Blackbird's Patent Troll Suit Against Cloudflare Gets Patent Invalidated

https://blog.cloudflare.com/bye-bye-blackbird/

by eldridgea • 8 years ago

261 56 8 years ago

blog.cloudflare.com

Eridrus3• 8 years ago

This makes me wonder: is there any downside to enacting laws to make patent invalidation due to them being overbroad applicable retroactively and forcing Blackbird to return the money it extorted? It might be challenging to enforce due to limited liability, but I don't see any obvious downsides to trying? It seems like it could provide an incentive for companies to not attempt to create over-broad patents.

chrsstrm• 8 years ago

Why? If it is ruled invalid today then it was also invalid the day it was issued. I would imagine any company who paid for a license under threat of suit would now be telling their legal department to file a suit to reclaim the fee paid plus interest plus any provable damages. So we already have a remedy for this situation, no need to complicate the statutes.

Canada2• 8 years ago

Victims would have waived that right when they settled with the patent troll.

Eridrus3• 8 years ago

IANAL, but I don't think this is how the law works today.

CodeWriter232• 8 years ago

We have a concept in US Law called “ex post facto” which means you are not liable after the fact if laws are changed.

rhino369• 8 years ago

There is benefit to making settlements and final judgments final. Otherwise you are incentivizing constant re-litigation of the same issues. It would also make trolls less likely to settle in the first place.

You can put such terms inside your own settlement agreements. One common way is to use a running royalty rather than a lump sum royalty. If the patent is ever invalidated, you can stop paying.

Retric• 8 years ago

Patent trolls are separate companies with ~zero assets outside of the patent. Think sock-puppet internet accounts.

They can just pay out any income as soon as it shows up so there is nothing to recover if their patent is invalidated.

PS: The only way to make this work is if you pierced the corporate veil when their patents where invalidated, and that would make patents even more useless to small companies.

Eridrus3• 8 years ago

I don't think piercing the corporate veil is the only possible solution, you could legislate that revenue from unlitigated patents couldn't be taken out as profit. Again, that might not be enough and the exact wording would need work, but I think that making it possible is the first step to making it practical.

Personally I think we should just abolish the entire patent system, since I really don't see much benefit in it for anyone but large companies, but basically everyone agrees on stopping patent trolls with garbage patents

peteforde2• 8 years ago

Thank you, Cloudflare, for fighting the good fight.

Someone should start a collective fund for smaller companies to help with legal support so that more troll claims can be fought instead of settled.

Anyhow, I'd be genuinely curious how much it cost to get to this point, and how much you think it would have cost if you'd had a protracted battle.

jimktrains2• 8 years ago

Someone should start a collective fund for smaller companies to help with legal support so that more troll claims can be fought instead of settled.

You mean the eff? Probably not exactly what you had in mind, but pretty close I think?

AnthonyMouse3• 8 years ago

You mean the eff? Probably not exactly what you had in mind, but pretty close I think?

Well, of course, that requires people to put money in the fund.

https://supporters.eff.org/donate

peteforde2• 8 years ago

I almost said "like the EFF" but stopped short because I don't think that the EFF gets involved in individual patent troll battles unless they have a tangible negative impact on digital civil liberties for everyone.

Am I totally out to lunch on this?

https://www.eff.org/issues/patents

Note that there's an important difference between publishing a position, general advocacy work in the interest of the public good, and being a reliable financial contributor to the legal fees required to defend yourself against a patent troll.

I heart EFF regardless, because if nothing else they unapologetically offer a progressive template for how the digital world could be. They challenge us all to be better versions of our digital selves.

x0x0• 8 years ago

fastly appears to have paid up

http://ipwire.com/stories/blackbird-technologies-settles-pat...

jlgaddis• 8 years ago

Yep, same patent too.

I'm curious how much Fastly paid. It's too bad that they didn't hold out for a weeks longer. Maybe they'll fight next time.

zarex• 8 years ago

Yuck. I hate the way ipwire.com describes blackbird. They make it seem like they are doing something good.

tgsovlerkhgsel• 8 years ago

I think IPWire is just providing the press release written by Blackbird themselves.

ryanlol• 8 years ago

This is a press release distribution service.

paulgb• 8 years ago

For context, IPWire exists in a state of denial that there is a patent troll problem:

http://ipwire.com/podcast/ep-14-special-bloomberg-view-stron...

dna_polymerase• 8 years ago

I guess they are not as well funded as cloudflare and therefore couldn't take the risk of loosing in court.

willyyr• 8 years ago

If the patent got invalidated now, wouldn't they be able to get their "fees" back?

chii• 8 years ago

retroactively applying a law is not very conducive to making predictions about legal matters, and therefore, it's very rarely done (if at all?).

