For those unfamiliar with the term, "patent sitting", or "patent trolls", refers to company's who own patents that are not actively using them: they patented a concept, an idea, without actually producing something. Normally, this isn't a bad thing: in today's world, it's probably a good idea to patent something when you first dream it up, so someone can't steal your thunder.
The problem, then, is when the patent granted is so incredibly vague that it's clearly designed to catch as many individual and unrelated ideas as possible. Patenting something like "a device linked through a USB Port that gives control input to a computer system based on key strokes made by the user", for example, grants you ownership of every keyboard on the planet. You now have the legal standing to demand compensation and ownership of the infringing products. You just became one of the richest people in history. Good for you.
Patenting something, waiting a while, and then launching a series of law suites against people who - unwittingly - infringed upon your patent rights has become quite a profitable business of late, and it's finally starting to get interesting.
Patent mud-slinging had been happening for some time, due to the frankly ridiculous laws around patents and the aburd nature of what constitutes a "patent". Sony were stopped from selling Playstation 3 due the mere suggestion that it infringed upon patents. The mobile phone world had it's first bomb-shell this year with a wonderful patent.
A helpful quote:
"The patent is #7,679,604, “Method and apparatus for controlling a computer system,” and it describes motion control as a means of interacting with smartphones and the like.
The invention, the patent’s authors explain, “facilitates an intuitive motion control of the application by physically manipulating the electronic device…it enables a user to intuitively control the state and/or displayed content of a computing device without the conventional need of pressing button(s), or manipulating a trackpad, trackball, etc. In this regard, the motion control agent represents a new paradigm in user control of computing systems.”
Sounds quite a bit like the motion control you find today in Apple’s (AAPL) iPhone, doesn’t it? Or in Palm’s (PALM) Pre. Or Google’s (GOOG) Nexus One (ironically, one of the inventors to which the patent is credited is a Google engineer). Or Motorola’s (MOT) Droid. Or Nokia’s (NOK) 5800."
That one is still playing out, to my knowledge.
Well, here's another wonderful storm brewing. And this one is going hurt.
"Last month, Texas-based Lodsys contacted a number of App Store developers who have implemented an in-app upgrades model in their games, demanding a percentage of revenues made due to the use of a Lodsys' patent on the model."
They want licence fees and revenue for anything that uses an "in-app upgrades model". I recommend reading it a bit further, there is more to it than that, however it's so incredibly vague that it covers a very, very large number of games. Independant or not, Lodsys now has the legal right to demand licencing fees, revenue and compensation from every infringing game. They just became insanely wealthly. And greedy. They've added EA Games to their list, on top of Apple. Apple and EA Games are giants, and they don't lose - they have more money for this kind of crap than most of us will ever have in their entire lives.
So, we get to sit back and watch as this interesting keg of power (slowly, thanks to the speed of the legal system) explodes. I'm putting my money on a bunch of hush money settlements, followed by EA and Apple funding the collective shit out of (re)election campaigns of anyone who can effect the reform of patent laws.