Cloudflare says that it is willing to spend up to $50,000 to award people who dig up prior art that invalidates Blackbird's patents ($20,000 for prior art related to the lawsuit and $30,000 for prior art related to Blackbird's other patents).
BUT (and it's a big but, Sir Mix-a-Lot) ...
> These opportunities remain open as long as Blackbird's case against Cloudflare is still active.
So, what will likely happen is that as soon as Blackbird spots this blog post and realize that Cloudflare has no intention of settling, they withdraw their suit, and that means Cloudflare doesn't have to pay anybody a prior-art bounty.
That would actually be in keeping with a patent troll's M.O. They don't want to waste their time actually pursuing lawsuits against companies that are willing to push back. Instead, it's much more lucrative for them to shake down easy targets and reach a quick settlement.
I had the very same reaction after reading this. A long post that describes how bad patent trolls are, a general call to embrace the fight, everyone should join the fight sponsored by Cloudflare and together we can win! But, if for whatever reason Blackbird leaves us alone and they bully someone else - not our problem anymore!
As someone who does not have a dog in this fight, I see no reasons to help them when it's blatantly obvious they are just fighting for themselves.
Fighting for themselves could also take the form of teaming up with Newegg and other active troll fighters, funding an ongoing prior art bounty together that targets the patents of known patent trolls, and keeping it going indefinitely.
I am guessing that, even if Blackbird motions to dismiss this lawsuit, Cloudflare will nonetheless file IPRs against each of Blackbird's 37 or 38 patents for which sufficient prior art is discovered.
This appears to be more than a strategic move for this particular case on the part of Cloudflare. Cloudflare is hoping to build a reputation as 1) aggressive, 2) vindictive, and 3) successful. Believe me, other NPEs will take note and will think twice (or thrice) about suing Cloudflare out of fear of multiple defensive IPRs aimed at not only the patents in suit, but all patents utilized by the NPE in past and current litigation and licensing efforts.
The NPEs, generally, have very low risk tolerance when it comes to actions which may invalidate their money-makers. Thus, Cloudflare is hoping to get blacklisted. Just look at how successful Newegg and Rackspace have been with this strategy.
Do not mistake employment in big law for infallible expertise. I deal with exactly this on a daily basis - patent litigation, IPRs, counter IPRs, NPEs, PEs. Regardless of their background, they do not want their assets facing IPRs. IPRs introduce delays, invalidity risks, and costs.
It's true that Cloudflare left themselves that loophole, but the general tone of the rest of the post seems to suggest that they're going for the throat. I wouldn't expect them to back out on paying the $50k even if the immediate withdrawal of the suit would allow them to.
I get the feeling that they won't be getting sued by patent trolls again for a long time, they know that, and they'll be grinding this one into the ground as far as possible.
Cloudflare has a lot of goodwill in my book. I'm sure they will come back and explain this was a miswording, and that they are happy to help even after this particular case is resolved.
Yes I believe that is what Cloudflare is banking on - Blackbird backing out and no bounty money spent. I wouldn't find it too bad of an outcome though. Googling "blackbird patent" will pull up Cloudflare's blog post and other tech companies can use the same strategy against them by offering a bounty.
Patent troll invalidation bounties might become a new thing. The more ways to slay the trolls the better.
For smaller companies and orgs, or individual software developers, I wonder if it now makes sense to pay into some sort of common "patent troll insurance pool" (I'm sure someone's suggested this already). If any member of the pool gets sued, the pool puts out patent invalidation bounties on the troll's entire portfolio and (for an additional premium) covers part of the legal defense in case there's a trial.
a) it can be structured like a credit union or something and owned by its members (reduces incentives for it to grow beyond what's necessary)
b) make it retroactive i.e. you don't have to already be a member to get protection. you can choose to buy in after you've been sent a letter
c) a protection pool of sufficient size and resources might do enough to invalidate so many patents that trolling simply becomes unprofitable. EDIT: Especially if suing a pool member poses an existential threat to the troll in the form of invalidating their entire portfolio. As Cloudflare have shown, you only need one party to stand up for themselves and contest the patents. In that case, premiums go down long-term
This is obviously different from patent pooling and cross-licensing agreements companies use to defend themselves against other practicing entities.
