A moot point in USA courts
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| Author | Content |
|---|---|
| Ridcully May 05, 2011 5:46 PM EDT |
I find this item on Groklaw amazing. In the first place 129 claims by Oracle have been rejected out of hand and there is a further ruling that they cannot be raised again apparently due to prior art. Even the last remaining three claims are apparently seen as shaky. In fact to quote PJ: "The judge even asks the parties to tell him if they anticipate that a trial will end up being moot." I looked up the word "moot" as apparently used here and found it has a very peculiar meaning specific to USA jurisprudence (I hope I have that phrasing right and hopefully dinotrac will illuminate here), and it seems to be: Subject to debate; arguable: a moot question. 1. Law. Without legal significance, through having been previously decided or settled. 2. Of no practical importance; irrelevant. This becomes even more amazing since it suggests to my "non-legal mind" that the remaining three claims are likely to have been settled by discussion before they even get to the courts - again probably because prior art will pop up. My take is that Android's use of Dalvik seems to be on fairly firm ground, but I may have a misinterpretation. My biggest hope is that at last USA legal minds are beginning to wake up to the fact that patents on software should not be permitted - and on this site at least, I don't have to explain that statement. |
| tuxchick May 05, 2011 8:26 PM EDT |
Dare we hope for a smidge of sanity? Maybe! |
| dinotrac May 05, 2011 11:27 PM EDT |
American courts are restricted to deciding actual cases are controversies. All of those great legal principles we see in court decisions come from the application of principles to real honest-to-gosh cases and not hypothetical harms. So, a case that addresses nothing is not a case that a court can hear. |
| JaseP May 06, 2011 9:50 AM EDT |
Quoting: My take is that Android's use of Dalvik seems to be on fairly firm ground, but I may have a misinterpretation. The main thing is that the Judge is forcing Oracle to reduce the redundant & red herring claims. It's common for a plaintiff to file a complaint that throws everything, including the kitchen sink, into the mix. The Judge just wants this to look sane to a potential jury. If the Judge is wrong in doing it, it's reversible error (grounds for an appeal). |
| Koriel May 07, 2011 5:03 PM EDT |
That Kitchen Sink(tm) is mine both patent and trademark, no way are they throwing it in, they could always throw in the Towel(tm) as I dont have that one in my arsenal :) |
| hkwint May 07, 2011 7:11 PM EDT |
What I'm still wondering is this: Microsoft has 17 600 patents. Just looked it up at USPTO using "AN/Microsoft". Typical software patents have about 30 claims each, so maybe there's 500 000 claims. I'm using Microsoft as an example, because the only two companies having more US patents (Samsung and IBM), are not solely 'software companies' - so not all their patents pertain to software. But Microsoft's patents - I'm pretty sure 90%+ of them are software ones. This also goes for Oracle, Novell et. all. patents. OK, let's use the number of 500 000 and do some 'probability calculation'. I'm not that good at it, but please bear with me: -There's the number of claims, -There's the chance of a claim being enforceable, separate values for 'chance of being enforceable during settling / licensing negotiations" and "enforceable in court". -There's the size of the 'scope' of the claim; how large is the 'intellectual region' the claim covers, -There's the popularity of the 'scope' of the claim; how many companies are doing "about the same thing" and how much money do they earn while doing so, -How difficult is it to evade / circumvent the claim -How many companies (relative value) did already license the patent (and therefore the claim). Now, taking the claims, one can calculate the value of the total patent portfolio by taking the 'dot product'. That's one by one the claims multiplied by the factors mentioned, then adding all separate claim values. I suggest (though I'm not sure), the value of the patent portfolio is somewhere in the books / on the balance. I'm no accountant though, but I think it works that way. Because it's on the balance, I'm pretty sure it's also part of the 'total market capitalization', as the investors on the stock-market expects the 'imaginative value of the patent portfolio' as given in the balance to exist in reality too. Now, suppose for a court, 129 of 132 software patent claims were turned down; just because the judge said "It's too much work". Of course it's unsure how representative those numbers are to the total set of software patents, but again I think one could use probability calculation here. Now, if I were an accountant, I'd say the worth of most software patents portfolios just declined. 