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SHIELD Act: finally a cure for patent trolling

Anyone in technology has seen how patent trolling has impeded technological innovation, and Congress is making a move to take legitimate action.

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What can be done to stop patent trolling

We have long written about the perils of patent trolling, which is a practice wherein a company files for patents on technologies/inventions they do not plan on ever using, rather sue when someone else “infringes” on their patent. But of course, like no bigot realizes that they’re a bigot, patent trolls do not consider themselves trolls, rather business people.

[pl_blockquote pull=”right” cite=”Boston University”]
“Patent troll suits cost American
technology companies over
$29 billion in 2011 alone.”
[/pl_blockquote]The current American patent system is set up to support trolling, in fact, I would argue that it encourages it, just look at the dockets of courts around the nation (or around East Texas, wink, wink). Last fall, President Obama signed the “America Invests Act” which is divided into three parts – (1) keeping the patent system attractive to global companies by aligning its processes with other countries’ processes, (2) aligning of funding for the U.S. Patent Office with its needs by modifying its fee system, and (3) raising the bar on the quality of the patents so only the most appropriate patent infringement lawsuits are filed. Click here to read the full Act.

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Related:

Infographic on why the current patent system is a problem.
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The President’s “America Invests Act” is not enough

Today, Congressman Peter DeFazio (D-OR) introduced legislation cosponsored by Jason Chaffetz (R-UT) that would protect American tech startups from patent trolls. HR 6245, the SHIELD Act, is a bipartisan effort to put the financial burden on patent trolls, and is already garnering a great deal of support.

“Patent trolls don’t create new technology and they don’t create American jobs,” said Congressman DeFazio in a statement. “They pad their pockets by buying patents on products they didn’t create and then suing the innovators who did the hard work and created the product. These egregious lawsuits hurt American innovation and small technology start ups, and they cost jobs. My legislation would force patent trolls to take financial responsibility for their frivolous lawsuits.”

[pl_blockquote pull=”right” cite=”Congressman Chaffetz”]
“A single lawsuit, which may easily cost
over $1 million if it goes to trial, can
spell the end of a tech startup and the
jobs that it could have created.”
[/pl_blockquote]Chaffetz said, “The SHIELD Act ensures that American tech companies can continue to create jobs, rather than waste resources on fending off frivolous lawsuits. A single lawsuit, which may easily cost over $1 million if it goes to trial, can spell the end of a tech startup and the jobs that it could have created. The tech industry is one of the few bright spots in our economy. It spurs the economy and creates thousands of high-quality jobs. This bill combats the problem of patent trolls by moving to a ‘losers pays’ system for software and hardware patent litigation.”

The Congressmen say the SHIELD Act does not have any impact on innovators with legitimate patent infringement claims and will force patent trolls to pay defendants’ legal bills.

The statement notes that “Patent trolls often buy broad patents that allow them to file flimsy lawsuits against multiple companies for infringement. Despite very thin evidence to back their lawsuits, companies are often forced to settle because going to court can easily cost over $1 million in legal costs even if the company prevails. Patent trolls most often target software and computer hardware companies. According to a recent Boston University study, patent troll suits cost American technology companies over $29 billion in 2011 alone.”

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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5 Comments

5 Comments

  1. Seth Siegler

    August 2, 2012 at 3:46 pm

    That’s a huge step in the right direction.  Raising the stakes in the decision of a troll to sue a company that is actually innovating could really cut down on some of the perils of releasing a product that actually solves problems.  I just wish there would be some sort of complete review of all existing, outlandishly broad patents that were somehow granted.  

    • laniar

      August 2, 2012 at 5:19 pm

       @Seth Siegler Agreed. In my personal opinion, this is just one tiny step – the entire system needs to be overhauled, and not in a cutesy “vote for me, I care about patent trolls” way politicians have been doing for the last year, but tear the whole thing down and rebuild it.

      • Seth Siegler

        August 2, 2012 at 5:42 pm

         @laniar Totally.  The best thing about this is that it’s bipartisan.  I forgot that word existed.  Hopefully it’s a start to fixing the actual problem.  Maybe we can even start making mobile apps in real estate, without getting sued!

  2. Pingback: One year later Guyzar, LLC is still trolling - you're probably next - The American Genius

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5 pending House bills that could break up Big Tech

(TECHNOLOGY) As Big Tech flails about with lobbying, legislators are forging ahead with bills to regulate their mere existence – can you name any of the five pending bills? If not, keep reading.

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The US House of Representatives has its sights set on Big Tech heavy hitters like Facebook, Amazon, Google, and Apple as it considers a group of five bills to tackle these giants in anti-monopoly legislation.