> So why would anyone buy in before they get a letter,
Plenty of people have already gotten a letter; if they all pooled their resources they'd have a decent defense fund already.
> , or maintain their membership once they're no longer in court?
This one, I agree, is harder. Best I can propose is a minimum 5 year membership once you've been sued. Or tweak it some other way so that membership is slightly cheaper, or about as much as, settling.
Yeah it's a fine line between "insurance" and "protection".
The key distinguishing factor here is the protection pool actively seeks to invalidate bad patents. It could also lobby for patent reform. By doing so, it makes patent trolling less profitable and thereby, reduces the need for itself in the future. It's like a health insurance company funding research into perfect health and immortality (but more achievable).
What you're (more or less) describing is a combination of defensive patent infringement insurance and a patent pool. Both are things that exist, but patent infringement insurance is crazy expensive, and patent pools are hard for small companies to enter into.
> patent pools are hard for small companies to enter into.
Per my understanding, patent pools also don't offer any protection against non-practicing entities, correct? Since patent trolls don't use any patents themselves, a defendant in a patent suit can't assert any of the pool's patents against the troll in a countersuit.
Woah, looks like this patent troll picked the wrong company to sue. Cloudflare is going after them _hard_:
> Step 1 — Cloudflare will fight this case in the courts
> Step 2 — Cloudflare will fund a crowdsourced effort to find evidence to invalidate Blackbird’s patents… all of them
> Step 3 — Cloudflare will investigate Blackbird’s operations to develop facts that support our arguments in the litigation and expose how patent trolls really operate
> Step 4 — File complaints against Blackbird attorneys by bar association disciplinary counsel in Massachusetts and Illinois
Step #4 is going right for the throat: their ability to practice law at all. That's a big "and fuck you too" on top of the other stuff which is only meant to shut down Blackbird's operations as a patent troll.
I have no sympathy for patent trolls any more than I do other extortionists - whether "technically it is legal" or not.
If they can truly bar them from practicing that would be the ultimate win. It would also send a message to new wanna be trolls that life is a troll isn't lalaland.
"""Blackbird combines both a law firm and intellectual property rights holder into a single entity. In doing so, they remove legal fees from their cost structure and can bring lawsuits of potentially dubious merit without having to bear any meaningful cost. """
Prenda Law already patented that breed. Expect infringement suit shortly.
Prenda Law were copyright trolls, not patent trolls.
(Also, Prenda Law were actively inducing the infringement that thhey were prosecuting, and inventing shell companies as fake clients to conceal their own interest in the litigation.)
Your effort at being pedantic falls rather flat, as the "new breed" was described as "combines both a law firm and intellectual property rights holder into a single entity". The description did not specify patents.
Clearly, the Prenda-Structure patent reads on this infringing Blackbird organization.
We need more companies to do this. Hopefully Cloudflare and Newegg will set an example for other companies . But, what we really need is proper reforms to the patent system .
Yes and yes! Mitigations like these are completely impossible to go through if you do not have a really good amount of money lying around (and that you'll never have it back), and even individuals (not only big corps) are subject to trolls. I remember a guy posting videos explaining how he was being sued for infringement because he downloaded something from the app store which was an infringement within his state (I don't remember exactly which one, but my guess is Texas).
Really hope these new tech companies can "disrupt" this kind of practice, but they do have to get together and agree on some sort of action. Newegg and cloudflare fighting back is great, but if facebook, Netflix, Apple, Microsoft & co join the cause, I'm sure trolls will have a good reason to, well, not troll.