39 out of 40 software claims may be rejected in court (well, not rejected, but not "tolerated to be discussed"), but let's be friendly to the IP-advocates and suppose because this case is not that representative, it's only 20 out of 40. Then, half of the assumed patent portfolio cannot be enforced in court. Which means, half of the value of the patent portfolio doesn't exist - and in fact never has. If the stock-market works like it ought too, I think this diminish in the value of the companies as a result to half the patent portfolio becoming worthless, is supposed to show through in the 'total market capitalization'. Simply said, that means shares Oracle ought to become significantly cheaper. Except for they didn't, only a tiny amount. So maybe the patent portfolio is not an important share of the "total market cap" of a company. But on the other hand, IP is all some "just-moved-over-their-top-" litigation companies (think Nokia, Microsoft,Apple) have to defend their "market leadership". So if patents are not an important part of market capitalization, then probably NOK, MSFT and AAPL are overvalued on the markets; because they can't make money by way of "competing with real products" these days. Maybe on the other hand patent portfolio is an important share of the 'total market cap'. But then, the diminishing of the patent portfolio because of this judging have not been processed in the stock prices of said shares, so in such a case there's a "patent bubble" in the market cap of IT-companies, and again this means shares are overvalued. So it doesn't matter if patents are an important part of the total market cap or not; whatever of the two it must mean stock prices of IT-companies are overvalued. The only way out is if another (higher) judge decides otherwise in an appeal about the 132 claims. Such would probably mean the case is going to take multiple years. But remember, these are only 8 patents! So 8 patents would take - let's say 2 years - to enforce by means of appealing. But MS has 17600 patents, which means it could only use like say 25 patents at a time when proceeding, because otherwise litigation would take such an amount of time it wouldn't make sense. Which means most of the 17600 patents would probably never be enforced - due to a lack of time / capacity in the courts, so are "not enforceable for court" either. Which would also mean the IT-companies are overvalued. So no matter which ones of the three, there's a "patent-value-bubble" in IT-stocks (assuming IT-companies have sw-patents). And said bubble might bust some day! It ought too, because I calculated the top 10 largest pharma-companies together only have around 25 000 US patents (using my own numbers). I haven't read many pharma-patents, though I'm pretty sure with pharma-patents it's probably pretty easy to decide if some 'competitor' infringes on a patent or not; given the right experts. For the abstract yada-yada language as found in software patents however, it's probably much harder to test. So, Microsoft has a software-patent portfolio about the same order of magnitude in size as the pharma-top10! Now take into account the vague abstract yada-yada language of the patents which makes it hard to understand / judge about them, and remember the lack of capacity in courts. Then I think most of the patents wouldn't / shouldn't be enforceable in court at all. To expect otherwise would be sheer madness; and only done by those who like futile debates in the 'art-pour-l'art' way: Legal discussion for the sake of legal discussion; paying lawyers which would otherwise be unemployed. So, if lots of claims are moot, then I think lots of the 'market cap' of IT-companies is also 'moot', which means 'irrelevant'. Only the market doesn't know yet, and lots of "financial beagles" (the sell-side) have merits in the market not understanding lots of the market cap - thus share value - is moot. |
| hkwint May 07, 2011 7:46 PM EDT |
OK, just found my own answer in Oracle's 10-K from 31 May 2010: 'Intangible assets - not related to support contracts etc' is in the books for about $6B. "Total assets" is in the books for $60B. BTW: Market cap is about $178B, just in case anyone wondered. Nonetheless, I think the "intangible assets" mentioned, is "copyright and patents" lumped up. Not trademarks - as that's a category on its own. I don't have the faintest idea about the "ratio copyright/patent value" though. But say it's 3 billion or so. Out of 60 billion, that's not that much eventually. Probably, my hypothesis is false: if 1/20th of a company's value is IP, but the patents-part of the IP is the only thing a company has to "defend" itself against competitors taking over the market, then the patents are probably undervalued. And if - in such a case - the patents are not enforceable in real life, than most of the companies assets have just gone out the window. Not sure if it goes for Oracle, probably not as they still sell a lot; and a big share of their assets is "software contracts". But it might go in the (near?) future for companies like Apple and Microsoft, and it did go in the (near?) past for SCO. |
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