Posts Tagged ‘licensing’

A Brief History of the Patent Troll

Thursday, 20 October, 2011 11:11 Written by Scott Nyman 4 Comments

Scott Nyman

The Selden "road engine."

 

If you’re reading this blog, chances are that you are familiar with patent trolls. For the uninitiated, patent trolls are typically groups or companies that collect patents with the sole intent to initiate infringement litigation against another party. Typically, patent trolls have no intent to develop or manufacture products relating to the patents-at-suit. Patent trolls generate a majority of their revenues by initiating infringement litigation against companies and settling for less than the cost of defending such litigation.

The origin of the patent troll has been debated, but many credit George B. Selden as the original patent troll. Selden was the owner of U.S. Patent No. 549,160 for a “Road Engine,” or an early automobile. Selden delayed the issuance of his patent sixteen years, resulting in a patent issued in 1895. Selden then  initiated suit against other automobile pioneers in 1903, including the Ford Motor Company. Selden never entered production for the road engine, which was the subject of the patent-at-suit.

Like many defendants that find themselves in the sights of a patent troll’s aim, many of the defendants to the Selden infringement suit decided it more advantageous to settle and enter a “licensing agreement” with the troll plaintiff. This strategy of settling, even when the facts are on a defendant’s side, typically revolves around one factor: patent litigation is REALLY expensive. Typically, trolls will be willing to settle for a price substantially less than the the cost to defend. Often, the decision to pay a nominal expense to mitigating the claim of infringement instead of defending a company’s innocence becomes a simple business decisions. Selden found that many of his named defendants found it most wise to take the settlement route, netting some quick revenue for the troll plaintiff.

However, Henry Ford was not interested in settling with Selden. Ford battled Selden for the next eight years, resulting in a trial and a judgement for the plaintiff, Selden. Ford then appealed the judgement in 1911, winning the case by proving that its engine was derived from the compression based Otto engine, which read against the gas turbine Brayton engine of the Selden patent. With Ford’s victory at hand, it continued to develop into the leading automobile manufacturer that we know today.

So why do some companies, like Ford, decide to defy business logic and fight the trolls? For some companies, it’s a matter of principle and honor. The company strongly believes that it did not infringe the patents-at-suit and wants the public to be aware of the same. Other companies maintain a strong policy of standing up to the bullying patent trolls.

By taking an infringement suit to trial, a defendant company sets the example that it is not an easy target to troll for quick and easy settlements. A troll better make sure it has some rock-solid patents if it seeks to name a company with a reputation to fight in its infringement complaints, otherwise it may end up with some invalidated patents and a pile of attorneys fees.

In the news today, I noticed that online retailers Newegg.com and Overstock.com recently won their ongoing patent infringement battle against French telecommunications company, Alcatel-Lucent. While many of the named defendants found it easier to settle with the plaintiff, “licensing” the patents relating to dropdown menus and other web interface tools, for a measly $4M, Newegg and Overstock would have none of it. Once trial commenced, Alcatel-Lucent dropped their licencing fees for the remaining defendants to $1M. Yet, Newegg and Overstock maintained their public reputation of fighting baseless infringement claims, netting a victory in the U.S. District Court for the Eastern District of Texas, a so-called patent rocket docket.

At the end of the day, trolls will now think twice before messing with the likes of Newegg, Overstock, or other retailers with the reputation to fight. Additionally, future trolls may be think twice before initiating suits on related patents. But, unfortunately, unless the patent trolls stop seeing profits from their efforts, I don’t think they will be going away anytime soon.

 

Read more:

http://www.bannerwitcoff.com/_docs/library/articles/HistoryOfPatentTroll.pdf

http://en.wikipedia.org/wiki/George_B._Selden

Apple to Turn Over Thunderbolt Trademark to Intel

Saturday, 04 June, 2011 14:48 Written by Mark Malek 0 Comments

By: Mark R. Malek

Seems as though every time I turn around, Apple is in the intellectual property news once again.  This time, I understand that Apple will be turning over ownership of the “Thunderbolt” trademark to Intel.

Apple originally filed for the “Thunderbolt” trademark to be used in connection with its new high speed data port.  Intel, however, worked with Apple to develop this new standard.  The deal allows Apple to have unrestricted use of the trademark.  As I was reading through this story, it does not seem as though there was any sort of “dispute” with respect to the trademark.  Instead, it looks as though Apple and Intel worked together on this new standard, and part of Apple’s contribution was to take care of the initial trademark filing.  Of course, any type of intellectual property story with Apple involved always seems like a dispute.

This almost seems like a cross licensing deal, and I am sure that the “Thunderbolt” trademark was not the only piece of intellectual property involved in the deal.  There may have been some patents or patent applications involved, and certainly some copyright issues raised in the licensing deal.