Blackbird combines both a law firm and intellectual property rights holder into a single entity. In doing so, they remove legal fees from their cost structure and can bring lawsuits of potentially dubious merit without having to bear any meaningful cost.
If there is a place where government regulation can do some good, this might be it. The combination of these two kinds of company represents a moral hazard. There is a precedent for this kind of regulation, which mandates the separation of certain kinds of companies:
increasingly in the world of software or tech patents, the trolls rely on the broadest possible interpretation of vague or generalized patents to sow as much uncertainty as possible.
I've run across people involved with patent law here and on reddit, and they seem to get triggered by laypeople ridiculing the vague and abstruse nature of patents. (Really, go and read some! Try searches for video on the Internet!) I find that also weird, in the same way that a lot of legal stuff is weird.
And about 70% of all patent infringement claims are filed by patent trolls, a share that has more than doubled in recent years. It is estimated that litigation initiated by patent trolls in U.S. courts cost companies as much as $30 billion in direct costs, a number that has increased more than four-fold over the last ten years.
Interesting statistic. If the preponderance of patent claims run counter to the original intent of the mechanism, then something is clearly wrong.
Without addressing the validity of patents or the appropriateness of NPE suits, which is being covered elsehwere in the thread...
Are "legal fees" that much more expensive than the cost of actually doing the legal work required?
A lot of companies have in-house lawyers, what's the difference between a NPE with in-house laywers to file patent suits, and a law firm that acquires patents to file patent suits? Or even, the difference between that and an NPE hiring an outside law firm which charges a very low margin (possibly with a contingency fee as well)?
The so-called study that came up with that "30 billion" number has been thoroughly debunked. Of course, the debunking of these things gets zero media coverage, because they get no rage views compared to "news" with outrageous numbers like that.
Most patents are probably not valid, and most patents used in licensing offers / threats are probably not strong enough to avoid being invalidated or found not infringed if litigated, but the would-be licensor / troll counts on the threatened party to settle rather than pay millions of dollars for litigation.
While there aren't any easy tactical solutions and a policy fix is a dim hope, we should be able to at least partly solve the problem by training an AI to do automated and thorough prior art search and analysis relevant to a patent, so a lot of the legwork of a patent litigation threat becomes orders of magnitude faster and cheaper, and it becomes vastly easier and less intimidating for a trolling target to respond to a patent threat like this, and quickly get their focus and resources back to developing their technology. Software eats patent attorneys, and reduces the burden of patents on the technology community.
(disclaimers: I am a patent attorney and I'm currently working full-time on coding a patent search & analysis AI service, this is not legal advice, etc.)
1. Everyone who gets sued by a patent troll is going to complain about the validity of the patent. Even when the patent is, in fact, completely valid.
2. Patent troll + Law firm is not a "dangerous new breed". This has been happening for a long while now.
3. It seems strange to complain about the being sued for patent infringement while owning '150' patents. Do you agree with patents or not? If you agree, then being sued for patent infringement is part of it. If you disagree, why invest so much? I understand the argument of patents being defensive, but, does that really help in a world of patent trolls? More likely, a company eventually goes under and the patents are acquired on the cheap - by a troll.
4. I think the "we will pay you a bounty to help make our problem go away" approach is interesting and I hope it works. ...but it's very self serving. Maybe just pay a law firm $50,000 to invalidate the patent rather than making a contest out of it.
To be fair, I really don't understand the concept of a software patent. If I can implement it then it is fair game.
I hate patent trolls with a passion, but these non-practicing entities are are just another negative by-product of what has devolved to be a negative system. Patents originally existed to protect inventors. Today, like in other legal systems, they have very little to do with justice and a lot to do with "whoever has the gold makes the rules". As such, while I definitely side with CloudFlare, it does seem like a complaint of "not fair, they are manipulating the rotten system better than us"
I don't understand why we can't just make patents non transferable. If you company gets bought, your patents go away. Small companies still have protection but trolls disappear. You still do have the IBM approach to "patent all the things" but that can also be addressed by forcing patents to have to be actively deployed in a public way or they expire after a year or something.
