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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.
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.
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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?
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?
Phil White, President, ECC Technologies, Inc.
Phil White, President, ECC Technologies, Inc.
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.
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.
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?
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.
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.
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?
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.
Software patents also have a nasty habit of being vague... very vague.
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.
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.
Software patents also have a nasty habit of being vague... very vague.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
That goes against the entire spirit of the patent clause (one can read the debate in the federalist papers).
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.
Shoe sure seems to fit here.
P
- Patent troll definition
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by InfiniPete
July 10, 2006 11:36 AM PDT
- 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.
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Reply to this comment
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- agreed but...
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by df561
July 10, 2006 11:43 AM PDT
- the term "Patent Troll" is too generous...they are far worse.
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Showing 1 of 2 pages (54 Comments)That goes against the entire spirit of the patent clause (one can read the debate in the federalist papers).
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.
Shoe sure seems to fit here.
P