Newsmaker: Have patent, will sue

Paul Ryan runs what is by most definitions a patent powerhouse--and a controversial one, at that.

As CEO of Acacia Technologies, Ryan is in the business of acquiring and enforcing patents. With the increasing proliferation of Internet technologies, Acacia has rung up the register. Over the years Acacia has patented proprietary its digital media transmission technology to a veritable Who's Who of blue-chip tech companies in the streaming media business. It also has patented a technology that lets parents filter television broadcasts according to ratings criteria.

The company's profit potential has helped propel Acacia shares close to their 52-week high, this in an otherwise ragged stock market.

But Acacia's activities have inevitably raised hackles in some quarters of the technology business. The Electronic Frontier Foundation, for instance, has lampooned Acacia on its Web site for "crimes against the public domain" because of what the Internet rights organization terms "laughably broad patents."

No doubt the company has acquired a reputation for hardball tactics, ultimately settling lawsuits against more than 200 companies to protect patents that it says it owns. Ryan, who dismisses suggestions that Acacia is simply in business to extort fees from other companies, recently spoke with CNET News.com.

We ran a profile on your company about a year ago and the lead paragraph was something to the effect that in the streaming media business, a letter from Acacia usually means one thing: the threat of a patent lawsuit. Does it bother you that Acacia has earned that sort of reputation?
Ryan: Well, that's not our reputation among large companies. We recently did three licenses with IBM, three with Sony, we announced one with Intel, and with Lenovo. So, we are licensing the major companies in the world. Patented technologies that we have partnered with the small companies that have developed these patented technologies but simply don't have the scale or the expertise or experience to go out and license the patents themselves. So, we're an outsource patent licensing company. We have the same people in place that IBM's licensing department would--except we're available on an outsource basis, and we're serving a large need for those companies.

I think the patent system has worked pretty well for 200 years.

Would it fair to say that Acacia builds portfolios in order to later extract settlements from others?
Ryan: No. Actually companies come to us who have patented technologies but who simply do not have the scale or the experience to license themselves, and they engage us basically on a partnership basis. We go out and perform that function and split the revenues with them. So, we're not targeting any particular areas, it's the companies that come to us with their patented technologies and if we feel that there's significant opportunity for licensing for that company to generate revenues for them, then we will become their partner.

Pardon me, but there are those who believe that there are entities--they call them patent trolls. This is used as a derogatory adjective, but I'm sure you're familiar with the term.
Ryan: Sure, absolutely.

Do you think those entities exist?
Ryan: Well, there are various definitions. I think it's a little bit disingenuous for companies that, in effect, steal other people's property by not licensing it to then call the party that developed the technology, "the bad guy." It kind of turns the world upside down...The term has been widely disseminated and used against companies generically that own patented technologies, which I think is a little unfair.

You guys are a patent licensing company. I've lost count, you've got currently how many patents now?
Ryan: It's over 150. There's a total of 47 different patent portfolios, and we've begun generating revenues from 17 of those so far.

More Newsmakers

[Sentinel]

What Technology?

This guy is talking about small companies who develop technologies which are licensed to big companies. What technology? If we are talking about patents, we are talking about concepts, not "developed technology", somebody's idea, not someone's invention. A true invention requires that something actually be... invented, not just dreamed about. "A way of transmitting data over the air" is not really a technology, not until it actually exists (note: this does exist, I only use it as an example). <br /><br />It is normal for a patent troll like this one to claim that they are not doing anything wrong and that, in fact, they are helping to the growth of the industry. And, according to the courts, they are. Now, the news only cover the high-profile patent cases involving big companies which can afford to pay millions in fines and millions more in licensing fees. So from the perspective of someone who only reads the news, one can say, "OK, but the companies who infringe another's patent can actually afford to pay licenses, so they must be made to pay". I'm all for that. But what about the smaller companies, which the news don't cover? An inside knowledge of the court system's cases would be necessary in order to know how many patent cases are actually processed by the courts. So, who knows how many cases actually happen that are, indeed, unfair. Say a small company develops a technology, I mean, really develop it, not just the concept. But they lack the resources for a thorough patent search to investigate whether a patent for their technology already exists. They are sued and need to go out of business. Now, the patent troll claims that he is right, and that the other guy is evil, when in reality, they were just ignorant about the patent. A legitimate business, gone out of business just because someone patented a dream. Tell me, Mr. Patent Man, how many cases like this have you handled?

