That is a tough call. I personally feel like I can do business with people who I don't really like. I mean, I could see myself walking away from people that I absolutely HATE, but there's a lot of room for wiggle there.
The only thing I would insist on is that everythign be well documented. If someone asks me to change my methods in a way that does not jive, then I have a problem.
@calebkraft You are a better person than I am because I find it difficult to work with people I don't like. That hasn't stopped me from working with them, because hey sometimes there isn't any choice, but I'm not a happy camper. If I felt someone was asking me to do something unethical or against my values, then absolutely, I would walk away.
I think if you have to ask yourself "is it wrong?" you pretty much already know it is. I had a wise US Government teacher who pointed out that everything the Robber Barons did in terms of company stores, monopolies, etc. was legal at the time, but completely, heinously morally wrong. Many and most of the business practices became regulated over time but not before they reaped massive wealth from it to the detriment of millions of people—lending greatly to the Great Depression. IMHO patent trolls are little about protecting inventors and more about greed and extortion...stymying innovation to the benefit of humanity. Hopefully patent reform will come soon addressing many of the morally corrupt issues Rick points out related to Patent Trolls. Until those regulations are passed, I think you have to look inside yourself and make the call if you want to actively encourage this morally corrupt facet of the electronics business to simply pay the bills.
I am not sure I believe it is that clear cut. If the legal company were employed by the company who owned the patent to sue infringers, who would question if that is wrong. If we argue that, then we arguing the value of the whole patent system and I am going to be morally guided by the industry in that respect. Now, the difference in the two cases is who is taking on the risk. In the first case it is originating company who pay the lawyers to do their bidding and if successful take any spoils. In the case of the NPE, the originating company gets a fixed amount no matter if the NPE wins or loses. The NPE pays its own costs and takes the risk.
Note, that I decided before I did any work that this was not a non-ethical troll who would target unsuspecting companies with baseless claims and extort money out of them. I believe that to be morally wrong. They wanted me to assess the liklihood that certain company products infridged on particular patents.
IMHO I think the big difference for me is one thing that Rick points out: Did the "patent holder" actually try to create a technology or product with it (make a real effort) or did they just acquire a portfolio of patents (related or unrelated) and are now turning that into a business. Years ago, I attended an EDAC event for emerging companies and there were two guest speakers. The first was an attorney encouraging EDA startups to use their patent portfolios as "an alternate stream of revenue" and to "patent in the path of innovation." The second speaker was an insurance broker who sold companies insurance policies to protect companies from folks like the first speaker. It was surreal and optimizes the absurdity of patent trolls (and the insurance companies, infrastructure and entire townships) that are built supporting this type of patent litigation.
So Mike, if a company decides that they will not continue to build product in a certain area (assume they have in the past), should they be forced to give up their patent right, to give up their rights to sue companies that infringe. If they had people licensing those patents, must they stop collecting royalties from them. If they do decide to litigate or continue to receive license fees, they are a NPE in that field and by your assertion, they are wrong.
I'm referring to Patent Trolls, which by my definition are NOT companies staffed largely with engineers, technicians, specialists, etc. all working together creating products and in doing so building a legitimate patent portfolio to protect trade secrets and a competitive advantage for x number of years.
To me, Patent Trolls are those organizations that state that at one point in time in the past they tried to productize a product; however, now their business consists of buying portfolios of patents and suing companies that they claim infringe upon those patents—drawing primary revenue from damages plus royalties. Typically these companies consist mostly of lawyers, paralegals, legal assistants and throw in an engineer or two to check infringing technology and serve as experts. They'll often try to hire industry experts and personalities (fulltime or otherwise) to bring the appearance of ethics to what they do.
Dealing with even the threat of a suit is just a waste of money for legitimate companies, and can kill small ones, IMHO. That's not to say that there aren't legitimate patent suits out there. It is not to say don't be an expert witness in patent suits. I think folks need to be mindful of who they are being an expert for and that they hopefully they are doing it for the just reason rather than simply $$$$. The spirit of the patent system is to protect the little guy or gal genius inventor from the big, bad corporation stealing a patent. That spirit has been corrupted, IMHO. I saw it when I was a reporter and it continues today.
You mentioned the "trolls" lawyer did not want a report. By hiring you for any amount, you can not be hired by anyone else on this case. They will sometimes hire multiple experts just to ensure they cannot be hired later by whomever they are suing.
Was the agreement ahead of time that the work would not be documented? I wasn't in that position, so I can't say for sure. My inclination would be to insist beforehand that my report be in writing and receipt acknowledged. Perhaps the patent troll would go away and leave me alone, if I stipulated this ahead of time?
