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Businesses Patents The Almighty Buck The Courts

A New Species of Patent Troll 258

Posted by samzenpus
from the easy-money dept.
Geoffrey.landis writes "According to the Wall Street Journal, there's a new species of patent troll out there. These new trolls sue companies that sell products with an expired patent number on them. That's right, it's against the law to sell a product that's marked with an expired patent number. The potential fine? $500. Per violation. And some of the companies have patent numbers on old plastic molds that have made literally billions of copies. Using whistle-blower laws, 'anyone can file a claim on behalf of the government, and plaintiffs must split any fine award evenly with it.' You've been warned."
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A New Species of Patent Troll

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  • by LostCluster (625375) * on Wednesday September 01, 2010 @10:20PM (#33444840)

    Who's the troll?

    The company that invented the product, got their rightful patent, but their patent rights expired as they should, and is still using old packaging/molds/etc. that display the patent number and are now falsely claiming protection they don't have...

    OR...

    The lawyer who finds out about this violation of the law, and gets a finder's fee of $250 per product in violation distributed, and raises $250 per product in money for the government who definitely could use some help collecting this fine.

    False patent claims can FUD a business away... but we also hate most lawyers here. Editors, please define which side to hate in all arguments. We /. commentators will crash if you execute Story.Comment without the required argument variable "$side".

    • by martin-boundary (547041) on Wednesday September 01, 2010 @11:22PM (#33445284)

      The company that invented the product, got their rightful patent, but their patent rights expired as they should, and is still using old packaging/molds/ etc. that display the patent number and are now falsely claiming protection they don't have...

      I actually blame the company. Packaging should have an expiry date built-in at a minimum. It's not like this is difficult to do: there are expiry dates on all dairy foods, and for good reason. Society benefits when people don't eat or drink food that's past expiry on a regular basis. Similarly, society benefits when the expiry date of a patent monopoly is clearly marked.

      Companies still using an old mold which doesn't have an expiry date is just greedy. They should have put the date in when they went to the trouble of putting the patent number in, or they should bear the cost of a new mold if they're still selling new products from it.

      • Re: (Score:3, Insightful)

        by digitalunity (19107)

        Not greedy, lazy. Most companies don't realize just how inexpensive it can be to get old molds modified.

        Depending on whether the patent number is a boss or not determines how easily it can be corrected. In some cases, a skilled machinist can remove the patent markings from the mold with nothing more than a file and a polishing stone set. And yet, most mold shops buy their molds from someone else and don't have the skilled person to do the work.

        It's a conundrum to be sure. Companies need to stop marking prod

        • by cgenman (325138) on Thursday September 02, 2010 @01:55AM (#33446172) Homepage

          Is it really a problem though? A patent on a product just lists a number. You have to look up that number to see what the actual protection is, and there you will see quite easily if it is expired.

          Falsely listing copyright would be a big thing because it covers all aspects of the product. But patents just apply to one technical aspect that you have to look up anyway.

        • by TubeSteak (669689)

          It's a conundrum to be sure. Companies need to stop marking products as patented when the patent expires, but what these "trolls" are doing isn't socially beneficial.

          I'd say that it's very socially beneficial.
          There's currently a flood of lawsuits and from now on, everyone will check to make sure they aren't asserting patent rights that no longer exist.
          The pain is short term and the benefits are long term.

          Or to put it another way: because the market didn't correct itself, the regulations are now being used to force a correction.

      • I actually blame the company. Packaging should have an expiry date built-in at a minimum. It's not like this is difficult to do: there are expiry dates on all dairy foods, and for good reason. Society benefits when people don't eat or drink food that's past expiry on a regular basis. Similarly, society benefits when the expiry date of a patent monopoly is clearly marked.

        Companies still using an old mold which doesn't have an expiry date is just greedy. They should have put the date in when they went to the trouble of putting the patent number in, or they should bear the cost of a new mold if they're still selling new products from it.

        A very simple solution is a sticker with all the patents. Since a bunch of stickers are usually applied to some product anyways, it's trivial to apply another sticker with the current patents that are still valid. Those that aren't valid anymore are either inked out, or a new set of stickers are commissioned (cheap).

        The question is, though, at what point does it it count to be invalid? If I made a product, and it sits on a shelf for 5 years before it sells, at which point the patent expired, am I infringing? The patents in question were valid when it was manufactured, just it sat in some warehouse for an extended period of time (my warehouse, retailer warehouse, etc). Or what happens if it's the day before the patent expires? Technically it's still patented, but it won't be tomorrow...

