If You Read Just One Article About The Patent Mess, Make It This One
from the infuriating dept
Steven Levy has always been a great writer covering the tech industry, but his article
on "the patent problem" for Wired is a must read,
even if you're familiar with these stories. He does a great job
illustrating just how screwed up the patent system is, focusing on a few
key trolls, and pulling in some important information and data to
support the anecdotal claims. Much of the story is about Mitchell
Medina, who took a ridiculous patent that came from an idea about
scanning medical documents into electronic format, and turned it into a
belief that he held a patent on which practically every website
infringed. You really should read the whole thing, but a few tidbits:
first off, Medina and the two other people named on the patent never
actually could build a working product.
Although the three had never tried to build a working model before they
were granted the patent, they now set out to create a business based on
the idea. Elias made a prototype, albeit one that Medina would later
admit “didn’t work particularly well.” He claimed to have visited “every
big player” they could think of in the computer industry to see if they
would like to license his patent and build a commercial version
themselves. He also claimed that he had attempted to raise venture
capital to create a company of his own. But no corporation or VC would
put money into it. According to Medina, they were particularly annoyed
when, during a meeting, an executive from IBM’s Lotus division rudely
dismissed the idea of paying to use the concept. “He acted as if these
kinds of patents were somehow laughable,” Lech says.
Eventually Medina cut out the guy who actually came up with the idea of
scanning documents, and set himself up as a patent troll. He sued over
100 companies -- and realized that as long as the "license" he asked for
was cheaper than fighting him in court, everyone would pay up, and
everyone did... except one company, Flagstar Bancorp. Levy goes through
details of the seven years spent fighting the case, including two
separate district court judges who absolutely slammed the lawsuit (one
said the case had "indicia of extortion") and told Medina he had to pay
up for filing such a ridiculous lawsuit (in between all that, the
appeals court, ridiculously, disagreed and sent it back). Eventually
the appeals court agreed with the lower court, and the Supreme Court
refused to hear the case, but it was a massive waste of time and energy.
Amazingly, the guy who demanded payment from all those companies (and
got it from most), for doing absolutely nothing to actually help with
the development of e-commerce, claims he's a "victim."
Mitchell Medina, who has sued more than 100 companies for infringing his
patents, sees himself as a victim. “When Jobs and Wozniak or Hewlett
and Packard start in a garage, they’re heroes and captains of industry,”
he says. “If you apply for a patent first, you’re a troll.” Via email
from Africa, he continues to attack the Flagstar decision, claiming that
Martinez ignored key evidence and ruled incorrectly. (Medina felt it
best not to talk by phone, because, as he put it, “I tend to speak my
mind, and it would be unwise for me to do so without the self-censorship
of writing.”)
“We did nothing improper,” he writes. “The judges in this case comported
themselves like spectators in a Roman coliseum who wanted to see plenty
of blood on the floor in the form of litigant’s money before they
considered the show worthy of their interest.”
Really, this is just touching the surface. Even if you're familiar with the Flagstar case (which we
wrote about
last year when the final CAFC ruling came down), reading Levy's
detailed piece is worth it. The problem, of course, is that this kind
of thing is happening over and over and over again -- nearly all of it
taking money from productive purposes of building companies and
products, and sending it to lawyers. It's a massive drain on the
economy and it's about time we fixed it.
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