These are some of the things that companies need to think about when entering into collaborative agreements with one another.  Before entering into collaborative agreements with other companies, these types of terms should be agreed upon.  Taking the time to think of these terms and making sure that everything is as clear as possible is a sure way to substantially reduce the likelihood of litigation at a later date.

You will notice that I did not say that litigation could be eliminated.  I wish that were the case, but it is just not feasible.  If someone thinks that they have a right to something, and they have $350 to file a lawsuit (that’s about the going rate for a filing fee for a complaint) then they can sue you.  With the proper agreements in place, however, you will likely have a good defense.

 

 

Made for Apple, OR ELSE!

Sunday, 10 April, 2011 21:01 Written by Scott Nyman 0 Comments

By Scott Nyman

It’s no surprise that Apple holds a large portfolio of intellectual properties. In fact, there are websites dedicated to tracking new patents and trademarks issued to Apple, such as www.patentlyapple.com. It should come to no further surprise that the company would desire to control and profit from such intellectual properties.

A few years ago, Apple began a licensing program as a requirement to market and sell iPod, called the “Made For Apple” program. This program has since transformed into the “MFi Program,” which has expanded licencing to include Apple’s iPod, iPhone, and iPad. Apple describes the MFi as a  “licensing program to develop electronic accessories that connect to iPod, iPhone, and iPad” and allow “licensed developers gain access to technical documentation, hardware components, technical support and certification logos.”

Joining the program allows a developer a license to market and use Apple’s patented technologies without provoking the wrath of the company’s litigation department. Of course, Apple charges for the licenses it provides, and sometimes for each device manufactured. For example, when the program was still called “Made for Apple,” accessory makers were required pay $4.00 for each unit that used Apple’s proprietary connector.

Some companies, including eForCity, decided to manufacture and distribute accessories for Apple’s iDevices without bothering with those pesky licensing fees. I don’t know if these companies thought they could fly under Apple’s radar or just didn’t care, but Apple noticed. In fact, this past July Apple filed a complaint with the U.S. District Court for the Northern District of California alleging infringement on their patents and trademarks and unfair competition. The defendants attempted to have the suit dismissed on procedural issue, but District Judge Jeremy Fogel has since ordered the case to proceed.

Where the case goes from here is anyone’s guess. Patent and trademark litigation can get very expensive very fast, and I am in no position to guess the financial ability of the Defendant companies to put up a fight against Apple. If history is any indication, eForCity and the others may look to settlement as the best alternative, as similar other Defendants have over an alleged infringement of Apple’s “MagSafe” power connector.

Got Trademarks?

Thursday, 24 February, 2011 09:35 Written by Aaron Thalwitzer 7 Comments

by Aaron Thalwitzer

In a move sure to please natural mom’s groups worldwide, the California Milk Processor Board (CMPB), who created and owns the “got milk?” tagline, has agreed to license the mark to La Leche League International. The new tagline is, naturally, “got breastmilk?” The ad campaign writes itself.

The CMPB is a trade organization, and recognizes the value of protecting their trademarks. They registered the “got breastmilk” mark two years ago because it is so similar to the “GOT MILK” slogan. The rising notoriety and, dare I say, ferocity, of various breastfeeding groups and individuals undoubtedly played a role as well. This is particularly notable because the CMPB has worked hard to protect its valuable trademark.

Isn’t this a conflict for the CMPB? They sell cow’s milk, not human milk (so far). Won’t milk sales decline if more moms choose to breastfeed? The

I'm waiting for the coozie.

CMPB’s executive director doesn’t think so. He recently said, “GOT MILK? and La Leche League . . . believe that breastfeeding is the most natural and effective way of satisfying the needs of the baby. And as the baby gets older, cow’s milk is the other best natural source of food for children.”

Moms that disagree should feel free to begin a comment war below. I welcome it.

Some “go breastmilk?” items such as buttons and postcards are ready for sale on the La Leche League website. Other branded items are sure to follow, and the CMPB will give 50 % of royalties from sales to La Leche.

Got milk? has been ripped off many times before, but let’s be clear.  This isn’t a ripoff, it’s strategic licensing. On the other hand, the ripoffs are every bit as entertaining as the real thing. My favorites tend to appeal to my avuncularity: Got hair? Got teeth? and Got wrinkles? But CMPB doesn’t mind — they love it (they say that each use helps them sell more milk). You could say it was viral marketing before viral marketing.

Le Leche was founded in 1956 by seven suburban women. They named the group for the Spanish word for milk so meeting notices could be printed in newspapers “without offending anyone.” I don’t understand what’s offensive about the word “milk” though. Maybe they should’ve called it the Le Leche del Pecha League.

In what is shaping up to be quite a month, I have now managed to get the words “footlong” and “breast” into consecutive titles of my posts.

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