Where I work, the ethics code reads very clearly that even the appearance of impropriety should be avoided. That makes sense to me.
BTW, I was also an consultant for a company unassociated with my job, for a certain amount of time. All on the up-and-up, but it made me uncomfortable because of the potential for "conflict of interest" issues coming up. Even though, during my period with them, this never did come up, I thought it best to end that relationship. There's always the potential for something that I might not have thought would be viewed as "conflict of interest," that someone else might think it was. So if I didn't disclose this, and it came to light somehow, then there would be this appearance of impropriety. They did pay me for these consultations, but honestly, so what?
@Bert - no there was no contract, no statement of work or anything up front. It was all very informal and only when I said that I was about to write my report did they tell me that they wanted nothing in writing. With that said, I have also been involved with the legal departments of large corporations that have also resisted having work in progress reported. I can understand this because a case I was involved in many years ago attempted to exploit that I had an incorrect knowledge of some technology during the early parts of my work in that area and had used terms in a lose manner. All of that came up in the hearings and I guess I wished I had never written some of it down - at least until I was certain of what I was saying.
Brian: First, I think you acted completely ethically in the case described. You were hired to do a job, you did it, and the customer got its answer. If they don't like that answer, they can hire someone else and "shop" for a version they like.
Second, though I don't like patent trolls, current law doesn't bar their activities and they can hire who they wish. When they do, I think that party has an ethical responsibility to tell the truth -- something often lacking in business today. So I though it would be unethical to tweak the facts to deliver a particular outcome.
What do other readers think of patent trolling? Should it be legal? If it were illegal, would that be an enforecable law? Do you think the trolls should be required to report ALL assessments if they bring an action against a company? Or should they be free to pick and choose the ones most favorable to their case?
I've done a fair amount of coverage on patents, patent law, NPEs, infringement suits and strategies to handle them. There are enough ethical issues in this area to write a few books and lots of grey zones.
Clearly you got lucky in not being asked to analyze a patent that might have cost big bucks for a lot of well meaning companies with good products.
The larger question to me is:
Is it ethical to sue infringing products when you make no product?
Is it ethical to extract significant monetary damages if you cannot prove the infringer was aware of the patent?
Given the plethora of patents filed every year and the quality of patents that somehow sqweak through the system (note Brian's many funny stotries on this score) is it ethical to extract significant damages at all?
Let's keep a dialog going on patent issues, Brian.
If a lawyer were acting on behalf of a company to bring about a suit, we would probably have less issues with it. Sure, as Rick points out, we can argue about the merits of the patent system anyways and it should make a difference if it were willful versus accidental. I would hope that in the latter case a settlement would be possible but then comanies can be nasty about these things. Now, if the lawyer is not employed by the company but is taking a cut of any gain, do we start to have issues with it at that point? Do we have a problem with the owning company selling a patent to another company? If not then why do we object to selling it to a NPE?
I always think of doctors when i am in dilemma about such situations. Doctors take oath to save the life of a patient no matter what category he/she belongs to or the past history. So, as an engineer the most important task is to do the work deligently and honestly.
@wilber_xbox- I'm with you. But I think there are hard decisions sometimes. We all, or ost of us, want to be eithical and honest in our professional lives, but sometimes the line gets blurry. All we can do is trust our gut.
The reason why the patent system was started was to protect inventions from being misued or copied by others without giving the inventors their due. Also it helps others in the field to understand the state of art to foster innovations. We should look at all the patent transactions from that angle.
The question asked can be then replied in this way. Will the orignial inventor be protected by selling the invention to a NPE: the answer is more complicated. Remember we have to protect the innovators. This will include the engineers/scientists and the company or individual who funds the innovation. So if the intent of the company that created the patent sells the patents with the intention of just causing disruption in the field then it is not very ethical to sell the patent. But if a innovator sells the patent to raise capital for furthering his innovations then it may be acceptable provided he has some assurance that the NPE may not abuse the enforcement of the patent. Now I understand that this assurance is hard to quantify, hard to get and harder to enforce. So this is a more complex issue.
What I am concerned here is that the NPE which are not in the field where the patent is being granted (this is the reason why Brian Bailey was consulted in the first place) will sue companies who are bringing in products in the market whereas these trolls and the companies that do not use these patents do not provide any service in the marketplace. They will then ask for unreasonable fees which will make the product unviable or in some cases shut the product and company down. This I think unfair trade practices and in some cases similar to what the arguments are in Anti Trust. Only thing is that the aggressor does not have a market share but does not want any one else to establish a market in the first place.
