By on October 6, 2009

Hybridlagiarism?

Bloomberg reports that the US International Trade Commission has launched a probe of alleged patent violations which could result in the banning of all Toyota hybrids from the US market. Paice LLC won a 2005 civil suit against Toyota, in which Paice’s founder Alex Severinsky sought a court order banning the sale of Toyota’s Prius, Highlander and Lexus RX400h hybrids. Instead, an appeals judge awarded Paice $4.3m in damages, and ordered Toyota pay Paice a $100 royalty per hybrid sold in the US. In the current case before the ITC, Paice claims that Toyota’s Camry, third-generation Prius, Lexus HS250h sedan and Lexus RX450h are “are materially the same” and violate the same patents as those in its first case. If Paice can convince the ITC that Toyota indeed violated its patents, he will still need to prove that the little-known company has a market to protect. But Paice doesn’t actually want Toyota to be banned from selling cars. In the words of one patent attorney,  an “injunction would have given Paice strong leverage to negotiate a lucrative licensing deal with Toyota…Paice always felt that their technology was worth a lot more than [$100 per car] to Toyota.”

Independent patent lawyer Michael Murphy explains Toyota’s patent violation thusly:

At its heart, it’s the cooperative dual management of the internal combustion and the electric motor. Either one is a candidate at any time for providing some of the torque or all of the torque needed to spin the drive wheels. What Paice says is its real innovation is in the fusing of the two, the seamless management of torque from either or both drive inputs….

If all you were doing was switching from an electric mode to a gas mode, you wouldn’t have infringement. In other words, you wouldn’t have infringement if you made a crude hybrid system that said we’re either running on batteries or we’re running on the gas engine, but never both.

The real point of [Paice’s claimed] sophistication is where you get torque. It may be, under certain conditions, it’s more efficient to get torque from the electric motor. Under other conditions, it’s more efficient to get that from the gas engine. And under other conditions, you want to seamlessly blend torque from both sources.

[Paice would] say their microprocessor-based controller looks at engine speed, motor speed, battery voltage, battery charge, ambient temperature, acceleration, direction, deceleration—all of those things—to make a decision about how much of the torque should be supplied by the engine versus the electric motor. That’s the heart of it. If it was an either-or system, Toyota wouldn’t be in court. Also, it wouldn’t be a very efficient hybrid system.

Read a complete interview with Murphy at hybridcars.com.

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70 Comments on “Toyota Hybrids Facing US-Market Ban?...”


  • avatar
    FreedMike

    Now THAT’s fresh ink. Wow. This could be a massive blow to Toyota.

  • avatar

    Sounds like I should pick up some more shares of FORD.

  • avatar
    psarhjinian

    ETA:

    What Paice says is its real innovation is in the fusing of the two, the seamless management of torque from either or both drive inputs….

    No, the real innovation is building and selling such a vehicle at a price and reliability level that’s acceptable to hundreds of thousands of buyers.

    I’m all for protecting the little buy, but Paice could have dropped the hammer on this when the first-gen Prius hit North American shores. I’m reminded of RIM/NTP from a few years back—notably how NTP waited until RIM was “high-flying” enough to make a lucrative target.

    I’m also reminded of how this kind of behaviour is actually chilling innovation, rather than protecting the small inventor. It’s coming to the point where patents are going to need to be considered in a fashion similar to trademarks: if you don’t defend them, or aren’t able to demonstrate that you’re suffering loss, then sucks to be you for sitting on it for a decade. The patent system is not supposed to be a mechanism for extortion.

  • avatar
    psarhjinian

    Sounds like I should pick up some more shares of FORD.

    Don’t kid yourself: if Ford and Nissan start to make money on their hybrid efforts, Paice will be on them like white on rice.

  • avatar
    m0jumb0

    Woo woo patent trolls… our patent system is seriously screwed up when a company that produces nothing but lawsuits can do this. What’s novel about using a computer to control the blend of torque from a gas and/or electric engine? There is microprocessor control for EVERYTHING nowadays. The patent examiners don’t understand technology so we end up with dumb patents like this getting granted. Hell Microsoft and IBM have tons of patents like this

  • avatar
    psarhjinian

    Hell Microsoft and IBM have tons of patents like this

    They do that because collecting patents en masse is kind of like stockpiling nuclear weapons: they’re not useful in and of themselves, but the threat of all-out patent litigation keeps all the players in-line. Think of it as the intellectual-property version of mutually-assured destruction: wasteful, crazy and distracting, but a necessary evil to ensure peace.

    The problem is when you get companies like Paice or NTP, who have nothing to lose because they’re little more than patent aggregators and IP lawyers. You can’t hit them with a retaliatory patent suit or injunction because they don’t sell anything. These people are the terrorists** of the IP world: nothing to lose, everything to gain, highly motivated and hard to squash.

    ** is there a version of Godwin’s Law for the T-word?

  • avatar
    Juniper

    Toyota and other large corporations should negotiate contracts and pay royalties to companies that own the IP. Not ignore them and force them to sue. Japanese companies stole a lot of IP in the 60s and 70s and protected their companies at home in court. Now the Chinese are doing the same.
    psarhjinian. does your company have patents?
    can I just use them without compensating your company? It’s not just the law. Ethical companies pay royalties, spending their money on technology not on defending their thievery.
    It sounds like you are in favor of IP anarchy.

