Archive for the ‘Patent Litigation’ Category

The author of the Cashman IP Blawg has now formed the Cashman Law Firm, PLLC. [Champagne, anyone?]

The Cashman Law Firm, PLLC is set up to help clients secure, protect, and enforce their business ideas. It will also protect clients’ assets when foreclosure or bankruptcy becomes necessary.

From here on in, contents of this blog will be posted on behalf of CashmanIP, the intellectual property branch of the Cashman Law Firm.  The Cashman IP Blawg will create articles helpful to the inventor to secure and protect his invention and preventing other companies from stealing his ideas.

In terms of protecting your invention, CashmanIP will search the prior art not only in terms of determining whether someone else already has already patented or marketed your invention, but to also determine the marketing potential of your invention — this will help you to determine how much you can make by licensing your invention to other companies once you receive your patent.

Specifically, we will determine how dense the technical area of your invention is, whether there are many or few patents in that area, and whether the patents in existence will pose stumbling blocks that will require you to take a license from inventors currently holding patents which are a threat to the efficacy of your invention.

If you decide to move forward, we will draft, prepare, and submit your invention to the U.S. Patent & Trademark Office, and we will respond to objections or rejections that come from the prosecution of your patent.

If you own a patent and someone is using your invention without your permission, we will aggressively protect your rights both in and out of court.  Even though we will not hesitate to start a patent lawsuit, we will encourage the business to agree to pay you a royalty through a license.   Knowing that we have the right to move forward with a lawsuit, we will also encourage them to pay for their past unauthorized use of your patent.  If you are more in the market to sell your patent rights rather than to enforce them in a court of law, we would also be happy negotiate a sale of your patent assets; if you want to form a partnership between you and their company, we can help you form and protect your rights within a joint venture agreement.  In short, if the company is found to be infringing your patent, you will learn that you have revenue-generating options both in and out of court, and the Cashman Law Firm, PLLC is in a position to help you navigate these options.

Lastly, if you own a patent but you have not or have no plans of making use of it (e.g., it is sitting on the shelf gathering dust), we will gladly analyze your patent to unlock the value which until now has laid dormant and unused within it.  We can help you form partnerships and joint ventures with companies who would have the interest and the financial ability to produce your product and bring it to market.  It goes without saying that we can help you form strategies to monetize your patent to make your idea a profitable one before the time on your patent runs out.

Our commitment to you is that the tone of this blog will not change.  We will continue to discuss concepts such as patent trolls, patent purchase conglomerates, patent licensing power, and patent reform.

The Cashman Law Firm, PLLC helps clients secure, protect, and enforce business ideas. We also protect assets when foreclosure or bankruptcy becomes necessary.

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[Originally published by Robert Z. Cashman, Patent Litigation Attorney on the Patent Prophet web site.]

There is a short and simple lesson in today’s article from law.com, “Federal Judge Tosses Out $388 Million Patent Verdict Against Microsoft” written today by Alison Frankel from the American Lawyer.

Last April, Paul Hayes of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo representing Uniloc in a patent infringement lawsuit won a $388 million dollar patent infringement verdict against Microsoft. Today, Judge William Smith from the Rhode Island federal district court vacated the $388 million jury verdict and ruled as a matter of law that Microsoft did not infringe Uniloc’s patent, stating that the jury did not understand the issues when they gave their ruling in Uniloc’s favor.

The lesson here is that while every patent litigator has his or her day in court, so to speak, “going all the way” [to trial] in a patent litigation suit is not always the most responsible course of action. In trial, many twists and turns can occur where within the dance between the patent litigation attorneys, results may surface with a motion, a hearing, or a ruling which can destroy an otherwise valid case of patent infringement.

On top of that, the Federal Rules of Civil Procedure (FRCP) are set up to reward the party that offers to settle and penalize the party who pushes their case to trial after a settlement where their case is found not to have merit.

For example, if a defendant in a patent lawsuit offers to settle and the plaintiff refuses the offer, even if the case ends up in the favor of the plaintiff, if the judgment is for an amount that is equal or less than the amount that was offered in the offer to settle, the defendant can ask for sanctions and attorney fees for the time and money spent fighting the case after they offered to settle. (This was actually the source for a defense tactic that I suggested to my peers when interning at Scully, Scott, Murphy and Presser PC, a subject to be discussed in another article.) Returning to the content of this article, the point is that going to trial has its benefits and its risks.

An alternative strategy to consider is settling the claims out of court. Too often in patent litigation (both with regard to plaintiffs who are suing because a company stole their patented idea and the companies being sued for patent infringement), ego takes a more prominent role than a sincere analysis of damages which hinders discussions of settling the claims before they go to trial. Too often a company accused of infringing a patent refuses to discuss licensing the technology from the often-seen-as “little” inventor and delegates any legal matters to their patent litigation attorneys who are instructed to fight this little guy with everything they can both regarding the merits, and via procedural tactics to boost the cost of litigation to a point in which the inventor simply cannot afford to move forward with the litigation and s/he just “goes away.” If the companies ethically sit down with the inventor and review the patents involved and try to resolve the case and to determine damages without involving a billable-by-the-hour patent litigation attorney, they can save often hundreds of thousands of dollars and often millions of dollars in attorney fees and costs.

