Red Hat settles patent case with Acacia - shares few details (InternetNews.com)

[Posted October 5, 2010 by ris]

Sean Michael Kerner shares his concerns that Red Hat has not been entirely forthcoming with the details of this case. "As to how Red Hat has settled the alleged IP infringement, that's where the transparency (or lack thereof) is my concern. When I asked Red Hat about the patent settlement with Acacia I got the following statement: "Red Hat routinely addresses attempts to impede the innovative forces of open source via allegations of patent infringement. We can confirm that Red Hat, Inc and Software Tree LLC have settled patent litigation that was pending in federal court in the Eastern District of Texas (Civil Action No. 6:09-cv-00097-LED)."" (Thanks to Don Marti)

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 5, 2010 19:23 UTC (Tue) by FlorianMueller (guest, #32048) [Link] (13 responses)

It's hard to see how that patent holder would have let Red Hat off the hook without paying. I discussed this on Twitter with a Texas-based IP lawyer, who saw my tweet about it in which I voiced the supposition that Red Hat paid royalties plus probably something on top so that the patent holder keeps quiet about the fact that Red Hat paid (since Red Hat wouldn't want to be seen as having been Novell-ized in a way).

The lawyer also doubted that Red Hat got off the hook without paying: @FOSSpatents doubtful. I remember looking at that #patent. Went through a reexam or 2. I then double-checked and he confirmed that in his recollection the patent survived one or two invalidation attempts.

So he concluded: Doubt we'll find out how much, but I'm sure they paid. He then thought that maybe Acacia would at some point disclose to the SEC the payment it received.

Past invalidation attempts no guarantee

Posted Oct 5, 2010 21:04 UTC (Tue) by dwheeler (guest, #1216) [Link]

I think the honest answer right now is that "we don't know". A patent that survives past invalidation attempts may still be invalidated in the future. Counter-intuitively, the statistics suggest this is even MORE likely; repeat patent plantiffs are more likely to lose. Most people thought that a patent that survived an invalidation attempt is a stronger patent, but statistics show that's not the case.

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 5, 2010 22:10 UTC (Tue) by bojan (subscriber, #14302) [Link] (7 responses)

Yeah, how does one settle a patent case will a troll and _not_ pay? That wouldn't make sense on the face of it, but maybe we don't know something they do.

A more important question is, who is covered by whatever settlement deal was struck?

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 5, 2010 22:41 UTC (Tue) by andresfreund (subscriber, #69562) [Link] (6 responses)

There are situations in which that happens - e.g. RH has somewhat strong evidence of prior art and A. gets the promise that RH does not share it or such...

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 5, 2010 23:17 UTC (Tue) by Wol (subscriber, #4433) [Link] (5 responses)

There's something known as "biting off more than you can chew".

If RH's lawyers went to Acacia's and said "you're going to get creamed in court because ..." then a sweetheart deal could easily be on the table.

All RH need do then is say "you give us a patent licence compatible with Free Software, and we'll pay you by keeping our mouths shut". That *could* explain this little scenario nicely :-)

Cheers,
Wol

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 5, 2010 23:31 UTC (Tue) by bojan (subscriber, #14302) [Link] (4 responses)

Yeah, maybe. I would think if RH were in such a strong position, they would want the troll to go to court, so they can invalidate their patent and make them pay. But, yeah, I see what you're saying.

On the flipside, RH may have gotten the deal because they couldn't fight this in court. Either way, it would be good to know what kind of "licence" changed hands.

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 6, 2010 3:21 UTC (Wed) by drag (guest, #31333) [Link] (3 responses)

The unfortunate reality is that often it's cheaper to simply pay the troll off then to sue them and defeat the patent.

If I was a patent troll and I had a weak patent then I'd just charge a licensing for it that would cost about 50-75% the cost of defeating it.

For most companies this is extremely effective way to troll companies.

Say your HP and you are faced with a troll that has a patent that they are threatening you with. You know that patent can just as easily be applied to Microsoft and IBM as it does apply to you and that, in fact, the troll will probably go after them next.

