The Legal Infrastructure of Business: Patent Trolls and Windows 8

Background

?Patent trolls? have been an increasing concern in recent years.? To provide a little background, patent trolls are individuals or companies that generally hold several patents but have no intention of bringing a product to market.? Instead, they seek to opportunistically monetize their patents by suing firms that allegedly infringe on their patents when introducing new products or services.

Patent trolls have been particularly problematic for companies involved with software development, computer applications, and the internet.? A recent study estimated that trolls account for more than 40% of patent lawsuits (up from 20% five years ago), and a disproportionate number of these lawsuits have affected high tech companies.? Further, many cases of trolling have largely gone undocumented.? In many cases, a patent holder will simply threaten legal action and the parties subsequently reach a settlement outside of court.

Windows 8

In the last week, Microsoft was sued regarding certain elements of Windows 8.? Specifically, SurfCast Inc. alleges that Microsoft is using their tile technology in ?Live Tiles? ? a core component of Microsoft?s new operating system that allows users to link directly to applications and websites (see below).?

SurfCast was granted a patent for its technology in 2004, which it claims is a ?system and method for simultaneous display of multiple information sources? using a tile and grid format.? SurfCast outlines what it views as the key differences between traditional computer-based icons and its patented tile format:

"Tiles can be thought of as dynamically updating icons. A Tile is different from an icon because it can be both selectable and live?containing refreshed content that provides a real-time or near-real-time view of the underlying information. Tiles can provide dynamic bookmarking?an at-a-glance view of the current status of the program, file, or content associated with it.? Tiles enable people to have all their content, applications and resources, regardless of whether on their mobile device, tablet, computer or in the Cloud?visualized persistently?dynamically updating.?

In 2011, Microsoft received a patent for its similar Live Tile technology, covering ?tile space user interface for mobile devices.?? Nonetheless, SurfCast alleges that Live Tile directly infringes on its patent, and is seeking monetary damages.

Patent Troll or Rightful Owner?

While this may not seem like a case of patent trolling at face value, it turns out that SurfCast thoroughly fits the mold.? First, the company doesn?t actually offer any products or services despite holding several patents.? As a result, it?s specifically seeking monetary damages rather than an injunction.? Second, when reviewing the company?s website, it?s seems highly probable that the entity exists for the sole purpose of monetizing its patents through litigation.? As we can discern from the screen shot below, SurfCast clearly doesn?t offer any products, and instead seemingly advertises (or even boasts of) its intent to capitalize on its patents.

So what can be done to curb patent trolling?? For one, it could start with inception ? that is, the US Patent and Trademark Office could apply much more stringent approval standards, which could limit trolls from receiving patents in the first place.? As we discussed in class, U.S. appellate judge Richard Posner is a major proponent of this approach.? Another potential solution that some experts have espoused is a law that punishes patent trolls.? Specifically, the statute would require the plaintiff party to pay the defendant?s legal fees if it loses.? While these are possible solutions, they?re certainly not silver bullets, and it?s likely that patent trolling will increase in-line with growth in the high tech industry.

More Information

http://gigaom.com/2012/10/10/study-trolls-account-for-40-percent-of-patent-lawsuits/
http://www.washingtonpost.com/business/technology/maine-company-files-patent-infringement-lawsuit-against-microsoft-over-elements-in-windows-8/2012/11/01/9b1b4c2c-2464-11e2-92f8-7f9c4daf276a_story.html
http://arstechnica.com/tech-policy/2012/10/patent-troll-claims-it-invented-the-windows-8-and-windows-phone-tiles/
http://www.csmonitor.com/Business/Latest-News-Wires/2012/1104/Patents-suit-filed-against-Microsoft-s-Windows-8
http://www.ibtimes.com/windows-8-release-may-stir-legal-troubles-microsoft-surfcast-files-lawsuit-over-tiled-interface

Source: http://picker.typepad.com/legalinfrastructure/2012/11/patent-trolls-and-windows-8.html

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