GeekWire first reported the news. Here’s the description of the patent:

Digital objects including e-books, audio, video, computer applications, etc., purchased from an original vendor by a user are stored in a user’s personalized data store. Content in a personalized data store may be accessible to the user via transfer such as moving, streaming, or download. When the user no longer desires to retain the right to access the now-used digital content, the user may move the used digital content to another user’s personalized data store when permissible and the used digital content is deleted from the originating user’s personalized data store. When a digital object exceeds a threshold number of moves or downloads, the ability to move may be deemed impermissible and suspended or terminated. Additionally or alternatively, a collection of objects may be assembled from individual digital objects stored in the personalized data stores of different users, and moved to a user’s personalized data store.

Users’ rights to resell digital content is already a contentious issue under copyright law. Startup ReDigi, which allows users to resell digital music, says its model is legal according to U.S. copyright law’s “first sale” doctrine, which lets people resell physical content. But the record label EMI is suing ReDigi, claiming that digital files can’t be resold like physical objects because there is no way to ensure that the “original” digital file was deleted. A court will rule on the case this year, and the outcome could have implications for Amazon’s marketplace.

Amazon’s patent for this marketplace is likely to muddy the legal waters even further. If the patent is as broad as it seems, Amazon could theoretically bar ReDigi and everyone else from offering a resale market in the first place. The company, after all, has spent years in court fighting to own the right to “one-click shopping” based on a 1999 patent.

As for the “electronic marketplace” patent itself, Amazon appears to take account of copyright owners’ concerns. The patent outlines a system to “maintain scarcity” of content: “a threshold may limit how many times a used digital object may be permissibly moved to another personalized data store, how many downloads (if any) may occur before transfer is restricted, etc….These limits may be set for a specific digital object, a digital object type (such as a particular title of book), a digital object category (such as all movies), etc….Alternatively, a user’s ability to access the used digital object by streaming may also be limited upon the occurrence of certain events.” It’s not clear, though, how the system would ensure that a user hadn’t stored a copy of the file somewhere other than his or her “personalized data store.”

The man in question is Scott Moskowitz. His company, Blue Spike LLC, has been furiously filing patent suits in East Texas against companies that use common digital water-marking techniques to prevent copyright infringement. His other targets include Sound Hound, Viggle, TuneSat and Facebook.

The lawsuits raise the question of whether Moskowitz should be rewarded with patent monopolies or whether he’s simply exploiting America’s troubled patent system.

Blue Spike’s legal filings explain that Moskowitz is “a pioneer in this new field between cryptography and signal analysis” and say that the “signal abstracting” he invented is a novel way to detect unlicensed music, text and films on the internet. Here is a more detailed description:

The filing also notes that Moskowitz has worked with the federal government and various professional societies, that he has two degrees from UPenn, and that Forbes and New York Times once referred to his work.

So what to make of all of this? On one hand, Moskowitz is well-versed in the field of digital watermarking and has won patents from the US Patent Office. But should this give him the right to sue every company that employs anti-piracy software?

There are reasons to be skeptical. First, it’s not clear that “Blue Spike” does anything besides sue people. The company has a website but the site doesn’t list products, clients or prices. And Blue Spike’s “office” is in Tyler, Texas, whose plaintiff-friendly judges and juries have made it ground zero of America’s patent troll epidemic. As for Moskowitz, his degrees are from business school — which seems an unlikely training ground for a cryptography master.

Then there are the patents themselves. Moskowitz applied for the core one in 2000 at a time when the US Patent Office was issuing patents for methods of swinging on a swing and exercising a cat with a laser pointer. Moskowitz’s US Patent 7,346,472 is for a ”method and system for monitoring and analyzing at least one signal” and describes a technique for comparing signals against those in a database.

The patent may be valid and good (I’ll leave it to the engineers to decide) but there is still the question of whether Moskowitz should be allowed to brandish such a broad monopoly against so many companies. The targets now face an unpleasant choice between buying a license to make him go away or paying hundreds of thousands (or more) for a court fight.

Moskowitz’s lawyers say it’s about “going forward with what you believe in and not letting people walk all over your rights.” They say Blue Spike is not a patent troll. The targets of the patent mugging may disagree.