> I don't understand why we can't just make patents non transferable.
Because inventors want to invent things, not prosecute patents, and making patents transferrable allows them to make money from inventions without having to accept any of the headache of patent defense, which is a distraction even when (as you will practically need to) you hire counsel to do the actual legal work.
The wright flyer was just sticks, canvas, and a small engine. Anybody could have done it - in fact there were teams around the world competing to be the first ones. The Wright brothers got a patent on it. Should they have?
They abused the system for their own gain, while at the same time "retarding the development of aviation".
"The Wrights' preoccupation with the legal issue hindered their development of new aircraft designs, and by 1910 Wright aircraft were inferior to those made by other firms in Europe. Indeed, aviation development in the U.S. was suppressed to such an extent that when the country entered World War I no acceptable American-designed aircraft were available, and U.S. forces were compelled to use French machines."
"The lawsuits damaged the public image of the Wright brothers, who previously had been generally regarded as heroes." [1]
In fact, a lot of airplane innovation was happening in the US during that era despite the patent being in force. For instance the seaplane was invented in the US (by Curtiss, the Wrights' most bitter foe.)
Also their patents were challenged repeatedly and, despite being interpreted broadly, upheld repeatedly because they actually were that much of an improvement over the prior art.
> As explained later in this blog post, we plan to (i) contest the patent lawsuit vigorously, (ii) fund an award for a crowdsourced search for prior art that can be used to invalidate Blackbird patents, and (iii) ask the relevant bar associations to investigate what we consider to be violations of the rules of professional conduct by Blackbird and its attorneys.
Interesting. Seems to be more of a long term solution than just "We'll stand up for ourselves because we can"
If patents help society, then patent trolling is not always a destructive process. In fact it's how things ought to work, if you accept the premise (which I don't). And if it's sometimes a good thing, actually it's not illegitimate to hold in an otherwise unproductive company. It's just like owning a bar of gold: does nothing for anyone, but it's an asset for the owner.
But it's not like gold. Gold is physical - it requires that you do something to obtain it somehow, and it's (generally) clear who rightfully possess that particular piece of gold at any given time.
Patents are ideas. Two (or more) people can independently come up with exactly the same idea, sometimes in very different contexts. The patent system rewards the person who files a patent for it first, and in fact, for the patent troll, it's particularly lucrative when other people execute successfully (which generally means they've actually contributed something of value to society).
I don't think I understand your argument. It seems like you are saying that if patents are overall good then patent trolling isn't always bad and I don't understand how that follows.
Just want to provide a contrarian view here: patent assertion and 'trolling' is not necessarily a bad thing in theory. It can create a secondary monetization route for inventors, instead of asserting it themselves. Now, that's all predicated on the validity of the patent and the degree of infringement, but it's not always a bad thing.
Can you cite an example of a firm operating along Blackbird's structural business model -- except adhering to a policy of asserting only patents that carry a plausible claim to validity?
Man, if I were a millionaire I'd gladly spend a good chunk of my money and time to fight back those trolls. (Maybe someday :)
In all seriousness, good move on fighting back and actually standing against those bullies. Naming the individuals and companies involved could maybe get you in legal trouble? Anyway, surely you've already discussed this internally and decided to name them. Honestly, I like it. It's probably the only way to stop patent trolls: Get their names dirty on the Internet, which never forgets.
I wonder if moves like this are known to people outside legal and tech. My guess is the public in general has no idea of these practices, which makes it harder to fight against because there is almost no reaction / backlash. (I'm not from the US, maybe people do know about them).
It may be small potatoes, but I'm voting with my wallet by upgrading my Cloudflare account from free to paid. Not because I need the additional features, but to support this fight.
About the claim that the patenterrorists here have offered a contingency to the previous patent holder in addition to $1, wouldn't it be much more plausible that they threatened said holder with a patent lawsuit which they would not bring if they paid their extortion fee, in the form of the rights to the patent?