This has good sides and possible down sides. More competition in the market drives prices down. Amazon says if it has to separate out core functions it will make it harder on small businesses who rely on their platforms and could compromise free two-day shipping. It is impossible to predict what changes may or may not come to pass at this stage, but it is clear that change is inevitable. As a leaked document from Facebook in October of 2020 made clear, preparations have been underway for a while.

In late June 2021, the DC federal court threw out two antitrust suits against Facebook.

US District Court Judge James Boasberg needed the suits to answer two critical questions they couldn’t provide sufficient clarity on. What were the two asks the suits couldn’t meet? Define a social network– specific bounds and features outlining the market in consideration. Determine Facebook’s share in said market – the lawsuit cited 60+% percent, but the judge declared their arguments “vague,” which in this instance can be taken to mean insufficient to develop case law.

Also in June 2021, the House Judiciary Committee considered 5 bills and gained nigh unheard of bipartisan backing, outlined below.

You can sign up for updates for legislative actions on each of the bills directly from Congress.gov by clicking each of the headings.

1. Ending Platform Monopolies Act

  • Introduced in the House of Representatives on June 11th, 2021 by Representative Jayapal as House Bill 3825.
  • “To promote competition and economic opportunity in digital markets by eliminating the conflicts of interest that arise from dominant online platforms’ concurrent ownership or control of an online platform and certain other businesses.”
  • This bill would provide definitions for unlawful conflicts of interest, enforcement actions and limitations on board membership and other service by interested individuals.

2. American Choice and Innovation Online Act

  • Introduced in the House of Representatives on June 11th, 2021 by Representative Cicilline as House Bill 3816.
  • “To provide that certain discriminatory conduct by covered platforms shall be unlawful, and for other purposes.”
  • Does “and for other purposes” make your skin crawl a little? Don’t worry, the other section headers include Judicial Review (guidance for judges), Bureau of Digital Markets (creating an oversight entity), Enforcement Guidelines, and Suits By Persons Injured.

3. Platform Competition and Opportunity Act

  • Introduced in the House of Representatives on June 11th, 2021 by Representative Jeffries as House Bill 3826.
  • “To promote competition and economic opportunity in digital markets by establishing that certain acquisitions by dominant online platforms are unlawful.”
  • This bill would outline what constitutes an unlawful acquisition, provide guidance to judges, and define enforcement actions and procedures.

4. Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act

  • Not to be confused with its 2019 predecessor, this bill was introduced in the House of Representatives on June 11th, 2021 by Representative Scanlon as House Bill 3849.
  • “To promote competition, lower entry barriers, and reduce switching costs for consumers and businesses online.”
  • This bill would define what unfair method of competition means, look at portability and interoperability of services, and authorize the establishment of a technical committee to oversee the development and implementation of the Act’s policies.

5. Merger Filing Fee Modernization Act

  • Introduced in the Senate on February 4th, 2021 by Senator Klobuchar as Senate Bill 228.
  • “To promote antitrust enforcement and protect competition through adjusting premerger filing fees, and increasing antitrust enforcement resources.”
  • This bill make it more expensive for corporate mega-mergers to occur and provide funding to the Federal Trade Commission ($418m) and the Antitrust Division of the Department of Justice ($252m).

How these bills will evolve as they move through the legislature is anyone’s guess. Whether any of them will make it to the President’s desk at all is even questionable at this stage. Big Tech is imminently going to see changes in regulation and oversight, as these major players touch all of our lives in some facet or another.

I am going to be keeping a close eye on the progress of this legislation. We’ll keep you posted.

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Tech News

The billionaire nerds’ space race is the launch of a new era

(TECHNOLOGY) As billionaires begin launching their own bodies into space, a new era of tourism is being born, and a plethora of ancillary industries will inevitably follow.

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“I know nothing with any certainty but the sight of stars make me DREAM.” – Vincent Van Gogh

For the entirety of the recorded history of mankind, we have dreamed of the stars. Some ancient cultures used them to tell stories, believing that the turning of time created more. Others developed complicated maps and time tables using their positioning. No matter who you are or where you come from, there is something about those twinkling points of light that strikes a sense of wonder at your heart. Whether it’s a twinkle in the eye or on the horizon, we can’t help but be enveloped by their essence.

Under all the hustle and bustle, a private race has been going on for the last two decades. A couple of billionaires with urgent aspirations have been racing towards one of the next biggest steps for human space travel. Virgin Galactic and Blue Origin both started within a few years of each other back around 2001. Since then, both companies and their founders have been pushing and striving for their goals.

Although culturally, most recognize Elon Musk’s SpaceX as the reigning royalty of private space exploration, after 16 years of research, Virgin Galactic recently reached the next milestone. Founder, Sir Richard Branson, is the first civilian on a commercial space flight – he declared, “We are at the vanguard of a new industry determined to pioneer twenty-first century spacecraft, which will open space to everybody – and change the world for good.”

