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A hazy shade of value: Software patents just took a hit

Jan 11, 2011, 21:02 (4 Talkback[s])
(Other stories by Erick Robinson)

"Much of the problem with the current U.S. patent system involves haze. Whether it is ambiguity regarding what the patent covers or murkiness about whether the technology covered by the patent is actually new, patent plaintiffs regularly use this uncertainty to their advantage. This ambiguity–often planned–allows plaintiffs to leverage settlements against businesses that are forced to either pay their own lawyers or opportunistic plaintiffs, or take their chances in court where judges and juries are often unsympathetic to companies.

"This haze is particularly pronounced with software patents. Unlike electrical patents, in which the electrons of an accused circuit either move in the way described by the patent or they don't, software patents can be manipulated to cover "inventions" far removed from the patent's description or any intent of the patent's inventor.

"An important area of "haze" frequently exploited by plaintiffs regards the calculation of damages. Most often, damages "models" are arrived at by a damages "expert" (paid by the plaintiff) picking a number (recommended by the plaintiff or its counsel) and then–after the fact–generating support for this number. Such "support" is often hazy in itself, relying on self-serving opinions on market trends, ultimately including only arguments that support a huge damages award."

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