What’s Left for Nokia? Patents, Patents, Patents!

POSTED BY Bridget Sarpu

Earlier this month Microsoft and Nokia struck a deal unlike any other.  Microsoft will obtain Nokia’s devices and services unit and license the company’s mapping services in a deal worth $7.2 billion.  Specifically, the two-part transaction included Microsoft spending $5 billion on Nokia’s mobile phones unit, in hopes to compete with companies like Google and Apple in the smartphone market, and then it spent another $2.18 billion to license Nokia’s patent portfolio.  What is included in that patent portfolio?  The deal gives Microsoft use of more than 8,500 Nokia design patents, as well as a 10-year license to around 30,000 feature patents and patent applications, intellectual property that is estimated to be worth about $6 billion.  So what is left for Nokia?

For years, patents have been a vital part of the technology business.  A patent is an intellectual property right granted to an inventor “to exclude others from making, using, offering for sale, or selling the invention.”  Patents allow companies to protect ideas, however, companies are also able to buy and sell patents to other companies, as well as profit by licensing them out to others for use.  Patents have recently become hot topics since big tech companies like Apple and Samsung continually sue one another for billions of dollars over the technologies found in smartphones, computers, tablets, and other gadgets.  With the rights of licensing patents, persons or companies can enforce patent rights against accused infringers who do not acquire the necessary patent license.  Unfortunately, some companies dedicate all of their resources to enforce patent rights in order to collect licensing fees, however they do not manufacture products or supply services based on the patent in question.  These companies, known as patent trolls or patent assertion entities, exist solely to exploit and intimidate competitors by threatening litigation for overly broad patents.  This in turn hurts businesses and stifles innovation.

So what is left for Nokia? To be clear, Nokia is keeping most of its patent portfolio.  All Microsoft is gaining are the design patents, along with licenses to the patent portfolio, not complete ownership of the portfolio.  Selling Microsoft its smartphone business could make way for Nokia to enforce its patents more aggressively.  Having sold all their physical devices and equipment, Nokia is now free to pursue any company they feel is “infringing” their patents.  Best of all they can threaten litigation on infringers without worrying about counter attacks against their own technologies (they have no real technologies that could be violating other patents).  This setup leaves Nokia as potentially an unlikable patent troll, most likely seeking to pursue infringers who rival Microsoft.

Because the patent licenses are nonexclusive, Nokia can use them any way it wishes and they will presumably use them as a profit center.  For example, Nokia is the holder of the only patents known to read Goggle’s video compression format software (VP8).   Nokia has already made clear that it has no intention of licensing to Google to use its patent thus leaving Google with a blocked technology with little hope to progress.  In the past, Google could retaliate by attacking Nokia’s infringement of its own patents.  However, because all of Nokia’s products belong to Microsoft, that line of defense is no longer available.  Nokia can now analyze EVERYONE’S business and identify and challenge all potential infringements.  With access to a substantial budget, Nokia can afford lengthy litigation and seek substantial fees from any industry that competes with Microsoft.

In sum, Nokia has ample opportunity to join the patent troll business, threatening not only big competitors like Apple, Google, and Samsung, but also threatening the progression of all future innovations.  For a company that seemed to be on the downfall for selling the majority of their products, Nokia now has a newfound and concerning power in the tech world.

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Could this be the Downfall of “Patent Trolls”?

Posted by Kevin Tan at 11:55 AM

Over the past several years, Patent Trolls have been targeting small businesses with the hope of scaring these small businesses with threats of costly litigation by alleging that these businesses have infringed their patents. By avoiding litigation, these businesses could settle by paying a fee. According to Professor Bessen, there has been an increasing amount of lawsuits filed against these small firms: 800 lawsuits were filed in 2005; 2,900 lawsuits were filed in 2011.

But what are Patent Trolls? The term, coined by Peter Dektkin, is defined as people or companies who purchase old patent rights with no intent to sell or endorse the patent product. The purchasers would then sue or demand royalties from companies that are allegedly infringing on patents owned by the troll. Many have criticized this practice because it shifts the manufacturer’s resources from developing the products to defending the lawsuits.

In response to the trolling, many businesses have complained about these activities by meeting with other businesses to discuss about how to deal with patent trolls and to promote various reforms to limit their attacks. These companies include tech, software, advertising agencies, retailing, banking, grocery industries, and more, who have begun addressing their concerns to their government officials. Given the fact that these small companies are considered the new sleeping giant, some officials have acted on their behalf by introducing legislation that deals with patent trolls.

