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MattHeaton

Patent trolls attacking small indie developers

25 posts in this topic

The problem is the trolls know the cost/time it takes for someone to get it to court where it can be ruled invalid is huge.  So that's their leverage, it will cost you more to fight it than to simply give in and settle.  Even though they know full well the patent would get blown up at trial.
That's why they are trying to pick on smaller game developers.  They have even less resources at their disposal to fight, so make easy victims.

 
The tactic of going after smaller businesses seems to have become mainstream lately.  Reading many articles about his, such as here, it is even rampant outside of the software industry.  Too me it appears to be nothing more than extortion that is somehow legal.  It's amazing to read about the various tricks (shell companies to hide their interests, playing the courts, etc.) these companies get away with.

 

It appears you did the right thing in not just immediately rolling over, and even better alerting others about the issue, but it seems like only patent law reform is going to help keep this type of thing from happening. There has at least been a lot of talk about reform - not sure about action.

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Free Software Foundation might be a good company to contact. They are most open-source supporters, but they are pro little-guy and against software patents in general and might be willing lend you a lawyer or give you some legal advice. There was also a small game-development law firm in the internet news a half-dozen months ago that was providing free or cheap legal assistance for studios - I don't remember the details though; anyone know who I'm talking about?.

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I just came out of a 3 hour meeting with a patent lawyer on Monday where we were applying for some new patents. After that meeting, I have no freaking clue what goes on in the minds of people who either patent the obvious or patent something that has been done for decades. In our meeting we constantly brought up possible prior art and were careful to ensure we were doing things that aren't currently being done. I just don't understand the arrogant, douchey attitude that one would have to have to completely disregard all of that and then screw over everyone they can.

 

Out of curiosity, do any of the new patent rules affect already granted patents, or do they only affect new patents?

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I just came out of a 3 hour meeting with a patent lawyer on Monday where we were applying for some new patents. After that meeting, I have no freaking clue what goes on in the minds of people who either patent the obvious or patent something that has been done for decades. In our meeting we constantly brought up possible prior art and were careful to ensure we were doing things that aren't currently being done. I just don't understand the arrogant, douchey attitude that one would have to have to completely disregard all of that and then screw over everyone they can.

 

Out of curiosity, do any of the new patent rules affect already granted patents, or do they only affect new patents?

 

The problem is that since trivial patents get granted frequently it is in any companys best interest to file for patents on every single little thing their products do or might do in the future, if you don't get those patents a competitor or patent troll might get them and use them against you, many of the companies that do this have no intention of ever using those patents to harm competitors but their patents sometimes find their way into the hands of patent trolls through bankrupcies and mergers anyway (and thats when those patents become really dangerous)

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We small guys are so easy targets...  

We can't afford the lawyers, and don't have time with it anyhow, so its very easy for these guys to intimidate us into paying their "licence fee".

 

In my mind, these guys are nothing short of "legal gangsters", their whole business idea is pressuring people for money, using various intimidation techniques.

 

Very sad.

 

It's also strange this couldn't be stopped. Most of these guys just buy up patents they know they can use to pressure people, they don't produce squat themselves.

You shouldn't be allowed to sit on patents. You should be mandated to use them, and they should expire...

 

That should dampen these shady guys a bit.

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And if you want to get annoyed, or learn more about it, you can listen to When Patents Attack. Doesn't give much advice though.

 

The US Patent office didn't want software to be patentable... but were supposedly leaned on by congress, and so now they just allow almost anything software-wise to be patented, without even checking if it had been previously patented or overly obvious. This explains why there are so many companies that have almost identical patents.

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Free Software Foundation might be a good company to contact. They are most open-source supporters, but they are pro little-guy and against software patents in general and might be willing lend you a lawyer or give you some legal advice. There was also a small game-development law firm in the internet news a half-dozen months ago that was providing free or cheap legal assistance for studios - I don't remember the details though; anyone know who I'm talking about?.

 

Pubpat (Public Patent Foundation) is providing support against some other trolls going after app developers.  I've contacted them about this now troll, threatening game developers.  So far I know of 6 other small game developers who received threats of litigation from Treehouse over this patent.  I can only assume the real number is at least 10x that.

Edited by mattheaton
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Use their own weapons against them.

 

Avatar is a registered trademark in the USA, owned for various classes by various companies.

 

Among others, IC 009. US 021 023 026 036 038. G & S: Computer software for the generation of web based computer programs and instruction manuals / IC 042. US 100 101. G & S: Business technology software consultation services are owned by iRise CORPORATION CALIFORNIA.

 

It may be worth pointing iRise corp to the derogatory and damaging use of their trade mark by a "computer programs" and "software consultation services" type of company. It doesn't cost you more than a letter.

 

Love it! smile.png  

Edited by mattheaton
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Man, this sucks. There is too much patent Yakuza crap and litigation going on these days. It seems that it is the new form of Cyber-bullying.

 

It is the worst feeling opening up one of those letters, though. I got my first one in the mail in March - LOL.

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Your country sound wonderful guys, but there is a thing I don't understand, if these patent can't stand in front of a tribunal, why do you care anyway, why not just ignore the letter, and if they start a procedure, they will have to pay for it and you'll just have to defend yourself. Why would you need to start a procedure (and pay) to break the patent before any legal action from the troll ?

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and if they start a procedure, they will have to pay for it and you'll just have to defend yourself.
Because you have to pay to defend yourself. Even if you win, you probably won't be refunded for that.

And the system is broken, so they'll probably win too :/

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and if they start a procedure, they will have to pay for it and you'll just have to defend yourself.
Because you have to pay to defend yourself. Even if you win, you probably won't be refunded for that.