  • avatar
    xyzzy

    Sounds like I should pick up some more shares of FORD.

    Doesn’t Ford license its hybrid technology from Toyota?

  • avatar
    slateslate

    m’eh, classic opening round tactic: give us what we want or we’ll injunction your ass.

    don’t know the merits of the case but whatever the outcome, it’ll be a while until a resolution unless Toyota agrees to Paice’s demands.

  • avatar
    Rada

    We need a “tort reform” for the IP. The whole idea of “I thought of it first!” is idiotic. So what if you thought of it first?

  • avatar
    DPerkins

    A $100 input cost is HUGE in an industry that seeks out savings in fractions of cents.

  • avatar
    psarhjinian

    We need a “tort reform” for the IP. The whole idea of “I thought of it first!” is idiotic. So what if you thought of it first?

    There’s some value to it because there’s a natural lag from “thought of” to “got the capital to develop” and finally to “developed and released”. If you didn’t have the patent system, companies with established fabrication or development systems would grind the little guy into the dirt.

    There needs to be balance, though: like trademark law, the onus is on you to defend your patent within a reasonable amount of time or it becomes public domain. Giving you a year or so to raise funds, tool up and keep abreast of your competition is ok; waiting six years until someone else has made money on and long-term plans for it and then extorting them is most certainly not.

  • avatar
    Juniper

    psarhjinian
    apparently you do not hold any patents nor have had your work copied and commercialized.
    Toyota already lost this case earlier. Now they are saying it does not apply to the new vehicles.
    To me this is a classic case of the big guy trying to wear down (financially) the little guy.
    Your defending Toyota is disgusting. There is a long history of Japanese and Chinese companies copying without paying and it has cost US and other companies billions. Ethical companies review patents, negotiate contracts and pay royalties. Toyota and other industrialists are patent machines, they know the game and would sure as hell have you in court if you touched one of their patents. On the other hand they ignore others patents and wait to be sued. Been there!

    sorry I repeated, my earlier comment vanished then came back.

  • avatar
    Chicago Dude

    Doesn’t Ford license its hybrid technology from Toyota?

    No.

    The confusion came from a cross-licensing pact Ford and Toyota signed. They agreed not to sue each other in regards to hybrid patents, which each company is pursuing on their own. This type of deal is extremely common among large computer companies but is not well understood by the general public.

  • avatar
    Telegraph Road

    Ford need not worry.

    In Paice vs Toyota, Judge Folsom ruled:
    “The Ford license covers the early Prius I technology, which has been abandoned by Toyota in favor of the technology covered by Paice’s patent.”

  • avatar
    Chicago Dude

    We need a “tort reform” for the IP. The whole idea of “I thought of it first!” is idiotic. So what if you thought of it first?

    The US Patent Office couldn’t care less who thought of something first. They care about who starts to turn the idea into reality first, assuming that person continued working on until it was finished.

  • avatar
    Juniper

    FYI
    http://www.paice.net/AboutPaice/tabid/62/Default.aspx

  • avatar
    psarhjinian

    Your defending Toyota is disgusting.

    Really? Why? They (Paice) sat on their invention for years while Toyota and others did the legwork and took the risk: then they swooped in with a predatory patent infringement suit.

    I’d be a little more merciful to Paice if a) they showed that Toyota stole their IP or b) they genuinely released a product or tried to develop the technology. But Toyota didn’t do a), and Paice didn’t do b). That puts them in the same refuse bin as NTP, among others. They’re not some heroic little Tuckeresque innovator among big meanie auto companies, they a collection of lawyers who exist solely to cherry-pick lucrative cases.

    I know Microsoft or Toyota use patents to stifle competition, but there’s a little karmic balance in that at least they develop actual products and, to them, patent-warchesting is something you have to do (note my comparison of patents to nuclear deterrents). And yes, I think that submarining patents by anyone, including Toyota, needs to be addressed.

    But Paice is worth all the scorn I can dump on them.

  • avatar
    AndrewDederer

    I’m hardly an expert on patent law, but I think what we’re looking at is closer to a copywrite suit than anything else. Other hybrid systems (Honda’s for one) use electric assist to increase torque (it’s one of the reasons to go electric), yet they aren’t in this suit.

    This suggests that’s this isn’t a “road engine” patent bit (look it up, guy was collecting money for decades for every car based on a vague never-built patent, got the law changed a little).

    What this reads like is a case of bad “clean-room” reverse-engineering. What’s probably getting Toyota isn’t using a microprocessor to control all this, it’s that they apparently cribbed this set of algorithims. When working on cutting edge stuff like this, WHAT doesn’t kill you in court, HOW does (remember the whole intermitant windshield wiper movie?).

    If you want to “copy” an idea like this, you pretty much have to make sure your design team doesn’t know anything about how the other guy did it (and be able to prove it in court), otherwise you buy up any pattent remotely close to it, unless someone gets there first.

  • avatar
    Juniper

    psarhjian
    According to the above site. The Abell foundation invested 20 million in the company. Should their investment not be protected.
    Read the above reference. You may think it’s BS,
    I don’t.
    And apparently you have not been on the receiving end of infringment, I have.

