Patent trolling. The Art of Unpleasant Surprises: Patent Traps

We have just successfully completed a fascinating epic confrontation with the patent troll Wetro Lan, and it’s not easy another victory. This is a case that will go down in the patent hall of fame because no one has won THIS before. We not only convinced the troll to withdraw the lawsuit, but also... to pay us compensation for... attention... so that he could withdraw the lawsuit against us. Sounds good, huh?! Let them be small symbolic compensation, but very significant and, as they say, hard trouble is the beginning.

I hear a silent question from the audience: “Was it possible?” Well, yes, it’s nice to make such unexpected discoveries :) And now to the essence of the issue.

The Butt kicker is very user friendly with the number of kicking repetitions, type of repetitions, speed of operation, amplitude or height of the kicking cycle, magnitude of the kicking force, and impact and energy of the kick all controlled by the user or operator . This invention is a new, novel, and unique machine with multiple uses, which range from amusement to fundraising and from motivation to discipline. The objectives of this invention are also many, including, but not limited to, teambuilding, self-therapy, to inspire creativity, and to be used as a model for future devices and works of art.

By the way, the topic of magical automatic kicks turns out to be quite well worked out in patents. Here's another device we managed to find :)

These are such completely mysterious patents.

I'm a little unclear about this. Is this the quality of testing for patent purity and novelty of inventions in America, or are they just such vile, shaggy trolls working there?

In general, it’s strange that they “ran into” us. We are perhaps the most difficult target to attack, since we do not agree to any pre-trial settlements. And sometimes. Maybe out of desperation? Like, try every chance, anticipating the imminent invalidation of the patent? No matter what, we will fight again. Until the last bullet... their cartridge.

And to make things completely fun, optimistic and positive, we blew the dust off the archives and made this selection of the strangest, stupidest, paradoxical and generally patents. Well, just to know where you might suddenly be bitten. patent trolls for flagrant violations of the Law :)

Purely subjective top 5 most [fill in the appropriate] patents

5th place: guillotine - the best remedy for headaches.

The Lomonosov-Kulibins have not yet disappeared from the Russian Land! Nuggets, giants of technical thought, geniuses of discovery, fathers of world progress! And here is some fresh proof of this.

It would seem that it is possible to invent such a breakthrough, for example, in the field toilet paper? But the most important inventor of all Rus', the brilliant Pilkin, is knee-deep in this and many other tasks.

The scenario of Citizen Pilkin’s work is simple and frank, like the “Pig” attack of the Teutonic Knights.

A patent is registered for some epoch-making mega-invention such as “toilet paper” or “monitor”. Then “chain letters” are sent with a proposal to license the patent or refuse to sell products that violate it. You may remember a case from three years ago

The first patent trolls appeared in the United States in the 70s of the last century, during a period of rapid development of technology with a general sluggish attitude of inventors to the protection of their copyrights at that time.

Specialists with good engineering and technical education did not concentrate on generating own ideas, but on monitoring other people's inventions and innovations. It is believed that they had extensive contacts in the Patent Office and brands at the US Department of Commerce. These specialists monitored new products and services on the market and checked them for patents. In his absence, they submitted an application to patent office and registered their intellectual property rights to an “orphan” invention. Usually, the scammers targeted either small non-patented components of mechanisms () or non-patented innovations in the design/appearance of products ().

Since the samples they selected for patenting were all different design features, necessary for registration - novelty, industrial portability, then they passed the examination without difficulty. Having received a patent, the scammers presented:

1. written complaints to manufacturers demanding termination illegal use a patented product with simultaneous payment of compensation for damage caused to the patent holder;
2. design suggestions license agreement For further use patent;
3. offers to buy out the patent.

Such scams eventually became known as “patent trolling.”

The fact is that the qualification of such actions within the framework of the criminal code is practically impossible, since it is legally lawful. This gives “trolls” the right to file lawsuits in courts of various instances if manufacturers do not satisfy their demands. Claims, as a rule, are satisfied, since the protection of property, including intellectual property, is one of main tasks law enforcement.