Ohter Blue Spike defendants include: Rovio; MySpace; Audible Magic; Specific Media; Photobucket; DailyMotion; Soundcloud; Myxer; Qlipso; Brightcove; MediaFire; Zedge; Harmonics; iMesh; Metacafe; iPharoah.

Here’s a sample complaint:

Blue Spike v Google

(Image by Realinemedia via Shutterstock)

As my colleague Jeff Roberts has reported, this case was launched by Apple against Samsung last year, based on what Apple said was Samsung’s wilful infringement of software-related “utility” patents and four design-related patents it holds for the iPhone and iPad. According to Apple, the company’s smartphones — including the Nexus S, Epic 4G and Galaxy S 4G — copied elements of the design and functionality of Apple’s iPhone models, and the Samsung Galaxy Tab copied design and functional aspects of the iPad. In its statement of claim, which contained drawings that jurors relied on to decide the case, Apple said:

“Rather than innovate and develop its own technology and a unique Samsung style for its smart phone products and computer tablets, Samsung chose to copy Apple’s technology, user interface and innovative style in these infringing products.”

Did Apple really suffer because of another phone’s shape?

From a legal point of view, there appear to be a number of questionable factors involved in the jurors’ decision in this case, at least according to Groklaw, including a debate over whether the jury actually understood the specifics of what they were being asked to do, and whether they ignored certain aspects of the case in their desire to penalize Samsung. That could lead to the case being successfully appealed, but even if it isn’t, or if the appeal fails, the Apple-Samsung decision adds even more weight to the argument that software and design patents are evil and that the entire patent process is badly flawed — if not broken.

As part of the case, Apple obviously argued that it suffered irreparable harm from Samsung’s alleged copying of its design and functionality. But has it really suffered competitively? It’s hard to see how, considering the company is the world’s most valuable publicly-traded entity, with a market value of over $600 billion, and its mobile products are the market leaders in almost every category. How much more successful could it possibly be? And now, the legal ruling gives it even greater power to beat up on Google and Android — is that really a win for the technology industry or for society as a whole? It’s difficult to see how (and let’s not forget that Apple doesn’t need software patents to protect it from knock-offs — it has trademarks, trade dress and a series of other legal tools that will do that too).

Defenders of the case, and of patent laws in general, would likely argue that it doesn’t matter how large or successful Apple is: the point is that Samsung did something wrong. But what exactly do we mean by this statement? Two of the design patents involved in the case describe the way in which the iPhone is rounded at the corners and flat on the top, and another refers to the way that icons appear on the screen. Among the utility patents involved are those related to the “bounce back” or “rubber band” feature in some of Apple’s apps — in which the screen rebounds after the user pulls it in one direction or another — and to the “pinch to zoom” functionality used for images.

One designer said that the pinch-too-zoom gesture has become so ubiquitous for mobile devices and apps of all kinds that it is like claiming ownership over the idea of a circular steering wheel. Would we be better off if one company controlled the rights to the steering wheel and could charge huge sums to all manufacturers for using that design element? Probably not. But Apple could now do this with pinch-to-zoom, as well as other design and utility features, giving it an even bigger lock on the mobile device business than it already has — despite the fact that there is evidence that similar gestures existed before Apple patented them.

Update: Nilay Patel at The Verge notes that none of the patents in the Apple-Samsung case specifically refers to the pinch-to-zoom process, although several cover related multi-touch elements of the interface and one covers the tap-to-zoom gesture.

Software patents are nuclear weapons, not defences

Even if you accept that Apple did something unique and revolutionary with the zoom feature that deserves to be protected by the full force of the law, should it have the same rights to a series of icons that are lined up in a specific way on a mobile device? Or to the fact that its device has a rounded screen, or that a window which pops up on top of another window fades away automatically over time? Or the fact that one of its iPhone icons happens to look like a gear, and another looks like a pad of paper? These are the kinds of things software and design patents can refer to.

The fact that software patents can apply to such obvious-looking or even trivial applications of design and usability is why some have described them as evil, and “a cancer” on the economy and society in general. Others have warned for several years about the coming of a software patent “apocalypse” created by multibillion-dollar technology giants accumulating software patents. And in the end, these cases do little to promote any kind of useful innovation — instead, they just tie up the courts and give some companies a nuclear arsenal they can use to attack competitors.