  • avatar
    hwyhobo

    I am so sick and tired of patent trolls. Patents should not be granted unless you have built it and proved it to work.

  • avatar
    dmrdano

    As I understand it, a patent does not mean no one else can use the same or similar idea, but that it does indeed mean, “I thought of it and registered the idea first.” It really only establishes the first piece of evidence for litigation, much as a copyright does. This is why engineers keep careful lab books/records, and why they are always subpoenaed in a lawsuit.

    In cases I am familiar with, if it can be established that the base idea and at least some of what it takes to make it practical came from a particular person at a specific time; and that time was before anyone else; and he gets the idea registered (the patent), then he is entitled to some kind of royalty. There also must be some effort to maintain control of the idea. Finally, there usually must be at least some proof that the later party was aware of the previous idea and used it to help develop their product. A good idea without a good lawyer is just a dream (nightmare?).

    But what do I know…

  • avatar
    psarhjinian

    http://www.paice.net/AboutPaice/tabid/62/Default.aspx

    What that page does not mention is that Paice did effectively nothing with their technology aside from having discussions with a few manufacturers, none of which resulted in saleable product. They certainly didn’t say a damn thing when the Prius showed up in 1999.

    It should be telling that Paice brought this suit in the most patent-troll friendly court in the country.

  • avatar
    Juniper

    psarhjinian
    obviously we disagree on this issue, and that is fine.
    also it is obvious you are very passionate about this subject (as am I) where are you coming from on this? what in your background puts you there.
    I worked for a mid size company that got copied and patent bashed by a large Japanese company. That is where I’m coming from.

  • avatar
    zaitcev

    It should be obvious to anyone who can read that Paice is a patent troll. This story is a good example of the damage that patents deal to the global economy. But we (e.g. car enthusiasts) are completely powerless when facing this destructive rent-seeking. What are chances that our senators and representatives would heed our voices? But trolls like Myrwold have arimes of lobbists in Washington ready to do their bidding.

  • avatar
    Juniper

    OK
    So apparently to some of you, if an inventor comes up with an idea and tests it and develops it enough to get a patent, but doesn’t have the money to commercialize it, it is OK for someone else to take and use the idea without compensating that inventor. Well, that will certainly help encourage innovation.
    And obviously Toyota has never copied anything.
    Our automotive historians fail us.

  • avatar
    Quentin

    Based on Toyota selling 100,000 Priuses this year, Paice stands to make $10,000,000 this year with essentially no overhead costs. That is a pretty good profit for not actually making anything. Greed.

  • avatar
    Bridge2far

    Wow, a Japanese company copies and steals from another and calls the idea it’s own? Who would imagine such a thing happening?

  • avatar
    wsn

    Bridge2far :
    October 6th, 2009 at 6:51 pm

    Wow, a Japanese company copies and steals from another and calls the idea it’s own? Who would imagine such a thing happening?

    ———-

    Are you going to have dinner tonight?

    Yes? That’s my idea. You are stealing it.

  • avatar
    Dimwit

    I thought that Paice lost the case last week. They lost something vs. Toyota.

  • avatar
    PeteMoran

    The US legal and patent system allows this sort of action.

    It also allows you to trip over your own feet and sue the owner of the sidewalk.

    Pop quiz, who said “I have a steady job and a lucrative hobby filing nuisance lawsuits”?

  • avatar
    Adamatari

    Can you say Patent Troll?

    This is why I say DUMP the current patent (and copyright) systems entirely… It’s a huge block on useful innovation, a waste of resources, and besides any good idea gets thought up more than once, as Calculus’s invention by Leibniz and Newton (basically the two greatest thinkers of their age) proves. The fact that large companies conspire to not sue each other when working in similar fields proves how common it is to stumble across very similar ideas.

    I read a book about patent that clarified and solidified my opposition to it, Against Intellectual Monopoly (http://www.dklevine.com/general/intellectual/againstfinal.htm). In my opinion it should be better known.

    Toyota will win or at worst settle, that much I am sure of.

  • avatar
    gslippy

    I smell GM money funding Paice’s legal efforts, just in time for the Volt excretion next year.

  • avatar
    Daanii2

    As a 25-year patent attorney, I have to say that my experience is that the patent system harms innovation. It does not help it.

    Look at the Wright Brothers. Their enforcement of their patent set the aviation industry in the United States back so far that no US-designed planes flew in World War II — all US-made planes were under license from foreign companies.

    Look at the Selden patent. It would have done more damage to carmaking had Henry Ford not fought it hard.

    Now Paice. I looked at their patent several years ago. Nothing against Alex Severinksy, but he did nothing compared to what Toyota did.

    If we want to encourage innovation in the United States, we would do best to get rid of patents.

  • avatar
    lothar

    Hopefully some of the comments here are just jokes. As an engineer in this county more and more we can’t work in manufacturing…because? Everyone else can make it cheaper….So we go off to work and think hard of ways to do things differently and sometimes come up with some great ideas and sell and patent those ideas. Now isn’t that supposed to be the future of our economy. My intellectual property is mine. Since when is stealing my engineering some cause for political reform. Some of the ignorace on the site is chilling.