Case in point, Paul Hayes, a skilled patent litigation attorney went through the whole trial process and won a $388 million dollar patent infringement verdict against Microsoft. As of today he lost the whole case and both his firm and his client still need to account for all the likely thousands of hours of costs and fees spent litigating Uniloc’s case. In some cases, the law firm can “eat” the loss of the billable hours, but depending on the jurisdiction, in some places the client is still on the hook for out-of-pocket expenses which can be expensive when the case goes all the way to trial. Had the two sides agreed to a reasonable settlement which compensated Uniloc for Microsoft’s use of their patented technology, everybody would have been happy. However, I can’t help but to think that somewhere along the line, greed, ego, or both stepped in and forced their case into trial.

If both sides came to an agreeable settlement early on, imagine how much money could have been saved in attorney fees on both sides. …and Unicom would have some money in the bank whereas now they have nothing except for a gaping hole in their pockets.

Robert Z. Cashman, owner of Patent Prophet is a contingency fee patent litigation attorney in Houston, TX. He works for a law firm that specializes in contingency fee patent litigation, and in the past, he worked in house for a patent company as both a patent attorney and a patent acquisition specialist, where he interacted daily with inventors looking to sell their patents.

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I was just reading the New York Times article by Steve Lohr about how exciting it is that Zoltar Satellite Alarm Systems will be placing their patents up for auction as if a patent auction were some new and exciting forum where valuable patents can be made available for the public to benefit from them. The funny thing is that in my opinion, patent auctions are where patents go to die.

The article continues to boast Zoltar’s patents stating that they have been litigated many times as if that boosts their value. I chuckled when I read this because the fact that the patents have been litigated only indicates that the value of the patents have deflated (like air escaping from a ruptured balloon) because there are no longer valuable prospects to sue. On top of that, I was surprised to see that the article mentioned that even in the lawsuits they initiated, the patents were found NOT to infringe which suggests to me that the value of the patents are even less that I thought they were by the impressive subject matter description of being a personal alarm device that transmitted a person’s location. In other words, it suggested to me that the patent claims were too narrowly drawn or were vague and unenforceable. Otherwise, unless the settlement offer was substantial (and a few million dollars is substantial, but the article suggests that they also spent a few million dollars which means they are only breaking even if they are lucky), there is no reason to settle unless Zoltar just wanted to get out of the lawsuit with the shirts on their backs because they learned at the Markman hearing that their patents had serious flaws and that it was not clear that they would have succeeded at trial.

I also found it interesting (and even funny) that the author gave a plug to venture capital companies like Intellectual Ventures, Acacia Technologies, Altitude Capital Partners, Intertrust, IPotential, Ocean Tomo, Rembrandt IP Management and Thinkfire. The reason I found it funny is that some of these companies (e.g. Acacia) are well known as being patent trolls who purchase patents for the purpose of licensing them to others under threat of suit.

Some of the other names on this list, such as IPotential, are not patent trolls, but are actual patent service companies who take a patent portfolio, wrap it up in a nice package where the value of the patents are clearly visible to buyers, and then find buyers who pay top dollar for the valuable patents they sell (quick plug and regards to Ron Epstein, the founder and CEO of IPotential). I find this service to be valuable because Ron knows the patent market and is not about to broker the patents off to a venture capital company who wants to pay pennies on the dollar for the patents. If I had some good patents to sell, I’d seek out Ron and convince him to take me on as a client before looking to any of these others on the list.

Another name on this list is Ocean Tomo, a patent auction house which holds fancy auctions in foreign countries making the whole process seem beyond five-star; I have written about them in the past. I like the concept of Ocean Tomo — they’ll package your patents in their high quality catalog with glossy pictures and fancy photos (I wouldn’t be surprised if each catalog cost them upwards of $15-20 each based on the high quality). However, the chuckle here is that just because their catalog is beautiful doesn’t mean the patents have any value. A prospective buyer will need to analyze the patents in depth as they would for any other patent purchase because listing it on Ocean Tomo’s auction does not mean that there is any value to the patents. On another note, sadly, I hear that attendance to Ocean Tomo’s auctions have been dying down and that only a fraction of patents listed recently have been sold which means that the auction house patent sale model might be losing momentum. That being said, I still like their idea of trading stocks on some kind of stock market forum. I’d succeed there because as a patent attorney and a patent litigation attorney, I’d see the valuable stocks and buy shares in them in an instant and watch the value grow in my patent stock portfolio.