President Obama has also announced several executive orders “to protect innovators from frivolous litigation”, and have ordered the Patent and Trademark Office to require all companies to be more specific about what their patent covers and how it may be infringed. Furthermore, Obama has asked the Patent and Trademark Office to be more cautious of frivolous and broad claims.

Vermont has recently passed legislation protecting these small businesses from bad faith patent claims. Under this new law, passed this past May, patent trolls can be sued by businesses, customers, and by the attorney general, and could be forced to pay all of the victims’ legal fees and damages of up to $150,000.00. Several state Attorney Generals have initiated special investigations to determine whether the claims brought by plaintiffs of the patent infringement cases are considered unfair, deceptive, and frivolous.

Although there seems to be a lot of activity going on throughout the nation that is trying to limit patent trolling, the act of purchasing a patent and then claiming that it has been infringed is not new. In fact, as Profession Bessen notes, this sort of activity has been practiced since the late 1800s, where “patent sharks asserted dubious patents on mechanical devices. Then, as now, the problem arose because large numbers of poorly defined patents were granted, making it difficult for businesses to avoid inadvertently infringing.” Time will tell if what we are doing, will actually limit patent trolling.

“To Like or Not to Like” That Is No Longer the Question

Posted by Laury Lucien at 11:00 AM

In an era where large quantities of interactions take place on the Internet, the scope of the protection provided by the First Amendment is often unclear. On September 18, 2013, the United States Court of Appeals for the Fourth Circuit extended the First Amendment protection of speech to Facebook’s “like” button in the Bland v. Roberts case.

This case arose in 2009, when employees at the Hampton Sheriff’s Office in Virginia lost their jobs by expressing their support for their boss’s opponent in an election for Sheriff by using the Facebook “like” button, and commenting on the opponent’s Facebook page. The employees filed suit in the Federal District Court against the Sheriff alleging that the Sheriff violated their First Amendment right “to free association when he refused to reappoint them based on their lack of political allegiance to him in the 2009 election.” The district court granted summary judgment in favor of the Sheriff concluding that merely ‘liking’ a Facebook page is insufficient speech to merit constitutional protection.” The employees appealed, and the case went before the Fourth Circuit.

On appeal, the Circuit Court concluded that clicking on the like button is “itself a substantive statement,” and that regardless of whether the statement is made by clicking on a like button or using “several individual strokes” to make the statement is “of no constitutional significance.”

The First Amendment has had to adapt to rapid technological advances in communication. As innovation progresses, the breadth of the First Amendment will consistently be revealed, and in this instance, it has revealed that it covers the “like” button. Here, the Fourth Circuit made the right decision. There is no difference between clicking a “like” button, which publishes to the individual’s Facebook community that this individual likes a particular thing, and physically saying that you like something. Ultimately, the sentiment is transmitted, and those who see it understand the expression. Although, the plaintiffs in this case did not receive any damages, the American people have one a major victory in that the law is keeping pace with the technological requirements of our day.

The Tech Lobby for Immigration Reform

Posted by Hillary Cheng at 11:00 AM

The technology industry’s hottest issue right now is immigration reform. While heatedly discussed in previous years, immigration reform has taken a back seat for most people to issues such as gun control, the debt ceiling, and the Syrian intervention. However, immigration reform has been a longstanding gripe of technology gurus including Facebook founder Mark Zuckerberg, and no political issue can distract them from pursuing this long-sought-after goal.

U.S. immigration law currently caps the number of temporary skilled workers companies can hire and require U.S. companies search for domestic candidates for open positions before making offers to foreign workers. Considering that the U.S. graduates only 70,000 engineers a year, enrollment in engineering graduate programs are falling, and many of these students are not American citizens, it seems only natural that tech companies are looking beyond the American labor market for competent employees.

As a result of a dedicated effort by the tech lobby, the House Judiciary Committee and the Senate have both passed immigration bills regarding high-skilled workers, and the bill awaits a vote in the House. The bill’s passage in the House is predicted to be difficult, owing to the conservative Republican control of the legislative body. The tech lobby is pushing for increased caps on temporary skilled workers and more availability of green cards to foreign graduates receiving degrees from U.S. universities.

Controversy over the bill revolves primarily around economic advantage for U.S. citizens. Conservative opponents to the tech lobby’s demand for immigration reform argue that U.S. citizens should have preferential status over non-U.S. individuals, in order to provide greater support for the American workforce. In response, the technology lobby asserts that there are not enough qualified American workers for the positions available, and it is apparent they are willing to go great lengths to employ the workers they find suitable for these jobs, who are not always American citizens.