        • Re: (Score:3, Interesting)

          by TheLink (130905)
          Does the law also apply to resellers? If it does I can see how this would be good for certain company strategies.

          There are many companies that have no intention of still selling the same product for 3 years and certainly do not intend to be still selling the same product for 20 years. So put a suitable patent number on say an iPhone and voila customers can't even legally resell their old iPhone by the time the new one is out, if you want an iPhone someone has to give it to you for free or you'll have to buy
        • by Hognoxious (631665) on Thursday September 02, 2010 @06:45AM (#33447352) Homepage Journal

          When I hear words and phrases like "simple", "trivial" and "a small matter of" it's usually a good indication that these minor trifles will be done (or paid for) by someone other than the writer.
              -- Henry Ford

      • Re: (Score:3, Insightful)

        by Hognoxious (631665)

        I actually blame the company. Packaging should have an expiry date built-in at a minimum. It's not like this is difficult to do: there are expiry dates on all dairy foods, and for good reason.

        Expiry dates on food are there for a reason; it goes off, and when it goes off it's bad to eat.

        This is not true of ethernet crimpers [uspto.gov], the first thing that came to hand with a patent number on it. They'll still be good in twenty years time.

        Also, expiry dates are not molded on, for reasons that even you can probably wor

    • Re: (Score:3, Insightful)

      by Bacon Bits (926911)

      Who's the troll?

      This is a silly question.

      An IP troll is someone who leverages the power of IP law as a means to turn a profit. IP laws are intended to protect creativity in Arts and foster ingenuity in Science and Engineering. The ideal is to protect and nurture those who seek the betterment of all Humanity through the enrichment of our culture or expansion of our knowledge. Anyone who profits from patents and copyrights solely as a consequence of the laws that back the IP and not because of their own cr

    • Re: (Score:3, Insightful)

      by Dachannien (617929)

      Note that the law only specifies that the penalty is a maximum of $500 per violation, with the government getting half and the relator (a member of the general public suing on behalf of the government) getting the other half.

      It's not really clear whether a "violation" is per product or per some larger unit of production. It's also not clear what the appropriate damages are for these cases. The courts have wide discretion to assign damages between the maximum of $500 per violation and an infinitesimal amou

    • Both sides are evil, and it's the patent system that made things that way. It doesn't have to be like that.

      So wasteful having these endless fights over who is allowed to use an idea, like many kids fighting over 1 toy that could have been copied endlessly. Instead of copying and sharing freely, and giving the inventors a special treat, we've declared sharing a great evil because it allegedly causes the market to break down. We've created a complicated, expensive, and damaging system for managing the fi

  • by eldavojohn (898314) * <.moc.liamg. .ta. .nhojovadle.> on Wednesday September 01, 2010 @10:22PM (#33444862) Journal
    Forest Group, Inc. v. Bon Tool Co. in 2009 paved the way [wordpress.com] (rocket docket Eastern Texas, of course) for big fat jerkfaces to go nuts [law.com]. The AP told citizens it's okay to sue [journalnow.com], hell even on Slashdot I submitted an article way back in Feb of Activision's problems with an incorrectly marked patent [slashdot.org] and because of precedent on incorrect markings we found out in March that this could cost some companies trillions [slashdot.org]. Expired or wrongly marked could cost you $500 per item sold.
    • Re: (Score:3, Insightful)

      by LostCluster (625375) *
      Yep... sell 2 million items with an incorrect patent and you're $1,000,000,000 in debt. Wonder if somebody could catch the business doing that?
      • Re: (Score:3, Insightful)

        by mysidia (191772)

        That's cool... I think i'm going to go to a few stores and see if I can find any products made by BP that have ancient expired patent numbers stamped on them.

        If an expired patent is stamped on a gas pump that pertains to a patent on the fuel formulation, does that count as a separate violation for every gallon of fuel sold? (Evil Grin)

        • does that count as a separate violation for every gallon of fuel sold? (Evil Grin)

          No, in case of BP, that would be a separate violation for each drop of fuel sold...