For decades, patent trolling techniques have remained virtually unchanged. Some modifications appeared in connection with the development of the Internet. Now “trolls” are forced to monitor the world wide web for descriptions of inventions, since publication of the object of the invention in open sources makes it impossible to pass the examination for novelty.

Russian "trolls"

In the USSR, patent fraud could not take place due to the lack of private property for the means of production. The meager bonus that was paid to inventors if a patented invention was put into production was unlikely to interest swindlers.

Patent trolls appeared in Russia with the collapse of the USSR and found themselves in conditions quite favorable for fraud.

The following factors can be considered favorable for patent trolling in Russia:

1. The presence of unscrupulous patent firms entering into criminal conspiracy with trolls.
2. Low prices for patent registration compared to legal costs to protect the rights of a bona fide manufacturer.
3. Weak patent training of small distribution and dealer companies, which most often become victims of trolls. Attacks on large corporations and companies are extremely rare, since the latter are not limited in the means and capabilities to carry out their defense.
4. Even if the claim against the trolls is successful, the costs incurred by the plaintiff court expenses are not recoverable from the defendant.

Important! In Russia there is no proven mechanism for holding a troll accountable for illegal acts. Therefore, it is not possible to recover from the troll material damage damage caused to the enterprise as a result of its actions.

It should be noted that for last decade were introduced into the legislation of the Russian Federation significant changes and additions aimed at protecting intellectual property rights. And these changes could not be more beneficial to patent fraudsters.

Thus, since 2015, Article 1406 of the Civil Code of the Russian Federation provides for the possibility of collecting compensation from a violator of intellectual property rights. In the case where a troll has the intellectual property right (patent), he has every reason to seek compensation in his favor for the use of the patented invention. Civil Code sets the amount of compensation in the range from 10 thousand to 5 million rubles.

Domestic trolls operate according to an algorithm worked out in the USA:

1. tracking;
2. checking for a patent;
3. application to Rospatent;
4. passing an examination for all conditions of patentability;
5. obtaining a patent;
6. filing claims or lawsuits in court.

Patent trolling: examples and risks

As mentioned above, distribution and dealer companies usually come under the attention of trolls.
A patent troll attack on the distribution companies Motorola and Euroset, launched in the Russian Federation in 2006, became widely known. As a result of the attack, colossal damage was caused to both companies - shipments were confiscated mobile phones in an amount exceeding 20 million US dollars.

Sometimes to patent trolling resort not only for reasons of profit, but also for reasons of revenge. Similar cases take place when conflict dismissal employees who were involved in the innovative developments of the enterprise during the period of labor relations.

So, former employee management pharmaceutical company CJSC "Institute of Medical Technologies" R. patented in his name the drug "Profetal", developed with his participation during labor process at his place of work, after which he filed a claim in the arbitration court to ban the drug and remove it from production. As is known, developments and inventions produced by employees in the process of performing their labor responsibilities, are considered the property of the enterprise. However, Profetal was not patented, which R. took advantage of after his dismissal. When considering the claim in the arbitration court, he demanded recovery from the defendant of damages in the amount of more than 2 million rubles, documenting the cost of the products sold by the defendant. Arbitration court satisfied the claim.

As can be seen from the above examples, the risks associated with the actions of patent trolls can be quite significant, therefore patent experts strongly recommend that developers file a patent application in a timely manner.

How to protect yourself from patent trolling

In the event of an attack by patent trolls, there are not many defense methods, especially if you do not seek qualified help.

Response options in in this case can be:

1. fulfilling the troll’s demands and buying out the patent;
2. contact law enforcement agencies with the requirement to establish bad faith of the patent owner;
3. wait-and-see attitude;
4. suspension of production.

You can completely protect yourself from patent fraudsters only by having a patent. By submitting an application to our patent office, the customer will receive not only necessary registration, but also full-fledged long-term counseling.

The experience of successfully developing companies indicates that their cooperation with the patent office begins from the moment the idea is conceived. An idea can be brought to life while working on a patent application.

Important! Processing time patent application may last several years, but to obtain a patent the date of its registration is not as important as the date of application to the patent office. The priority will go to the one who applied for a patent earlier.