This proposed immigration reform would allow American technology companies to hire on a more meritocratic basis. A worker’s national origin has no bearing on their qualifications, and a true interest in innovation and progress requires that immigration law reform so that technology companies may more easily employ foreign workers. As a nation of immigrants striving for a better society, it is in America’s best interest to retain talented individuals to further our genuine interest in progress.

Apple’s iPhone 5S Introduces Security Issues with Fingerprint Scanner

Posted by Grant Bowen at 11:00 AM

The iPhone 5S, released to the public this past Friday, September 20th, ushers in a new era of smart phone security – it can be unlocked using just a fingerprint. By pressing a finger to the home button, iPhone 5S users will be able to access their phone without having to swipe an unlock button, or set up, remember and enter a password as previously required. Furthermore, users will be able to log into their personal Apple iCloud and iTunes accounts in order to purchase apps, music, and videos.

However, this new innovation, dubbed “Touch ID”, not only brings opportunities for convenience, but also questions of security. Unlike passwords that are memorized and frequently changed, biometric data, which connects people at the most intimate level to their information, never changes. If a hacker were to get a hold of biometric data (a fingerprint, retina scan, or facial recognition information), the results could be devastating. These are key markers used in surveillance, passports, and now smart phones and laptops across the world. And, because these cannot be altered like a traditional password, once corrupted, there is no chance for a user to recover. Essentially, hackers may have the opportunity to steal a user’s actual personage – not just the numbers, codes and passwords that currently make up a person’s “identity”.

Apple claims to have an answer to this though: storing the information solely on the device itself in mathematic algorithms, rather than in a centralized server or cloud. When a user presses their finger to the circular glass pane embedded in the home button, tiny plates contact and close a circuit, generating current. The software then reads the energy of each cell and stores it in the phone’s encrypted microprocessor. Additionally, because Apple currently allows the fingerprint to unlock only the phone and access a user’s iTunes account, security risks at launch are minimal.

However, IT experts are not convinced this evades threats of cyber-attackers. The issue at the core of the security threat is simple: users do not control what their applications do with the information put into them. So, as Apple begins to open the fingerprint scanner to app developers, they are simultaneously opening the door to millions of security threats for every iPhone 5S owner. Once users start to log into these apps with their fingerprints, they could be allowing developers to access the fingerprint information stored on the device. And what these developers do with the biometric data they collect is out of the users’ hands – possibly collected and sold to marketing agencies, social networking sites, or even the National Security Administration.

Additionally, there is a threat of fingerprints being lifted off of any surface, reproduced and then used to unlock the phone, allowing access to private user data stored on the phone. In fact, there is already a $2200 bounty for the first person to post uncontroverted evidence of a successful Touch ID security breach using this method.

It is inevitable someone will figure out a way to either collect biometric data through app use, or find a way to hack past the fingerprint scanner on the iPhone 5s. And, the unfortunate truth is there are many companies and individuals across the world that would invest large amounts of time and money in order to do so. By controlling what could be the “ultimate” password, companies may be able to create databases of individuals using their services, link fingerprints to IP address, or intimately track their clients and employees. Worse, identity thieves could potentially hack personages, rather than just the numbers and codes we rely on to define our “identities” now. If there is one certainty with the release of Apple’s iPhone 5s, it’s this: starting on September 20th, millions of people across the globe will confront new biometric security threats.

Net Neutrality: Not Having It?

Posted by Alex Zamenhof at 10:55 AM

Net neutrality is a system whereby large Internet companies, such as Verizon, are prohibited from using the identity of websites as a reason to charge them extra for access to their customers. For example, without net neutrality, a Verizon user might suddenly find that their Netflix cost goes up because Verizon is charging Netflix more for premium access to its customers. If we want our prices for the services we enjoy to remain static, net neutrality is a vital requirement.

According to the FCC, their authority to impose this regulation comes from the Communications Act of 1934 and the Telecommunications Act of 1996. The Obama administration has shown strong support, while many congressional republicans are arguing that it represents unnecessary government involvement in private business. According to Verizon’s attorneys, if the rules were indeed overturned, Verizon would consider charging certain companies more for access to their users.

Almost everyone pays some sort of monthly bill for internet-related services: whether it’s “plain old Internet,” Hulu, Netflix, Spotify, HBO, or whatever else you could imagine. There’s likely a $9.99 or thereabouts charge showing up for your monthly indulgences in movies, TV, music, or other varieties of entertainment. If this FCC rule were to be overturned, and Verizon and other Internet providers could charge more for access to their users, these prices would all go up. Even access to Google from a Verizon server would start to cost Google more money – resulting, possibly, in a monthly charge just to use Google as we all do everyday. Granted, the charge may not seem like much – an extra dollar here and there – but in the grand scheme of things, it would hamper our access to these services. Say, for instance, that Comcast had a spat with Netflix and therefore, without the net neutrality rule, was able to simply deny their users access to the site. I have Comcast, and I also have Netflix; suddenly, because two massive companies are throwing down, I can’t get access to what I paid for? There is no world in which allowing the already insanely powerful Internet providers (Verizon, Comcast, XFinity, FiOs, etc.) to have even more of a stranglehold on which sites they allow their paying customers access to.

