loquitur

Refresher:  There are two parallel systems involved with patent validity.

One is the patent office itself who issued the patents and wants to nullify them
saying they were overbroad and anticipated by network standards committee
documents (RFCs) fleshing out end-to-end encryption.  The PTAB authority
has domain-level experts.

The other system is the courts, who use different standards, and non-expert lay juries
including the ones attached to the infamous Eastern District of Texas who are easily
swayed by lawyers in the adversarial system.

The Supreme Court has commented that it's strange to have two systems, but
Congress designed it this way and only the legislative branch can try to straighten the
messy system out with new law.   So, it's a turf war.

Meanwhile the security standards were implemented by different companies (including
Cisco, Apple, and Microsoft) in different ways.  These companies rolled out actual
products, but VirnetX peddled the overbroad patent claims saying they were "first".

Dr. Short may have had some nifty implementation wrinkle, but VirnetX wants folks to
believe they invented end-to-end encryption, when what they do is basically implement
DNS lookups to secure domains ending in .scom.   This is not stuff that appears as
novel in textbooks on network security, just a workman-like engineering effort
subject to multiple re-invention.

To add to the insult, VirnetX thinks their one improvement idea is worth multiple
hundreds of millions, or a significant percentage of sales.   The iPhone utilizes literally
thousands of hacks -- Apple and the rest of the industry would pay this amount only
for complete bundles of thousands of patents from established cellphone technology
companies like Qualcomm and ye olde Motorola.   So the issue of proper "apportionment" is
in flux.   Adding to all that is the Supreme Court decision in Alice v. CLS Bank,
which since 2014 has provided a dim view of software patents in general.

Since VirnetX conned some patent clerk to accept broad language in their issuance
which may even be upheld by appeals courts, they may yet win on a technicality,
but it won't be because they invented *the* way to turn an iMessage from the color green
(unsecure SMS) to the color blue (a bit more secure, until backup-to-iCloud at least).

The problem with patents like those held by VirnetX is multi-fold.
Not only were they purchased by a troll (i.e., a patent assertion entity [or PAE]
and also a non-practicing entity [NPE] at first), but they are overbroad,
which slipped by the patent office when issued.  

The PTO realized their mistake and had them invalidated by the Patent Trial and Appeal Board (PTAB),
whose decisions oddly run in parallel with the courts, who have different technical
breadth requirements for claims, and who use non-technical juries to adjudicate.

So they are simultaneously held invalid by the PTO as a regrettable mistake
(they are basically warmed-over public Internet committee RFCs) and held
valid by the Texas troll-friendly courts.   Only a higher court can resolve
PTAB vs. CAFC appeals.

Simultaneously the (tentative) judgement awards are completely out-of-proportion
to any value added to a product such as the iPhone, even if the patents were
deemed valid.   Juries have been fooled into thinking that the bogus patents
are worth $1.20 per unit, even though the underlying idea (e.g. adding security
to iMessages enough to turn them from color green to blue) is one of literally
thousands of ideas within Apple software.   So, until rationality can come to jury
damages, it's rather random.

Richard Stallman was right that software patents are like minefields.

Much of the dust-up with Qualcomm and actual trolls like VirnetX
has to do with the concept of patent "holdup".   This informs the
issues of FRAND, etc. mentioned in earlier comments.   An article
from the FTC explains things well, with case histories from Motorola and
Microsoft over H.264 royalties, and LSI/Realtek over underlying SEPs.

https://www.ftc.gov/system/files/documents/public_statements/1350033/mcsweeny_-_the_reality_of_patent_hold-up_3-21-18.pdf

The holders who often lay in wait until standards settle often demand an unreasonable
percentage of product sales for implemented ideas which are only a tiny percentage of
the total IP content of a device.  

For example VirnetX wants a $1.20 per iPhone for a few patents which are warmed-over
ideas pre-dated by public RFC (2401) network protocol standards.  They've actually been
declared invalid via a parallel adjudication by PTAB body technical experts.   Yet
at the same time VHC has convinced lay juries (in Texas, natch) for multiple hundreds
of millions for "VP on demand" which Apple doesn't even use anymore.   For just
one obvious idea they want a percentage of sales, when an iPhone has thousands
of hacks to make it all work.  Perhaps Qualcomm's ideas are worth 0.5% of sales
in toto, just like Nokia's or Motorola's of yesteryear, but less as time goes on when
more software ideas are integrated into a product.   Dolby is an example of a
company that isn't too greedy, historically.

So, how can fair apportionment of patents too "big for their britches" be made to work?
Courts coming up with random outcomes seem to be the wrong places to determine such.

thrang said:

Apple seems insanely careful to NOT do what she says is endemic in the tech industry. It doesn't mean they don't swing and miss on occasion, but I suspect Apple is treading VERY deliberately with Health initiatives...

True, because (and you likely know this but not many others) the chairman of the board of Apple is Dr. Art Levinson, erstwhile CEO of biotech giant Genentech until they were absorbed by Roche.   He certainly knows about proceeding deliberately with the inherently conservative FDA, achieving successful scientific outcomes with statistical significance, and marketing any resulting medical products with aplomb, not bombast.   Dr. Levinson is an enormous behind-the-scenes mover and shaker of Apple Inc.

Left unstated here is that this is just the Texas court adjudication, using lay juries who are not told about  ...
the parallel system of the USPTO Patent Trial and Appeal Board (PTAB), which has declared the
patents at issue entirely invalid!    PTAB uses domain experts, not random juries, and has held
that the VirnetX patents are straightforward, non-novel extensions of various Internet RFC standards
from eons ago.   The PTAB rulings are basically the patent office admitting that they made a mistake
issuing these over-broad patents.   The courts meanwhile plod on inside their own bubble, in a twisty
"race toward finality" between the two systems exhausting the appeals within each system.