A consultation with a patent lawyer will help you select the most promising ideas among the ideas, and in the future, work on a patent application and work on bringing the idea to life will go hand in hand. Our patent office specialists will provide you with qualified legal assistance at all stages of work - from the origin of the idea to the moment the patent is issued.

Modern patent trolls look much more intelligent than their “ancestors.” But the operating principles are still the same

Yesterday, Evgeny Kaspersky, the head of Kaspersky Lab, spoke in his blog about the end of a long history of confrontation with the Wetro Lan patent troll. According to the businessman, this case can be called unprecedented, since the company managed not only to withdraw the claim, but also to force the opponent to pay for the right to stop trial. The money is relatively small, considering the specifics of the proceedings - about $5,000. But indeed, a voluntary-forced transfer of funds by a patent troll to an organization that he was trying to sue is something out of the ordinary.

The company that sued Laboratory began operating in the fall of 2016. The defendant received a patent infringement claim for packet filtering technology. The complaint contained a proposal to resolve the problem in pre-trial procedure, of course, not just like that, but with payment from Kaspersky Lab of a certain amount of money.

The patent that is the subject of the dispute can be viewed. In fact, it describes how a firewall works. The most interesting thing is that all this was documented long before the patent was registered. The author of the document, who managed to register the patent, did not extend its validity. But after the patent lost its validity, it was bought by the Wetro Lan company. Immediately after this, this company began an attack on many organizations in the IT sector. Or rather, many dozens of such organizations. As for Kaspersky Lab, it had to act as a defendant for a number of its products, starting from 2010 and ending in 2012.

As usual, this dispute seemed stitched with white thread from the very beginning. But formally, the court is obliged to comply with all the requirements of the law regarding patent disputes, and these requirements are very strict. Defendants have to pay for the work of lawyers, for business trips for employees, spend time familiarizing themselves with documents related to the trial, etc. Not all companies have the time and money, so many prefer to just pay because pre-trial agreement, as a rule, have a much lower price tag than the one billed by the plaintiff during the trial.

According to Kaspersky, his company prefers court to agreements, since patent trolls are like blackmailers - you pay once and then you will pay constantly. Actually, there is nothing to be surprised by all this, since patent trolls have been working in the IT sector for a very long time. Many such organizations specifically seek out patents that describe already existing, deeply rooted technologies and begin to litigate them.

Having learned that the “Laboratory” was going to sue, the patent troll decided to reduce the amount pre-trial settlement, offering the company to pay him first $60,000, then “only” $10,000. In some cases, if the company refuses to pay, the troll withdraws the claim and trial is cancelled. Everyone stays to their own. But in this particular case, Kaspersky Lab decided not to retreat and launch an attack. Namely - to demand compensation from Wetro Lan, and quite a lot - the same $10,000.

Evgeny Kaspersky speaks at Mobile World Congress in Barcelona

The interests of the patent troll were represented in court by Corcoran IP Law, which very often stands up to “defend” the interests of trolls. According to Kaspersky, offhand he and his colleagues found 148 records about the affairs of this law office. These cases can be found at the appropriate link.

As a result, the parties agreed on a payment from the troll of $5,000, with the signing of the corresponding document.

Evgeny Kaspersky, among other data, provides statistics on collisions with patent trolls. According to him, there were five claims won in court (that is, the court refused to satisfy the plaintiff’s demands). In the pre-trial procedure, they managed to “fight off” 23 times.

Of course, for defendants, their disputes with patent trolls do not always end so successfully. For example, last year the court ordered Apple to pay VirnetX $625 million. Not thousands, but really millions. VirnetX's victim different time became Cisco, Avaya, Siemens, Microsoft and others.

This year, Cloudflare fought the Blackbird patent troll. This battle is still being waged.

The law “The Innovation Act of 2013” ​​was supposed to put an end to the actions of scammers. It was even adopted by the lower house of the US Parliament, but it did not make it to the Senate. Moreover, over the past ten years, the number of patent lawsuits has increased approximately 6 times, 70% of such lawsuits are filed by patent trolls.

In our information age, everything higher value have rights to intellectual property. Competition forces organizations to want one thing - to be first in everything. It is from this desire that the so-called patent trolls profit.