We need some reform here to protect innovations and innovators and ways to protect the entities that bring meaningful products to consumers.
I think more emphasis on proof of reduction to practise would be most beneficial. The removal of that requirement while a good housekeeping move, to prevent the patent office being filled with boxes and other junk, has a downside.
One of the problems with the present system is a small inventor can think up some marginal idea get a patent without providing any proof that it works or is practical. They can then set about conning VCs or threatening large companies who will sign licensing deals, sometimes with down payments, especially if the latter have in-house work underway in the same area. Even sell the patent on to others.
To implement this just keep in touch with the technical literature and wrap your patent in the latest buzz words and you can have a company with revenue based on licensing. The way round this is to get two witnesses who under oath have to swear they have seen the claimed invention reduced to practise.
An interesting case of a struggle between maintaining integrity and making a buck. Most of us have to deal with this at some point in our careers. It's never an easy call. For instance, do you continue to manufacture digital pocket scales when you realize their main use is in pushing street drugs? Issues like that seem to be everywhere.
You are very adamant about this (use of capital letters).
But it is not clear in this case that the lawyer and the potential IP acquirer he represented had done anything wrong.
And the boundaries are grey. What is the difference between a NPE and a troll; between a NPE and an engineering company? Does engineering work down earlier this year count even though the effort is discontinued?
Many companies retain IP portfolios in areas where they are non-practicising even though they do engineering in other areas. Practising companies often want to create patent pools held by third-party non-practising entities to enable them to draw down their value and prevent unlicensed use of technology, and so on.
You are saying don't feed trolls, but it seems it is not the companies that are to blame but the patent/legal system.
While ever that is structured the way it is you will have company's that own and make money out of patents in a manner that is independent of, and allowed to be independent of, whether they make products.
I think Brian made it clear in his article that what the troll is doing is morally wrong, not legally wrong. He also identified the difference between an NPE and a troll - as he put it, the troll buys a patent with intention to sue. The troll is never the inventor, the inventor is never a troll Apparantly the patent system is open to this type of abuse. The trolls thrive on questionable patents which are settled out of court and would never survive re-examination, so the ideal solution is to devise a cheaper method of invalidating weak patents. Unfortunately, the USPTO have done the oppostie and raised the cost of filing an ex-parte re-examination.
I think Brian's point was that if a potential acquirer went on to delibrately sue small non-infringing companies that could not afford to defend themselves that would be morally wrong.
And doubt that any respectable person would want to get involved with such a scheme.
Other cases are questionable but not clearly morally wrong.
Basing judgments on intentions is always difficult. When you are dealing with companies well ahead of potential infringement lawsuits it is almost impossible to know what the intentions of company executives are -- or will be,
I agree Peter, we should not feed the trolls. On the other hand, we need to fix the system instead of just not liking how it works. I was disapointed in the Patent law fix proposals but do not know what should be done to fix a clearly brocken system. I want the original creator/inventer to own their work, AND not have to spend many dollars fighting off Trolls and/or larger corportations to protect their IP. It seems to me that there needs to be some sort of review of challenges to patents done by an impartail 3rd party (How about the Patent Office). Sort of that we will continue to see money harvesting being done to extract money via lawsuits or the threat of lawsuits.
Bear in mind that patents are granted in the name of individuals who nearly always assign them to a corporate entity. They do so because it usually a condition of employment that everything somebody invents in the course of their work MUST be assigned to the employer.
So in a way company's are "buying" patents with their salary checks ...and they only do so on the basis that may use those patents to protect their economic interest, in other words sue.
So by some people's definition of patent troll you could argue that ALL companies are patent trolls.
The biggest problem that I see is that patents are issued (at great expense) far too easily and it is then left to a confrontational legal system (at great expense) to argue over which ones are valid, which ones are infringed, and which ones should never have been issued.
It all makes work for the working lawyer to do.
Perhaps if there was a limit to the number of patents that could be issued in a year and companies had to bid to obtain the right to try and patent something.
That would limit the number of patents and the bidding process would mean only the most useful/valuable ones would get granted.
Peter, I must confess a little concern over the bidding process for patents. It is an interesting idea but we should not be limiting the number of patents in a year or for that matter the number to a company or indivigual. That would only stifle creativety and leave open the possible loss of revenue if a competetor were to gain a patent just because you had used up your quota. I would like to see a patent office review process that really determines what is valid or may be patented, rather than the current approach of patent it then we will find out if it is patenable through lawsuits. Again, I feel the problem is with the patent office not the patent holders or others. There needs to be a higher level of determination prior to a patent being awarded.