Even some judges — such as the one who recently ended Apple’s patent lawsuit against Google-owned Motorola — have questioned whether certain industries that already experience plenty of innovation (such as the mobile phone business) need to be protected by patents at all, including software and design patents. And research by Harvard’s Berkman Center for Internet and Society has shown that software patents have provided little or no net social benefit over the past decade, despite billions in lawsuits and various legal victories.

In the end, the important question isn’t whether Apple was right to sue Samsung, or whether the Korean manufacturer directly copied elements of Apple’s design for its phones — the question should be what is gained by allowing companies to launch multibillion-dollar cases involving the shape of icons or the swiping motion that users employ to switch pages.

Post and thumbnail images courtesy of Flickr user Stefan

Apple’s case is based on claims that Samsung “slavishly copied” its popular iPhone and iPad.

The jury’s award was based on the determination that products like Samsung’s Galaxy tablet and assorted phones violated Apple’s patents. The infringements related to so-called “utility patents” that cover features like the way a smartphone screen reshapes and “double-tapping” functions.

Apple also won rulings based on its “design patents” which covered the shape of its iPhones. The jury did not, however, side with Apple on its controversial “rectangle” design patent that related to the shape of the iPad.

The jury also found that the patents are not invalid — which would have protected Samsung.

The news for Samsung went from bad to worse as the jury found that Apple did not owe any damages related to its alleged infringement of Samsung’s patents. In the case of Samsung’s patents, the jury ruled that Apple didn’t infringe some of them in the first place. For two others, the jury found that Samsung had “exhausted” the patents and couldn’t enforce them against Apple.

The news came down after the jury unexpectedly announced that it had reached a verdict in the complicated intellectual property case. Legal pundits had predicted the deliberations would take several more days given the complexity of the case.

The jury’s finding therefore appears to reflect that the jurors had largely made up their mind already about the case.

Samsung will now ask Judge Lucy Koh to review aspects of the jury’s ruling, including the size of the damages. The company can then appeal the ruling to the US Circuit Court for the Federal Circuit, a specialized-patent appeals court in Washington, DC.

See also: Triple damages and injunctions: what next for Apple and Samsung

Here are some takeaways from the conference — skim the sub-heads if you’re in hurry. If you’re not, read the entire article and click the links for the scholars’ own words.

A Privacy Bomb-Thrower is coming to the FTC

The University of Colorado’s Paul Ohm is joining the FTC in two weeks as a senior adviser on mobile privacy issues. At Stanford, he showed little restraint in his presentation, blasting Silicon Valley “pivots” (where a company picks a new strategy) as “lurches” that trample on user privacy. He proposes using companies’ own trademarks as a lever to get them to comply with privacy promises. His theory might require, for instance Facebook to choose a new company name if it modified its core privacy commitments.

It will be curious to see how someone so outspoken fares within the FTC. If he plays his cards right, Ohm could initiate a serious discussion between consumers, app makers and the government about the best way to balance privacy and innovation. But if he grandstands, Ohm will further the Obama Administration’s pattern of seeking headlines rather than comprehensive solutions to privacy problems.

Early patents: A Boat powered by horses

America’s early patents show that the historical scope of what could be patented is broader than many imagine. Professor Michael Risch’s slideshow and paper offer a view of America’s earliest patents, and provides new perspectives about how to think about inventors and the start of the patent system.

Skeptics of patents for software or business methods might consider that patents were granted for milk of magnesia, asbestos, lead paint and a programmable loom. Then there is the inventor of the horse-powered boat who obtained a patent — and promptly filed a lawsuit!

Frustrated that people are sharing your content without permission? Watch porn

Well, the porn industry that is. In a segment called “Industries without IP,” Professor Kate Darling described how copyright enforcement in the adult entertainment industry is prohibitively difficult for many content owners. In response, porn producers have shifted towards making “experience goods” like live chats. Is there a lesson here for other industries?

• See also, GigaOM’s Janko Roettgers “Why is there no Netflix for porn?”

In Q&A, Darling suggested that the lawyers who are blackmailing P2P users are outliers in the industry as a whole and their activities primarily target gay porn consumers. She added that courts are starting to put a stop to this.