[Sentinel]

What Technology?

This guy is talking about small companies who develop technologies which are licensed to big companies. What technology? If we are talking about patents, we are talking about concepts, not "developed technology", somebody's idea, not someone's invention. A true invention requires that something actually be... invented, not just dreamed about. "A way of transmitting data over the air" is not really a technology, not until it actually exists (note: this does exist, I only use it as an example). <br /><br />It is normal for a patent troll like this one to claim that they are not doing anything wrong and that, in fact, they are helping to the growth of the industry. And, according to the courts, they are. Now, the news only cover the high-profile patent cases involving big companies which can afford to pay millions in fines and millions more in licensing fees. So from the perspective of someone who only reads the news, one can say, "OK, but the companies who infringe another's patent can actually afford to pay licenses, so they must be made to pay". I'm all for that. But what about the smaller companies, which the news don't cover? An inside knowledge of the court system's cases would be necessary in order to know how many patent cases are actually processed by the courts. So, who knows how many cases actually happen that are, indeed, unfair. Say a small company develops a technology, I mean, really develop it, not just the concept. But they lack the resources for a thorough patent search to investigate whether a patent for their technology already exists. They are sued and need to go out of business. Now, the patent troll claims that he is right, and that the other guy is evil, when in reality, they were just ignorant about the patent. A legitimate business, gone out of business just because someone patented a dream. Tell me, Mr. Patent Man, how many cases like this have you handled?

[df561]

how dare they compare themselves to Thomas Edison

I'm sick to my stomach.

[df561]

how dare they compare themselves to Thomas Edison

I'm sick to my stomach.

[cohaver]

Pantent Reform is needed

Patent Reform is needed. Romans thought they made everything to. History bares the mark of these stupid men. I own the wheel and all ways to use it the caveman was to stupid to file the paperwork at the patent office but i sold him the hammer to make the wheel

[cohaver]

Pantent Reform is needed

Patent Reform is needed. Romans thought they made everything to. History bares the mark of these stupid men. I own the wheel and all ways to use it the caveman was to stupid to file the paperwork at the patent office but i sold him the hammer to make the wheel

My Experience with Acacia Technologies

ECC Technologies, Inc. (ECC Tek) www.ecctek.com contacted Acacia Technologies to see if Acacia would help us license our advanced error correction (ECC) designs and US Patent Number 5,754,563. Acacia only wanted to know one thing -- Is your patent currently being infringed? Since I do not know of any current infringers, they had no interest in helping ECC Tek license our advanced ECC designs and patent. You can draw your own conclusions from that experience, but I was not left with a very positive impression of their true intentions.<br /><br />Phil White, President, ECC Technologies, Inc.

[baswwe]

infringing

I'll start infringing to help U out.

My Experience with Acacia Technologies

ECC Technologies, Inc. (ECC Tek) www.ecctek.com contacted Acacia Technologies to see if Acacia would help us license our advanced error correction (ECC) designs and US Patent Number 5,754,563. Acacia only wanted to know one thing -- Is your patent currently being infringed? Since I do not know of any current infringers, they had no interest in helping ECC Tek license our advanced ECC designs and patent. You can draw your own conclusions from that experience, but I was not left with a very positive impression of their true intentions.<br /><br />Phil White, President, ECC Technologies, Inc.

[baswwe]

infringing

I'll start infringing to help U out.

[WJeansonne]

Finally, Someone Said It!

