(IV), a company that was initially founded on the premise of acting as a against opportunistic patent litigation, is now routinely labelled as a , has been branded “” and most recently has for its . IV as a company that is developing a “more efficient and dynamic invention economy” by buying and building inventions then supplying those inventions to innovative companies through licensing and other partnerships. They believe that creating this “active market for invention and ideas” will encourage innovation and “energize technological progress”.
IV convinced early investors that their “Patent Defense Fund” would act as “troll repellent” against malevolent outsiders, who otherwise would go out and buy up cheap patents only to turn around and file lawsuits alleging infringement. By building up their own hoard of patents, IV persuaded companies they could protect themselves by preventing patent trolls from getting their hands on patents. Companies that invested in IV would also be given access to IV’s entire patent portfolio which they could use to defend themselves. To dismiss fears that IV itself would become a “”, Nathan Myhrvold, the CEO and co-founder of IV, has said he is and that “”.

This aversion to patent litigation appears to have lifted in late 2010 when IV used its “defensive” patent portfolio to file three separate lawsuits in relation to , and . IV has also been accused of “patent trolling” by using closely connected third party non-practicing entities to do their patent infringement litigation for them. In a recent expose titled “”, National Public Radio (NPR) looked into IV’s claim they “encourage innovation by ensuring that investors get paid”. When asked for an example, IV cited an inventor named Chris Crawford who had a great idea but was unable to profit from it. IV eventually stepped into the picture and bought his patent. It turns out that IV subsequently sold the patent to another company called Oasis Research in July 2010 who immediately used it to a random collection of high tech companies. NPR was able to locate a court document which listed IV as entity who had a financial interest in Oasis. NPR learned from Peter Detkin, a co-founder of IV, that IV likely has a “back-end arrangement” with Oasis whereby patents were likely sold to Oasis for a certain amount of money up front, but then IV would receive a share of any royalties that are generated from the patents or get a cut from any damages awarded from its lawsuits.

IV’s most recent lawsuit against Motorola Mobility involves six patents relating to Google’s Android operating system.  This comes shortly after Google that it would be acquiring Motorola Mobility and its patent portfolio, in a move largely seen as a means to help Google and its partners . Adding to the intrigue is the fact that Google was an early investor in IV and actually helped them accumulate one of the in the world. Google’s investment in IV would naturally appear to immunize the recently purchased Motorola from this sort of legal action; however, incredulously it appears that Google only acquired licenses to certain patents owned by IV, but not the patents owned by Intellectual Ventures 1, LLC or Intellectual Ventures II, LLC, the actual plaintiffs in the lawsuit.

Intellectual Ventures that it first approached Motorola about licensing its patent portfolio in January of 2011 and despite good faith efforts to negotiate was unable to arrange a licensing deal on reasonable terms. It is interesting to note that five of the six patents named in the suit were only acquired by IV in the (US Patent Nos. 7,120,462, 6,557,054 and 6,658,464 were acquired in September and Patent Nos.  7,810,144 and 7,409,450 were acquired in July). IV claims in the suit that they are the exclusive licensee of Patent No. 6,412,953 and is the assignee of all causes of action but it is unclear when they acquired these rights. IV states that they discussed “several” of the patents asserted against Motorola in the complaint over the next “several” months. However, the complaint does not specify which of the patents in the complaint were under discussion or at what time they came into the discussion. The ambiguity involved and the timing of when the patents were acquired opens up the fear that by refusing to license IV’s patent portfolio and accept their protection you risk the possibility that IV may then use their patent portfolio against you.

However, before condemning Intellectual Ventures, one must ask whether they are actually abusing the patent system or simply exploiting good patents and rewarding inventors. It must be first noted that there is no “use” requirement in patent law, akin to that found in . Patents do not confer positive rights to make, use or exploit the invention but rather the patent holder gets the right, for a defined period of time, to exclude others from making use of the invention without the consent of the patentee.