All this being said, it’s sad that the NY Times article is describing old players and making them seem new. Intellectual Ventures has been buying up patents forever. Acacia has been a patent troll forever. Ocean Tomo has been around forever. Some of the newer names such as Rational Patent Exchange in my understanding are offshoots of Intellectual Ventures (the same guys are running each patent chop shop), except they run the business like the mafia, stating, “buy into my elite club and you we’ll protect you against patent trolls. Decide not to buy into our club, and we’ll sue you ourselves with our army of patent litigation attorneys.”

I could go on, but in sum, there doesn’t seem to be anything new or exciting presented by this article. Just old sheep in new clothing, however the cliche goes.

Robert Z. Cashman, owner of Patent Prophet, is a contingency fee patent litigation attorney in Houston, TX. He works for a law firm that specializes in contingency fee patent litigation, and in the past, he worked in house for a patent company as both a patent attorney and a patent acquisition specialist, where he interacted daily with inventors looking to sell their patents.

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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.

Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP 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.

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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 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 a multi -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 judgment 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.

Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP 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, and Strategic Counseling.

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Today in Barron’s, there was an article “RIMM To Pay $267.5 Million To Settle Visto Patent Suit” by Eric Savitz.

I’m actually not that sad about this settlement. If Visto’s patents genuinely covered the technology used by RIM, then they had a duty to license their technology and not to steal it. Without delving deeper into the facts, I’d give RIM the benefit of the doubt that they just didn’t know about Visto’s patents when they went into that technology area. That happens quite often, and is the reason the patent system is in place. Here, Visto bought patents owned by Motorola and I would expect that RIM should have known about these patents and should have sought a license for the use of the subjects they cover, but I’m guessing that their GC thought, “hey, these patents were just bought by some venture capital (VC) company. What are the chances they’ll sue us?” Silly GC, VC’s are often trolls under a legitimate business structure.

Nevertheless, even if Visto was not some VC, it’s likely the same story — Big companies don’t take little companies / inventors holding patents seriously. They fail to realize that inventors pour out their life’s savings to develop a technology with the hopes of one day achieving some kind of financial remuneration for their inspiration and innovation. It is only fair that an inventor can hold a legal monopoly and can go to court to sue when their patent is infringe (noting that laches is always a good defense for the infringer as a side note because inventors often don’t act fast enough or they trip up while trying to send threat letters to the big companies letting them know of their infringement and then doing nothing when the big companies retort).

That being said, companies as big as RIM often take the little guy not seriously when they come with a valid patent in which they are practicing. They’ll stall, hee and haw, and will cost them thousands just to convince the huge companies to take a license from them.

Any inventor / small company that has to resort to going to court to resolve a patent disagreement deserves a good judgment because if it has come to a lawsuit, the licensing negotiation and stalling tactics by the big company has taken too long.

Obviously patent trolls are a different story. They didn’t invent the technology; they bought it at a fire sale and now they’re trying to assert it EVEN when they don’t have a strong case.

Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP 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, and Strategic Counseling.

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I was reading this morning’s post on the Patently-O Patent Law Blog about the Biomedical Patent Management Corp. (BPMC) v. California Department of Health Services (on petition for certiorari) brief by the Solicitor General.

In short, I feel that the Court is spending too much time looking for the perfect case to justify the ruling (a.k.a. law) they are looking to implement. However, I believe that injustice is being done because bad law is being pushed on the lower courts because the Court is not hearing these poorly-decided cases. I feel this is bad practice, and I implore the courts to stop this practice. Their job at their level is not to “legislate from the bench,” but to resolve issues where the lower courts have made errors. My comments to the Patently-O article is below:

TJ, I think the problem is that the SG is looking to pick and choose the best cases to create the law they’re looking to implement. Metabolite v. Labcorp was a good candidate to take on the “thinking step” patentability issue, but nothing significant happened, thus no material change to the patent law system. Now, we have a case where the Cali gov’t is enforcing their patents, but hiding under 11th Amendment immunities. Again, the SG claimed this was not the right case to create this kind of law, noting that the issue is really a problem. I can think of a few more examples of this off the top of my head.

Pardon the baseball analogy, but it’s unfortunate that the courts are looking for a slow pitch down the middle to assert the law they wish to implement. Perfect cases only come once in a while, and we are racking up issues that need to be addressed, and the courts keep going silent. This is not justice — not for the litigants, not for the patent law system, and not for the country. Stop looking for the perfect cases, and make the wronged litigants whole by hearing cases where there has been an injustice done at the lower courts, because by being SILENT, you are creating precedent and BAD LAW. Just stop it.

The Court needs to put a stop to looking for the “perfect” cases so that they can “legislate from the bench” and must return to adjudicating cases to right a wrong when the lower courts have gone awry.

Robert Z. Cashman is a patent litigation attorney / patent attorney in Houston, TX.  He has started an informative website using the name Cashman IP 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, and Strategic Counseling.

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