You have got to admire Mark Cuban’s chutzpah, if nothing else. As a self-proclaimed enemy of patent trolls, a vocal advocate for fundamental change to the US patent system and the funder of the EFF’s Mark Cuban Chair to Eliminate Stupid Patents, this high-profile billionaire has long been a darling of the patent-sceptic side of the US reform debate. Never mind that back in 2012 he became a major investor in Vringo, for the anti-patent lobby Cuban is on the side of the angels.
"The current state of patents and patent litigation in this country is shameful … Silly patent lawsuits force prices to go up while competition and innovation suffer. That's bad for consumers and bad for business. It's time to fix our broken system,” Cuban said when announcing the creation of his EFF chair. The tech community loved it. In 2014, in an interview with WSJ.com, Cuban went even further with his criticisms. “Blow up the patent system,” he said; “patents don’t matter”; “ideas are easy”. And, no doubt, he meant it. How times change.
Earlier this year, Cuban signed a letter of agreement to acquire the exclusive rights to license a patent owned by someone called Shane Chen (the same Shane Chen whose company Inventist has been sued by Segway and its Chinese owner, as we reported earlier this week) . The patent covers “a two-wheel, self-balancing personal vehicle”, known in common parlance as a hoverboard. Chen has been in dispute with a company called IO Hawk about the hoverboards it was importing from China and selling in the US. Cuban has now taken that case over, while also reportedly sending cease and desist letters to other parties on top. When news broke that WalMart was to start selling hoverboards, Cuban responded: “They are in for a nightmare.” It does not take much to work out what he means by that.
Someone purchasing the exclusive license to a patent and then seeking to enforce it against alleged infringers and those that distribute their allegedly infringing products; it’s a familiar sounding business model, isn’t it? For many patent owners, teaming up with such a person or entity makes sense. As inventors, they may not have the time, the money or the expertise to manage a licensing programme themselves; they may have struggled to get a hearing from potential infringers with deeper pockets and greater resources; so why not hand over responsibility to a third party that has the wherewithal and means to drive a hard bargain and/or to go to court it in exchange for a share of the proceeds?
At IAM we call that kind of arrangement a win-win business partnership. Many others, though, are far more dismissive. They call it patent trolling.
Basically, after spending years lambasting the patent system and the “trolls” who “abuse” it, Mark Cuban has discovered that patents make sense and that you do not have to be the maker of anything to have a legitimate right to enforce them. Some might label him a complete hypocrite, but we think that would be unfair. Cuban now “gets it” – he is a sinner in the process of repenting.
As part of that redemption process, Cuban might want to sit down with the EFF and other anti-patent groups to explain some real world home truths to them. Perhaps, he might say, this whole troll thing is much less black and white than they like to pretend; that SMEs and lone inventors often need third party support to enforce their rights; and that backing legislation which makes it even more expensive and much riskier to assert patents is going to ensure securing such support will be even harder than it is now.
Given the money they have taken from Cuban, it is hard to believe that the EFF would not pay very close attention. Who knows, they might even share what they think with us. We look forward to reading the organisation’s press releases about this.