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Summary:

This just might be the stupidest patent lawsuit of the year. A shell company is suing Apple over a patent called “Wireless Mobile Phone Including a Headset” — this is just the latest evidence the patent system is badly broken.

Norwegian Troll
photo: Flickr / Jacob Bøtter

Editor’s note: This story originally contained a reference to Intellectual Ventures that could not be substantiated and did not belong in the report. We have removed that reference, and apologize to readers.

The head of the U.S. Patent Office last week told critics of the patent system to “give it a rest already,” and said the system is working. If only it were so. The latest lawsuit against Apple shows the system may be more broken than ever.

In a complaint filed in California, a shell firm wants the iPhone maker to hand over $3 million for daring to include headphones with its phone devices. Intelligent Smart Phones Concepts LLC points to U.S. Patent 7,373,182 titled “Wireless Mobile Phone Including a Headset” to argue Apple must pay up.

Despite its fancy name, the plaintiff doesn’t make or do anything, meaning that it’s not vulnerable to a counter-attack from Apple. And, in case you’re wondering, its marvelous invention is depicted like this in the patent:

Contacted by telephone, the shell company’s lawyer, Sepehr Daghighian declined to comment or explain who his client is. But we can make a guess.

A search of the USPTO patent transfer database shows a number of connections to the Seattle area. And one of the named inventors, Peter Zatloukal, is a former Microsoft employee.

USPTO director, David Kappos, who is leaving his job in January is well-liked and highly respected by both academics and the patent bar. But his defense of the status quo simply does not hold up. At this rate, his agency risks teaching a generation of young innovators to hold the entire system in contempt as a vehicle for destructive lawsuits and parasitic opportunists. Enough is enough.

Intelligent Smart Phone Concepts v. Apple

  1. What an embarrassing piece of reporting.

    First, “All of this points to Intelligent Smart Phones Concepts LLC being another spawn of mega-patent troll, Intellectual Ventures or one its relatives.” Ummm, Apple is an original and continued investor in Intellectual Ventures. An ounce of investigative journalism would have uncovered this widely known fact. As an investor, Apple gains a license to all patents acquired by Intellectual Ventures. In smaller words: IV would not sue a company who already has a license to a patent.

    Second, “For the unfamiliar, IV is run by a former Microsoft executive named Nathan Myhrvold who has made it his mission to amass junk patents and sue everyone.” It seems the reporter is most unfamiliar with how costly patent litigation is, and especially when one uses a “junk patent” and loses all that litigation money. Intellectual Ventures has over 30,000 patents – including top tier patents. They would not sue with this weak asset.

    Third, read the claims. They recite a lot more than “Apple uses headphones.” The simplicity of this shortening sums up how little the author understands about patents.

    There is not enough space here to go into what is really happening in the patent space, but this article is woefully blind to what this particular litigation is about, who is behind it, or what is really happening to the startups. In the absence of knowing anything relevant though, please stop reporting unsubstantiated and embarrassing nonsense.

    GigaOm has higher reporting standards than this.

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    1. Will, thanks for taking the time to respond but your comment seems more patronizing than constructive. You spend most of your words denigrating my knowledge or sophistication rather than addressing the underlying issue — whether suits like this reflect a functional patent system.

      I’m happy to get into the back and forth of IV and so on but, for transparency, I’m curious who you are.

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      1. Kudos on not actually addressing the point raised in any comments so far.

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      2. First of all, you were misleading. If you’re going to say that a patent is described by an image, at least use the full image from the patent. You omitted half the image, either intending to willfully misrepresent the facts or by ignorance of the patent document. Second, this patent is not just about headphones, it’s about using audio in addition to non-audio signals through the headphone interface, which I was not aware of any phone doing before the iphone. There is a significant third party market that takes advantage of the feature described in the patent. You should do a little more homework before saying claims are bogus.

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      3. One last thing – I’m with Will. This article demonstrates sub-par reporting standards. You know who I am so you can’t pretend that I’m hiding behind anonymity. Defend yourself or avoid the subject again, it’s your standards on the line not mine.

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      4. Josh, no you haven’t identified yourself. You do you work for? What do you do?

        As for my knowledge of patents, comment sections are a poor place for flaunting credentials; but a little Googling will show I know a thing or two about IP.

        As for the substance: the patent is for a phone with headphones for crying out loud. If you can explain how this is not anticipated or obvious, please do. Or better yet, please weigh in on how you think people gaming a broken regulatory system with strategic lawsuits contributes to net public utility or innovation.