  • Helpful. (Score:4, Insightful)

    by eggman9713 (714915) <{eggman97132007} {at} {mac.com}> on Wednesday September 01, 2010 @10:23PM (#33444864)
    Why is this a problem? So what if the patent is expired, it still EXISTS. In fact, the patent numbers are helpful because it leads you right to the source that tells you whether its expired or not, and indirectly, how long you have to wait before you can cash in by making a cheap knockoff.
    • Re:Helpful. (Score:5, Insightful)

      by LynnwoodRooster (966895) on Wednesday September 01, 2010 @10:37PM (#33444992) Journal
      Exactly. And - per the reason the patent system was set up - it allows you to more easily find the art to create the invention. You can find the original patent, which is supposed to be enough documentation to teach someone skilled in the art how to build the invention.
    • Re: (Score:3, Insightful)

      Screw that. This is patent lotto. Some company selling a million articles with a wrong or expired patent number and you get to split half a billion bucks with good ol' Uncle Sam! And it only goes up from there!

      Why follow the source, be practical, or go through the work of making a cheap knockoff? This is free money. It's the American way, buddy!

    • I'm pretty sure they can list expired patents on it if they want, as long as they are marked as such. It is somewhat misleading to the public, although you could argue that the concerns are minor. However, the effect it would have on the ecosystem would be that companies are very careful and proactive in correctly labeling patent marking. That's not a particularly horrible scenario IMO.
      • It is somewhat misleading to the public, although you could argue that the concerns are minor. However, the effect it would have on the ecosystem would be that companies are very careful and proactive in correctly labeling patent marking. That's not a particularly horrible scenario IMO.

        Look around, in this climate, what is the incentive to clearly mark your products with patent information at all?

        This is what I just read:
        "Patent marking permits the patent owner to seek monetary damages (in addition to injunctive relief) in a patent infringement action without proof that the infringer had actual notification of the patent."

        I only see more patent trolls in the future because of these shenanigans, with the other side playing patent lottery :\

  • This is not new. Sure, the WSJ article is dated today(/yesterday depending on where you are), but the Solo Cup case they reference is from last year at the most recent and maybe older than that.
  • This should also be extended to copyright and clearly unenforceable license terms: companies should not be allowed to claim "intellectual property" that they don't have the rights to.

  • Imagine if this (stupid IMO) law also applied to copyright: once a copyrighted work expired (e.g., a book), the original owner would have to pay a fine.
    • by ZDRuX (1010435)
      Why SHOULDN'T someone pay a fine if they claim copyright or patent ownership over something they actually don't?! I don't understand.
      • by SharpFang (651121) on Wednesday September 01, 2010 @10:47PM (#33445066) Homepage Journal

        I wonder if the wording was changed. "This product is protected by patents ######### until they expire"

      • by Surt (22457)

        He's (ludicrously) claiming the purveyor would be responsible for subsequent copying, rather than subsequent sales of new items without the claim removed, because (in his ludicrous version of reality) you'd be held responsible for the copies other people made, or the existing, already produced copies with the correct-at-the-time claim in them.

        Yes, it was quite insanely off-base.

  • Anything that exposes the absurdity of our current and antiquated patent law needs to be done.
  • Wildly Overblown (Score:5, Informative)

    by Grond (15515) on Wednesday September 01, 2010 @10:45PM (#33445050) Homepage

    The emerging case law on this kind of action is putting the damper on a lot of get-rich-quick schemes. First, the potential damages are up to $500 per violation. Courts are not handing down massive damage awards; quite the opposite, in fact. It's likely that most of these cases will end up with damages assessed at some fractions of a dollar or even fractions of a cent per violation. $500 per violation is a cap on damages, not a target.

    Second, the courts are setting a fairly high bar for the 'intent to deceive the public' element of false marking. The majority of these cases are the result of typos or failing to retool an assembly line the moment a patent expires.

    • by wvmarle (1070040)

      Don't forget old stock.

      Producer in China makes product, ships it out a week later, another month or so later it arrives in the US, yet another few weeks to arrive on store shelves. That's already at least two months between manufacturing and arrival in the stores (which is exactly why high season for production is Jul-Oct, to make it in time for the Christmas season - ordering is done even earlier). All in all for most products up to a year between design/tooling/mould making and hitting the shelves.

      This

      • Re: (Score:3, Interesting)

        by canajin56 (660655)
        Right, but TFA is talking about expired by 50+ years, not by minutes. If, you make NEW molds and NEW designs that still are labeled with patents that are expired by decades, there's a clear intent to deceive.
        • by Reziac (43301) *

          I disagree, because the consumer doesn't give two shits about patents, expired or otherwise -- why would anyone care if there's an expired patent, or a patent at all, if they're just USING the item?

