Cloudflare beats patent troll so badly it basically gives up Cloudflare on Thursday celebrated a victory over Sable Networks, which the former described as a "patent troll." That’s a term for an individual or organization that exists solely to makes patent infringement claims in the hope of winning a settlement from defendants concerned about costly patent litigation. "Sable sued …
Patent Troll:
El Reg: a term for an individual or organization that exists solely to makes patent infringement claims in the hope of winning a settlement from defendants concerned about costly patent litigation.
Cloudflare: [Sable IP] doesn’t make, develop, innovate, or sell anything. Sable IP is merely a shell entity formed to monetize (make money from) an ancient patent portfolio acquired by Sable Networks from Caspian Networks in 2006."
Many companies want to monetize their IP. If it's not of use in their technical strategy, they also have the right to sell it, and the new owner can monetize it as they wish.
The red line is where the IP owner is suppressing progress with unreasonable claims or licensing fees. And only a court can rule on that, as the USPTO don't exactly help.
They don't have to directly use the patent in order to make money off it.
Step 1: buy some real patents.
Step 2: Find someone who wants to build something using the IP.
Step 3: Sell them a license or negotiate an outright sale of the patent.
Did these guys do that? I'm guessing not. This suggests that they couldn't. In principle, you're correct that maybe one of those patents was valid and they have an actual infringement case. I can't disprove that just because they never used it or allowed others to. However, I consider it reasonable to doubt them when they don't offer such a thing, and the outcome in court is further reason to believe that they did not hold any justified patents.
I totally agree. Patents were there so the originator could profit from the development and sale of their invention without competition for a limited time. This encourages investment in R&D.
If you sell patents on to an organisation who simply holds that patent, they are neither the originator of the patent nor able to profit from the development/sale of their invention so have no interest in paying back R&D costs.
True, but the USPTO grants patents willy-nilly without any effort to understand prior art, trusting that the applicant divulges prior art, which of course reduces the chance of the application's being approved. And unpatented prior art, like obvious stuff or things that predate allowing software patents, is not usually even taken into account. So the patent has to be invalidated or the troll will go after users with something they didn't invent, they just bought a garbage patent that shouldn't have been granted in the first place.
That is the problem in a nutshell.
The patent system is broken, the USPO doesn't have the funds or the skilled staff to asses each patent on it's merits, especially in the software and technology sphere. This has allowed large companies to register many many spurious patents that don't hold up to scrutiny.
But as said elsewhere, you need the cash to scrutinise them.
I was reading a story on a different site about a company suing Apple for the heart rate sensor on their watch.
I ended up spending far more time than I would've liked reading the linked patent. (I'm a software engineer, I was curious).
It was pages and pages of words that as far as I could tell broke down to 'Arrange some sensors in a pattern, e.g. a circle or a grid, and take an average reading. The layout of the pattern isn't hugely important. It should be able to be worn'.
Which is apparently innovative. (Note, they were patenting the placement of sensors, not the sensors themselves).
What really struck me though, it linked to the patent application for the sensor in question. That was developed in the late 70s/early 80s and the patent was a completely different beast.
Firstly it was a lot shorter, being free from the verbosity designed to confuse.
Secondly, it succinctly and accurately described a complex and (then) innovative device.
A vague patent is generally more valuable anyway, as long as the edges of the vagueness aren't stretched so far as to encounter prior art. Make your patent too precise and it will be much easier for someone else to skirt your application. Just because you used a blue, ridged, PVC part doesn't mean that should be your patent, because mine can then either be turquoise, rippled or plywood and still match the two others. Getting the balance right is a job for the patent writers, but they also need the inventors to think broadly about what is the crux of the invention, vs the particular solution they implemented.
A good point since one of the less understood things about patents is this:
The "protection" being granted a patent provides is only as strong as your ability to defend it. Ultimately that comes down to "how deep are your pockets".
Generally, particularly in the US, the one with the most money (deepest pockets) usually wins.
It's not a new phenomenon - just bigger. Back in the 18th century, a group of people met regularly over coffee to encourage inventors not to patent their ideas, but to make them public and freely available to others to use and make life better for all. To do so, they set up financial awards for new ideas: get an award and you got payment there and then, without having to risk more in developing your idea or fighting off others.
Almost 100 years later, they (well, those who followed on in the organisation they formed) were key in setting up the 1851 Great Exhibition to showcase Britain's technical talent; later, that organisation set up the first national school exam board to establish some common educational standards across the country. The organisation still exists, encouraging people to share ideas and collaborate on work to benefit those who may fall behind...
> The red line is where the IP owner is suppressing progress
That existence of patent trolls already suppresses progress.
Because their existence creates a chilling effect on inventors who aren't multinational companies with deep pockets and highly paid legal teams.
This is great! Glad to see it.
But IMO… Suing over patents is not the problem. If I invented a better mousetrap, damn skippy I’d want to be able to sue people stealing my design.