Without IV, many small inventors or entities may otherwise not be able to amass the necessary resources to pursue litigation or have the leverage to negotiate fair licensing agreements with much larger companies that are making use of their ideas. By matching patent owners with licensees, IV and similar companies help inventors monetize their inventions, creating a further incentive to innovate. One real life example is that of Richard Reisman. He is the inventor of two of the patents (US Pat Nos. 6,557,054 and 6,658,464) involved in the Motorola suit who sold his patents for which provided him with resources to develop further inventions.

The post Intellectual Ventures: World’s Largest Patent Troll Or Patent Dealer Building Global Market For Invention? appeared first on IPOsgoode.

In a , the Federal Court of Australia upheld a that found that, while it is not reasonable to force Internet Service Providers (ISPs) to act as “ ” or face liability for , they do have an important role to play in protecting copyrighted works by to prevent their subscribers from engaging in copyright infringement.

The ruling concerned a lawsuit between a group of large movie studios and , one of Australia’s largest ISPs. The studios, represented by the Australian Federation Against Copyright Theft (), claimed that iiNet was liable for authorizing copyright infringement by failing to act on the information which showed iiNet subscribers to be sharing copyrighted movies on peer-to-peer networks. iiNet refused to forward infringement notices to their subscribers that were sent to them in bulk by AFACT or to cut off alleged repeat infringers from the internet and instead suggested that AFACT “promptly direct its allegations to the appropriate authorities”.

The majority of the appeal court agreed with the trial judge that iiNet was not liable for infringement for refusing to act on the notices as a “[m]ere assertion by an entity such as AFACT, with whatever particulars of the assertion that may be provided, would not, of itself, constitute unequivocal and cogent evidence of doing of acts of infringement”.

The Court did, however, find that it would be reasonable to implement a graduated response system to prevent copyright infringement if the ISP has been provided with unequivocal proof of infringement along with an explanation of how the data was collected and a “statement verifying the accuracy of the data and the reliability of the methods used to collect it”. The type of graduated response system envisioned would involve the ISP forwarding the allegations of infringement to their customers, allowing the customer to respond to the allegation and either refute the claim or give assurances that they will refrain from committing further infringements. If the customer fails to respond within a reasonable time, the ISP would then warn the customer that their service will be suspended until a response is received. The ISP would also take steps to prevent repeated acts of copyright infringement by warning the customer that their service may be suspended or terminated in the event of further infringements.

While the ruling was a victory for iiNet in the specific circumstances of the case, the chief Judge made it clear that under different circumstances “iiNet might in the future be held to have authorized primary acts of infringement on the part of users”. This is because Australia’s current includes liability for authorizing copyright infringement. When determining whether a person, or ISP, has authorized infringement the provision states that the Court should analyze the power of the ISP to prevent the act, the relationship between the ISP and the infringer, and whether the ISP took reasonable steps to prevent or avoid the act of infringement.

In an effort to distance ISPs from liability and promote an alternative model for policing copyright infringement, iiNet recently released a paper entitled . In their paper they outline a strategy of implementing an “impartial referee, for resolution of disputes between the parties and the issue of penalties to offenders” as shown in the diagram below:

source:

While there has been on the responsibility of ISPs, Canada’s current is ambiguous on many issues related to ISP liability. The now dead Bill C-32 had been proposed in part to . Canada’s largest ISPs currently employ a voluntary system of forwarding copyright infringement notices to their customers. The customer’s personal information is kept confidential and their internet service is not threatened to be cut off. Bill C-32 aimed to make this system mandatory and to also require ISPs to retain records of the notification for use in any subsequent litigation. However, and argue that this type of notice-and-notice system is likely to be ineffective in changing people’s behaviour or preventing copyright infringement. Perhaps Canada can reflect on the lessons being learned in Australia while drafting Bill C-32’s successor after the third in a row .

The post Australia’s Federal Court rules ISPs must help prevent Copyright Infringement appeared first on IPOsgoode.