Sunshine and Antitrust laws are our best bet against the patent trolls

The troll phenomenon — in which shell companies that don’t make anything  but amass patents in order to sue those who do — is even worse than we imagined. New research by Professors Robin Feldman and Tom Ewing shows that super-troll (or “mass aggregator” if you want to be polite) Intellectual Ventures is tied to at least 1,300 shell companies.

Feldman’s talk “Giants Among Us” offered a closer look at IV and other mass trolls, and described the case for and against them. She noted that one frustration associated with trolls is that it can be impossible to know who is controlling them and who receives the gold they extort. One solution may be to require the shells to disclose their actual owners and for federal regulators to use anti-trust laws to address patent abuse by IV and others.

We are just beginning to understand who controls social media at work

The now-famous case over a blog that sued an outgoing writer to reclaim his Twitter followers is forcing scholars to think about who owns workplace social media accounts. Professor Zoe Argento explored how to balance the personal character of an account versus the account’s value to a company’s goodwill. The issue is turning into a can of worms not just for the law of trade secret but for employment law too. (See the abstract for Argento’s “Who owns the Social Media Account.”)

The smartphone patent mess: the past is the key to the future

The sight of Apple and Samsung using hundreds of thousands of patents to sue each other all over the world is enough to induce despair about the patent system. But Professor Colleen Chien of Santa Clara puts this in perspective by studying two previous patent epidemics — one over farmers’ tools in the 1880′s and another over railroad technology around the turn of the century. In both cases, interest groups built the requisite pressure over a period of 15-30 years to reform the system. To address the current problem, Chien says history shows that narrow laws will fare better than broad bills aimed at reforming the entire patent system.

The Supreme Court and unlimited copyrighted

The Supreme Court’s recent decision upholding Congress’s right to pluck material from the public domain has implications for free speech, according to Professor Howard Abrams (paper here). The Court’s expansive view of the constitution’s copyright clause means copyright defendants will have to rely on fair use and the idea/expression dichotomy rather than the First Amendment. There is also the question of what will happen next. ”Mexico has already adopted life plus 100 years [for copyright terms] and Disney is salivating.”

Bureaucratic behavior determines the patent landscape

Two little know institutions, the Court of Appeals for the Federal Circuit (the patent court) and the United States Patent and Trademark Office, have an outsize influence on the country’s innovation policies. Their decisions about patents are shaped in part by a desire to preserve their power, prestige and relevance — and may not always align with the country’s best interest.

At the Stanford event, scholars like Paul Gugliuzza explored why specialized courts like Federal Circuit behave the way they do while members of the USPTO put themselves on the line to explain how the office collects fees (this led Professor Mark Lemley to question whether the USPTO’s fee structure will lead it to try and maximize revenue at the expense of issuing quality patents).

– — –

These summaries represent only a few of the conference highlights and reflect my own cursory impressions. To get a proper understanding of the ideas at play, please consult the scholars’ work directly. The conference was organized by Brian Love who has recently accepted an assistant professorship at Santa Clara Law Faculty.

See a full list of the presentations here.

See the scholars and their papers here.

(Image by Andrey Burmakin via Shutterstock)

The storyline (true or not) is simple enough — a popular inventor fights to protect the fruits of its genius from a shameless imitator. But Apple’s ability to tell that simple story in court is based on a sophisticated legal strategy that took as much time and creativity to develop as any one of its products.

Apple’s custom-built legal strategy can be seen in the unusual legal arrows it’s using to sling Samsung. The company’s dramatic accusations that Samsung “slavishly copied” the design of the iPad and iPhone, for instance, are based on a type of patent (called “design patents“) unfamiliar even to most intellectual property lawyers.

Far less common than conventional “utility patents,” design patents protect the ornamental aspects of a practical object. According to law professor Sarah Burstein of the University of Oklahoma, design patents were traditionally limited to fields like furniture and lighting until Apple began obtaining them for consumer electronics.

“It’s a credit to Apple and its patent counsel who made progress in getting them through clever claiming,” said Burstein, who specializes in design patents.

In addition to design patents, Apple is also using another lesser known form of intellectual property known as “trade dress” to jab Samsung. Unlike trademarks which protects names and logos, trade dress protects distinctive shapes and packaging like Jif’s lemon juice bottle or, in this case, the iPad.

