patent trolls

For the past several months, we’ve exposed the flaws in the patent system and how they’re being exploited by opportunistic patent trolls looking to extort a quick buck – or hundreds of thousands of bucks, if you will – from businesses large and small. It’s a drain on innovation, a plague to all of technology and a drag on the economy.

For years Senator Charles Schumer of New York has been a driving force in the battle to abolish low quality business method patents, the type that patent trolls regularly use to attack businesses with vexatious lawsuits. He authored Section 18 of the America Invents Act, which is known as the transitional program for covered business method patents.  The purpose of the program is to create an effective and fair post grant review for business method patents used in the “practice, administration, or management” of a financial product or service.

We’ve been vocal in our opposition of patent trolls and their attempts to extort settlements from businesses that actually create value. And we’ve done more than talk—in the past month, we fought a troll in court, and won, and we turned the tables on another, suing them in Federal Court.

Today we drove a stake into the ground in our dogged fight against patent trolls – we sued one of the most notorious patent trolls in America.

Score one for the good guys. Rackspace and Red Hat just defeated Uniloc, a notorious patent troll. This case never should have been filed. The patent never should have been issued. The ruling is historic because, apparently, it was the first time that a patent suit in the Eastern District of Texas has been dismissed prior to filing an answer in the case, on the grounds that the subject matter of the patent was found to be unpatentable. And was it ever unpatentable.

On Thursday March 14, 2013 the House Subcommittee on Courts, Intellectual Property and the Internet held an important hearing entitled “Abusive Patent Litigation: The Impact on American Innovation & Jobs, and Potential Solutions.” Judiciary Committee Chairman Bob Goodlatte of Virginia summed up the patent troll problem perfectly in his prepared remarks:

The most creative and productive elements of our technology economy won a major ally last week when President Obama called out corrosive patent lawsuits and called for patent reform during a globally accessible Google+ Hangout.

David Kappos runs the United States Patent and Trademark Office. On Tuesday he gave a speech at the Center for American Progress where he gave a full throated defense of software patents. Here is a link to a pretty good article on the speech: http://arstechnica.com/tech-policy/2012/11/us-patent-chief-to-software-patent-critics-give-it-a-rest-already/

On this blog, we have written a number of times about patent trolls, the patent system and our efforts to change it. Rackspace is increasingly the target of lawsuits filed on behalf of these patent trolls; suits that aim to disrupt our business and extract a tax on innovation. Patent litigation is the fastest-growing part of our operational expenses at Rackspace — faster than salaries, faster than R&D, faster than datacenter energy costs.

In a recent blog post, I issued a call to action to make patent trolls pay. It stemmed from a questionable patent infringement lawsuit filed against Rackspace by a patent troll – a plaintiff calling itself PersonalWeb Technologies – that claims Rackspace infringes on its patents with Rackspace Cloud Servers and by hosting the GitHub code repository (view the complaint here).