  • avatar
    Greg Locock

    “A $100 input cost is HUGE in an industry that seeks out savings in fractions of cents.”

    I think that’s a tired old meme that deserves to die. Cost saves in excess of a dollar a car are taken somewhat seriously, but someone trying to push a cost save of 1c per vehicle would get told where to put it, at least in Australia.

  • avatar
    PeteMoran

    @ lothar

    Since when is stealing my engineering some cause for political reform. Some of the ignorace on the site is chilling.

    Do you really think people are saying that? If the case were clear then it wouldn’t be bouncing around in court.

    Or, are you suggesting that there aren’t frivolous procedural abuses of the patent system (by filers/holders) and their enablers in the legal profession?

    In my professional experience I have worked with a number of manufacturers who in absolute honesty thought they had “invented” something only to discover a similar (or claimed-to-be similar) version crop up many years later.

    The company’s attempts to say “we’re sorry, we looked hard, we have evidence of patent searches, please let’s negotiate a license….” are turned into some sort of potential ATM for the “patent” holder. Even massive IP companies like Intel get caught.

    Knowledge and innovation is often incremental, or built on the work of others, so patents should expire if you can’t show attempts to leverage or license their use and no software or gene patents ought be granted.

    IMHO, plenty of scope for desperately needed reform.

    Here’s an example of patent abuse; large passenger aircraft tyres need replacement because of the sudden landing skid/acceleration/flat-spot from spin up they receive, not the stress of the landing itself. Someone invented a wheel rim based turbine that would spin up the wheel in the breeze before landing. It would double the useful life of aircraft tyres. Who is the owner? A very large tyre manufacturer.

    (I believe wheel/tyre technology has moved on from there anyway).

  • avatar
    Daanii2

    A few points, for those who have interest.

    You can read Dr. Alex Severinsky’s main patent at http://www.pat2pdf.org/patents/pat5343970.pdf. He is the founder of Paice. His patent was filed in 1992.

    The verdict against Toyota was reached by a jury in the federal district court in Marshall, Texas. That court is the favorite of patent plaintiffs across the United States because it has one of lowest-educated populations in the country. A jury of 12 can usually be picked in which no one has a college education.

    No one said that Toyota stole Paice’s technology. Whether you infringe a patent or not has nothing to do with whether you stole someone’s technology. If you come up with the same idea as someone else completely on your own, you still infringe.

    Studies vary in their conclusion as to whether patents promote innovation. It seems to me that the ones who find that patents do not promote innovation have the better case.

    For example, it’s clear from history that James Watt did more to hinder steam engine technology than he did to help it. Due to his greed, from when he got his patent until when he died, no one in England could buy a better steam engine than the initial model he developed. (Watt did not invent the steam engine, by the way. He just improved it.) When Watt died, innovation could begin again.

  • avatar
    yankinwaoz

    Patent are used to suppress innovation, as described in the airline tires example. Here is another example that almost happened.

    When Mr. Dyson invented and patented his bagless vacuum cleaner, he tried to sell his idea to Hoover and the other large vacuum makers. They all passed because they make their money selling bags.

    So Mr. Dyson decided to make his own vacuum cleaner using his idea. Now he has one the best selling machines in the planet.

    When asked, the managers of Hoover said they now regret not buying Dyson’s idea at the time offered. Not because they wanted to make bagless cleaners. But only to prevent it from coming to market.

    The patent system has been turned on it’s head and is being used to stifle innovation, blackmail corporations, and pretty much do everything that is was supposed to prevent. It needs some reform.

  • avatar
    psarhjinian

    You can read Dr. Alex Severinsky’s main patent at http://www.pat2pdf.org/patents/pat5343970.pdf. He is the founder of Paice. His patent was filed in 1992.

    What interesting about that patent (and about the history of hybrids in general) is two of Severinsky’s own citations:
    1. Toyota itself—several times—as far back as 1974, had dealt with this concept of a hybrid-electric drive. And they’re not the only ones the Dr. has cited. It’s not like he came up with the concept.
    2. Toyota had previously been beholden to a TRW patent that was due to expire; it’s theorized that they’d waited until that obstacle was cleared before releasing their work.

    So apparently to some of you, if an inventor comes up with an idea and tests it and develops it enough to get a patent, but doesn’t have the money to commercialize it, it is OK for someone else to take and use the idea without compensating that inventor. Well, that will certainly help encourage innovation.

    See above, point #1

    There is a huge difference between theft and infringement. Toyota infringed on what comes across as a submarine patent. They did not, based on the timelines, their own patents and—this is important—Severinsky or Paice’s never having approached Toyota about licensing, steal someone else’s idea.

    Again, read up on the RIM vs NTP case. RIM absolutely did not steal a thing from NTP, they infringed on a patent NTP was sitting on. If Paice really had a viable idea so far ahead of Toyota and was in discussions with Lockheed and Bosch, why wait until 2005 (when the hybrid market finally self-validated) to spring the trap?

    You want some more fun? Read about a firm called Acacia who does nothing but buy up patents and sit on them until someone else does the legwork to develop similar technology. Or the Rambus/JEDEC fiasco from a few years back. Recently there was i4i vs. Microsoft. Or Eolas, if you want someone who hit the news today.