“Most companies don’t do much with design patents and trade dress. It’s an after-thought but wasn’t for Steve Jobs,” said intellectual property lawyer Peter Toren of Weisbrod, Matteis & Copley, noting that Jobs has his name on hundreds of design patents, including the stairs of the Apple store.

Interlocking legal forcefields

Neil Wilkof, an Israeli law professor and IP lawyer, says the company’s fixation with intellectual property dates back to the 1980s when it confronted clones that copied the operating systems of Apple II computers. Apple made history in 1982 when it won an appeals court verdict declaring for the first time that companies could use copyright to protect the software embedded in chips.

For Apple, this was just the beginning of an effort to push out the legal boundaries protecting its products. By the 1990s, Apple lawyers had developed a strategy of wrapping layer after layer of legal rights around each gadget. These layers can include one of its dozens of i-related trademarks or some of the thousands of patents in Apple’s portfolio.

“Apple is very much a believer in using a coordinated, comprehensive intellectual property protection scheme,” said Toren, the IP lawyer.

In practice, this means that any Apple product — from basic headphones to a 16 GB iPad — is bristling with utility patents, design patents, trade secrets, trade dress, copyright and other legal spikes designed to keep its competitors far, far away.

The company’s obsession with intellectual property is also reflected in its refusal to prune its patent portfolio. Typically, companies let some of their weak patents lapse rather than paying thousands of dollars in maintenance fees to hold onto them. Not Apple. According to the Patently-O blog, Apple never abandons a single patent.

And the company is still at it. Apple’s most recent coup is what appears to be an unprecedentedly broad design patent for the wedge shape of its Mac Book Air laptop.

More harm than good?

Apple’s bulging intellectual property package is paying off in its fight with Samsung. The company can hold up each patent or trademark as a badge to tell the jury and the press that it alone is the inventor. If the company wins in San Jose, the verdict will vindicate both its narrative and its aggressive legal strategy.

In the bigger picture, though, Apple’s innovative use of intellectual property may ultimately be harming it and everyone else. In the years since Apple won its 1982 copyright claim, more and more companies are clogging the courts with IP claims of every description. These include big companies who use their IP to squash startups that can’t afford lawyers as well as  patent trolls — shell companies that don’t make anything but use second-hand patents to shake down companies that do (including Apple).

In the hype surrounding the Apple-Samsung, it can be easy to forget that, for consumers, more intellectual property means more monopolies — and higher prices. It also means that companies divert research money to lawyers and that the overall space for innovation shrinks.

The patents originally belonged to AOL and were purchased by Microsoft earlier this month. Microsoft in turn sold 70 percent of the patents to Facebook for $550 million cash. The source would not comment on the strategic reasons for the deal.

Given the broad range of patents in question, Facebook may have acquired them simply to protect itself from further suits like the one Yahoo filed against it earlier this year. Newer firms typically do not focus on patents which can make them vulnerable to lawsuits from established companies.

Google, for instance, made little effort to build up its patent portfolio but then found itself facing a mounting series of lawsuits. After a consortium of rivals out-bid it for bankrupt Nortel’s patent portfolio, Google decided to purchase Motorola Mobility and its patents for an eye-popping $12 billion last summer.

Facebook may be attempting to stockpile early before it comes under more serious threats. The Microsoft deal is the company’s second major patent acquisition.

Microsoft acquired those patents and hundreds of others in a deal with AOL earlier this month.

The news was announced on Facebook’s website.

The move comes as Facebook wades deeper into the waters of patent litigation while it readies for an IPO expected in May. The social network is in a major patent lawsuit with Yahoo and is also wrestling with dozens of smaller patent suits.

As tech companies grow, it is common for them to seek out patent portfolios as a form of self-defense against other tech behemoths.

The Facebook purchase is especially intriguing, however, as it suggests a deepening strategic alliance between Facebook and Microsoft  . The latter was an early investor in the social network and both companies have common rivals in Google and Apple.

Microsoft acquired 925 AOL patents and patent applications in an auction for $1 billion. Shortly after, reports stated that Facebook had been an unsuccessful bidder in the auction.

