Category Archives: Patent Trolls (NPEs)

Black hats and white hats in the patent law system (summary)

Pasted below is a summary version of the article posted on JD Supra on “Black hats and white hats in the patent law system” that I wrote on 8/16/09.

Within patent law and the patent litigation system, there are good ways and bad ways to make use of the rules and laws that have been set forth for us to follow. Many patent practitioners and patent litigation attorneys follow these rules to further technology and to protect the rights of inventors via their patented inventions. In the analogy of white hats and black hats (terms used in the information security / hacker communities), people who do good by the law would be considered white hats.

However, within the patent litigation system, there are also black hats, namely venture capital companies, inventors, and attorneys who seek to harm others by writing, enforcing, and suing on patents where the protection does not cover the technologies these often non-practicing entities (NPE’s) hope to target through the patents they assert. This causes havoc by overburdening the court systems with frivolous lawsuits, by devaluing patents already in existence, and by causing inventors to sell their patents to those who wish to profit and do harm with them. Often this results in the inventor making only a fraction of what she is entitled to, and the NPE’s taking the majority of profits by suing or licensing on a technology they did not invent.


If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Cashman IP Law Firm which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Black hats and white hats in the patent law system.

It took a few seconds to come up with this analogy, but after reading the “Wear a White Hat” article by Scott Gibson, I couldn’t stop thinking about how relevant the concept of black hat, white hat was not only to archetypes, hackers, and network security professionals, but also to patent practice professionals.

In the hacker / network security / cybercrime world, a black hat is a hacker who, among other things, penetrates networks and security systems and often wreaks havoc on the systems s/he has gained access to. Viruses can be installed, information can be exploited and/or manipulated, and general bad things can happen when a hacker penetrates your system.

On the other hand, there is also something called a white hat, which generally refers to an “ethical” hacker. Frequently, this is a programmer or a team of network security professionals who are hired by a company for the purpose of testing the company’s network for security holes, vulnerable entryways, and for weaknesses in the company’s network security system. While they may work with grey hats (best described as those who walk the fine line between violating laws and ethical hacking), these white hats help companies combat black hats who are intent in finding a security hole, penetrating a network, and exploiting the vulnerabilities inherent in that vulnerable network.

I see patents the same way. There are white hats who practice traditional patent practice whether on the side of patent prosecution, patent licensing, or patent litigation. These are the practitioners who write the patents and advance technology by sharing inventions with the public in return for amulti -year monopoly so that the inventor can benefit from their invention. The goal with white hat patent practitioners is that they are looking to help their inventors to find where the inventor’s understanding of the invention is lacking, and to help their inventors secure protection of their inventions by covering as many embodiments of the invention as possible to most completely and to most broadly describe the invention. This is similar to the white hat ethical hacker who finds security holes with the intent of writing a patch to fill those holes and to keep the network secure.

In licensing and in litigation, there are also white hat patent practitioners. These are the attorneys who help the inventor protect their inventions against companies who have knowingly or unknowingly taken the protected invention and have used the invention to make a product or a service which incorporates the protected subject matter of the patent. This white hat patent practitioner will often approach the company or individual using the protected invention of the inventor and will ask the company to properly compensate the inventor for the value of his/her contribution. If and when the company decides not to pay the inventor for the invention that is protected by law as belonging to him through his patent (whether their decision is in bad faith, e.g. denying the inventor compensation based on the company’s greed or whether their decision is based on a good-faith belief that the patent is invalid), the white hat patent practitioner (here a patent litigation attorney) will file suit to enforce the inventor’s patent rights. Throughout the proceedings, the white hat patent litigation attorney will develop evidence and will ethically move through the lawsuit proceedings so that the judge or jury will find that their client was wronged by the company who refused to take a license and pay the inventor his/her fair share of the value their invention contributed to the company’s profits, and in the end, if the inventor is in the right, the court will find for the inventor and will order the company or infringer to pay the damages rightly owed to the inventor.

Interestingly enough, just as there are white hat inventors and patent attorneys, there are also grey hat and black hat inventors and practitioners. Often known as patent trolls, these individual or companies will patent or acquire patents to inventions with the sole purpose of using them as a weapon to harm another company, whether it be to block them from making a product, or more frequently, to carve out a profit for themselves by asserting the newly acquired patent against the company. The stated purpose of patents are to promote and to reward innovation and to further the growth of technology; forcing a company to “pay up or else,” or to stop producing a product under threat of lawsuit blocks and hinders technology.

