This ain’t competition

Sun, 03/21/2010 - 9:47pm
Brian Santo

Verizon filed two patent infringement suits against Cablevision this week. Cablevision doesn’t want to comment beyond calling it a nuisance suit, and Verizon doesn’t want to comment beyond a statement that raises more questions than it answers.

Verizon filed one suit with the International Trade Commission (ITC), the other with the U.S. District Court in Delaware.

Verizon provided some meager details about the former suit but said nothing about the latter beyond acknowledging its existence.

In the ITC complaint, Verizon claims patent infringement of certain (unnamed) imported set-tops. As a practical matter, the issue when you go to the ITC is the importation of products. The importation can be challenged for any number of reasons, patent infringement being one of them.

Thus Verizon gets to sue the importer – Cablevision – and not the manufacturer, presumed to be Cisco.

The Cisco set-top boxes are technically imports because, going back to the days when Scientific-Atlanta was independent, it’s been designing them and having overseas contract manufacturers make them.

If Verizon were to prevail, the ITC could presumably cut off Cablevision’s future supply of Cisco boxes.

Suing Cisco directly would probably aggravate Cisco, and there are two reasons why that might be a bad idea for Verizon: 1) Verizon buys routers and other equipment from Cisco (not STBs, though), and it’s sensible to avoid openly antagonizing a key supplier; and 2) Cisco has a vast patent portfolio, and it may not be wise to get into a patent war with someone who can effectively retaliate in kind.

As it is, threatening to cut off one of Cisco’s accounts isn’t going to make Cisco happy.

But that leaves open the issue of the patent infringement case filed in U.S. District Court. Verizon describes that only as a “parallel patent complaint.”

Typical patent infringement cases involve a patent holder filing a complaint in a U.S. court against the manufacturer of a product that the patent holder suspects incorporates its patented technology.

So who is Verizon suing in district court? Cisco or Cablevision? And what for, exactly? Verizon won’t say.

Verizon says it asked Cablevision to license the patents, but Cablevision refused.

But has Verizon licensed these patents to anyone else? To any other service providers? To any other device manufacturers? Under what circumstances?

Verizon declines to elaborate.

Here are Verizon’s descriptions of the patents it is claiming at the ITC are being infringed:

  • United States Patent No. 5,666,293 describes a set-top box that downloads operating system software and application software through a digital broadband channel.
  • United States Patent No. 5,635,979 describes a dynamically programmable set-top box that can be updated with software to support additional functionality.
  • United States Patent No. 6,381,748 describes a set-top box that can be used to access content on the Internet.
  • United States Patent No. 6,367,078 describes a set-top box with user interface software that allows users to navigate available content by category, as well as by channel.
  • United States Patent No. 7,561,214 describes a set-top box with user interface software that allows users to navigate available programs by channel, and through the selection of an “anchor” channel, by category.

The patents are phenomenally obvious, describing processes that even the most dull-witted set-top manufacturer or service provider would have anticipated needing. They’re akin to Amazon’s idiotic patent for one-click ordering.

The problem with such patents is that they don’t protect innovation, they stifle it. They take advantage of a well-known problem at the U.S. Patent and Trademark Office – the lack of enough evaluators with relevant expertise.

Given the short staffing at the USPTO, you can patent just about anything as long as you think to do it first. It’s stunning that no one’s thought to patent a means of communicating using apparatus that run on electricity. There you go – you can have that one for free. Mazel tov.

The fact is that patents are no longer being used to protect intellectual property, but as a means to hinder, and even punish, competitors. And that’s not just me talking; that’s a growing opinion among some very prominent economists, including a handful of Nobel laureates. A key document in the argument is the book “Against Intellectual Monopoly” by Michele Boldring and David K. Levine.

You’re a service provider, you have a system you’re working within, you’re doing your duty when you exploit it. Verizon is doing it. Charter has done it suing Verizon. There are many more examples.

It’s just business. But it’s getting pretty damn tedious.


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