    I thought that Paice lost the case last week. They lost something vs. Toyota.

    They didn’t lose, they just didn’t win as big as they had hoped because they couldn’t really prove willful infringement, even in ED Texas. They’ve also some concerns that the third-generation HSD system would be so different as to see their revenue stream dry up.

    also it is obvious you are very passionate about this subject (as am I) where are you coming from on this? what in your background puts you there.

    I do systems analysis, though most of what I have to do now involves back-stopping salespeople when they bend the truth. On larger clients, we’ve gone in with proposals and lost because we’re not big enough to provide patent-suit indemnification in the event some part of our product or some product we depend on is beholden to a patent that someone else is sitting on and waiting to spring.

    This is why my argument isn’t automatically for the likes of Toyota, but for reform of the patent system. Patents should be a way to ensure innovation; they should not be an ATM machine.

  • avatar
    DPerkins

    @ Greg Locock

    “A $100 input cost is HUGE in an industry that seeks out savings in fractions of cents.”

    I think that’s a tired old meme that deserves to die. Cost saves in excess of a dollar a car are taken somewhat seriously, but someone trying to push a cost save of 1c per vehicle would get told where to put it, at least in Australia.

    Wrong. I am not comfortable revealing who I work for, but this is a fact of life in the industry.

  • avatar
    Angainor

    Patents aren’t about who “thought of something first” but who “filed the patent first”.

    What I can’t stand is the issuing of patents for ideas that are obvious or the natural evolution of a system. Paice’s patent appears to be for using a computer to determine which is the most efficient place to get torque from. Wow, using a computer to make a calculated decision. Why didn’t I think of that?

    I think I’m just going to sit around and think of obvious applications for microprocessors and then patent them. I’ll be rich!

  • avatar
    menno

    Let me get this straight.

    Toyota can’t make a profit in North America. Check.

    Patent trolls are likely to win against Toyota and extort them for money due to idiotic antiquated patent law and sharp lawyers in Amerika. Check.

    Amerika has become like the Italians in World War II, and like the Germans before World War II, and have socialized losses while retaining privatized gain (for the chosen elite only) all the while merging the interests of government and corporations – kind of like Chicago “politics” of the 1930′s (or “mob rule”) writ large. Check.

    As part of this, the current Amerikan administration has essentially taken away the property of the bondholders and stockholder via sham “bankruptcies” and handed over the property to friends, pro-Democratic voters and cronies – such as the UAW. This means a massive long-term political disadvantage to non-GM/Chrysler companies. Check.

    Much of the rest of the world realizes that adding literally two trillion dollars of deficit since January 2009, means that the United States dollar is liable to become the next Zim-dollar, and everyone with a brain is lining up to abandon the dollar before the value evaporates. Check.

    Given the above, what is the likelihood of the United States economy being viable enough to sustain the sale of even enough cars per year to replace the ones being worn out/wrecked or turned in for yet more hand-outs of “free money” from those simply publishing it up willy-nilly and handing it out? Check. In fact, we are currently not even selling enough new cars in this country to replace those being taken out of the road fleet, by some accounts.

    Haven’t you all seen the headlines, where the UN wants to replace the dollar as worldwide reserve currency? And how China, Russia, much of OPEC, Japan, France and others are trying to establish one before it is too late?

    As the saying goes, the handwriting is on the wall.

    So, any of you who mocked me for writing that Toyota might be considering, in their heart of hearts, about pulling out of the United States had better buy some tabasco sauce. I hear it is good for disguising the taste of crow.

    And yeah, I know it’s not “likely” that Toyota will pull out.

    But my point is this – there are sufficient reasons that it might not be worth staying in a country which is potentially soon on the rocks.

    Once the country rebuilds and comes back (if it does), it might make sense for Toyota to come back into North America (which may not be called the UNITED STATES in the central portion by then, who knows?)

    Put another way – after the Soviet Union fell, it took about a decade before things improved to where foreign companies felt safe investing/selling in what used to be a united country – and is now multiple countries.

    Before people flame me – trust me, I don’t want the United States to collapse any more than you do.

    But then again, I’ve been saying for 30 years to anyone who’d listen, that we were aiming for a fall. Nobody listened, though I note there are more people echoing what I’ve been saying (and a small minority like myself) for a long time.

    I guess it goes down to people – and nations – reaping what they’ve sown. It’s just like nature.

    Plant good things, eat good things. Plant weeds, starve.

  • avatar

    Daanii2
    Look at the Wright Brothers. Their enforcement of their patent set the aviation industry in the United States back so far that no US-designed planes flew in World War II — all US-made planes were under license from foreign companies.

    Either I imagined a lot of history or you meant to say World War I. I think the latter.

    I’m fairly sure the Wrights would argue that they deserved compensation for their work that was being shamelessly copied, which is why they brought the suits. The unintended consequences may have been as you said, but I wouldn’t hold the Wrights accountable. What other recourse did the bike mechanics have?

    psarhjinian, I haven’t read all of the referenced articles in this thread, but something caught my eye. You mentioned that “Paice could have dropped the hammer on this when the first-gen Prius hit North American shores [if they were serious about defending their patent and not Terroristic, Lawyer D-bags© ]“. Paice may in fact be a bunch of Terroristic, Lawyer D-bags©, but Telegraph Road observed:

    In Paice vs Toyota, Judge Folsom ruled:
    “The Ford license covers the early Prius I technology, which has been abandoned by Toyota in favor of the technology covered by Paice’s patent.”

