Just had some time to think through the Paul Allen vs. the World
lawsuit and the things said by the posse about it.

First things first: When carl (or was it someone else?) said that a
patent troll cannot claim damages, Joe corrected him. To paint a more
complete picture, that _exact_ line of reasoning was used repeatedly
by microsoft against i4i, in the case where they lost massive amounts
of money (the patent in question was about custom XML in documents of
some sort): They claimed i4i LP wasn't selling anything that used this
patent, and thus there were no damages.

The judge got so tired of the microsoft legal team's continuing use of
this argument after being repeatedly instructed it held no legal
merit, that they were held in contempt and fined $40 million in
addition to the eventual massive payday for the suit itself. How's
that for clear legal precedent that you don't have to have a product?

Also interesting to note i4i filed this case in *EAST TEXAS*, which is
why I and a few others have been so adamant that Oracle v. Google is
more complicated than oracle just fishing for a big check. If you want
money, you file there. They didn't.

Note that the waters are a bit muddier than this; the company suing
was i4i LP, a holding firm which held a patent created by i4i itself,
and i4i DID have a real product, which was a microsoft office addon
called "x4o". This structure, where a holding company owns most of the
assets but doesn't actually engage in any contracts, is extremely
common and every company larger than your cornershop grocery store is
set up that way. Nevertheless, it clearly shows that patent trolling
is legal. Reading the underlying case, i4i even had a real "moral"
reason to sue microsoft: They were communicating rather a lot and
basically engaged in a business deal, and microsoft stabbed them in
the back by making their module obsolete with a new release of office.
The moral right is irrelevant though: The stick they were beating
microsoft with, the stick oracle is now beating google with, and the
stick Paul Allen is beating the rest of the world with, is quite
indiscriminate. If oracle wins this case, they can easily sue firefox
too. It *IS* an attack on open source, because of that. If Paul Allen
wins, well, he can pretty much force your grandmother to pay him
licensing fees, so, yeah, nuclear option indeed.

Joe's idea of allowing the patenting of an idea ONLY by companies that
actually have a product exploting it, even if you managed to sidestep
the holding v. working company issue (i.e. by forcing the holding
companies to donate their patent portfolio to the working company),
isn't going to work. A patent troll will simply start selling, I
dunno, the snow they shovelled off of their lawn last winter, with one-
click, or with suggestions for alternate products. All hell is going
to break loose if a courtroom is going to have to decide if the
application of a patent is just taking the piss out of the legal
system or is an honest but miserably uneconomical attempt at real
business. The "real product" is most likely going to be as silly as
possible, as the patent troll firm wants to ensure they don't run
afoul of anyone elses patents.

This comes back to my central idea that while the theory behind patent
law is sound, its simply not possible to make it practical: No amount
of reform is going to lead to a system that will do more good than it
does harm, at least not for software patents, unless you regale the
idea of software patents only to ensuring things like: The *exact*
look of let's say the iPhone main menu can't be ripped off, but even a
minor variation on it will be fair play. I don't have conclusive proof
of this, only that I've been able to riddle with holes any idea
anyone's ever mentioned for patent reform so far.

A seemingly more fair way to attempt to enforce this "must use in a
product" rule, is to disallow licensing. Now a patent troll company is
forced to compete in the market place, though with monopoly rights on
the idea they just patented. I'm betting this is going to have a
disastrous effect on competition, though! Its also rather complicated
to attempt to enforce such a rule: The patent troll company can create
a trivially simple library that purports to do something they
patented, and naturally in order to allow a company to sell tools and
libraries to other companies, you must be able to sell the right not
to be sued together with your library. Now just make the "library"
ridiculous and you're in the same boat: A court of law has to judge if
the library they are selling, and the price they are selling it at, is
just an attempt to sail around the "no licensing" law, or is an honest
attempt at real business. No way this is going to work right, if the
USPTO can't even see that Paul Allen's ability to offer you a
different product because its related is clearly invalid due to prior
art.

Prior art, you say? Oh, yeah. He's patented the idea of telling a
customer about a different product for sale that is likely of interest
to this customer based on the stuff he's just selected to buy. I'm
saying there's prior art. I'm sure this was around well before he
patented it:

"One hamburger. Right, would you like fries with that?"*

*) Credits for this insight go to groklaw.

More: http://www.groklaw.net/article.php?story=20100829012006847

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