As long as the rule is still in place, the consumer is certain that they are able to have access to what they pay for, no matter which company they subscribe to, and no matter what lawsuits they may be involved in with one another. If that changes, Internet companies will start inching even more quickly towards monopoly – Netflix might decided to partner with Verizon, Hulu with Comcast, Spotify with RCN… imagine, if you wanted both Spotify and Netflix, you’d have to choose between two ISP providers! It is a ludicrous attempt by the big companies to gain even more control over the Internet then they already have, and as usual they are being aided and abetted by Republican congressmen who detest government interference with anything that is not strictly government. And yet, in an age where the Internet and the government are woven so closely together, might it not be the prerogative of the government to maintain some degree of control so that private corporations do not entirely swallow everything? I think so.

Did the Patriot Act make Steve Jobs Big Brother?

Posted by Stefan Martinez at 7:34 PM

The National Security Agency (NSA) has been monitoring smartphone devices since 2010 according to documents released by former intelligence agent Eric Snowden. Documents apparently showed that the NSA cracked the platform of major smartphone makers, namely: Google Android, Blackberry mobile operating system, and Apple iOS. This form of telecommunication surveillance raises constitutional implications that the government has stretched the Patriot Act to its breaking point.

German news outlet SPIEGEL was granted access to NSA documents relating to surveillance of smartphones and issued a report on their findings on September 9, 2013. SPIEGEL’s report relies on NSA presentations that, among other things,details how iPhone files on computers –stored when a user synchronizes their phone– contain valuable information such as contact lists, call logs, and drafts of text messages. From this information, the NSA has developed reliable “scripts” that perform surveillance on different features of the iPhone, which include location features from third-party applications, geolocation of individuals to track their movements over time, and pictures taken with the iPhone’s camera.

How the NSA developed these scripts remains a mystery. SPIEGEL postulates that the organization hacked into the servers of private companies and stole encryption keys, or collaborated with technology companies to build back doors into their software, or else covertly introduced weaknesses into encryption standards.

The reason why smartphones are so attractive to intelligence gathering agencies, according to SPIEGEL, is that users suffer from “nomophobia.” That is, smartphone users take a carefree approach to their devices, which are in reality mini-computers. Smartphone users, use their devices as personal communication centers, digital secretaries, and personal motivators. This allows the NSA and other intelligence gathering entities to track a smartphone user’s social contacts, behaviors, location, interests (from search terms used on search engines), photos, and credit card/password information. As it were, the iPhone has gone from creating limitless channels of communication to creating limitless channels to invade users’ privacy under the power granted by the Patriot Act.

The Patriot Act has expansive power when it comes to limiting American’s right to privacy. The Act is highly criticized by those who hold an individual’s right to privacy as the most fundamental right in our country. From the SPIEGEL article, it now appears that the Patriot Act has ushered in George Orwell’s surveillance state. It is now time to have an open discussion about the powers granted by the Patriot Act and how our government plans to monitor those who invoke its power.

Proponents of the NSA’s tactics will likely argue that the surveillance protocol is only utilized for targeted individuals and tow the party line of “we have nothing to hide.” However, it is the further reaching implications of this use of the Patriot Act that necessitates the need for an open discussion about how the Act is utilized.

From the SPIEGEL article it is known that the NSA has a “Tailored Access Operation Department” that allows them to crack even the toughest of smartphone encryptions, which appears to be overstepping the purpose of the program which is to monitor valuable target information not to create a leviathan. The wealth of information that is procured by the NSA has also spawned a NSA Department responsible for customized surveillance operations against high interest targets, the ancillary to this a general surveillance operation against everyday individuals. Also, task forces that intensely study operating systems created for consumer use are only an inferential step away from an enforcement agency that polices the telecommunications of all citizens.

At its worst this form of surveillance can mutate into a government initiative to utilize public surveillance. If information is being stored, even as a precautionary measure, it is still available for future use if the Patriot Act enjoys greater acceptance. For this reason, the public may need to develop wariness to their smartphones and third-party applications. The prompt: “XYZ would like to use your current location” appears less attractive when the reality is that the NSA may be accessing your device and can thereby gather your private information.