Robotics Developer: We actually had/have a system in which patents are reviewed by the patent office and awarded on merit, but it falls short of the need. With humans involved, there are always inconsistencies on was this really worthwhile? Was it truly unprecedented? Do the PTO really understand the gizmo in question? I don't really have an answer to that one. (Maybe we need an inventor!)
But all that is separate from the issue of trolls. How about this: patents can only belong to invidividuals. That way, they move with the person who can let an employer use it, or not. And companies that exist purely to trade in patents may not own them, so it eliminates the issue of companies formed to buy patents and litigate them.
If an individual troll decided it wanted to go after an individual, they would have to do it as another individual, which screws up that whole business process.
Would that be an improvement? I think, if nothing else, it would empower (and enrichen) those who came up with the concept.
Except that when you work for a company, that company owns the result of your work and thus any patents that result from it. This is only right because they have paid you for the time you spend thinking about it, possibly prototyping it, etc. And what happens when multiple people are involved in the invention?
Brian said "I would also add that if the inventing company is not producing product that uses it after, let's say 3 years, the patent becomes public domain."
I have long felt that the 20 year monopoly given to a patent -- a monopoly that follows the patent from one assignee to the next -- is one of the biggest problems with the system.
Instead, how about a system in which transfer of assignment of a patent immediately reduces the remaining life of the monopoly? The original inventor or assignee (usually the inventor's employer) gets the full 20 years, but upon sale of the rights, the new assignee gets either 3 years or the remaining life on the original 20 years, whichever is less -- unless the new assignee is a NPE, then instead of 3 years, make it 1 year.
This scheme reflects a market value philosophy that some patents have great worth to their inventors or original assignees, especially when they are producing a product that implements the invention, but if after some time the inventor no longer values the invention, its value in the market should be reduced and it should move into the public domain much sooner. It further reflects a philosophy that if an invention has lost so much of its worth that not only does the inventor no longer wish to produce products based on it, but neither do others interested in buying the rights to it (NPEs), then it should move to the public domain even more quickly.
Unfortunately much of the book value of companies is the value assigned to their patents - so if a startup generates new technology but is not big enough to afford a large sales network, its value is in its IP (as embodied by the patents) and not in its turnover. When a larger company buys the startup, or the startup tries to float, then the company valuation is likely to be based on the IP and not the realised turnover (although both will be taken into account). If the patent life gets slashed on sale, then the valuations will also be slahed, and this would likely cause many startups to never happen at all.
This would lead to a reduction in innovation - not a growth, I believe.
I am not sure the suggestion was that the patent life reduction would happen through acquisition, but if the patent rights were sold to a 3rd party organization and no longer practiced by the original inventing company.
A startup with new technology inventions that comprise a large percentage of the company's book value is hardly a NPE -- it's almost the opposite of a NPE, even if the company is still in the angel funding or Series A funding stage and not yet able to go to market with products using that technology.
Without a doubt, there are difficulties to work through regarding any sort of accelerated public domain rules for dormant patents and closing loopholes that could allow those rules to be circumvented. The primary aim would be to safeguard patent protections for inventions that are deployed or are in the process of being deployed in real products, while recognizing a lesser value (by way of accelerating release to the public domain) of patents that are no longer being practiced or never were practiced by the original inventor or his assignee.
I recall a patent issued for a device to reduce injuries from a circular saw that was invented by a user. After not being able to reach an agreement in 5 years with any saw manufacturers, a company was founded to manufacture saws with the device. In this case, should the individual lose the patent after 3 years? Should the saw makers be allowed to "wait out" a shortened patent life to avoid licensing the invention? What about the safety of users during this period?
What about patents for things that are economically unaffordable in the marketplace with current manufacturing technologies but become economically viable to produce after five years of improvements in manufacturing technology?
It's not an easy call when the inventer is not tied in with a big manufacturer or when the economics of production determine what will and will not be produced today or in the future.
You make some very good points Buck-on-Bass. Maybe the fact that the patent holder was actively attemting to license it is an indication of its usage. It is not just sitting there. As for a patent that is not yet economically manufacturable, then it is a much more grey area. I do not believe that someone should be allowed to patent an idea that they think may become useful in the future and then lay in wait for someone to actually do it. I was once asked to write some patents on something that the company I worked for would never actually make, but thought they may be valuable patents some ways down the road. I declined to do it.
Rick, you are so right about the work load at the Patent office! I can't imagine being responsible for the mass of submisions that come in every day. I had enough trouble working on my patent application and I had a lot of help from a few patent attorneys.
