FTC Defends Ethernet From Patent Troll

I Don't Believe in Imaginary Property writes "The FTC has put a stop to Negotiated Data Solutions, a patent troll that bought a patent on an important part of the Ethernet networking standard and tried to jack up the royalties for licensing it. In a consent decree (pdf), N-Data agreed to continue licensing the patent at the formerly promised rates. 'Whatever the merits of the decision, it shows that the FTC sees the value of standards and will be on the lookout for any behavior that could undermine these standards-setting process. That alone could keep companies honest when they enter the standards process. Standards-setting bodies have also become more sophisticated over the years (after being burned in several high-profile cases), and now do a better job at forcing involved companies to disclose and license patents.' The IEEE voted back in 2002 to make patent letters irrevocable, which could have prevented this, but neglected to make that clause retroactive."

Re:GPL?

[IndustrialComplex]

The patent was written so that it would be a one time fee of $1000. In terms of business costs and licensing fees, that's peanuts.

Re:GPL?

[kellyb9]

I think it's about 20 years and then it goes into the public domain, but that isn't the case here. The patent is on one particular part of Ethernet, particularly it's use of autonegotiation of speed and capabilities between different devices. It was adopted in 1994 into the Ethernet standard. Initially the patent deal was set up in such a way that every manufacteurer of Ethernet products had to pay a one time royality fee of 1,000 dollars which is pretty weak.

How about a change in patent law...

[dpilot]

Why not limit the number of times patent rights can be reassigned?

As set forth in the US Constitution, the purpose of patents is twofold:
1: The temporary monopoly on the invention gives the inventor recompense for the investment made in the invention. In other words, it keeps him/her inventing instead of waiting tables.
2: The limited term of the patent brings the invention into the public domain, to be used as fodder for future inventions.

The whole idea of assignment of your invention rights is simply another way of getting recompense. It's a good idea, because it means you don't have to be a manufacturer and marketer, as well as an inventor. Assignment of rights lets you focus on inventing and not on those other things, if that's your bent.

And maybe reassignment by the first assignee might make sense, too. But by the time patent rights have been sold multiple times, the link back to one of the original functions - to keep the inventors inventing - is so diffuse that it has been lost, IMHO.

The Constitution never intended the patent as a revenue source beyond spurring invention. (Same with copyrights)

All I can say is WOW.

[LWATCDR]

"Why wasnt this patent written so that in X number of years in became extinct and the contents of it went out under the GPL? "
All I can say Wow...
1 A patent is not a software license or a copyright. A patent does have a limited life span.
2. When a patent expires then it becomes totally free. Not free as beer, speech, or the GPL. Free as in public domain free. You can do anything you want with it after it expires.
So all I can say is WOW.....

Re:GPL?

[timbck2]

It is, but shortly expiring a drug company will often release a new very minor improvement and do everything it can to discredit it's older product while pumping up the new one.

Many times it isn't even a true "improvement", just a minor tweak; like dextro-rotating (or levo-rotating) the molecule, or producing a racemic mixture (e.g. Adderal vs. Dexadrine, the aforementioned Prilosec vs. Nexium), or making an extended-release version.

Re:GPL?

[russotto]

Expanding on this, why shouldn't they at least be allowed to increase the original cost of the patent inline with inflation?

Because their predecessor in interest, National Semiconductor, agreed to a $1000 license, with no consideration for inflation. Which Negotiated Data Solutions should have known when they bought the parent.

(Geez, "Negotiated Data Solutions" even sounds like the name of a shakedown organization)

Re:How about a change in patent law...

[dpilot]

Last I checked, I held 19 patents, so I'm not simply an uninterested party foisting problems off on someone else. The system is currently broken, though as others have suggested, there are new improvements in the prior art process that may help. I was just coming up with another idea, aimed at the trolls.