Virgin Galactic launch: Sir Richard Branson becomes first billionaire in space

Sir Richard Branson made astronautical history on Sunday afternoon by becoming the first billionaire in space.The 70-year-old Virgin Galactic founder lifted …

Now personally, I see this as a severe over-simplification of the next steps for us but we can definitely see the beginning of a new industry taking shape. With both grace and expediency space travel – as tourism – is taking off. There are many possible avenues these companies to take. We can only sit back and watch currently as these titans continue to grow.

On the heels of Virgin Galactic, Blue Origin has just completed their own manned flight with their respective billionaire, Jeff Bezos. Who, in stroke of compassion, has invited the renowned Wally Funk to join him on their inaugural flight.

Blue Origin’s rocket launches to edge of space, carrying Jeff Bezos and crew

CNBC’s “Squawk on the Street” team watches the liftoff of Blue Origin’s historic launch that is carrying Amazon founder Jeff Bezos and his crew.

As we near this new era in travel we have many things to not only be thankful for but also to figure out. This long-awaited moment has now been experienced by the super-rich. Virgin Galactic’s prices were last reported at $250,000 per seat. Other reports for some companies put one of the seats for Blue Origins maiden flight $28 million. Enough money to be thrown around to cover so many things.

We all knew this was going to be expensive.

The price of advancing the human race was always going to be capitalism. Let’s see where the planet’s billionaires take us. Hopefully it’s better for us all as we continue to manifest our dreams amongst the stars.

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Tech News

How blockchain could dramatically improve democracies

(TECH) Blockchain is changing the face of democracy with a magical fix to basically all the problems.

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Despite our best intentions to be active, informed citizens in democratic practices, not everyone has time, figuring out how to be engaged can be confusing, and reps don’t always vote how you want. Plus, confidence in Congress is hilariously/depressingly low with all the scandals and thinly veiled corporate interests.

Well hooray for the future, because now we have blockchain technology to propel us out of the murky waters of representative democracy and into a more efficient liquid democracy.

A liquid democracy platform, also referred to as delegative democracy, has voters select a personal representative as a proxy for their vote. In our current set up, elected representatives vote for things on your behalf, and the best you can do other than running for office yourself is call in and ask them to vote your way.

With a liquid democracy, everyone votes on each piece of legislation.

You can assign a delegate to vote on your behalf by proxy when you’re not available. Personal representatives can be removed and reassigned at any time unlike set terms for elected officials.

The delegate can even select a proxy for their votes, creating a directed network graph, where voters and politicians are connected on a publicly verified blockchain. Anyone can be selected as a delegate as long as they’re a legal resident of your jurisdiction registered to vote.

Quick refresher course: Blockchain is essentially a decentralized digital list of records with timestamps and transaction data information. Each individual record is considered a block, which is cryptographically secured and resistant to modification.

Blocks contain a cryptographic hash of the previous block, creating a chain. Once recorded, data cannot be altered without network majority consent. As an open, peer-to-peer distributed ledger, blockchain is a permanent and efficient way to record transactions.

Used by Satoshi Nakamoto in 2008 for cryptocurrency exchange to create Bitcoin, blockchain has now expanded to the healthcare industry, banking, and now potentially democratic practices.

David Ernst, one of the leaders of the liquid democracy movement, founded United.vote, a platform established to get the ball rolling. The site helps connect voters to personal representatives, and provides a scorecard that tracks how elected politicians’ votes compare to constituents wishes.

“What if instead centralizing authority into the hands of a few strong men, we expanded political power to many, many more voices,” Ernst suggested at the 2017 CyFy conference.

His plan to expand power is liquid democracy via the United.vote platform, which he notes is backwards-compatible with our current system. Ernst is also running as an independent candidate for California Assembly District 19.

He was partially inspired by the Flux Party’s 2016 campaign in Australia, who tried to implement an issue-based direct democracy similar to liquid democracy. Although the party only got 0.15 percent of the vote nationwide, Ernst stands by the idea.

A liquid democracy via blockchain would theoretically increase accountability, participation, and representation.

Through direct participation and personal representation, elections would no longer be necessary.

Instead, voters simply choose someone to represent them, and can select a different person for individual issues. Delegation can be changed at any time, so you’re not stuck with someone if they end up being a total weasel.

So far, only a little over one thousand people have signed up for United.vote, but Ernst stated, “If I got elected, but only 20 people were actually using [the platform], I would still follow those people.”

Although the concept may be ahead of its time (and possibly a wishful Utopian dream), Ernst is confident that these changes can fix democracy.

This editorial was first published here in February 2018.

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