Black hat patent practitioners and black hat inventors usually fall into the category on non-practicing entities (NPE’s). These individuals generally see a patent as a commodity to be mined and exploited rather than an invention to further technology. You’ll often find black hat practitioners trying to reverse engineer and to invent around existing inventions for the sole purpose of suppressing the next step in the furtherance of technology, or to try to induce the real inventors and companies to “trip” (so to speak) over the patent and infringe it and then WHAM! the lawsuit and threats start pouring out. You’ll also find many venture capital companies acting in a black hat capacity by aggregating patents for the sole purpose of making a pretty penny by enforcing one or more patents against a target company with deep pockets who stand to lose the most by being confronted with one or more patents which may or arguably may cover the technology they are practicing.

Lastly, the distinction between a black hat patent litigator versus a white hat or grey hat litigator is how they conduct themselves in the preparation for and during trial. Black hat litigators will threaten, scream, intimidate, and will use scare tactics and legal maneuvers to intimidate the other side into settling with them WHETHER OR NOT they really are infringing the patents being asserted against them. Sometimes a party facing a lawsuit will settle giving money to a black hat litigator who has no leg to stand on just to save money on the expensive costs that will be incurred if they decide to fight the black hat litigation attorneys.

In the network security world, the job of the good guy belongs to the white hats who write security updates and patches to prevent the hacker black hats from causing damage through their illegal and often immoral activities. However, in the patent world, a white hat is often at a disadvantage when facing a black hat, and their only remedy is to endure the high costs of litigation and attempting to file a declaratory judgment and or summary judgement motion, or defending their client all the way through trial until a judgment is granted in their favor.

However, the real white hats in the patent world belong not to the patent attorneys and the patent litigators who ethically run their practice, but to the congressmen, the senators, and the lawmakers who are able to explore how black hat patent practitioners exploit and abuse the system, and they can pass laws to patch up the vulnerabilities in the law which allow black hats to do their damage. This can only happen through advice and letters from ordinary people like you and me who write them and share their thoughts, their feelings, and their experiences to best empower the real white hats to propose legislation changes to remedy vulnerabilities in the patent system as it is today.

If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

“Facebook Huddles with Patent Vampire”

It just occurred to me that social networking sites are about to become fewer in the coming months. There is an article in the Jewelry BlogStore Blog, “Facebook Huddles with Patent Vampire” referring to talks between Nathan Myhrvold from Intellectual Ventures, and Mark Zuckerberg, the founder of facebook.com. In the article, it shows the two icons talking.

Here is how I would think the conversation likely went:

Zuckerberg: “What do you think you can do for me by me selling you my patents for millions of bucks?”

Myhrvold: “How would you like to be the only social networking site in existence?”

Zuckerberg: “You can do that? How?”

Myhrvold: “Well, you know all those me-too social networking sites? Do you have any idea how many of them are infringing patents?”

Zuckerberg: “My patents don’t cover their activities. I’m not so sure it will work.”

Myhrvold: “Think a bit bigger, my friend. We’ve been buying patents on social networking for years, so much so that we can even put you out of business with our patents. We obviously wouldn’t of course, and we’re friends, and I’d like it to stay that way.”

Zuckerberg: [a bit nervous] “Uh huh…” *frown*

Myhrvold: “If you sell us your patents, we will give you a license to keep practicing your patent forever. Think of it as a royalty-free lifetime license. We — together — will bring the other social networks down to their knees, and we’ll share the profit 60/40.”

Zuckerberg: “I’m not so sure about this.”

Myhrvold: “You can’t lose. The patents speak for themselves. Plus, imagine what you’ll be allowed to do on your own facebook.com site because we’ll license you these patents which will allow you to expand your capabilities. You’ll have the #1 social networking site in the world!”

Zuckerberg: “What about the Twitter problem?”

Myhrvold: “We’re working on it. ;)”


If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Possible good motives of the supertroll patent conglomerates.

It’s assumed in the blogworld that IV is evil and that Nathan M. is public troll #1. I keep wondering in the back of my mind, what if he is up to good rather than no good.

Everybody agrees that there are serious kinks in the patent laws and that the USPTO is backlogged until Moshiach comes. 😉 There IS a hole in the system regarding people being able to enforce patents they did not invent. This is one of the big holes IV is exploiting.

The thought is — what if they’re trying to gather enough political clout to force a change in the law? What if as the biggest potential troll in the world, they are able to eradicate all other trolls from the patent system? What if they are trying to bring justice to the system (in a socialistic kind of way which I don’t quite understand or support) by bringing huge companies down to their knees?

There is a lot of money behind those patent conglomerate companies, and they’re obviously doing what they do for some reason. G-d knows they own enough patents to cripple the patent litigation system forever with valid (not frivolous) lawsuits should they choose to. It would take a flick of a pen and we could say goodbye to the system as we know it.

