology"? So .. this is not possible to answer beyond just saying: It depends. It is case-by-case and is balance between an business' intellectual property, any contractual agreements (non-compete) you may have signed, and your right to work / find gainful employment.
I think that might be a bit of a historical anomaly, though, related to when different doctrines were developed. Nowadays legal personhood is personhood-enough for most areas of law. One could imagine a court in 2014, looking at this issue for the first time, deciding that when a company puts a bunch of R&D money into something, and an invention results, through the actions of perhaps dozens of people working within the company's structures and facilities, it is in effect the company as an aggregate entity that has invented the invention. That might even fit a bit better (though still imperfectly) with modern scientific/historical understanding of invention, which generally views single-person "eureka!" moments as the exception, and collaborative efforts where some R&D "system" can be reasonably credited with the invention as the norm.
But this particular body of law was settled back in the days when the prevailing legal fiction around corporations was a bit different, so only humans can legally invent things. Due to the common dance around assignment, it doesn't make much practical difference anyway.
This also completely devalues the credibility of their IPA [1] patent thing. If Twitter gave in, why would everyone else who might've been interested in the whole IPA thing not do the same, too?
[1] - https://blog.twitter.com/2012/introducing-innovators-patent-...
I did a qualitative analysis of the patent portfolio here: http://www.preferredembodiment.com/1/post/2014/03/twitter-bo...
In most peoples' worlds, innovation describes the act to innovate. An act is not someone's property.
Twitter's been busy buying up patents with its' IPO capital by the looks of it.