It's the open source socialists who decry patents or intellectual property in general, since it's their deep seated philosophy that no one should own private property. That no one should profit from the fruits of their labor or invention. It's audacious to say the least, especially in America!

[enovikoff]

Open Source Socialists

The point of open source is collaboration, not the elimination of personal property that your destitution-focused mind is afraid of. <br /><br />Think about it: open-source was created by programmers. What do programmers want? They want to be able to develop software that works and meets people's needs. If you've ever worked in a big company writing software, you know that the reason the company does things are obscure and often not related to either producing good quality software or software the user wants.<br /><br />The open source people got together because they discovered how to solve this problem. Perhaps you're confused between open source and pirates? Or maybe you're in Paul's pay? You certainly can't work here in Silicon Valley, your ideas would be laughed out of town here.<br /><br />In case you think I'm not speaking the truth, try downloading Open Office, and compare it to Microsoft's software. Reliable, better functionality, free, interoperable... what is there to complain about? What is the fear?

[stmon99]

profiting from patents

The issue isn't that people should not profit from their inventions. Of course they should. The problem is that the patent office is granting ridiculous patents. If you sent in an application describing a two digit method of wiping your anus, I bet you they'd grant a patent for that.

[Thomas, David]

You've lost your mind.

eom

[operativem]

Open Source Socialists? I Think Not.

Your comment compares open source proponents to socialists. I think you might want to go back to college and learn how to construct a non-fallacious argument. People who espouse open source technology represent a spectrum of political and social idealogies. Using unfounded generalizations to paint an unflattering picture of your "opponents" really doesn't advance your position and only makes your comments look ignorant. It is a fact that many software patents are approved by patent examiners without domain specific expertise. As a result, many software patents are granted even when the technology is obvious or when stacks of prior art are in existence. If you spend any time examining software patents, you'll notice numerous patents where prior art [which really means prior discovery] should have been grounds enough to deny the patent application. The current patent system is easily abused. People such as myself who dislike software patents are simply opposed to this abuse. Especially because software patent abuse hurts the free market. Before you accuse open source proponents of socialism, perhaps you should spend a few minutes thinking about the day when the "free market" is completely carved up and walled off by government-issued patents. Or think about how broad software patents often stifle innovation, competition, and promote the weakest ideas to the top of the food chain. That sounds a lot more like socialism than than what you describe.

[operativem]

Open Source Socialists? I Think Not.

Your comment compares open source proponents to socialists. I think you might want to go back to college and learn how to construct a non-fallacious argument. People who espouse open source technology represent a spectrum of political and social idealogies. Using unfounded generalizations to paint an unflattering picture of your "opponents" really doesn't advance your position and only makes your comments look ignorant. It is a fact that many software patents are approved by patent examiners without domain specific expertise. As a result, many software patents are granted even when the technology is obvious or when stacks of prior art are in existence. If you spend any time examining software patents, you'll notice numerous patents where prior art [which really means prior discovery] should have been grounds enough to deny the patent application. The current patent system is easily abused. People such as myself who dislike software patents are simply opposed to this abuse. Especially because software patent abuse hurts the free market. Before you accuse open source proponents of socialism, perhaps you should spend a few minutes thinking about the day when the "free market" is completely carved up and walled off by government-issued patents. Or think about how broad software patents often stifle innovation, decrease competition, and promote the weakest ideas to the top of the food chain. That sounds a lot more like socialism than what you describe.

[WJeansonne]

Finally, Someone Said It!

It's the open source socialists who decry patents or intellectual property in general, since it's their deep seated philosophy that no one should own private property. That no one should profit from the fruits of their labor or invention. It's audacious to say the least, especially in America!