That wouldn't be "extortion" in the legal sense, which (typically) requires the thread to be something illegal, or otherwise unusually damaging to the victim. Simply saying "give me X or I will sue you" is just how it works.
I submitted a few different examples of (what I think is) prior art for the 335 patent. My favorite is this one, a multi-user shared annotation system based on an HTTP proxy:
Basically, you could submit annotations to be placed at any point in the document, and you and other users of the annotation server would see them (literally inserted into the HTML file). It was a crude and slow system, but the authors planned to replace it with a Java applet in the future. According to them, “since it is expected that the Java run-time system will be an integral part of all future web clients, this remains a pan-browser solution.”
So many failed dreams… not just Java, but the whole idea of a user’s browsing experience being theirs to command and design, with the server’s response only a suggestion. Maybe I’m being overdramatic. Browser extensions, custom CSS, user scripts, etc. can do the same things today – and of course they’re far more capable, in terms of the range of functionality exposed, and indeed far more popular – but I still feel like there’s something missing. Semanticity, maybe. So many pages these days are just blobs of minified JS and CSS that (intentionally or not) prevent you from understanding the structure of the document without extensive reverse engineering.
…anyway, I’m getting off topic. I think it’s prior art because it satisfies all the conditions of at least some of the claims:
1. A method for providing an internet third party data channel, said third party data channel being established within an existing data channel between an internet server and an internet client, said third party data channel connecting a data source distinct from said internet server to said internet client, said method including the steps of:
existing data channel: the HTTP connection
internet server: original website; internet client: user’s browser
data source: annotation server’s repository of data
third party data channel: connection between proxy and annotation server
a) using a processing device distinct from said internet server for monitoring said existing data channel for a data communication having a predetermined property, said data communication having an intended recipient of one of said internet server and said internet client,
processing device: HTTP proxy (in the paper, it’s separate from the annotation server, one of those trivial details that can make a big different w.r.t. patents)
data communication: HTTP response
predetermined property: various; probably it checks the HTTP status code, though I haven’t checked the implementation
b) upon detection of said data communication, performing:
b1) the step of accessing said data source to obtain third party data,
(querying the annotation server)
b2) a step selected from the group consisting of the step of modifying said data communication in response to said third party data and the step of replacing said data communication in response to said third party data to obtain a resultant data communication, and
(modifying the response to add annotations)
b3) the step of sending said resultant data communication to said intended recipient.
(returning it to the user)
Though, while writing this up, I realized there’s one potential problem. At a literal level, the proxy does not “monitor” packets waiting for a HTTP response to the browser. Rather, it receives requests and makes its own request to the server; arguably that is not an “existing data channel”, and arguably the site’s response is directed towards the proxy, not the browser.
Luckily, the patent’s description seems to explicitly disclaim this interpretation:
For example, a proxy can be thought of as an application level router, not contributing to the data stream being transported through it. This logical transparency of a proxy is maintained even if the proxy, in fact, forwards cached copies of requested objects to a client.
> Of course, the patent troll system attempts to shield Mr. Kaufmann and his companies’ operations from the lawsuit by having Blackbird become the owner of the patent — even if Mr. Kaufmann maintains an interest in the litigation.
Can't Cloudflare still have their lawyers go look at the original patentees for possible infringement and file a suit against them?
BUT (and it's a big but, Sir Mix-a-Lot) ...
> These opportunities remain open as long as Blackbird's case against Cloudflare is still active.
So, what will likely happen is that as soon as Blackbird spots this blog post and realize that Cloudflare has no intention of settling, they withdraw their suit, and that means Cloudflare doesn't have to pay anybody a prior-art bounty.
That would actually be in keeping with a patent troll's M.O. They don't want to waste their time actually pursuing lawsuits against companies that are willing to push back. Instead, it's much more lucrative for them to shake down easy targets and reach a quick settlement.