How’s that for an apocalyptic view of the patent litigation system and those who hold the true power of it? 😉

Not always so clear when a patent acquisition company has gone troll.

Recently when I’ve searched for “Intellectual Ventures” on the Twitter web site, all I’ve been seeing are comments about how they hit up a big company for a large sum of money over a license based on a number of patents they owned (a.k.a. purchased). The opinion, as described in the “Microsoft Wants to ‘Save’ the World, Using Restrictive Monopolies” article suggests that IV has gone bad.

It’s both surprising and not surprising to me that IV is said to have gone offensive, especially with the recent Intuit license that has everyone in a frenzy.

I thought the whole purpose of IV/RPX was to form a patent protection conglomerate to protect against frivolous lawsuits claiming patent infringement when there was none. The purchase of all those patents as far as I understood was for the use of member companies (those who paid to join in) to defeat those claims that ordinarily would cost companies millions.

I’m not so quick to start calling Intellectual Ventures a super-troll. There is probably a lot going on there behind closed doors. Some good may come of it.

On the point of the article regarding Microsoft giving open source programmers a difficult time because of their patents, that somewhat hits a nerve between the programmer in me who believes in open source and the attorney in me who believes in copyrights, patents, and protection of intellectual property. On the one hand, I suggest that Microsoft leave the open source community alone as there are bigger fish to fry, so to speak, as there are commercial applications infringing many of Microsoft’s longstanding patents. However, if their method of attack is to sue members of the open source community to go after lost profits based on what they claim they would have made had they sold the same program for which they own the patent, I understand that their damages would be greater, however their ability to collect would be nominal.

Maybe it’s more about acquiring a meaningful judgment to bolster the strength of their patents and in patents in general rather than a small-to-moderate judgment that will make their shareholders a few dollars (more likely a few pennies on their stock, if even that), as I’m sure they don’t need the latter or the aggravation of collecting a judgment against a small fish.


If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

Ethics and morality, too little enforcement and too much regulation.

I was thinking about Zusha Elinson’s “New Business Targeting Patent Trolls Signs IBM and Cisco” article in which he discusses how RPX Corp appears to have the business model of aggregating patent assets (likely relevant to their members) “off the street” so that patent trolls cannot get to the assets first and enforce them against their members. Additionally, the article discusses how the company is buying NOT to enforce their patents against their members.

The issue here is two-fold: 1) whether RPX can control itself regarding costs to its own members and not become a mafia-type of organization extorting funds from corporations who have the choice of “join or be sued,” and 2) what RPX will do to companies who choose NOT to join their organization.

As per the question of whether RPX can control itself internally, I see from looking at Wall Street that companies do not and can not control themselves when there is opportunity to get away with an abuse. It reminds me of the old “moral versus legal” discussion I used to have in law school about whether one should be permitted to do something immoral and wrong even though it is not illegal, and whether all immoral activities should be illegal (obviously the answer is no — when there too much control, wrongdoers surface and look to find loopholes in the system, and the question becomes only whether something is legal versus whether it is moral.) With the over-regulation and under-enforcement by the federal regulators, my opinion is that there are few controls and risks for companies who violate laws and it is simply too costly to enforce the laws against those companies breaking them. Thus, people do what they can to make a profit and their conscience has no part in the equation. My opinion about this issue is that government must cut down on the regulations and must stop over-regulating, but MUST significantly increase their enforcement of rules that are on the books.

Similarly with regard to RPX’s activities towards companies that choose not to be part of their posse, the danger is that a for-profit organization has a profit motive, and often the ability to grow profits will overtake ethical considerations such as fairness and morality, as discussed above. A company infringing a patent soon-to-be-owned by RPX obviously should either 1) take a license, or 2) get sued for patent infringement. However, my question is more about questionable bullying practices which are likely to occur as soon as a for-profit organization has muscle.

I have read on the web about some questionable litigation tactics where abuses of the legal system force a company take licenses when they are not necessarily infringing the patents being asserted against them. The reason here is that the cost of litigation ends up being HIGHER than settling and taking a license to the assets even though the company is not infringing them. This is a serious abuse and is something that should be addressed in the form of legislation and/or regulation.


If you are interested in a patent litigation attorney or a patent attorney in Houston, TX, I have started an informative website using the name Patent Prophet which will be a resource for those who wish to obtain a patent or for those who would like to find out how to prevent companies from stealing their inventions. Services include help with entering into IP Agreements & Licensing options, IP Enforcement and Litigation, Strategic Counseling, and much more.

“Patenting Past” innovation.

