back to article SHOCK! US House swats trolls, passes patent 'extortion' bill

The US House of Representatives has momentarily put aside its internecine warfare and actually passed a bill aimed at stopping the worst excesses of the patent trolling business, and most of the technology industry is rejoicing at the news. "Today Congress worked in bipartisan fashion to do the right thing and secure America's …

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Anonymous Coward

Making IV unhappy is a sign that the bill might have some value

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Intellectual Vultures: "but even the best of [the articles in the bill] need a great deal more refinement"

I foresee that the bill will suddenly be amended in the middle of the night the day before the vote has been tabled, with representatives duly informed by an e-mail to their personal address bearing the informative subject "I AM JORGEY MALKONY FROM NIGERIA AND HAVA OFFER TO MAKE".

The vote will then proceed with no-one (no-one not in on it) noticing the versioning update of the nicely printed and bound dossier on their desk.

To the consternation of all, patent trolling will thus become a cartelized profession for special holders of "troll regulation licenses" only, and will be subsidized to the tune of NO MORE THAN 10'000'000 (TEN MILLION) USD per year per license holder to protect "the innovation".

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Anonymous Coward

On the other hand

It might just be the kind of legislation that protects the Big Boys and keeps the Little People from even daring to file a complaint.

A double edged sword perhaps?

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Re: On the other hand

Not even a double edged sword. It is simply a terrible law that does nothing to correct the real issue, which is crappy patents in the first place.

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About time!!

Enough said!

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WTF?

Did the Patent "Industry"...

... fail to buy bribe offer campaign finance to the right people...?

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Anonymous Coward

Re: Did the Patent "Industry" fail to finance...

And there you go, the truth in a nutshell.

What is surprising is not that this bill passed, is that El Reg and its readers are surprised by that. The US government has become a fully corporate paid-for construct and, therefore, a bill such as this was bound to pass as it takes the most important part of the US population into account...that being Big Business interests.

Do you really think that any large tech or manufacturing business would be AGAINST this sort of legislation? And there you are: a bill that assures Congress' attention!

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Re: Did the Patent "Industry"...

perhaps other groups just out bribed them.

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Re: Did the Patent "Industry"...

Na, the patent industry just pissed off enough of the little people that they started writing letters to their representative, and getting 10 or so letters a day on your desk all complaining about the same thing from different people kinda makes you sit up and take notice. If for no other reason than they have to reply to every letter, so it's a cost in time if not money.

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Anonymous Coward

It was promising...

...until they got to this:

"if a lawsuit fails they would have to pay the defendant's costs."

Assuming that applies to all cases, it's like handing a free pass to big companies. Suppose a Fortune 100 company infringes on a patent my five-person company holds - suing them would be an insane risk. I'd be forced to defend my patent with my three-hundred-dollar-an-hour lawyer, but if I lose, I'll have to pay their team of fifty two-thousand-dollar-an-hour lawyers? You'd have to be crazy to take that risk.

If the law is implemented the way it appears from this article, it's little more than a way to ensure that individuals and small companies no longer have patent protection from large corporations.

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Re: It was promising...

It also doesn't help in situations where a patent troll company with deep pockets takes a small software company to court, for example Uniloc suing every just about Android developer and their grandmothers too.

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Re: It was promising...

Most lawsuits, the loser has to pay the winner's costs, mind you winning costs doesn't mean you get all your money back. As best you'll get maybe 70%.

Been there, been screwed and that was with us winning......

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Re: It was promising...

Except the troll usually just assigns the IP to a throwaway company. If they lose the patent has no value anyway and the off the shelf company can just go bankrupt before paying any fees

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Re: It was promising...

The way I read it the corporate veil would be lifted in these cases, so the owners of the company (shareholders either corporate or human) would become liable for the costs should the patent holder corporate be unable to meet them. That would be aimed to stop the exploitation of the veil in these circumstances. But IANAL and I have not read the draft bill.

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Re: It was promising...

"It also doesn't help in situations where a patent troll company with deep pockets takes a small software company to court, for example Uniloc suing every just about Android developer and their grandmothers too."

Thing is, if I'm reading this right, the trolls can't go after these developers if the code in question was not theirs by design. IOW, they'd have to take it to the originator of the offending code, and if it's in the Android base, that's probably Google...a company with some of the deepest pockets in the IT world, a company that was able to hold the dreaded MPEG-LA to a stalemate.

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There goes Rockstar

into oblivion at last. Microsoft / Apple will be already figuring a way to continue the trolling no doubt

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Re: There goes Rockstar

You wish. And I wish it were true. But I don't see much in this that will stop Rockstar.

