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The Almighty Buck Government Patents News Your Rights Online

FTC Defends Ethernet From Patent Troll 59

Posted by Zonk
from the much-appreciated-folks dept.
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."
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FTC Defends Ethernet From Patent Troll

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  • A small victory (Score:4, Insightful)

    by dk90406 (797452) on Thursday January 24, 2008 @10:49AM (#22167818)
    Nice to see the FTC moving in a sensible direction. Of course the only reason they did it, was because we are talking Ethernet. If it was some less known standard that a troll way trying to attack, they would let it slide.
  • by arivanov (12034) on Thursday January 24, 2008 @10:51AM (#22167864) Homepage
    Sorry, this was a no contest situation.

    With 100M worth of capital you do not go against an industry with turnover in excess of 100s of Billions per year. Most networking gear all the way to 10G is Ethernet now and that industry as the chairman of FTC noted can fend for itself. In fact, based on the FTC decision it surely did.
  • Neglect? (Score:5, Insightful)

    by Eunuchswear (210685) on Thursday January 24, 2008 @11:22AM (#22168362) Journal

    The IEEE voted back in 2002 to make patent letters irrevocable, which could have prevented this, but neglected to make that clause retroactive.
    I doubt they "neglected" to make the cause retroactive, I suspect that not being brain dead they knew that they had no such power.

  • by s20451 (410424) on Thursday January 24, 2008 @11:24AM (#22168412) Journal
    I think that would feed rather than quash the patent trolls. What if a patent can only be transferred n times, and you are the nth guy in the chain? Then your only way to make money from that patent is to license and litigate. So, when the (n-1)th guy gets tired of owning the patent, off to the patent troll it goes, who gets the patent at a nice discount since nobody else is interested in buying it.
  • by mcmonkey (96054) on Thursday January 24, 2008 @12:41PM (#22169682) Homepage
    Not necessarily a good thing

    First, the GP is only a troll is the poster doesn't believe the content of the post, but rather posts just to go against the prevailing sentiment and arouse a reaction.

    Second, a phrase like "exploiting the flaws of the system" is quite loaded. Like if someone you like is charged with a crime but not convicted, you might say that person is not guilty. If someone you don't like is in the same situation, you might say, they only got off on a technicality.

    I'm not guilty of murder, but only on a technicality. Of course, that technicality is the fact that I haven't killed anyone, or caused the death of anyone, or done anything else covered by the laws that define murder. But that's only a technicality.

    If you think the right of a patent holder to charge licensing fees is a "flaw of the system" then yes, in this case the company was trying to exploit that flaw. Of course I could say the requirement to release source code is a flaw of the GPL, and anyone trying to get me to release the source of an application based on GPL code I am selling is just a troll exploiting the flaws of the system.

    I may hear replies that the requirement to release source code is not a flaw of the GPL, but rather is an intentional aspect of how the GPL works. On the same tip, some might say the right of a patent holder to charge licensing fees for use of works covered by the patent, and the right to increase those fees should the patented works prove to be popular, is not a flaw in the system, but part of how patents are intended to work.
  • by DerekLyons (302214) <fairwater AT gmail DOT com> on Thursday January 24, 2008 @01:37PM (#22170678) Homepage
    It doesn't matter how many times the patent has been assigned - because assignment doesn't change the duration of the patent. What you have here is a solution in search of a problem and a potential enforcement nightmare.
    Am I the only one that notices Slashdot's propensity to propose/applaud the limitations of others rights, while screaming loudly at any percieved limitation of their own?

To be a kind of moral Unix, he touched the hem of Nature's shift. -- Shelley