          And any competitor who DOES care about the patent ... well, having the expired patent number(s) ready to hand makes it that much easier to look up and confirm that it's a dead patent. Think of all the wasted time you're saved, since you won't have to track down all those patents via the vaguaries of the PTO's sea

  • Good (Score:4, Informative)

    by harlows_monkeys (106428) on Wednesday September 01, 2010 @10:45PM (#33445058) Homepage

    As others have noted, incorrect patent marking stifles innovation.

    Letting the public enforce this is efficient. It reminds me of how certain forms of illegal stock trading were discouraged. Certain stockholders are not allowed to engage in something called "short swing trading". If they do, and are caught, they have to give all their profits from the trade to the company. The brilliant way Congress and the SEC came up with to enforce this was to make it so any shareholder can sue on behalf of the corporation. If the shareholder wins (and he always does, because the people who aren't allowed to do these trades are the same set of people that have to report all their trades to the SEC, and so their illegal short swing trades will quickly come to light), the illegal trader has to pay the shareholder's attorney fees. Finally, in the most brilliant part of all, the shareholder only has to be one at the time of filing the suit--not at the time of the illegal trade.

    Net result: law firms get the SEC data, run programs to identify short swing traders, go out and buy one share of stock in the company, and sue.

    To make it worse, profits are calculated in a way that is very unfavorable to the defendant. Suppose you bought stock at 100/share, later sold that all at 90/share, then later bought the same amount at 80/share, and then sold that at 70/share. You've had a net loss of 20/share, right? That's what you bank account reflects--but that's not how the court calculates it. The court finds the lowest you paid and the highest you sold for and matches them. Repeat until as much is matched as possible. So, the court would just look at that 90/share sale and the later 80/share purchase, and order you to pay 10/share to the company. The remaining 100/share purchase and 70/share sale are ignored. So in addition to losing in reality 20/share on your transactions, and having to pay plaintiff's attorney fees, you also have to pay 10/share to the company!

    This has made short swing trading so scary that among those who have to report their trades it virtually stopped shortly after these rules went into effect.

    • by j0nb0y (107699)

      incorrect patent marking stifles innovation.

      How, precisely? You have to look the patent up anyway to see what exactly it covers. When you do, you will surely notice if the patent is expired. Sure, you wasted a couple minutes, but was innovation stifled? I don't think so.

      • If a product has no current patents, you could copy any functionality of said product without having to look anything up.
        • Re: (Score:3, Insightful)

          by Animaether (411575)

          If a product has no current patents, you could copy any functionality of said product without having to look anything up.

          And how, exactly, are you going to know that it has no current patents without looking anything up?

          I have in front of me a DVD case from Amaray (I used it in another comment) that has the patent # in it. I can look that up. Oh hey, it's still valid.

          I also have in front of me a wheeled cutter. It says "patent pending". Well I bought that about 2 years ago.. does that have an active pat

          • And how, exactly, are you going to know that it has no current patents without looking anything up?

            Patent holders are required to mark their wares with their current patents, if they wish to be able to recover damages for infringement.

  • by Anonymous Coward

    Live by the Sword, Die by the Sword.

  • So if you want to protect your shit you just designed, the government encourages you to put a patent number on the device, often formed into the very metal or plastic comprising the casing or body of your thingamajig.

    Then, at some time in the future, when the patent expires, you can't use that mold or casting tool anymore and have to build a new one, because otherwise it's false advertising?

    Even if the mold says "This item is covered by patent #xxxxxxx," isn't it useful for further innovation that anyone ca

    • by king neckbeard (1801738) on Wednesday September 01, 2010 @11:29PM (#33445332)
      Why not make a label saying the patent number and the expiration date of said patent? Then there is no misinformation, all of the benefits of patent marking, and no need to remake molds. Everybody wins
      • by Anonymous Coward on Wednesday September 01, 2010 @11:57PM (#33445514)

        All these suggestions of "print an expiration" miss one thing: utility patents in the US require maintenance payments, so the expiration date is not set in stone; if a company were to produce goods marked with the latest possible expiration date, then through malice, neglect, or simply a change in business plans, fails to pay a maintenance fee? Now you have products explicitly stating an expiration date some years after the patent has gone out of force.

        • That does make things a bit more complex. Maybe have a list of possible expiration dates, or just have patent holders adjust their molds, which likely costs less than the maintenance fees.
        • by Qubit (100461)

          All these suggestions of "print an expiration" miss one thing...expiration date is not set in stone...

          Yet another reason to just print the number by itself. As with most design, K.I.S.S.