Patent trolls are organizations or individuals who exploit intellectual property rights for profit. This is the only activity of patent trolls; they do not invent anything else, do not produce or provide any services. They only file lawsuits for infringement of their patents. At the same time, they do not risk anything, because it is impossible for them to file a counterclaim - they do not produce anything, therefore, they cannot violate anyone’s copyright.

How trolls get their patents

Very often, patent dealers simply file patent applications for everything. Whether they contact the patent office or do everything themselves, the same schemes are used. Absurdly ambiguous, vague formulations are often used. With their help, the copyright holder tries to describe a product already existing on the market in a new way in order to receive royalties for it. This does not always work out, because the relevant authorities carefully study the application before approving it.

Another area from which patent trolls draw inspiration is inventions that may be created in the future. Of course, in such cases the wording can also be ambiguous, because this is only an approximate description of something that does not yet exist. Here the trolls try to point their fingers at the sky, but sometimes they hit the bull's eye.

Precedents

The history of patent disputes has accumulated many absurd attempts by patent trolls to gain benefits. Sometimes they succeeded, and sometimes they didn’t.

Eg, American company Back in the 90s, IPAT patented a technology for limiting the launch of computer applications and the operations performed by them. On this moment it is used in modern operating systems, so several years ago IPAT filed a lawsuit against the largest IT companies. Among them were such giants as Apple, Asus, Dell, Acer, Fujitsu, Panasonic and other famous companies.

The same company tried to sue the manufacturers of antivirus programs. Our Kaspersky Lab won the court with dignity, and IPAT lost the right to file claims under this patent. Other defendants succumbed to the provocation and agreed to pay royalties.

In 2008, another American company, Minerva Industries, tried to sue the world's largest companies producing smartphones. a large sum money. For some reason, the company decided to file a lawsuit before the patent authorities made a decision on their application for registration of the corresponding patent. Of course, the claim had to be withdrawn.

A typical “patent troll” dressed in entity, can be determined by 4 characteristics. This troll:

1. Has no significant assets, with the exception of patents. Patents are property and, like any other type of property, can be freely bought and sold.
2. Does not produce any products. Typically, the "patent troll" wants a pot of shiny gold in exchange for doing absolutely nothing.
3. Has as key employees patent attorneys.
4. Acquires patents, but does not invent the technology itself. At the same time, patents are purchased cheaply from individual inventors, bankrupt companies or small businesses that do not have the capacity and legal experience to effectively protect their patent rights.

Read also: Affiliates of the company (LLC, JSC)

Going to the dark side

Anecdotally, the story with Peter Detkin ended with the fact that in 2002 he founded his own intelligent enterprise, which in 2013 was registered as the largest patent holding company. After he himself gained a wealth of experience as a fighter against patent trolls at the Intel corporation, Detkin miraculously went over to the side of the “enemy” and created one of the same enterprises. Although now he probably does not use this term to describe his activities own company.

And this is no coincidence. After all, the royalties charged reach unimaginable amounts. In 2001, litigation ensued in the area network technologies and products between NTP Inc. and the famous company Research In Motion Ltd. (RIM), renamed BlackBerry on January 30, 2013. NTP claimed that recovery technologies operating system By e-mail, used by RIM, violate a number of its patents. The cost of damages claimed by the plaintiff was $612 million. The court satisfied these demands, and a year later RIM was subjected to another attack from the same “patent troll,” but for a much more “modest” amount – only $53 million.

Such a problem economic wars with “patent trolls” is typical not only for intellectual production in the field of IT technologies. In the US, patent legislation is considered a real curse of Silicon Valley, but many lawsuits are brought against trolls and other manufacturing companies food products, detergents and cosmetics, mechanical engineering, household goods. After all, everything can be patented - from a recipe to sauerkraut to the shape of a plastic bottle used as packaging.

Of course, it is more profitable for an experienced “troll” to get a good jackpot with big company rather than waste time on small producers. Plus, in last years companies that produce products and services quite “honestly” do not hesitate to use the tools of “patent trolls” to fight their competitors. According to some estimates, on litigation Patent trolls account for about 67% of all patent lawsuits.