As I was writing this comment (below) to the “New patent aggregator RPX may have an Oedipal complex” article by Matt Asay, I got chills down my back. You know I’m all for business and profits, but I am also for innovation and the furtherance of technology. If for no other reason, I got into patent law to help be a part of the future, as I believe that technology can solve the world’s problems… it can also cause and aggravate them. When you have patent holding companies that are so big and who wield so much POWER and CONTROL over those who have patents in subject matters which fall within their line-of-sight, it stuns me how quickly these conglomerates could kill businesses by “patenting past” their technologies.

Okay, first of all, very cute analogy to Oedipus. You even got a chuckle out of me. Secondly, a business model such as theirs IS something to be feared, but ALSO in an awe-stricken kind of way. Companies who cheated inventors out of licenses that rightfully should have gone to the inventors have created trolls and troll conglomerates. Obviously patent reform will somehow address this issue because corporations are shaking in their pants when a conglomerate such as this one or its family knocks on the door. Perhaps they’ll eventually have to hang on to the same patent law they threw under the bus when they decided to infringe in the first place. I equate a conglomerate to the Angel of Death (AoD). If one is virtuous (e.g. if a company stays within their protected rights covered by their patents and rightfully takes licenses to those inventors whose patents they are practicing), then that company will get a pass and they won’t have to submit to the will of the AoD.

What scares me is not the acquisition of patent rights from inventors who have been cheated out of licenses that rightfully belong to them, but think tanks of scientists who patent “just to stay ahead of technology.” Now that is freightening, because a company with enough resources can rule the world if they speculate and patent each and every speculation. This appears to be exactly what is happening, and from a corporate perspective, it is HIGHLY profitable.

That being said, I am sure that once patent conglomerates begin to stifle business’ ability to grow because they have to pay the keeper to cross the bridge — the true meaning of a troll — then at that point if not before, government will have to step in to preserve the patent system and restore it so that patents are returned to being used to further innovation rather than to stifle productivity.

Loosely using the term “patent troll.”

Another article appeared discussing patent trolls. The article is called, “Looking to fend off patent trolls, IBM, Cisco support startup RPX” by John Cook. It appears I have a crusade here to properly define the issue of patent trolls for the patent community. My comment is below.

“Look, you are throwing around the term “patent troll” too loosely. A patent troll is one who acquires a patent for the sole purpose of enforcing it against someone else in litigation.

Everybody admits that the issues are 1) frivolous patents are awarded which duplicate subject matter in the prior art, 2) corporations infringe patents and bully inventors who deserve to be compensated for their innovations, 3) big patent-holding conglomerates are SCARY because they hold too much political and commercial power (according to some).

While the concept of a troll, e.g. company who buys patents to enforce them, seems to make them appear to be evil, remember that there would be no trolls if corporations were fair in their licensing practice and if they took licenses where licenses were appropriate. Instead, they play games and initiate stalling tactics to force the inventor into bankruptcy or to scare them into not pursuing them due to lack of funds. THIS is the problem. Get rid of this problem, and these helpless inventors will not sell their patents for pennies on the dollar.”

Regarding Intellectual Venture’s Purchase of Transmeta’s Patent Assets

I was just reading the “Secretive IP Holder Funds Tech Acquisition” article where it mentions that Intellectual Ventures (IV) had a stake in the recent purchase of the Transmeta assets. My opinion about their interest is below.

First of all, and this is off the top of my head, there are those who claimed that Transmeta Corp. was a troll in that their goal was to patent around Intel’s patents. Obviously I have no backup for this other than word of mouth. However, when Transmets did sue Intel, Intel settled because the Transmeta claims did read on products Intel created and was in the process of creating.

Thus, IV purchasing Transmeta’s many patent assets would be nothing more than one IP holding company purchasing the assets of an IP holding company. I suppose it all relates to intent. So far, their intent appears to be to acquire assets and assert them against companies who are infringing their patents to force them to take a license on those patents. I don’t have anything wrong with this because IV rightfully purchased those assets, and as patents currently stand, they are PROPERTY which is transferrable. (Whether I believe the right to assert should belong to big companies or to the inventor is a different topic.)

But in sum, Intellectual Ventures is doing nothing wrong by purchasing Transmeta’s assets. All you can hope for is that IV will use them in a more productive and “friendlier” way than Transmeta has.
Remember, the goal in patent law should always be “to promote innovation” rather than to promote corporate profits.

A Patent Conglomerate, a.k.a. “Mafia”

Another paste of a comment from the TechDirt article on “New Patent Buying Firm Swears It’ll Never Litigate Over Its Patents

Re: Mafia – Nov 25th, 2008 @ 1:29pm
There is no reason that those looking for patent protection have to pay the equivalent of a mafia in order to have protection from would-be infringers. The laws themselves should provide enough patent protection to the inventors, but they don’t in their current form.