Posted tagged ‘Patent Trolls’

Infringe my patent. I dare you!

May 23, 2010

We’ve seen it a lot how seriously companies take the patent protection of their innovative products to ensure that competitors will not immediately imitate the products they have researched and developed. Obviously innovation or developing innovating goods is risky, time-consuming and expensive. However, its benefits to the companies are far beyond imagination!

Much has been written about patent rights and patent infringements, but what I’m going to talk about is patent trolls. To give you an idea, patent trolls are firms which basically buy up patents usually from bankrupted companies, inventors or by acquiring smaller licensing companies, then demand fees from companies which use technology that they say is covered by one of those patents. It’s a simple strategy: to obtain patents with the initial purpose of making patent infringement allegations.

The most famous patent troll also known as the Mother of all Patent Trolls is Acacia Research Corporation, a company that makes no products, with at least 337 patent-related lawsuits since its establishment. What such companies do is they target companies that have  much to lose or little money to defend themselves. knowing how expensive and risky it would be to fight patent trolls, usually encourages defendants for a settlement.

One of Acacia’s patent infringement claims was against Yahoo. I’m sure you all are familiar with IMVironments-the background themes for Yahoo Messenger-which has made so much trouble for Yahoo! Acacia claimed that IMVironments infringes U.S. patent Number 6,205,432, field by a trio of inventors and published back in 2001. Here is an abstract from the patent: An advertisement system and method are provided for inserting into an end-user communication message a background reference to an advertisement. In some embodiments, the background reference causes an advertisement image to be tiled, or watermarked, across an end-user screen behind the text of an e-mail message or public posting.

Yahoo lost the patent infringement case and as a result forked over $12.4 million plus $6.6 million damages in the lawsuit. In addition, Acacia also was awarded an ongoing royalty rate of 23 percent for all Yahoo IMVironments sales. Sounds easy enough, but is it?  Well, if you ask the critics they would say that the patent trolls are in a position to negotiate licensing fees that are grossly  out of alignment with their contribution to the alleged infringer’s product or service. From their point of view, such tactics curb innovation and produce threats and lawsuits that try to cash in on the matter. 

With everything that has been said, what’s your take on it?