They said pretty much everybody out there infringes their patents. They're just getting started.

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Re: There goes Rockstar

Their patents? Sold the rights to troll them by companies even though they didnt invent anything? Patent Troll pure and simple it's no wonder they hate the idea of this! They fall right under the radar of what this is trying to stop

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Flame

what else is in the bill

Anytime a bill goes smoothly through Congress there is tones of pork, set asides and hiding agendas.

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Re: what else is in the bill

Mmmmmm bacon

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Thumb Up

End software patents, everywhere, immediately.

Software patents are an abomination upon the planet and must be ended, everywhere, immediately, no questions asked. Hopefully this bill is a step in the right direction.

When 99.9% of Microsoft's "mobile revenue" comes from racketeering/extortion of Android, you know the system is broken and needs to be changed.

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Re: End software patents, everywhere, immediately.

Some form of software patent MUST exist somewhere because copyright is not enough to protect a TECHNIQUE which can be defeated with a clean-room copy (remember how Compaq cloned the IBM BIOS). BTW, people can get around a software patent by burning the code into a chip, turning it into HARDware instead. No, the main issue is the short lifecycle length of the computer industry. A more reasonable solution would be that software patents only be granted for very short lengths, say three years.

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Anonymous Coward

Re: End software patents, everywhere, immediately.

"Some form of software patent MUST exist somewhere because copyright is not enough to protect a TECHNIQUE which can be defeated with a clean-room copy (remember how Compaq cloned the IBM BIOS)."

You say that as if it were a bad thing. It's not.

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@Charles 9

Bad example. The IBM BIOS was more an API than a technique. What the clean room guys got was information such as Interrupt 13 is for disk I/O and what registers contain buffer addresses, flags, and other stuff associated with the request. The code to implement this may have used a wildly different TECHNIQUE as the disk controller chip used by Compaq may well have been completely different. I seem to remember that Compaq often had little tricks up their sleeve to ensure you only purchased replacement drives from them.

There would have obviously been many similarities to the IBM code as the 8086/88 architecture determined the addresses for the interrupt vectors and would influence the code in various ways, but the various clone BIOS teams basically had to do all the work barring the initial spec.

If you think this is worthy of patent protection rather than copyright you are siding with Oracle in their spat with Google regarding the Android Java affair. As a developer my choice is copyright (which doesn't preclude FOSS) and never patents for software.

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Re: @Charles 9

"If you think this is worthy of patent protection rather than copyright you are siding with Oracle in their spat with Google regarding the Android Java affair. As a developer my choice is copyright (which doesn't preclude FOSS) and never patents for software."

I'm with NEITHER side. My side is that patents for software and the like should exist BUT that patent terms should be relative to the industry in which they apply. And for the software industry, lifecycles are short, so make the patents short as well (my current throught is three years--long enough to get some value out of it, not long enough to really abuse or troll it). If you don't allow for the truly novel to be worthwhile, especially in this day and age, then nothing truly novel will appear. Patent law is meant to act as both stick AND carrot.

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Re: End software patents, everywhere, immediately.

"You say that as if it were a bad thing. It's not."

Look at it from the perspective of the one writing the code or developing the technique. If you planned to sell you technique on the market, how would you feel if you learned your hard would could just be copycatted and sold for less if not just given away? People rarely work for work's sake, especially when bread needs to get on the table, and if I just happen to develop a new and radically-useful algorithm, perhaps I'd like to SELL my idea. And before you say it's intangible, suppose I put the code on a microchip or circuit board; how's THAT for intangible? Plus you can apply the same principles to medicine, which use programming of a different sort with chemistry.

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Re: End software patents, everywhere, immediately.

Yes. It is intangible.

It is no different than directions written on a piece of paper.

And as you can't patent an IDEA in the first place, you can't sell it either.

Now, if you invent a specific piece of hardware then you have something - it is called a "transformation of matter".

Writing is not transformational - it is recorded language. And it doesn't matter what can read that recording, it remains a recording.

Mathematics is an idea.

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Re: End software patents, everywhere, immediately.

Just because something is intangible doesn't mean it doesn't have power (literally). Energy is intangible, for example. We can't feel radio waves (and many electromagnetic waves pass THROUGH us) yet we can harness them for assorted ends.

