Patent trolls, Machiavelli's descendents

Machiavelli was quite the thinker. The author of one of the most insidious books ever written, The Prince, his name is synonymous with deviousness and manipulation. Ever wonder what happened to his descendants? I have a theory … I think they became "patent trolls."

The way patent trolls work is they secure a patent on something -- a process or a way of making something -- that they typically didn't have diddly-squat (that's a legal term) to do with. Then they claim some or all of someone else's business is theirs based on the victim's use of whatever their patent covers. How's that for devious?

When faced with such a claim the victim has to make a choice: They can let loose their lawyers (which will cost somewhere in the range from "ouch!" to "OMG, when did someone decide I have to pay off the national debt of Chile?"), or they can give up, pay the patent trolls off and hope they go away.

To continue reading, register here and become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

Machiavelli was quite the thinker. The author of one of the most insidious books ever written, The Prince, his name is synonymous with deviousness and manipulation. Ever wonder what happened to his descendants? I have a theory … I think they became "patent trolls."

The way patent trolls work is they secure a patent on something -- a process or a way of making something -- that they typically didn't have diddly-squat (that's a legal term) to do with. Then they claim some or all of someone else's business is theirs based on the victim's use of whatever their patent covers. How's that for devious?

When faced with such a claim the victim has to make a choice: They can let loose their lawyers (which will cost somewhere in the range from "ouch!" to "OMG, when did someone decide I have to pay off the national debt of Chile?"), or they can give up, pay the patent trolls off and hope they go away.

Here's what's so cunning about these patent trolls: They know there is a threshold at which paying them off is less expensive  and easier (and more legal) than any other course of action, so they usually pitch high then allow you to negotiate a lower license fee.

Here's the other devious thing patent trolls do: They know large corporations using products based on their patents are just as good targets as the product manufacturers themselves.

Perhaps the most infamous of the patent trolls, at least up to now, has been the Santa Cruz Operation, which, for the last few years, has been hitting up vendors and users for licenses for what SCO claims are its patents.

Now consider US Ethernet Innovations. USEI acquired four patents from 3Com, which it is using to extract license payments from manufacturers and users. How USEI came to acquire the patents is not clear and as of this writing the company hasn't returned my call to discuss its history and business strategy.

The patents themselves are pretty interesting: Granted to 3Com between 1994 and 1998, the patents apply to network adapters. Two of the patents deal with "automatic initiation of data transmission" while the third involves "host indication optimization." But it is the fourth patent, "Network Interface with Host Independent Buffer Management" -- that is the biggie and one company USEI alleges to be infringing on this intellectual property is Apple.

Going after vendors might be understandable, regardless of what you think of the ethics involved (or lack thereof). But you have to marvel at the insanity of the U.S. patent system, which allows patent holders to target those who purchase products in good faith.

In the case of SCO, the company managed to "persuade" a number of large organizations to purchase what was essentially protection from litigation. These "licensees" included a hosting company, EV1Servers, for a reputed $850,000, and CA as part of a $40 million deal.

US Ethernet Innovations is being even more creative in choosing which users to go after: The company is targeting major hotel chains that run huge networks knowing the chains will most likely just pay up rather than get into what could be, in both time and money, a hugely expensive legal wrangle.