[enovikoff]

Open Source Socialists

The point of open source is collaboration, not the elimination of personal property that your destitution-focused mind is afraid of. <br /><br />Think about it: open-source was created by programmers. What do programmers want? They want to be able to develop software that works and meets people's needs. If you've ever worked in a big company writing software, you know that the reason the company does things are obscure and often not related to either producing good quality software or software the user wants.<br /><br />The open source people got together because they discovered how to solve this problem. Perhaps you're confused between open source and pirates? Or maybe you're in Paul's pay? You certainly can't work here in Silicon Valley, your ideas would be laughed out of town here.<br /><br />In case you think I'm not speaking the truth, try downloading Open Office, and compare it to Microsoft's software. Reliable, better functionality, free, interoperable... what is there to complain about? What is the fear?

[stmon99]

profiting from patents

The issue isn't that people should not profit from their inventions. Of course they should. The problem is that the patent office is granting ridiculous patents. If you sent in an application describing a two digit method of wiping your anus, I bet you they'd grant a patent for that.

[Thomas, David]

You've lost your mind.

eom

[operativem]

Open Source Socialists? I Think Not.

Your comment compares open source proponents to socialists. I think you might want to go back to college and learn how to construct a non-fallacious argument. People who espouse open source technology represent a spectrum of political and social idealogies. Using unfounded generalizations to paint an unflattering picture of your "opponents" really doesn't advance your position and only makes your comments look ignorant. It is a fact that many software patents are approved by patent examiners without domain specific expertise. As a result, many software patents are granted even when the technology is obvious or when stacks of prior art are in existence. If you spend any time examining software patents, you'll notice numerous patents where prior art [which really means prior discovery] should have been grounds enough to deny the patent application. The current patent system is easily abused. People such as myself who dislike software patents are simply opposed to this abuse. Especially because software patent abuse hurts the free market. Before you accuse open source proponents of socialism, perhaps you should spend a few minutes thinking about the day when the "free market" is completely carved up and walled off by government-issued patents. Or think about how broad software patents often stifle innovation, competition, and promote the weakest ideas to the top of the food chain. That sounds a lot more like socialism than than what you describe.

[operativem]

Open Source Socialists? I Think Not.

Your comment compares open source proponents to socialists. I think you might want to go back to college and learn how to construct a non-fallacious argument. People who espouse open source technology represent a spectrum of political and social idealogies. Using unfounded generalizations to paint an unflattering picture of your "opponents" really doesn't advance your position and only makes your comments look ignorant. It is a fact that many software patents are approved by patent examiners without domain specific expertise. As a result, many software patents are granted even when the technology is obvious or when stacks of prior art are in existence. If you spend any time examining software patents, you'll notice numerous patents where prior art [which really means prior discovery] should have been grounds enough to deny the patent application. The current patent system is easily abused. People such as myself who dislike software patents are simply opposed to this abuse. Especially because software patent abuse hurts the free market. Before you accuse open source proponents of socialism, perhaps you should spend a few minutes thinking about the day when the "free market" is completely carved up and walled off by government-issued patents. Or think about how broad software patents often stifle innovation, decrease competition, and promote the weakest ideas to the top of the food chain. That sounds a lot more like socialism than what you describe.

[baswwe]

So what they own alot of patents?

Quit infringing on them and they'll go away.

[Penguinisto]

Not that easy...

Patent trolls (not to be confused with valid patent holders) actively try to patent things that are either obvious, or have obscure but existing prior art attached to them. Other trolls will take an existing non-computer process, tack on '...on the Internet', then claim it to be a valid new patent. <br /><br />They then sit on the things until someone else does the hard work and actually puts a similar concept to use and to market. Then, they sue - basically getting/extorting income w/o doing any of the hard work.<br /><br />Software patents also have a nasty habit of being vague... very vague.<br /><br />For the un-ignorant, patent law with regards to software is a mess. Software patents should have never come to existence IMHO - software has sufficient legal protection in copyright, and shows that at least someone was willing to do the work - not just dream something up then lie in wait for someone else to do all the hard work.

[baswwe]

So what they own alot of patents?

Quit infringing on them and they'll go away.

[Penguinisto]

Not that easy...