Plus, even if blackbird has to pay back their collected fees, they can "just" bankrupt - after all, the money is gone (unless you are implying that any dividends/payment to employees etc, are clawed back...)

dragonwriter2• 8 years ago

No. Past settlements are not undone.

erikrothoff• 8 years ago

This is so cool. Obviously it's a big financial risk to take this route, but it's great to have a large company actually fighting the good fight. Mad props to Cloudflare, Newegg, EFF, and all others in this battle.

b6• 8 years ago

Is there any feedback mechanism to prevent the patent office from issuing more bogus patents?

bleuarff• 8 years ago

There's a Stack Exchange site for that: https://patents.stackexchange.com/

brlewis• 8 years ago

You're asking for something impossible. Software patents exactly analagous to Benson, Flook and Diehr are de-facto allowed. Software is such a broad and fast-moving field that you can't expect any patent office to be able to fairly judge novelty and non-obviousness.

If there's any hope for the patent office it involves an act of congress explicitly making software non-statutory material for patents.

d0lph2• 8 years ago

Honestly, it seems patents discourage competition, and in my opinion are therefore anti-Capitalism. I would not miss them, at least for software.

It's almost a bit arrogant too, how long would it really take for someone else to come to the same realizations?

S_A_P3• 8 years ago

Is it possible that a nonprofit could troll the patent trolls and start proactively suing them to get their patents invalidated? It seems to me that a consortium of above board companies could fund such a thing and come out way ahead of fighting litigation targeted at their business.

pzxc• 8 years ago

That would be prohibitively expensive. The number of overly broad patents that patent trolls own is way too large to be able to challenge them in a cost effective way.

If you want to play offense rather than defense, your money is better spent lobbying to get the law changed so that overly broad patents are more difficult to acquire in the first place.

dpark4• 8 years ago

In addition to the cost of doing this, you have to have legal standing to pursue the suit. You cannot sue to invalidate arbitrary patents unless you can prove harm to yourself. If you cannot demonstrate legal standing, the courts will not hear your case.

S_A_P3• 8 years ago

True, and I could see this becoming a tool of oppression by "big evilcorps" if it were possible to do. I guess its a fun thought experiment though. I generally like the patent idea, if someone comes up with something innovative then they should see the upside. I wonder if a time window would improve matters. Get a patent and you have X number of years to produce something sale-able or publicly available for consumption.

jaredhansen• 8 years ago

This is great news. Regarding the several comments along the lines of "there should be a way to pool resources across many companies to fight trolls", there are in fact several such orgs (beyond EFF, already mentioned below). The three I'm most familiar with (and of which we are members) are:

1) RPX, which is basically just troll insurance. http://www.rpxcorp.com/

2) LOT Network (LOT=License on Transfer): http://lotnet.com/

3) My favorite: Unified Patents, which actively files IPRs against NPEs: https://www.unifiedpatents.com/

There may be others and I'd be glad to hear about them. I recommend every startup join at least these three - the annual fees are modest (free in some cases) and potential benefit is enormous.

apeace• 8 years ago

In this specific case, Cloudflare crowdsourced prior art research on Blackbird's patents:

https://blog.cloudflare.com/project-jengo/

Not exactly the same as a generic pool, but still a neat way to fight back against these trolls.

AceJohnny2• 8 years ago

While this is nice, it's still a game of whack-a-mole. How much were the legal costs for CloudFlare to invalidate this one patent?

I'm glad they did this and they've certainly gained some goodwill from me for this altruistic move. Was that part of CloudFlare's motivation, use it as PR? Because otherwise, the economics still appear to be in favor of the trolls. This battle is won, but how goes the war?

molyss• 8 years ago

For sure, the result is a good news, but it highlight what I believe is a major flaw in the modern court systems : the tax payer and the defender ends up footing the bill for what is essentially abuse of the system and pure incompetency.

Is there any follow up on the body that approved a patent that should never have been granted ? Not per the court order. Is there any punitive damage awarded to the defender against the filer ? Not per the court order.

Having been personally frivolously sued in the past, I can tell you, it's not fun and it's expensive. And even if you win, you have to sue back to pretend to any kind of financial compensation. If you have a settlement saying the opposing party is supposed to give you X amount of money, you have to sue to recover that money. And they can appeal. And even if you have an agreement saying that the winning party is entitled to have their legal fees paid by the opposing party, apparently no judge ever grants the real legal fees.

There's a major amount of work to be done in how we deal with abusive lawsuits and who pays the bill for the shared public legal system.

Blackbird's Patent Troll Suit Against Cloudflare Gets Patent Invalidated

Related Stories