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      5. I gave you my full name, a little googling will show that I know a thing or two about a thing or two. It doesn’t take a lawyer to show that you misrepresented facts in your article.

        It’s pretty clear in the patent that it’s not just for including headphones with the phone. It describes the phone having a headphone jack as a shared audio and non-audio input/output interface. That’s the key distinction that makes it a non obvious claim in light of the long history of using headphones and headphone jacks in phones solely for audio output and not for non audio signals.

        Fess up to your factual omissions. Then maybe someone will want to discuss the bigger picture with you. It won’t be me, you earned my disgust today. My mistake is that I shouldn’t have expected to be anything but disgusted by a lawyer.

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      6. Vladimir Protopopov Wednesday, November 28, 2012

        Josh,
        You are wrong. There is no mentioning of ”Non-audio signals” in the patent, but only “telephony and non-telephony audio signals” (Figure 4).
        Read once more all 14 claims – it is just plain description of a standard cellphone with audio connector and MP3 player. Moreover Apple is not so stupid to use audio jack for digital signals. Standard USB is much better.
        Hope Plaintiff will net get a penny from Apple.

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  2. This lawsuit cannot be used to assess or reflect the patent sytem and its health without knowing the details behind the suit. That is gross overstatement. Who is really suing? Why? There are a dozen options and possible back stories. Elementary deduction says all the possibilities are in play until evidenced otherwise. It could be a nuisance suit, but we will not know until another 10 defendants are added. It could be a competitor hitting Apple via a shell company (doubtful though, the asset is too weak, and the chain of title is a mess), but this will not be known until discovery. For now though, it is clear that IV is not behind the suit.

    I’ll reach out to you when I have more time.

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    1. “gross overstatement” “Elementary deduction” etc. With respect, Will, it feels like you’re trying to bootstrap your argument or advocate on someone’s behalf.

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      1. Advocate on someone’s behalf? Absolutely not. Advocate for better reporting and a more progressive discussion on patent happenings? Yes.

        The article lacked basic legal research and then proposed unsubstantiated speculations that were wholly traversed by basic legal research.

        Worse, the article conveyed frustration with the patent system (‘Enough is enough’) while resting on those unsubstantiated speculations.

        Bootstrap? See the Michael Jemal links below. Nice work, seandr. ;)

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  3. Varia Holdings LLC, the WA shell company that transferred the patent to Intelligent Smart Phone Concepts LLC, lists Michael Jemal from Brooklyn, NY as its sole member.

    http://www.sos.wa.gov/corps/search_detail.aspx?ubi=602756859

    Intelligent Smart Phone Concepts LLC, has a Brooklyn NY address.

    You can google Michael Jemal yourself.

    I’m no fan of Intellectual Ventures, but it doesn’t appear they are the troll behind this lawsuit.

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  4. P.S. Intelligent Smart Phone Concepts LLC is registered in Delaware. You can search for more info about the company at the Delaware Division of Corporations web site:

    https://delecorp.delaware.gov/tin/GINameSearch.jsp

    Unfortunately, the search is only operable 7:00 a.m. to 11:59 p.m. EST. Apparently, their databases needs their sleep.

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  5. GigaOM is dropping down its standards by publishing below par articles. Perhaps the author is good in other areas, but this motif is far from his area of expertise.

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  6. Editor’s note: This story originally contained a reference to Intellectual Ventures that could not be substantiated and did not belong in the report. We have removed that reference, and apologize to readers.

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  7. from USPTO search for registered patent attorneys / agents:
    Boards & Counsel > OED > Patent Attorney/Agent Search > Search Results

    You searched for Last Name: roberts, First Name: j
    Displaying results 1-7 of 7 found. Please select the Last Name of a row to view its details.

    Last Name First Name Middle Name Suffix City State/Province Postal Code Country
    Roberts John S San Francisco CA 94103 US
    Roberts John H Memphis TN 38104 US
    Roberts John L The Woodlands TX 77381 US
    Roberts John L Columbus IN 47201 US
    Roberts John L South Jordan UT 84095 US
    Roberts Jon L Reston VA 20191 US
    Roberts Jonathan A Arlington VA 22203 US
    … hmmm. No “Jeff John” here, folks.

    One more guy who thinks he knows something, but lacks even the most basic credential to substantiate his theory of knowing.

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  8. So this is what it looks like when nerds fight? Kinda boring.

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  9. haha

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