    It would seem that the TLDs© prudently avoided suing when the Prius I shipped, which would explain their delay.

    And that’s why I love cars!

  • avatar
    PeteMoran

    @ menno

    Go back to bed and get out the other side.

  • avatar
    John Horner

    Our patent system is fundamentally flawed at the core. Scream about the Sanctity of Intellectual Property all you want, but one of the reasons China is developing its industry so rapidly is that they reward actual production, not who got which piece of paper approved first.

  • avatar
    menno

    Yes, Pete. I’m cranky. I’m watching my country, which I swore in front of God and man to defend from enemies both foreign and domestic (there is no “time-limit”), self-destruct before my very eyes.

    And I can’t do anything to stop it.

    I’ve already watched the American auto industry – and I’m a “certified car nut” – self-destruct over the past 35 years. It’s been like watching a massive multiple train-wreck in slow motion.

  • avatar
    Autosavant

    Forget Toyota, this would be a MASSIVE blow to the US CONSUMER, as the Prius is heads and shoulders better and more fuel efficient (by a margin of 10-30 MPG!!!) than ANY other hybrid on sale today. ANd I have ACHIEVED these MPGS with Prius rentals in the LAX area, I am not just quoting the EPA numbers.

  • avatar
    Morea

    It seems that many patents fail the “non obvious” test. They are simply obvious extentions of existing ideas. There are very very few dramatic breakthroughs that warrant patent protection. But since the PTO gets a fee when you apply they have every incentive to have lots of applications and grant lots of patents. This is the flaw in the “pay as you go” system of government. Next on the list is the FDA where you can pay for expedited review. I wonder if that will effect which drugs and devices get approved? He who pays the piper calls the tune.

  • avatar
    200k-min

    While I don’t know much about patent law, I do work in an “intellectual property” business. Clients literally hire me to think $hit up. That’s my job, I sell design, creativity, ideas. Clients pay for that while my employer builds nothing. Actual production is sent out to bid and produced by someone else.

    I don’t work directly in automotive nor am I familiar with this case. That said, I wouldn’t be so quick to call Paice a patent troll. Just because Toyota is a multi-billion dollar company and can push something to market faster and easier than a small start-up should not give them free reign to do whatever they want.

    If Paice has a case, and that’s up to the courts, Toyota should compensate them accordingly. Or, what Toyota should’ve done in the first place is BUY Paice outright for the billions their idea was worth.

  • avatar
    rnc

    Much of the rest of the world realizes that adding literally two trillion dollars of deficit since January 2009

    Were they sleeping, when from 2001-2008, the federal deficit more than doubled over what had taken the previous 40 years to accumulate (1960-2000)?

  • avatar
    Richard Chen

    @Autosavant: FWIW, the latest Consumer Reports issue is out and they got the same average 44mpg with the 3rd gen Prius as they did with their 2nd gen Prius. Their Ford Fusion Hybrid got the same 34mpg as the Toyota Camry Hybrid. I forget how the Jetta TDI did but I think its mpg was south of the hybrid sedans.

  • avatar
    menno

    Yes, rnc. If you notice, I’ve written about talking about a fall coming for 30 years. I knew that Reagan was a problem because the Libertarians started to make a few inroads when he was running against Carter, and so he “borrowed” their major plank and promised to limit the deficit. The proceeded to double the deficit from $1 trillion (which had taken 204 years to accumulate) in was it four year? Or eight? I can’t remember now.

    The new numbers dwarf these figures.

    I simplify it this way for folks. A family living on credit cards with less income than outgo can continue doing this for how long?

    Now give this family a printing press with which to print money and see what happens.

    Let’s also say that this family lives in a small town in which they have exclusive banking rights.

    Can you fathom the disaster coming for the rest of the people living in that town?

  • avatar
    Pch101

    One reason that the US has been a highly successful country is because of its IP protections. They encourage innovation and an entrepreneurial ethic among inventors.

    Large companies tend not to innovate much, for a variety of reasons. If the system was based upon output, rather than idea and design protection, then we’d have a far less innovative system.

    The Chinese model of stealing ideas wouldn’t work, either. To be a thief, there has to be someone to rob. There is a reason why the world isn’t spending much effort and time stealing from the Chinese, even though they represent 20% of the world’s population. There isn’t much reason to innovate when intellectual robbery is an acceptable alternative.

    I don’t know the facts of this particular case, but regardless, it’s clearly a drop in the bucket for Toyota. The idea that this would impact Toyota’s future US plans is ridiculous.

    Along those lines, it would be nice if we could get some posters to dump their ill-informed political rants that are clearly rooted in evangelical religion, rather than facts down here in the real world. It gets tedious, quite frankly, and does nothing to provide useful information to the audience.

    Much of the rest of the world realizes that adding literally two trillion dollars of deficit since January 2009

    As we speak, the yield on 10-year US treasuries is 3.2%. If the markets shared your End-timer based beliefs, there is no way that it would accept a yield that low. Do try to learn something about the markets before you comment on them.