The problem is that all of these patents are total garbage. It needs to be way harder to get them, and way easier to get them invalidated.
And for that reason the USPTO should be responsible for both sides' legal costs. Both sides because, by granting a patent that they shouldn't they've encouraged the plaintiff to waste their money. The fact that the plaintiff might suspect it's an invalid patent is neither here nor there, the USPTO needs to be discouraged from charging for a worthless rubber stamp.
Putting this in context - USPTO examiners have routinely complained that their supervisors are putting them on quotas for patents approved - which gets denied just like stories of traffiuc wardens getting assigned quotas even with recorded evidence to the countrary
This rot has spread from the USPTO to the EU version and is the core of a major scandal around its director in the 2010s
Couple that with the unjustifiable and unsustainable extensions of both copyrights/patent terms over the last 60 years and something's going to break
The original Royal Patent system was abolished by King James due to massive levels of abuse and the "new" system is now at more or less the same stage
It's the utter nonsense of the US patent system. The marketing departments of US corporations have decided that in order to demonstrate creativity they have to have patents; lots of patents. Therefore every idiotic or incremental obvious thing is claimed as a patent and the marketing company are happy because they can lie to the shareholders about how creative the organisation is. The US Patent Office are happy because their mode of operation is simply to accept money and to grant a patent, and to allow the good ol' US legal system to decide whether or not a patent is valid or not. This is great for the the US Patent Office because their finance department is happy with the income and their marketing department can lie about how creative the US is and how great and wonderful US organisations are. The lawyers in the US are happy because they will be able to charge lots of money to deal with all the useless patents being challenged (not forgetting that prior art outside of the US does not count as prior art)
In the civilised world, patents should be granted fairly rarely and after a lot of investigation and searches and take effort to achieve rather than just being a money cycling and marketing scheme.
From TFA:
Five other companies that we know of sued by Sable – Cisco, Fortinet, Check Point, SonicWall, and Juniper Networks – settled out of court.
Five other companies that we know of sued by Sable – Cisco, Fortinet, Check Point, SonicWall, and Juniper Networks – provided sufficient investment funds for someone to retire on
Erm... no. ARM sells thousands of designs to other companies. They just don't manufacture the chips.
That's precisely my point, they don't make anything, just license the designs. Your position is they must actually make at least some of the chips in order for them to be permitted to do so.
In ARM's case, it's pretty easy. Those core designs they make are products. Those products are sold to other chip designers alone and those designers have to make the physical thing, but nothing says that a product must be physical in order to count. ARM has plenty of provable use of their patents in something they sell.
There can be a trickier side where a company does really exist to license out IP. They can buy it from the inventor because the inventor doesn't want to go into the business of manufacturing the thing they invented, then find someone who does. In this case, the question can be rephrased as "when did someone last build a product based on this patent", thereby including any customers of the company who licensed the thing. In both cases, you would also need to consider that someone might be in the process of developing a product but hasn't released it yet.
It's not a good enough test to stand on its own. A no to this question does not conclusively prove that the patent is invalid. It does suggest that it might be, though.
"As a judge, I would start with one question : when is the last time you made a product based on your patent ?"
Why? Let's suppose you came up with a smart new idea for use in cars. On the assumption that you've no relevant expertise in design-to-manufacture and selling hardware to large corporations, I'll assert there's no way you'd be able to go from concept through product design, testing, and manufacturing in a way that you could sell to car makers. You could patent it, but the only way you'd be able to make money would be to sell or licence the intellectual property to either an established automotive parts maker, or a car maker...or a patent troll.
The issue in this case as others have pointed out, and in much US patent litigation is not the existence of a firm that has legally purchased a patent and wishes to enforce it, but the decades long crap performance of the US Patent Office who do wholly inadequate checks to ensure that only genuinely new, good quality patents are issued.
It's like patenting a long-established business process "But on a computer"
Which was one of the big objections to worthless patents back in the 1990s as this was happening regularly
Patents are for NOVEL ideas
The other problem in the USA is that "Patents" also cover trade dress - "registered designs" and "trademarks" in other parts of the world
That's a particularly stuipd thing to have had happen and needs cleaving
>What words do the Germans and French use?<
German for "registered designs": Gebrauchsmuster/geschütztes Design
German for "trademark": Markenzeichen
The point is that "patent" in german does not include the above which confuses Germans hearing about US patents for things like 'rounded corners'.
While it is confusing it is hardly one of the major issues in the current patent system in my opinion.
I have a patent (technically multiple as it exists in UK/US/EU and other patent offices) that covers what could and usually would be something done using software, but could equally be implemented with clockwork or paper or another mechanism.
As for a physical implementation existing with functional prototype, since when has that ever been a thing? Patents exist to protect the right to the idea, it doesn't have to be achievable at the point you protect it; think how much tech has required years of development to get to a point where the necessary elements exist to function.