So you can choose to either pay them 50% to make them go away and they will then proceed to sue your competitors. Or you take them to court and pay 100% the costs to defeat the patent and then your faced with the loses while Microsoft and IBM got off completely without paying a dime.

What would you do if your legally responsible for people's livings, retirements, investments, etc etc etc?

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 6, 2010 3:43 UTC (Wed) by coriordan (guest, #7544) [Link]

That's a very common strategy.

And if a rich company calls their bluff and goes to court, they offer a very cheap out of court settlement so that their patent doesn't get invalidated and it even looks like it was enforced against a big company.

(In Pharma and cars, this doesn't work since all mass producers of those things have oodles of cash and lawyers. Patents simply don't suit software development.)

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 6, 2010 3:56 UTC (Wed) by bojan (subscriber, #14302) [Link] (1 responses)

Maybe you misunderstood - I'm not blaming anyone at Red Hat for whichever outcome. They have to do the best they can in the crazy environment they're in. It would just be nice to know what really happened and what effect it will have to what.

I see you point with paying off the troll. At least you can inflict some damage on competitors while at it. Makes sense. In a crazy kind of way, of course.

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 6, 2010 14:14 UTC (Wed) by drag (guest, #31333) [Link]

I was not dissagreeing really. I was just offering a different possibility.

Hmm

Posted Oct 6, 2010 14:33 UTC (Wed) by tialaramex (subscriber, #21167) [Link]

When a person has received due payment for abandoning their principles they may imagine the same behaviour in others. For no-one wants to believe themselves a scoundrel but if everyone is doing it then there can be no shame in it.

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 7, 2010 11:49 UTC (Thu) by jwildebo (guest, #38479) [Link] (2 responses)

So you don't know the details, simply accuse Red Hat to have been apying and make a point based on that unfounded assumption. That is lame IMHO.

Patent lawyers agrees with my belief that Red Hat will have paid

Posted Oct 7, 2010 13:00 UTC (Thu) by FlorianMueller (guest, #32048) [Link] (1 responses)

You can't just dismiss it as "lame" to describe the modus operandi of such patent holders (there's an economic logic and a legal one for that) and to conclude what most likely happened and what Red Hat may most likely be trying to hide.

Many such disputes happen, and there are well-known patterns. I've been following that type of activity for some time, and Patrick Anderson, whose tweets I quoted, is a lawyer focused on patents in the state of Texas, which as you know is an extremely popular venue for such litigation.

In my opinion, by far and away the most probable assumption is that you (Red Hat) have just suffered a Novellization at the hands of Acacia. Patent owners don't grant GPL-style patent licenses protecting all downstream users including non-customers and forkers, unless they're in an incredibly weak legal position (which is doubtful given that the patent wasn't on the verge of invalidation, but on the contrary had proved defensible) *and* tight on cash (which isn't the case with Acacia).

It would be up to Red Hat to put the facts on the table. Can you assure all non-customers using your code on GPL terms that you've covered them? Including all forkers of your code on GPL terms, no matter what kind of GPL-based software they may create?

I'm sure that if you could, you would say so, as you did in a past case.

But you don't, which is weak, and the facts I described above speak a clear language.

Prove that you aren't another Novell, please.

"I found a lawyer who agrees with me"

Posted Oct 7, 2010 14:44 UTC (Thu) by tialaramex (subscriber, #21167) [Link]

Florian, go back and read all the coverage of SCO. According to the same kind of "pick a lawyer who agrees with me" process everybody from Red Hat to IBM to little non-profits with a Linux server in the corner, would soon be paying fat royalties to SCO. That's just how it works, they assured us, you have to pay the Dane.

But we didn't.

Acacia, Microsoft and Acacia's connections

Posted Oct 8, 2010 12:56 UTC (Fri) by pboddie (guest, #50784) [Link]

It's interesting that today there's the news that Microsoft have settled with Acacia, and in that article it's mentioned that the patents in question originate from "[Acacia subsidiary] ACCESS Co, Ltd". Of course, the patents concerned are supposedly related to smartphones, but there's a degree of speculation about the relationships between these organisations.