Barnes & Noble pummels Microsoft patents with prior art(itworld.com)
itworld.com
Barnes & Noble pummels Microsoft patents with prior art
http://www.itworld.com/mobile-wireless/225615/barnes-noble-pummels-microsoft-patents-prior-art
7 comments
I don't know about indefinitely. At some point it may change. A good lawyer may argue successfully against continued use of court precedents presuming validity of granted patents. Presumption of validity is arguably out of place given today's patent system.
> Presumption of validity is arguably out of place given today's patent system.
It comes from the statute though, so a court isn't really free to just ignore it. Changing this presumption would take congressional action.
It comes from the statute though, so a court isn't really free to just ignore it. Changing this presumption would take congressional action.
It's kind of amazing that the company that is finally standing up against insane, stupid patents is ... a bookstore. But perhaps it's because B&N doesn't have any mobile patents of its own to defend?
I was thinking the same thing, but I think it might have more to do with the fact that B&N would have no other relationship with Microsoft as an OEM in other markets.
Samsung, HTC, Dell, etc... all have other cross cutting businesses that could influence whether they play ball with MS on issues like mobile patents, B&N has no such constraints.
EDIT: In addition the Nook is probably the lone shining star in the B&N business, they can't surrender a single point of margin if they don't have to. If the Nook becomes untenable as a business B&N could become untenable as a business and sooner or later they'll go the way of Borders Books.
Samsung, HTC, Dell, etc... all have other cross cutting businesses that could influence whether they play ball with MS on issues like mobile patents, B&N has no such constraints.
EDIT: In addition the Nook is probably the lone shining star in the B&N business, they can't surrender a single point of margin if they don't have to. If the Nook becomes untenable as a business B&N could become untenable as a business and sooner or later they'll go the way of Borders Books.
I keep hearing the idea that the Nook is B&N's last great hope, but I don't buy it.
Every time I go in to a B&N physical store, it's packed. They're one of the few stores I'll go to just for the experience of going in there. They're relaxing. They're pleasant places to be.
Certainly, book sales face stiff online competition, but I find it hard to believe that a company with 705 physical locations that people want to be in, (plus 636 college book stores), can't find a way to make a profit even if the Nook should fail.
Every time I go in to a B&N physical store, it's packed. They're one of the few stores I'll go to just for the experience of going in there. They're relaxing. They're pleasant places to be.
Certainly, book sales face stiff online competition, but I find it hard to believe that a company with 705 physical locations that people want to be in, (plus 636 college book stores), can't find a way to make a profit even if the Nook should fail.
B&N sure is acting like the Nook is their last great hope.
My local store is renovating about 1/4 of their floor space to be occupied by Nook products. When you walk in to the store, your are greeted by a salesperson who asks if you are buying a Nook.
My local store is renovating about 1/4 of their floor space to be occupied by Nook products. When you walk in to the store, your are greeted by a salesperson who asks if you are buying a Nook.
I'd imagine the margins on e-books are compelling enough to drive them to really push them as the future of their business. The marginal production cost on an ebook is the price of a few kb of bandwidth - practically free. I think you'd have to be insane to not try to shift as much of your customerbase towards electronic delivery as possible.
They've taken the playbook from Apple on its stores. When the Apple store opened they only had like 4 products to display. But they made displayed the hell out of them.
They may be packed, but that doesn't mean much by itself, because their book sales are in decline. The stores are relaxing but according to a friend who works there -- many people go there just to browse it like a library, read for a few minutes and then go buy their stuff on Amazon.
read for a few minutes and then go buy their stuff on Amazon.
BN.com has made its prices competitive with Amazon (finally!). I got an offer for a BN credit card, similar to the Amazon Visa, in the mail a few days ago. BN might finally be making a real play against Amazon. It might be too late, but it's nice to finally find them in the game.
I wonder of BN's stores will evolve in an Apple Store-like direction, with physical book sales that happen to match online prices.
BN.com has made its prices competitive with Amazon (finally!). I got an offer for a BN credit card, similar to the Amazon Visa, in the mail a few days ago. BN might finally be making a real play against Amazon. It might be too late, but it's nice to finally find them in the game.