  • avatar
    menno

    Looks like Honda is soon to be joining Toyota, in not being able to turn a profit in the United States.

    http://www.autoobserver.com/2009/10/strong-yen-could-be-next-problem-for-japan-automakers.html

    The value of the yen going up is inaccurate; it is actually the value of the US dollar plummeting which is to blame here.

    Simply building cars in the United States will only work for so long – given the fact that some commodities must be purchased on the international marketplace.

    Things like platinum, palladium, rhodium, rare earths for hybrids and hybrid batteries, specialty ores for high-strength steel, energy to build the damn things….

    These must be paid for with depreciating US dollars in a market which essentially will cut the sellers off at the ankles if prices are raised to try to recoup the losses.

    This, in a marketplace which more closely resembles the old Soviet Union – with two of the three major domestic auto makers being given as much money as they can p*ss away to keep the doors open (for now).

    Pch101, I know enough about the markets to say that they’re rigged and that only a few really make money off of them. I’m supposed to be impressed by that, how? I know enough to realize that the powers that be have been manipulating the price of gold & silver to try to keep the US dollar afloat – and that this effort is again like a dam with a crack in it right now ($1045 an ounce and rising daily). (Or should I say the value of gold is constant and the value of the dollar vs gold is slowly eroding – wasn’t it $350 an ounce 5 years ago? – this tells me they’re losing the battle).

    Australia just raised their pay-out interest rate.

    Internationally, people are starting to be wary of investing in what was the quality US market. Now that 3rd world-style politics has taken over for what used to be considered safe-haven investing, why invest in the US? If you can invest in some other corrupt nation and get more return, such as Russia, and frankly have to calculate into your figures that you may have your investment simply taken from you – why settle for 3.2% in the US when O-bankruptcy simply nullified bondholder’s interest in the same way as a 3rd world craphole “investment opportunity”?

  • avatar
    Pch101

    I know enough to realize that the powers that be have been manipulating the price of gold & silver to try to keep the US dollar afloat

    Seriously, you have no clue what you’re talking about. None.

    If you understood the first thing about markets, then you wouldn’t make statements that are clearly that irrational and have no basis in fact. Quit with the Apocalyptic Bible thumping, and try to learn something about how foreign exchange actually works.

  • avatar

    So…

    How’s this Toyota deal look to end up? What’s Paice worth outright? This latest round might be nothing more than a prod to get Toyota to write one, big, final check to be rid of this meddlesome entity, because it doesn’t appear that Toyota’s going to drop the Synergy Drive system anytime soon.

  • avatar
    PeteMoran

    @ menno

    Now give this family a printing press with which to print money and see what happens.

    You really need to sharpen up on your “Theory of Money Supply” (Pat. Pending) or at least re-read your Cantillon.

    Australia just raised their pay-out interest rate.

    Yes, and we’re none too pleased about it!

    It makes our $A exports yet more expensive for buyers, but imports from the USA less expensive.

    Now is just the time for our companies to buy US made product; Boeing aircraft for Qantas, John Deere equipment for our farmers, Caterpillar equipment for our miners, new servers for our businesses, holidays in the US again. Anything valued in US dollars is “cheaper” from our point-of-view.

    It will mean that more production/service is required from US based (or owned) industry selling in US dollars overseas.

    A weaker $US should be an export advantage for the USA, so stop feeling sorry for yourselves and hop to it.

    (Back to bed for you however Menno).

  • avatar
    greenb1ood

    menno: While I share some of your concerns about the last 35 years and the US economy jumping from bubble to bubble without finding an actual answer for what will replace a dwindling manufacturing base (hint: it’s not green energy), to try and extrapolate the O’dministration’s actions in slowly-dying automotive companies to the safety of other investments is pure hyperbole.

    GM and Chrysler were on the rocks financially since the 90′s, and destined for failure since 2000 (see: Farago, Robert). While the bankruptcy proceedings were complete BS, the mass investors that lost their money were either speculators (pro and amateur) or stakeholders (employees, suppliers, etc) who were as blind as Rick and Fritz thinking growth was right around the corner.

    I have zero sympathy for Cerberus (speculator) and only a little for GM white collars (stakeholders) who tied up their 401k money in GM stock when all it took was a quick look around the office to understand the viability of that plan.

    To suggest that investing in the US is now equivalent to investing in the third world is ridiculous. I would argue that investing in GM and Chrysler as investment-grade securities was only slightly a better option to investing in T-bills from Somalia.

    Forget politics and stick to the real issue: Without a robust, efficient, and fair patent system the future of a US economy based on our greatest assets (education, innovation, and entrepreneurship) is going to be in serious jeopardy. Our politicians don’t have some long-term conspiracy worked out. In fact, their biggest problem failure to understand what is needed to ensure a strong future. They are all about putting a band-aid(tm) on the present and pushing off responsibility.

    Pch101 – Don’t hate. Educate.

  • avatar
    menno

    Well, Pete and Pch101, I may not be the brightest crayon in the box but I know a few who are and managed to avoid losing 401k monies – overall my retirement investments including 401k are positive. Quite very positive, in fact. Like from $270 to $1045 and $3.50 to $18 in 6 years.

    How’s yours looking?