Plus, remember the adage "scientia est potentia" ("Knowledge is power.") This applies not just to specific topic but also to knowledge IN BROAD (like the concept of radioactivity, polished in the late 19th century). You're stuck on the concept that concepts are always specific. I'm recognizing that concepts can be broad as well, and copyrights ONLY cover specifics; they're not useful enough for generalities since you can end-run around that with a second implementation (that's why I brought up the Compaq BIOS--it specifically defeated a COPYRIGHT, but what if IBM held a PATENT on the concept of a Basic Input/Output System). All this attitude about patents being a whole "protection" racket a la the mafia is an overreach and smacks of "Gimme! Gimme!" entitlement. That kind of attitude can make conceptualizers think, "Blow this for a lark!" and keep their ideas to themselves, just as they can for inventors. Remember, information wants to be free, but people are greedy; you have to play with that hand or new ideas die in their heads and you can't tell when it'll come again (has anyone given thought to how much knowledge was lost in the Alexandria Library disaster?). You need the incentive to make them come out, BUT at the same time it should be recognized that they can only exploit their idea for so long, which is why I keep saying limit conceptual and software patents to terms like three years. Is that really too much to ask?

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Mushroom

Can't hide behind shell companies

Well that's Nathan Myhrvold screwed, then.

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Tel

Bye bye Lodsys!

Don't let the courthouse door hit you on the arse on the way out.

Actually, do. It'd be fun to watch you fall flat on your face.

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Ah well, explains the cold weather. Some small part of Hell just froze over.

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What, Congress actually did something?! I am shocked.

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Bigger picture

I wonder if this has some grudging acknowledgement of the "rest of the world" still being out here.

China may see the US as a litigious bear pit and not worth the effort, the global economy moves on and there are some pretty serious markets out there now (mixing metaphors) to play ball with.

There comes a point where they just won't pass the ball to someone who writes their name on it and wants to then charge others to use it.

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Alert

Might work...

… if they strike down the other garbage they did pass, the America Invents Act or the "Patent Troll Porkfest Act" where whoever files for patent first wins the patent, even if there's prior art. So while the risks of losing are higher, the chances you'll lose a troll patent are also smaller because "prior art" will no longer be valid defense against new patents.

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Re: Might work...

Warning! That triangle has rounded corners.

But is that patent on rounded corners only valid on right-angled rounded corners?

This could have severe implications to the Vienna Convention 1968.

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Re: Might work...

America switching to first to file doesn't change prior art invalidating a patent.

It means that you don't patent something, invest in manufacturing, build a market and then have an IBM come along and say, we thought of that years ago but didn't do anything about it - now you have proved a market we will file our patent and take it from you.

Now they need to show that they published their idea and you could have known abut it and benefitted from it and in thw worst case can invalidate your patent not have it re-assigned to them.

Originally first to invent was needed in America because it took weeks to get a letter to Washington, but it became a way of big companies with lots of lawyers to sidestep the patent system.

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Re: Might work...

I thought America had been first to file for over a century. Isn't that how Bell won the patent for the telephone: by beating a simultaneous inventor to file by about three hours?

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Pirate

Copyright

Can I be the very first to suggest this:

From 2017 onwards, every single film or album made in the EU should contain the song "Happy Birthday to you".

These will then not be legally available in the USA until 2030 :-)

Let them try to sort that one out...

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Anonymous Coward

Re: Copyright

Now let them try to sort the loss of revenues from the American market, which is still too large to ignore for the most part. This would particularly hit export-driven economies like Germany.

In any event, that's a copyright issue and not relevant to this law. If you want to fix THAT problem, you'd better be prepared to take on Disney, Warner, and the rest of the big movie studios.

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Happy

Translation

"We're not opposed to all, or even most measures in H.R. 3309, blah,blah ..."

Or, in other words "Shit, shit, shit!"

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What will the Register do?

That's 50% drop in story output when they sort out patients!

Just teasing really, love you Reg.

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Happy

Re: What will the Register do?

is that the patients that read El Reg (or those that write it)?

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Double edged sword

If not written absolutely carefully this could just as easily be used to screw smal inventors.

Whilst they're at it, why not do something about submarine patent enforcement - such as the whole rambus fisasco.

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Roo
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Re: Double edged sword

The RAMBUS fiasco is what drove all this "FRAND" crapola. Patents should be FRAND by default, the holder gets paid (hopefully the inventor - but in reality likely to be a law firm in all but name), and in return the holder doesn't get to choose how to distort the market.

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Re: Double edged sword

> Patents should be FRAND by default, the holder gets paid (hopefully the inventor - but in reality likely to be

> a law firm in all but name), and in return the holder doesn't get to choose how to distort the market.