I wonder of BN's stores will evolve in an Apple Store-like direction, with physical book sales that happen to match online prices.
> It might be too late, but it's nice to finally find them in the game.
I don't think it's too late - Amazon has a philosophy that seems to indicate different strengths than B&N. Apple has proven that brick&mortar stores combined with a powerful brand can work for content and device sales.
Further, in order for B&N to thrive, Amazon doesn't have to lose...
I don't think it's too late - Amazon has a philosophy that seems to indicate different strengths than B&N. Apple has proven that brick&mortar stores combined with a powerful brand can work for content and device sales.
Further, in order for B&N to thrive, Amazon doesn't have to lose...
That's what I try to do, but it often doesn't work. I walk in to Chapters thinking that I'll just order the books I want from the library. Then I start reading something and end up buying it because I need to finish it now, rather than waiting the day or two it would take to get it from the library...
> Every time I go in to a B&N physical store, it's packed. They're one of the few stores I'll go to just for the experience of going in there.
And there's the problem - it's packed because people are in there just for the experience of going in there. That doesn't pay the bills.
And there's the problem - it's packed because people are in there just for the experience of going in there. That doesn't pay the bills.
Starbucks is full of people who like the experience, and they pay the bills. I realize that there is an obvious difference between B&N and Starbucks, but most of the B&N stores I've been in have a cafe, so there are at least some ways to monetize people there for the experience.
Perhaps it would make sense to have fewer aisles and make the whole store more cafe-like? It would be different from what they have now, but if the alternative is slowly going out of business due to online competition, it would be a way to do something online simply can't do.
Perhaps it would make sense to have fewer aisles and make the whole store more cafe-like? It would be different from what they have now, but if the alternative is slowly going out of business due to online competition, it would be a way to do something online simply can't do.
Just imagine the margins a book seller has to have in order to operate a large store with 20+ employees. If you can walk-through the store and compare their prices with Amazon's it puts pressure on B&N not to charge as much, even if they may be more convenient. Plus a ton of people do browse.
Isn't B&N one of the few places to still carry a large selection of Music?
Isn't B&N one of the few places to still carry a large selection of Music?
This is along the lines of what I was thinking. B&N is at the point where they have to make a last stand.
They really have little to lose by pursuing this case which really frees up their legal team politically.
They really have little to lose by pursuing this case which really frees up their legal team politically.
I suspect that this stand is at least partly the result of vicious competition from Amazon - adding a $20 license fee to the BOM just might make B & N's devices completely uncompetitive. And if they don't have a credible electronic device on the market, it's hard to see them existing in 3 years.
and a lot to gain, given their interest in getting a stronger position in the market.
From the linked article:
> What's interesting to me, as a clear layman observer, is why Microsoft didn't know that it would be so easy to find so much evidence of prior art against these five asserted patents.
Obvious answer, based on experience of large organisations: Legal and engineering are in different silos and don't talk to each other, except through senior management with limited bandwidth and legal/engineering understanding.
> What's interesting to me, as a clear layman observer, is why Microsoft didn't know that it would be so easy to find so much evidence of prior art against these five asserted patents.
Obvious answer, based on experience of large organisations: Legal and engineering are in different silos and don't talk to each other, except through senior management with limited bandwidth and legal/engineering understanding.
I think it's more likely Microsoft knew and didn't care. These "obvious" patents have been profitable for quite some time and once you are awarded the patent the burden of proof (and legal costs) falls to the alleged infringer.
Also, take this with a grain of salt, but I vaguely recall reading somewhere that using prior art in court to invalidate a patent is much more difficult than we assume.
Also, take this with a grain of salt, but I vaguely recall reading somewhere that using prior art in court to invalidate a patent is much more difficult than we assume.
I think it's more likely Microsoft knew and didn't care.
The parent to your comment - by mhw - is pretty darned close. At Microsoft, legal and engineering are in different silos and don't talk to each other, except through senior management with limited bandwidth and legal/engineering understanding and also - in my experience, and to some extent - program managers.