    • by mooingyak (720677)

      For example: I just bought a weird kitchen tool at the thrift store the other day and was puzzled as to its precise use until I typed in the patent number on it and found out that it was an ice cube chunker (it works pretty well, too -- no, I'm sorry, I forget the patent # off the top of my head). Had it not had a patent number on it, I'd probably still be trying to squeeze citrus with it or something!

      I'm going to go out on a limb here and propose that this might just possibly be an edge case and that there's a chance most people are aware of the intended use of the product they are buying.

    • by retchdog (1319261)

      the government encourages you... Then, at some time in the future...

      Gee, all that and what do they get in exchange? Merely an absolute state-enforced monopoly for nearly two decades. Woe be unto them.

  • by istartedi (132515) on Wednesday September 01, 2010 @11:26PM (#33445312) Journal

    An expired patent number on a product has positive social benefit. If anything, we should require the manufacturer to continue affixing the patent number to the product for a period after the patent expires. This lets you know how to reproduce the product, which you now have the right to do.

    I don't know about the rest of you, but whenever I see a patent number on something interesting, I think, "OK, I can look that up and see when it expires". If they aren't allowed to keep putting the number there, the answer will always be "sometime in the future" as opposed to "x number of years ago".

    In other words, if they aren't allowed to put the expired number there, it'll be harder to get the good news.

    • Re: (Score:3, Interesting)

      by mysidia (191772)

      An expired patent number on a product has positive social benefit. If anything, we should require the manufacturer to continue affixing the patent number to the product for a period after the patent expires. This lets you know how to reproduce the product, which you now have the right to do.

      Yes. I think the law should be changed, so it's OK to affix an expired patent number, as long as you print the expiration by the number, for example "Pat No 1,234,567. Expires XX/YY/ZZ

      Should not incur a fine, as

      • Re: (Score:3, Insightful)

        by Hognoxious (631665)

        it's OK to affix an expired patent number, as long as you print the expiration by the number, for example "Pat No 1,234,567. Expires XX/YY/ZZ

        Except the laws on validity periods could change during the lifetime of a product.

    • by wvmarle (1070040)

      Often these patents are for just a part of the product - and it's generally easier to figure out how to make it for yourself by looking carefully at the actual product, than to try to learn it from the patents. Patents tend to be quite obfuscated.

  • Better check any patent numbers in those .C files and .H files for expiration.

    I know i've seen patent numbers mentioned in source code before.

    I'm not quite sure how the courts would deal with "possibly unlimited numbers" (of copies distributed), uncounted free downloads.

    Perhaps it could be the first time a patent troll gets an unlimited damage award? "The court finds in favor of the plaintiff. The defendant is hereby order to hand over all their money, worldly possessions, and all money and world

  • Easy, die grinder to the rescue. Sure word will get on and just remove the number from the mold then keep on selling.
  • General Kenobi, Who's the more trollish? The troll, or the troll who follows him?

  • What happens when a company builds a quantity of units with a current patent number, that then sit in a warehouse for a few years before being sold?
    • That would depend on whether the law governs production or sale. Production would make more sense to me, and thus not harm this hypothetical warehouse.
    • Re: (Score:3, Informative)

      by canajin56 (660655)
      Nothing, because the law applies to "making a product that blah blah blah" not "selling a product".
  • Take a photo of the patent number and it gets sent to a server for OCR and analysis against a patent database.
  • In the case of copyrights, the law is supposed to go two ways... first it's protected, then it belongs to the public. The problem is, they keep extending copyright terms.

    In the case of patents, the law is supposed to go two ways... first it's protected, then it belongs to the public. What's the problem? Too many to mention.

    In this instance, I think it should serve as a wake-up call. I see this in ways that are similar to the "Junk Fax Trolls" who use the laws against unsolicited facsimile transmission a

  • While I think the statutory damages here sound excessive, if it really gets to be a problem the legislative branch can easily pass an amended statute correcting that. Meanwhile it does seem to be desirable to have some disincentive in place to prevent manufacturers from claiming the protection of expired patents. A better system might require a company be served with notice to stop claiming the patents, giving them a reasonable amount of time thereafter (30 days?) to correct their manufacturing; any devic

  • So you were granted a patent back in 1492. Regardless of whether that patent is still applicable, why is it wrong to mark products you produce with that patent number? That patent number, while now obsolete, still stands and should be seen as a marketing promotion. When Gore-Tex lost its patent, they still promoted the Gore-Tex name, because hey, while others can now produce goods based on that patent, the Gore-Tex patent says, "hey, we did it first, we sell a product we're more experienced with."

    This is a

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