And the system is broken, so they'll probably win too :/

 

 

 

Not to mention all the time you have to spend not developing your game, instead spending it talking to lawyers, sitting on planes to travel to whatever place they decide to sue you, the mental stress, etc, etc.

 

It doesn't matter what country you live in, if you sell your product in the US (and who doesn't with digital content in english?), they can sue you in an american court.

Edited by Olof Hedman
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It doesn't matter what country you live in, if you sell your product in the US (and who doesn't with digital content in english?), they can sue you in an american court.

 

 

Good luck with them dragging you from your home country to America, just to go to court.  ;)

 

I don't think that would happen...

 

Sure, if you choose to visit the US in the future, it might be an issue.

Edited by lonewolff
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It doesn't matter what country you live in, if you sell your product in the US (and who doesn't with digital content in english?), they can sue you in an american court.

 
Good luck with them dragging you from your home country to America, just to go to court.  ;)
 
I don't think that would happen...
 
Sure, if you choose to visit the US in the future, it might be an issue.

You don't have to be there for the case to go ahead, and for an injunction against you andyour product to be granted inside the US. It's not a "criminal" case, where they want to drag you there so they can punish you, it's a "civil" case where the other party wants to get their hands on your money.
 
Visa, Mastercard, Paypal, Steam: many of the companies that move money from your customers to you, exist in the US, which means your supply of money can be cut off, or redirected to this other party.

If you don't sell your game to American customers, and don't use any American middlemen, then it's not a problem... but almost everyone uses American finance, and the American market is one of the biggest for selling games... Edited by Hodgman
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This is an issue for me, lucky I didn't do anything or else I might get threats, I am an indie mmorpg dev and due to this I might not ever release my project. Hopefully someone eventually tales them to court and has the patent claimed ambiguous. I am not risking anything.
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If you don't sell your game to American customers, and don't use any American middlemen, then it's not a problem... but almost everyone uses American finance, and the American market is one of the biggest for selling games...

I wonder if this cannot be worked around with subsidiaries, though. Obviously it isn't all trivial to do, or everybody would be doing it...

But, as a quick brainstorming, what does this sound like? You sell your licenses in bulk to a reseller (which you own, too). Reseller sells to US customers.
Say, you're selling licenses in quantities of 1,000 for 49,989.99 currency, and reseller sells them for 49,99 each. Note the "8" in there.

Thus, reseller makes 1¢ gross profit per 1,000 licenses. Which is important because otherwise the tax office will shut you down after two years.
Of course, you have at least one employee to "manage" the transactions (yourself) who is being paid a small salary. Which means there's not much tax left to pay for the subsidiary at the end of the day.)

Now, whom can a patent troll sue? You don't do business with anyone in the US, and the entity that does has no money. In fact, it's probably possible to turn it around such that they have a debt with your main company (I'm not very versatile in accounting, but I am sure this is possible!).

So, yeah, they can sue that subsidiary, but even if they get a title they will only be the second creditor in line. Creditors are always served in first-come order (anyone who tried sueing a company already being liquidated has learned this lesson), so there is nothing to gain from sueing the subsidiary. No money, Sir.

 

Indeed, running this subsidiary as consignment sale entity should just about give you what's needed. But a "real" reseller may be more advantageous because in this case you would "sell" the licenses to the reseller subsidiary (which consequently owns them, but in return owes you money). When the reseller has sold the licenses, you get the money from it. If someone successfully sues the reseller subsidiary, it still owes you the money.

Of course, the payment is due immediately, when the goods are handed over. Seller and buyer agree that buyer is at default of payment if this does not happen (it never happens in time, of course, that's the idea), but seller will not demand interest for... say, 60 days. Or however long it usually takes to sell the licenses. That means that the subsidiary is basically always at default, and any money that comes in is already owed to the main company before it is even received.

 

So, the only thing that the patent troll can arguably seize are the licenses since there is no money to be had (but even so, actually even licenses could only be seized after you, the first creditor, have been served, which means few to none remain). Which is however no problem in any case -- let them have the licenses -- since your terms of service to which the subsidiary has of course agreed say "no money back on bulk orders, never, not ever", so they cannot be converted back to cash. Also, licenses may only be sold by authorized resellers, which you clearly state in your terms of service.

 

Thus, any end user tempted to buy a license from the patent troll knows that the license is invalid according to the ToS. In fact, the licenses that the subsidiary buys from you might as well be explicit "not for sale in the US" licenses (of course, you do have "for sale in US" licenses as well, but for some strange reason none of your resellers ever buys them!).

Thing is, only because you explicitly forbid your reseller selling those licenses in the USA doesn't mean you have to act immediately (or at all) when they do it. And it doesn't mean you even have to know (or have a way of knowing). Yes, the reseller is breaching the contract by doing so, which technically renders the sale, and thus the licenses, invalid.

 

Of course, as long as money keeps coming in, you have no reason to complain. But as long as a single license from a batch was sold in the USA (and sure enough, you do know that!), you have a valid reason to withdraw and ask back all goods. Because, hey, they broke the contract.

 

Unluckily, with a license code, it's not really possible to give back the "good" as it's just a number, so instead you can legitimately invalidate/blacklist the whole batch (or any subset of it). Which means of course, you can also blacklist each and every license code that a patent troll might successfully seize.

 

And yeah, you can leave the ones that legitimate customers bought legitimately from your subsidiary. Because, you know, you don't have an obligation to enforce your rights (a clever tax accountant might even be able to write the "lost" licenses off as loss although you got money for them...).

 

Hahaha... and to top it off, open that subsidiary as anonymous foundation run by a lawyer firm in Vaduz, and owned by a company in Gibraltar... laugh.png

Edited by samoth
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