Developers (at least) are told not to look at patents or patent applications. I'd be surprised if PMs were told differently.
Does MS Legal have engineers on staff to determine if something is worthy of a patent and to look for prior art? That's a possibility. But your "more likely" (granted - it's your opinion) doesn't seem incredibly likely (in my opinion.)
The parent to your comment - by mhw - is pretty darned close. At Microsoft, legal and engineering are in different silos and don't talk to each other, except through senior management with limited bandwidth and legal/engineering understanding and also - in my experience, and to some extent - program managers.
Developers (at least) are told not to look at patents or patent applications. I'd be surprised if PMs were told differently.
Does MS Legal have engineers on staff to determine if something is worthy of a patent and to look for prior art? That's a possibility. But your "more likely" (granted - it's your opinion) doesn't seem incredibly likely (in my opinion.)
I think the NDA requirement before revealing the infringing patents is a telling sign. They know they were weak and stand on shaky ground.
I had thought that if some entity was to properly assert their patent rights, they had to make the specific patent claims known to the parties concerned which gives a period of time for the potentially infringing company to rectify, or to progress further into arbitration. Microsoft seems to be playing it like a organized crime protection scheme.
I had thought that if some entity was to properly assert their patent rights, they had to make the specific patent claims known to the parties concerned which gives a period of time for the potentially infringing company to rectify, or to progress further into arbitration. Microsoft seems to be playing it like a organized crime protection scheme.
It's common practice for engineering to be discouraged from looking for prior art. This leaves the lawyers alone to determine what needs to be revealed on the patent app.
http://m.paidcontent.org/article/419-why-tech-companies-want...
http://m.paidcontent.org/article/419-why-tech-companies-want...
It is common practice for engineering to be explicitly forbidden from looking at any patent whatsoever.
A peculiarity of the U.S. patent system is that the size of the penalty is larger if the party accused of infringement is shown to have "knowingly" infringed. This is intended to punish deliberate malign behavior more severely than accidental infringement, because there is a lower penalty if you didn't realize there was a patent to violate.
However, the second order effect is that accurate knowledge of patents is a legal liability. When considering whether a party "knows" about a patent, any engineer in the company would count. If Bob reads Patent A and Sally writes code that infringes Patent A, it's difficult for their company to prove that Bob never said anything to Sally. And why even take on the burden of that proof? As a practical matter, the potential legal cost of the larger infringement penalty outweighs the potential benefit of searching beforehand to ensure you aren't infringing.
When I joined Microsoft, part of the instructions given to all new employees was that you should never view any patent, anywhere, ever, no matter what. Even if there is some reason why knowledge of patents is necessary, you should not try to search for or view those patents yourself, because if you look at a page of 50 patent search results to find the one you want, someone could argue you "know" about the other 49. This is arguably ridiculous, but when your goal is reducing legal costs, you must avoid even the possibility of ridiculous arguments, because arguing back requires time from lawyers.
Standard operating procedure is for engineers to know nothing about patents and the legal department to make all patent-related decisions. Naturally, the legal department makes those decisions with the goal of maximizing profit from lawsuits against other companies and minimizing loss from lawsuits by other companies. The process deliberately and explicitly eliminates the possibility that accurate knowledge of software and hardware will be applied to patent decisions, because the only people with that knowledge are engineers, and letting engineers know about patents increases your legal risk.
Since the Patent Office also does not have the manpower or technical resources to make accurate decisions about engineering patents, and in any event is not incentivized to reject patent claims, patents on average bear no relation to reality. They're determined entirely by what you can get away with in court.
A peculiarity of the U.S. patent system is that the size of the penalty is larger if the party accused of infringement is shown to have "knowingly" infringed. This is intended to punish deliberate malign behavior more severely than accidental infringement, because there is a lower penalty if you didn't realize there was a patent to violate.