Patent trolls (not to be confused with valid patent holders) actively try to patent things that are either obvious, or have obscure but existing prior art attached to them. Other trolls will take an existing non-computer process, tack on '...on the Internet', then claim it to be a valid new patent. <br /><br />They then sit on the things until someone else does the hard work and actually puts a similar concept to use and to market. Then, they sue - basically getting/extorting income w/o doing any of the hard work.<br /><br />Software patents also have a nasty habit of being vague... very vague.<br /><br />For the un-ignorant, patent law with regards to software is a mess. Software patents should have never come to existence IMHO - software has sufficient legal protection in copyright, and shows that at least someone was willing to do the work - not just dream something up then lie in wait for someone else to do all the hard work.

[enovikoff]

Is there Truth in what this man says?

This interview reminded me of interviews with members of the Bush administration. When trying to defend the undefendable, create a rational-sounding argument that puts the people speaking truth on the defensive by painting them as the cause of the problem! The woman who called patent reform advocates "socialists" caps this trend perfectly, making it look like a conspiracy either because she's in his employ or because she's been brainwashed by his synthetic truth.<br /><br />In my profession, distinguishing the truth of people's statements is critical. Paul Ryan's statements have a coercive, smug, I've-got-all-the-answers ring to them that I've found always means the person is hiding something obvious, usually at great personal gain to themselves.<br /><br />The truth is that this man is like a leech on our society, supported by outdated laws. All the money that his team of lawyers extracts goes nowhere, producing nothing, just trophy homes. Instead startup anfter startup is forced out of business, costing jobs and throwing away ideas that could have been the next Great Thing. Here in Silicon Valley, I've seen countless examples of companies destroyed by patent trolls such as Rambus and Acacia.

[drfrost]

What Rambus did was different...

Rambus sat in on the standards committees helping form the specifications for the next memory standard, all the while violating the agreement they signed when they joined those committees and filing patents to cover that future technology. It was unethical. It was wrong. It's one example of how our current system is broken.<br /><br />Shyster lawyers trying to enforce "laughably broad patents" are another example of how this system is broken. The guiding idea behind what is patentable is simple: it has to be original, innovative and nonobvious. The litmus test is simple: if it's obvious to someone reasonably skilled in the art, it's not patentable. Lawyers love to argue over each of those terms, and who qualifies as "reasonably skilled" but the truth is that the patent system which was intended to foster and protect innovation has actually become a tool to stifle it. While there are instances where it works, over 90% of the patents I've read in my area of expertise are absolute garbage. They're either laughably broad or obviously covered by prior art. Unfortunately, that doesn't keep lawyers from trying to defend them, and in some cases succeeding.

[enovikoff]

Is there Truth in what this man says?

This interview reminded me of interviews with members of the Bush administration. When trying to defend the undefendable, create a rational-sounding argument that puts the people speaking truth on the defensive by painting them as the cause of the problem! The woman who called patent reform advocates "socialists" caps this trend perfectly, making it look like a conspiracy either because she's in his employ or because she's been brainwashed by his synthetic truth.<br /><br />In my profession, distinguishing the truth of people's statements is critical. Paul Ryan's statements have a coercive, smug, I've-got-all-the-answers ring to them that I've found always means the person is hiding something obvious, usually at great personal gain to themselves.<br /><br />The truth is that this man is like a leech on our society, supported by outdated laws. All the money that his team of lawyers extracts goes nowhere, producing nothing, just trophy homes. Instead startup anfter startup is forced out of business, costing jobs and throwing away ideas that could have been the next Great Thing. Here in Silicon Valley, I've seen countless examples of companies destroyed by patent trolls such as Rambus and Acacia.

[drfrost]

What Rambus did was different...