Microsoft’s winning bid also gave it a license to 300 other patents that AOL still owns. Today’s announcement stated that Facebook too will have a license to those 300 patents — suggesting that Microsoft obtained a right to sub-license the 300 patents to certain other parties (like Facebook) Update – After some initial confusion, a Facebook spokesman confirmed that Facebook will only have a license to the patents owned outright by Microsoft that it did not purchase–275 patents–as opposed to the 300 patents still owned by AOL that it is licensing to Microsoft.

It is unclear how Facebook will use the patent portfolio in the near futre. Asked if Facebook will use it to sue other companies, a spokesman said:

“We believe that litigation over patents is a substitute for innovation. We believe in innovation.”

The spokesman also said Facebook was intrigued by Twitter’s announcement last week that it sign contracts with its engineers in which the company promised not to use patents in an offensive fashion.

Facebook would not elaborate on the nature of the patents it purchased. Reports have said that the 300 patents which AOL retained (and Facebook is now licensing) are related to imaging. If the reports are true, imaging patents would be significant to Facebook in light of its $1 billion purchase of photo-sharing site Intagram.

Late Wednesday, Samsung filed court documents in California, claiming Apple is infringing on eight of its patents. The action is a response to a February claim originally filed by Apple that Samsung was infringing on two of its patents that cover, among other things, spelling and auto-correct on mobile devices.

The eight patents named in Samsung’s counterclaim cover: “performing non-scheduled transmission in a mobile communication system for supporting an enhanced uplink data channel,” “signaling control information of uplink packet data service in mobile communication system,” volume control for external audio reproduction, multimedia syncing, data display, virtual keyboards, recording and reproducing digital images and speech and remote video transmission.

These technologies covered in Samsung’s claims aren’t limited to mobile devices, which has largely defined the patent litigation between the two companies. Rather, Samsung is effectively targeting  Apple’s entire product line. The technologies named are found among all models of Apple’s iPhones, iPads, iPods, Mac computers, Apple TV, iCloud and iTunes.

And as patent blogger Florian Mueller notes, two of the eight patents are considered FRAND (standards-essential, and must be offered to competitors at fair, reasonable and non-discriminatory licensing terms). Five of them were patents Samsung itself applied for, while the other three were purchased by Samsung from others. This is notable because the European Union has already begun investigating whether Samsung has been abusing FRAND patents, by overcharging on license fees to competitors — like Apple — on technologies that are necessary to any mobile device.

Samsung filed its response claims in the same California court where the two companies just agreed to arrange a settlement conference within the next 90 days. For those hoping there will be an end to the patent bickering between these two partners/enemies, don’t hold your breath — Samsung, at least, doesn’t appear to be in a settling kind of mood.

In lawsuits filed this week, a shell called “Touchscreen Gestures” claims devices like the iPhone, the iPad and the Blackberry Playbook are infringing on its technology. A related suit accuses Samsung’s Galaxy tablet of violating the same patents.

The patents are US  Patent 7190356 (“A method of identifying double tap gesture”), US Patent 7180506 (“A method for identifying a movement of single tap 7180506) and US Patent 7184031 (“A method identifying a drag gesture”).

A fourth claim takes aim at scrolling, invoking US Patent 7,319,457 (“Method of Scrolling Window Screen by Means of Controlling Electronic Device”).

All four patents were issued in 2007 and 2008 to Taiwanese company Sentelic, a privately-held company that makes touch-pads. CNET last year spoke poorly of the firm in reviewing a laptop:  ”The touch pad is equally terrible, which is to be expected: it’s a Sentelic. Erratic behaviour and terrible software is the hallmark of a Sentelic pad.”

To be valid, a patent must be new and non-obvious. (Our mobile editor Kevin Tofel notes, “Windows CE / Pocket PC had on screen tapping around 2000 and Palm even before that.”)

The trolls typically pick a plaintiff-friendly jurisdiction like East Texas where rural juries have frequently issued verdicts in the tens of millions of dollars.

The troll problem is becoming more acute in 2012 as top patent lawyers leave their firms to partner with hedge funds in trolling ventures.

Defenders of trolls (more politely called “non practicing entities”) say the patent lawsuits are a way to promote innovation. Critics say the lawsuits are a form of extortion.

Here’s a copy of the suit against Apple:

Touchscreen v Apple

Photo courtesy of Flickr user [Jacob Bøtter]