However, the second order effect is that accurate knowledge of patents is a legal liability. When considering whether a party "knows" about a patent, any engineer in the company would count. If Bob reads Patent A and Sally writes code that infringes Patent A, it's difficult for their company to prove that Bob never said anything to Sally. And why even take on the burden of that proof? As a practical matter, the potential legal cost of the larger infringement penalty outweighs the potential benefit of searching beforehand to ensure you aren't infringing.
When I joined Microsoft, part of the instructions given to all new employees was that you should never view any patent, anywhere, ever, no matter what. Even if there is some reason why knowledge of patents is necessary, you should not try to search for or view those patents yourself, because if you look at a page of 50 patent search results to find the one you want, someone could argue you "know" about the other 49. This is arguably ridiculous, but when your goal is reducing legal costs, you must avoid even the possibility of ridiculous arguments, because arguing back requires time from lawyers.
Standard operating procedure is for engineers to know nothing about patents and the legal department to make all patent-related decisions. Naturally, the legal department makes those decisions with the goal of maximizing profit from lawsuits against other companies and minimizing loss from lawsuits by other companies. The process deliberately and explicitly eliminates the possibility that accurate knowledge of software and hardware will be applied to patent decisions, because the only people with that knowledge are engineers, and letting engineers know about patents increases your legal risk.
Since the Patent Office also does not have the manpower or technical resources to make accurate decisions about engineering patents, and in any event is not incentivized to reject patent claims, patents on average bear no relation to reality. They're determined entirely by what you can get away with in court.
This is hilarious, as the whole original point of patents is to make knowledge more widely spread so that people can use that knowledge after the expiry of the patent. It seems that a point of law meant to help the little guy is instead effectively deleting the point of having patents in the first place.
I wish everyone who defends the patent status quo could read and understand this. The ideals they espouse have no resemblance to the reality you describe. Thanks for sharing your insight.
It's kind of interesting to look at it this way, and it also presents something of a way out: if all of these companies followed the same procedures (patent-clueless engineers), and all of these engineers STILL came up with the same method, it stands to reason that the method is obvious.
Can't prove a negative, though, so legally it's a nonstarter.
BTW, the America Invent Act prohibits treble damages for failing to seek opinions of counsel on patents:
http://techwildcatters.com/2011/09/a-little-info-on-the-amer...
[deleted]
Legal people decide what to patent?
Actually, they probably do have a significant hand in it. I suspect there have been more than a few patents submitted more because the legal team thought they could manage it than because the engineers thought there was something significant to protect.
But the point I was getting at is that I suspect that in this kind of case the selection of patents to put in the legal case against B&N was down to the lawyers picking from a long list, and the chances of them asking the engineers whether they'd stand up in court were reduced due to the organisational structure.
But the point I was getting at is that I suspect that in this kind of case the selection of patents to put in the legal case against B&N was down to the lawyers picking from a long list, and the chances of them asking the engineers whether they'd stand up in court were reduced due to the organisational structure.
Invalidating patents with prior art isn't as easy as you might think. There are two ways to do this: you can invalidate on novelty grounds (that is, the invention was anticipated by a single piece of prior art) or non-obviousness grounds (a combination of prior art essentially undermines the idea that the patentee took an 'inventive step'). Only the claims in the patent are considered when assessing novelty and non-obviousness. In the case of novelty, a single piece of prior art must embody everything claimed in the patent, whereas non-obviousness loosens this restriction. Non-obviousness claims are typically far more difficult to prevail upon, which is why companies won't do it more often.
For what it's worth, the relatively recent KSR v. Teleflex case gives us the current opinion of the Supreme Court in non-obviousness battles. In that case, they slid the scale back to favor the Graham[1] test for non-obviousness, rather than the controversial teaching-suggesting-motivation test, which tries to determine whether something in the prior art suggests the desirability of combining the claimed subject matter, and thus its obviousness. Now, the Graham test (which was a 1966 decision) allows for empirical evidence of non-obviousness, to wit: commercial success, long-felt but unsolved needs, and failure of others to invent the patented subject matter.
All of these are issues that need to be litigated in federal court, an exceptionally expensive endeavor that no corporation will take without a very strong incentive.