Rambus sat in on the standards committees helping form the specifications for the next memory standard, all the while violating the agreement they signed when they joined those committees and filing patents to cover that future technology. It was unethical. It was wrong. It's one example of how our current system is broken.<br /><br />Shyster lawyers trying to enforce "laughably broad patents" are another example of how this system is broken. The guiding idea behind what is patentable is simple: it has to be original, innovative and nonobvious. The litmus test is simple: if it's obvious to someone reasonably skilled in the art, it's not patentable. Lawyers love to argue over each of those terms, and who qualifies as "reasonably skilled" but the truth is that the patent system which was intended to foster and protect innovation has actually become a tool to stifle it. While there are instances where it works, over 90% of the patents I've read in my area of expertise are absolute garbage. They're either laughably broad or obviously covered by prior art. Unfortunately, that doesn't keep lawyers from trying to defend them, and in some cases succeeding.

[Far-L]

My company was sued by Acacia

We were one of the first companies sued for their so-called "DMT" patents. Already they have had one of their claims destroyed as invalid and I believe the subsequent claims will tumble soon thereafter. Acacia's Rob Berman once described my industry, I am in adult media, as the "low hanging fruit" and also declared that Acacia just "wanted to dip their beak". (Remember that line in Godfather II?)<br /><br />Why CNet continues to do these fluff pieces that don't address Acacia's trouncing on the V-chip or their woes dealing with our ongoing litigation is beyond me.

[Far-L]

My company was sued by Acacia

We were one of the first companies sued for their so-called "DMT" patents. Already they have had one of their claims destroyed as invalid and I believe the subsequent claims will tumble soon thereafter. Acacia's Rob Berman once described my industry, I am in adult media, as the "low hanging fruit" and also declared that Acacia just "wanted to dip their beak". (Remember that line in Godfather II?)<br /><br />Why CNet continues to do these fluff pieces that don't address Acacia's trouncing on the V-chip or their woes dealing with our ongoing litigation is beyond me.

[Far-L]

My company was sued by Acacia

We were one of the first companies sued for their so-called "DMT" patents. Already they have had one of their claims destroyed as invalid and I believe the subsequent claims will tumble soon thereafter. Acacia's Rob Berman once described my industry, I am in adult media as an owner of Homegrown Video, as the "low hanging fruit" and also declared that Acacia just "wanted to dip their beak". (Remember that line in Godfather II?)<br /><br />Why CNet continues to do these fluff pieces that don't address Acacia's trouncing on the V-chip or their woes dealing with our ongoing litigation is beyond me.

[Far-L]

My company was sued by Acacia

We were one of the first companies sued for their so-called "DMT" patents. Already they have had one of their claims destroyed as invalid and I believe the subsequent claims will tumble soon thereafter. Acacia's Rob Berman once described my industry, I am in adult media as an owner of Homegrown Video, as the "low hanging fruit" and also declared that Acacia just "wanted to dip their beak". (Remember that line in Godfather II?)<br /><br />Why CNet continues to do these fluff pieces that don't address Acacia's trouncing on the V-chip or their woes dealing with our ongoing litigation is beyond me.

[InfiniPete]

Patent troll definition

This is somewhat contentious, but my definition includes a company that buys patents and who have *no intention of making anything embodying the patent*, but merely use it for licensing.<br /><br />That goes against the entire spirit of the patent clause (one can read the debate in the federalist papers).<br /><br />If you merely buy patents to get a revenue stream but never make, or intend to make, anything, then in my book you are a patent troll.<br /><br />Shoe sure seems to fit here.<br /><br />P

[df561]

agreed but...

the term "Patent Troll" is too generous...they are far worse.

[InfiniPete]

Patent troll definition

This is somewhat contentious, but my definition includes a company that buys patents and who have *no intention of making anything embodying the patent*, but merely use it for licensing.<br /><br />That goes against the entire spirit of the patent clause (one can read the debate in the federalist papers).<br /><br />If you merely buy patents to get a revenue stream but never make, or intend to make, anything, then in my book you are a patent troll.<br /><br />Shoe sure seems to fit here.<br /><br />P

[df561]

agreed but...

the term "Patent Troll" is too generous...they are far worse.