It's only the USPTO that really has a problem like this, my experience was that it's generally not a cheap or quick process to successfully get patents granted and that (mostly) you can't get any old rubbish through.
I was under the impression that in order to qualify for a patent the idea but be implementable - not the same as as a physical implementation as intangibles are potentially patentable. You can't patent a balloon made from lighter than air concrete on the off chance someone invents a lighter than air concrete.
This is, without doubt, one of the areas I'm always interested in.
One of the biggest challenges is the culture of litigation across the pond, it rather promotes this as a lucrative way to exist, the payouts are at times mind boggling in terms of size, so I can see the attraction.
I remember flagging similar nonsense when it started appearing in Europe.
My main case against some of the draft European legislation was being proposed, was to ensure we're actually protecting and rewarding innovation, not creating a model for Patent Trolls to start operating in the EU with impunity.
There are some absolutely dreadful Patents out there that USPTO has signed off.
I once designed a piece of research equipment for the US Government. All of the design files were initially placed on a government website for anyone to download and duplicate. Later when the project was cancelled, the website was taken down. A large corporation then took the design and patented it.
Later, part of the project was revived and I was asked to make modifications to it. I said I can't because I'd be violating the patent. The incompetence of the USPTO is staggering -- USPTO granting a patent to a corporation for a design that was developed by another branch of the government, paid for by taxpayers and was in the public domain.
> Hey, I just got this patent for a wheel
You may think you're joking because hey, it's the wheel - but an Australian chap did exactly this to show the new Aussie patent system (in 2001) was broken...
https://www.newscientist.com/article/dn965-wheel-patented-in-australia/
"Patent trolls" are more akin to fraudsters who send out fake invoices to companies in the hope of being paid. Companies with portfolios of useful patents are vital in the world of tech (granting non-exclusive licenses industry-wide, paying a lump sum to inventors, insuring against legal costs, guaranteeing value of IP used as collateral against loans, ensuring enforcement etc).
Sable Networks seems to have fallen into the random fraudster category.Cloudfare called Sable Networks bluff. Sable Networks doubled down.
How much ready cashflow do you think Cloudflare had commit at some point to see this through?
Sable Networks is bankrupt so Cloudflare won't be getting their money back. Meanwhile the people who owned it will be back next week with another batch of BS patents and "remember how much it cost you last time (with that totally unrelated company) - and you won that one."
>"In the end, Sable agreed to pay Cloudflare $225,000,
>grant Cloudflare a royalty-free license to its entire patent portfolio,
>and to dedicate its patents to the public, ensuring that Sable can
>never again assert them against another company," said Terrell and Nemeroff.
>The Register called Sable’s listed phone number, and it is no longer in service.
>The company's website is unresponsive and an attorney for the firm did not
>immediately respond to a request for comment.
Well, that's pretty darned amazing, I've never heard of such a thing.
Their legal team should win some kind of prize.
But it isn't clear where this comes from, did Cloudflare counter-sue? Was this a verdict or a settlement? Were there more undisclosed terms?
A quick search doesn't find any answers to these questions, either.
"In the end, Sable agreed to pay Cloudflare $225,000"
Demolished the Troll's bridge... and made the Troll pay to cart the rubble away. ;)
Of the two outstanding patents the jury found one hadn't been infringed and the other was invalid.
The link is in this article viz https://blog.cloudflare.com/patent-troll-sable-pays-up/ but still worth reading for Sable's Borcher's testimony. He clearly admits the business is entirely ambit law suits - little more than a protection racket.
Patents were originally to allow the inventors of a device or idea to benefit from it for a while. A good example was obstetric forceps,
Over the 20th century, this changed into something that stopped other people using an idea at all. An example is how oil companies used them to prevent Electric Vehicles from catching on.
By the end of the 20th century, This moved into a mobile telephone manufacturer using them to cut down competition (don't innovate, litigate).
This only ever delayed progress. The forceps are now available to whoever needs them, EVs are selling in ever increasing numbers and, outside the USA, that brand of smartphone is mainly used by the uninformed with too much money (expect downvotes from iFans here)
What should be done? Firstly, patents should be returned to their initial length - was that 17 years?
Secondly, that period should only be patents still owned by the individuals who created them. Any patent that is owned by a corporation should automatically be halved in length. Any that were owned from their start should never even get to the full length.
Finally, any patent troll that loses an attempt should automatically be fined 100 times what they were suing for as a minimum or a minimum % of their annual turnover - whichever is greater,
https://www.cloudflare.com/en-gb/insights/
Of course I am just thick but any company that gets itself embedded into the infrastructure of the toobs to the level that...
"Internet requests for millions of websites run through Cloudflare’s network, giving us unprecedented insight into our customers’ web traffic. Our edge sees all requests made to a website, regardless of whether it’s cached or uncached, the user has adblock, or they turned off JavaScript. This enables us to provide actionable insights to our customers."
"If you are not a Cloudflare Customer you are their Product."
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