And I have seen some of the tricks people use to pull the wool over their eyes. We don't give them a fighting chance to begin with. Perhaps as an industry we should work out how much trolls cost the industry and donate that money to fund more examiners in the area.
There is no moral angle to the legal systems in place. It just relies and rightly so that our society by large will remain moral enough to keep the business going and that immoral ones will get ultimately weeded out in the long term.
But overhauling the Patent system is a much needed endeavor and should be done by a committee of engineers sponsored by leading companies and lawyers who know how to plug the loopholes so that its a win-win for both inventor and public.
"They obviously weren't too vested in whatever they had you research"
This was an early investigation and they just wanted a quick assessment of the quality of the patents. They had told me that if my first impressions were favorable, then they would want me to help with full due dilligence and valuation of the patents. I could have made a lot more money out of them by telling them that they were good, but I gave my honest opinion that meant they probably went no further with it.
Brian: Why was there no paperwork for your initial role? I suspect it is what another writer noted -- they didn't want a paper trail that shows you found little value. If a lawsuit ever materializes in this case, it would be hard to identify you as someone who had been involved in this matter at all. In the meantime, they could proceed if they found another appraiser who thought the patents were worth a great deal, but I would think it would be in their own interest to get an accurate appraisal.
I agree Tom: there would be no use in them shopping for an opinion unless they thought that would be enough to scare a company into paying, but I didn't get the impression that this company intended to use scare tactics. They were interested in targeting specific companies and specific products. Perhaps they were lookng for someone who both thought those products did infridge and could create some good arguements as to why they infringed. In this case I found lots of proir art that showed the patents to be easily invalidated. If I can do that in a couple of hours, the targeted companies would also have been able to do the same and quickly show that the suit had no merit.
This looks similar to the stock trading where the trader has no interest in what the companies are doing . The trader is only interested in making money out of speculation. So the traders create hype about a stock to raise its market price and then sale it to garner the profit.
If stock trading is ethical then why not the Patent trading ?
"If stock trading is ethical then why not the Patent trading?"
Stock trading in the way you describe - where someone "creates hype" simply for the purpose of raising or lowering the price of a stock in order to profit from it - is not ethical or condoned, even on Wall Street. (Admittedly it isn't always an easy call - it can sometimes be difficult to tell whether someone is "hyping" something or just expressing a strongly-held conviction.)
"If stock trading is ethical then why not the Patent trading?
I am not against patent trading and just look at how much of it has been going on recently. The patent porfolios of Nortel, Motorola and others have gone for huge sums of money. Are the poeple that bought them non-ethical? Are these coalitions that are buying up patents for several companies non-ethical? A stock trader can be very ethical as can a patent trader. This is very different from being a troll.
Hi Brian -- it's strange how you can be an ethical person but -- if you aren't careful -- you can end up being drawn into things of a dubious nature.
When I was a teanager, one of my aunts told me "Be true to yourself." I didn't really understand what she meant at the time, but I grew to understand over time as "choices" came my way.
I think that the simplest way to go about things is to just steer clear of anything that in any way makes you uncomfortable. Of course this is often "easier said than done," but it's a great starting point :-)
It all depends on your "values". At the end of the spectrum, if you value money first and foremost, anything goes and ethics do not come into the picture. At the other end of the spectrum, if you value justice and piety, you probably would not deal with any aspect of modern life. Most of us are somewhere in between, thank Goodness :-)
I guess I must be one of the "Old Skool" engineers: I was taught that there is "No such thing as free lunch" and to document all my work related activities in an 'engineering notebook'. I have always fully practiced both lessons to the maximum extent possible; including those event that can be considered non-technical issues (e.g. work-related social interactions). These 2 simple tenets have saved and protected my bacon too many times to cite here.
Ethics should be an integral part of any profession and must be a life-long mandate. Yet, it was never a compulsory curriculum in college. Unfortunately, US (higher) education system does not put enough emphasis on ethics, values and morality but it should. There will always be the potential for moral dilemmas in any profession and EE life does not get immunity from such. Keeping things simple with the above 2 lessons have always allowed me to resolve such issues with the least amount of angst and repercussions.
What are the engineering and design challenges in creating successful IoT devices? These devices are usually small, resource-constrained electronics designed to sense, collect, send, and/or interpret data. Some of the devices need to be smart enough to act upon data in real time, 24/7. Are the design challenges the same as with embedded systems, but with a little developer- and IT-skills added in? What do engineers need to know? Rick Merritt talks with two experts about the tools and best options for designing IoT devices in 2016. Specifically the guests will discuss sensors, security, and lessons from IoT deployments.