That is eventually one solution for one market (most likely telecommunications). But you have to realise that patents are also being used in other markets (think pharma, chemistry et al.) and there, you want to grant the monopoly to the inventor so that the inventor can refinance its R&D.

I wonder whether we need different systems for the different markets:

* Telecommunications is driven by technical standards and economic network effects and you want to be able to use the standard. Thus, no cease desist claims for standards only adequate compensation for inventors;

* Goods markets are driven by manufacturing and the products' differentiating factors. Cease and desist claims should be possible so that you can use the monopoly to refinance;

* Service markets are driven by operational quality and you may want to be able to compete in any field/draw on any supplier. No patent protection at all.

It would be interesting to know what Mr. Worstall as the resident economist thinks about the patent system since he apparently did not follow up on his expose on free goods.

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Roo
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Re: Double edged sword

"That is eventually one solution for one market (most likely telecommunications). But you have to realise that patents are also being used in other markets (think pharma, chemistry et al.) and there, you want to grant the monopoly to the inventor so that the inventor can refinance its R&D"

FRAND appears to be a very flexible term, "reasonable" doesn't not equate to "cheap" or "free" !

I think the toughest problem is accurately determining how much the R&D actually cost (not always easy to do if it is the result of an offshoot of a larger piece of work). I would also like to see the duration of the patent tied to the total amount of money that has been claimed in licensing revenue - so the total revenue earned by the patent over it's lifetime would be R&D+Fixed Margin.

The aim behind this is to prevent Patents from being unusable because the holder refuses to hand out licenses - and in some cases that can go on for decades - effectively blocking any forward progress for mankind as a whole.

Personally I'd rather we were able to share ideas freely without having to worry if we have independently replicated some IP from first principles that happens to be held by a shyster in Texas.

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Re: Double edged sword

"The aim behind this is to prevent Patents from being unusable because the holder refuses to hand out licenses - and in some cases that can go on for decades - effectively blocking any forward progress for mankind as a whole."

Isn't that the "ND" part of "FRAND": Non-Discriminatory? It could also apply to the "F" part: Fair.

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Re: Double edged sword

@Roo: First of all, thank you for your response.

"FRAND appears to be a very flexible term, "reasonable" doesn't not equate to "cheap" or "free" !"

Agreed.

"I think the toughest problem is accurately determining how much the R&D actually cost (not always easy to do if it is the result of an offshoot of a larger piece of work). I would also like to see the duration of the patent tied to the total amount of money that has been claimed in licensing revenue - so the total revenue earned by the patent over it's lifetime would be R&D+Fixed Margin."

This may work for a market that is subject to network effects. Here, the inventor does not only receive the compensation you intend to grant him but he also benefits commercially from his technology being adopted as his technology will be compatible.

However, for a goods industry, this benefit usually does not occur at all or at least not in the same amount. So, only granting a limited compensation to e.g. a metallurgy company limits their ability to free enterprise. Admittedly, the granting of a monopoly limits everybody else's ability to pursue their business but the inventor can claim that they started one part of the market. In essence, it is a question how you grant enough incentives to the inventor.

"Personally I'd rather we were able to share ideas freely without having to worry if we have independently replicated some IP from first principles that happens to be held by a shyster in Texas."

I wonder whether this problem of the non-practising entity can only be resolved by limiting everybody else. You could introduce different levels: If the patent holder offers to sell (and price gauging regulations apply), you should not be able to avoid the monopoly. If he fails to sell, curtail his claims to license fees. That would still leave us with the issue of how to determine these license fees but you then would have access to the technology as you intend.

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Roo
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Re: Double edged sword

"In essence, it is a question how you grant enough incentives to the inventor."

That's the point of the "Margin" bit, as I pointed out FRAND is not necessarily "cheap".

It would be interesting to see how it panned out if you took FRAND to it's logical market driven conclusion, namely licenses are freely traded in an efficient open market, I suspect it would favour people who made stuff which I think would be a good thing. Virtual stuff is all well and good but it doesn't put food on the table.

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This is a terrible day for the little guy

This completely defeats the point of patents!!!

Patents are supposed to allow the little guy to protect his idea from being stolen. All that has happened here is that big corporations can now steal a good idea from someone who does not have the money to productize it.

Patent trolls are not the issue. Bad patents are the issue.

How is a company that purchases a stake (or outright buys) in an idea from a small guy/person that does not have the funds to fully realize the idea any different from a venture capital company??? Exactly the same business model.

This law now gives big corporations free access to completely ignore patents from anyone who simply does not have enough money to take their idea to the next level.

Very, very bad decision.

There has certainly been some back hand payments from big corps in getting this passed.

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