[1]: http://en.wikipedia.org/wiki/Graham_et_al._v._John_Deere_Co.....
For what it's worth, the relatively recent KSR v. Teleflex case gives us the current opinion of the Supreme Court in non-obviousness battles. In that case, they slid the scale back to favor the Graham[1] test for non-obviousness, rather than the controversial teaching-suggesting-motivation test, which tries to determine whether something in the prior art suggests the desirability of combining the claimed subject matter, and thus its obviousness. Now, the Graham test (which was a 1966 decision) allows for empirical evidence of non-obviousness, to wit: commercial success, long-felt but unsolved needs, and failure of others to invent the patented subject matter.
All of these are issues that need to be litigated in federal court, an exceptionally expensive endeavor that no corporation will take without a very strong incentive.
[1]: http://en.wikipedia.org/wiki/Graham_et_al._v._John_Deere_Co.....
Barnes & Noble see moving into the tech industry as the next move for the company, but because, as a company rooted in the business of physical books, they lack a patent "moat" to protect themselves against other big tech companies. It will be difficult for B&N to produce anything but low margin commodity devices. Any differentiation from other devices will eventually drag B&N into a patent battle. Their (possibly) declining physical book business would make it hard to purchase a portfolio from a dying tech company.
One day, here comes Microsoft demanding from B&N a license fee per device for some obvious patents. Since B&N is building a platform that sell high margin products (e-books), the license fee is likely to be affordable....at least until Amazon comes along with patents for a "online bookstore"... Yet... What a perfect opportunity to rack up a storm, raising awareness of the ridiculous patents owned by existing companies!
It is in B&N's interest to devalue existing patent portfolios of their current and future competitors in the tech industry, and they are trying to do exactly that. Even if the plan fails and politicians are unmoved, future tech companies may think twice before threatening B&N with a patent lawsuit... B&N is actually going to bother to find all the pieces of prior art!
We shouldn't be surprised a bookstore is fighting against software patents, because we know an existing technology company, with software patents valued at billions, are definitely not going to do it. It had to be a large company that could afford such a fight but the large company had to not have invested heavily into a technology business. Companies with no stake in a technology business would have no interest in demolishing software patents... unless it is moving into it. What companies making such a move? A company that is facing a fast declining market for its products.[1]
Such a company can only be a bookstore. [2]
[1] If it wasn't fast declining, they wouldn't be doing anything. Imagine putting a frog in a slow cooker, compared to putting a frog in boiling water.
[2] It could have been a company in the music industry... but I think it might be too late for those guys. All they can do is try to hang on to what they've got.
One day, here comes Microsoft demanding from B&N a license fee per device for some obvious patents. Since B&N is building a platform that sell high margin products (e-books), the license fee is likely to be affordable....at least until Amazon comes along with patents for a "online bookstore"... Yet... What a perfect opportunity to rack up a storm, raising awareness of the ridiculous patents owned by existing companies!
It is in B&N's interest to devalue existing patent portfolios of their current and future competitors in the tech industry, and they are trying to do exactly that. Even if the plan fails and politicians are unmoved, future tech companies may think twice before threatening B&N with a patent lawsuit... B&N is actually going to bother to find all the pieces of prior art!
We shouldn't be surprised a bookstore is fighting against software patents, because we know an existing technology company, with software patents valued at billions, are definitely not going to do it. It had to be a large company that could afford such a fight but the large company had to not have invested heavily into a technology business. Companies with no stake in a technology business would have no interest in demolishing software patents... unless it is moving into it. What companies making such a move? A company that is facing a fast declining market for its products.[1]
Such a company can only be a bookstore. [2]
[1] If it wasn't fast declining, they wouldn't be doing anything. Imagine putting a frog in a slow cooker, compared to putting a frog in boiling water.
[2] It could have been a company in the music industry... but I think it might be too late for those guys. All they can do is try to hang on to what they've got.
Somewhat off topic, but why are the licensing fees that MS is demanding redacted from the cited documents? Are these not public records?
I think but IANAL that those are considered trade secrets.
[1] http://www.forbes.com/asap/2002/0624/044.html