    I read “other idiots who don’t know what they’re talking about” and try to think things through, even though I’m perhaps not so great at trying to explain this well. But I know how to think outside the box.

    Guys like this: http://urbansurvival.com/week.htm

    And this: http://www.theinternationalforecaster.com/

    But my primary concern here is that we’ll have messed ourselves up so badly as a nation, that it’ll take us decades to pull out of it. And that we’ll follow (once) Great Britain in entirely losing our auto industry (as we’ve pretty well lost the ability to manufacture quite a bit, over the past 40 years).

    Look at Argentina’s mess and sudden depreciation of their money about two decades back, and how it affected them.

    Argentina was considered a first world nation early last century; it hasn’t had that luxury since.

    People who refuse to learn from history….

    greenb1ood – I’m more than fully aware of the vast shortcomings of the prior administrations (plural), and place blame equally amonst them.

    I’m unique in the sense that I believe that virtually all of the prior living US administrations, congresscritters and supreme court justices should all be tried for high treason. Then perhaps we could actually start dusting off our Constitution and save this country. But the likelihood of this is depressingly small, if truth be told.

    That’s not “bible thumping” as someone tried to dismiss me with, but the sad truth as seen by increasing numbers of people the world over. Try reading some of the non-US government-suckup media some time, folks.

  • avatar
    greenb1ood

    menno:
    I missed where I defended one politician over another. They are all equally worthless for the most part.

    My point was that politics has nothing to do with understanding the need for – one more time- “a robust, efficient, and fair patent system the future of a US economy based on our greatest assets (education, innovation, and entrepreneurship)”, hence, this discussion has nothing to do with weaving into your political concerns.

    There may be another article where it makes sense to debate your ideas in context of the article. This ain’t it.

  • avatar
    menno

    greenb1ood wrote: “They (politicians) are all about putting a band-aid(tm) on the present and pushing off responsibility.”

    OK but isn’t that politics, too?

    But I grant you, that I fully agree that something must be done about, as you so well describe, “a robust, efficient, and fair patent system the future of a US economy based on our greatest assets (education, innovation, and entrepreneurship)”

    So the next step is to ask – what would you suggest?

    In fact, broaden it out to the entirety of the best & brightest. I see we even have some patent experts who’ve chimed in, with comments above.

    How would we the people fix this issue?

    Patents were considered so important to the new United States that one of the first things that President Jefferson did in 1793, was established a patent office in the United States. Or so I once read.

  • avatar
    Daanii2

    Some interesting points made here. Clearly patents are here to stay. Every major country around the world now offers some kind of patent protection. I still think patent cause harm more than help. Hard to say much in a forum like this, but I’ll summarize my 25 years in the patent war trenchs that way.

    Let me respond a bit on the case of the Wright Brothers, which I have studied carefully. I did indeed mistype WWII for WWI. The problem with the Wright Brothers is that they shifted their energies and inventiveness from building airplanes to suing others. They built their early models, and then stopped.

    Although their company did build airplanes, the brothers’ main efforts went into lawsuits in the United States and abroad. His family said that patent lawsuits killed Wilbur Wright, since he took sick and died in the middle of a fierce battle because, they believed, of the intense stress.

    Would the Wright Brothers have built an airplane without the incentives of the patent system? Almost certainly yes. Some diary entries make that clear. Other inventors seem to be the same. You can never say for sure, but I think our patent system, from which I personally have profited for 25 years, does little to encourage education, innovation and entrepreneurship, yet causes great harm.

    Keep trade secret protection. That’s important. But patents? No.

  • avatar
    Pch101

    People who refuse to learn from history

    Your links to nutjob blogs indicate that you have no desire to learn from history. Your efforts to constantly politicize this forum with your farout views and ignorance of basic facts is not appropriate for a website about cars.

    There may be another article where it makes sense to debate your ideas in context of the article. This ain’t it.

    Right. But he’s on a crusade, and doesn’t want to stop. This is something that only a moderator is going to be able to fix.

  • avatar
    Daanii2

    Since, as Pch101 points out, this is a website about cars, let me throw out the example of George Selden’s patent on a car.

    That’s a very interesting story. For those who do not know about it, here is one article on it: http://www.americanheritage.com/articles/web/20051105-automobile-car-George-Selden-patent-Henry-Ford-Brayton-engine-Association-of-Licensed-Automobile-Manufacturers.shtml There are plenty of others.

    The article I cited concludes: “The prolonged Ford suit convinced the industry that patent litigation did no one any good, and in 1915 the manufacturers set up a system of cross-licensing for most patents. There hasn’t been another patent suit among car makers to this day.”

    The aircraft industry also had a patent pooling arrangement dating back to 1917, when it was formed under government pressure. The semiconductor industry also has de facto patent pooling arrangements.

    Should we expect the United States government to step in and demand patent pooling for hybrid and electric car technology? Especially if Toyota loses in the ITC? Toyota’s lobbyists may be gearing up for a fight already.

  • avatar
    menno

    Dannii2 has a good idea which sounds appropriate.

    “Should we expect the United States government to step in and demand patent pooling for hybrid and electric car technology? Especially if Toyota loses in the ITC? Toyota’s lobbyists may be gearing up for a fight already.”

    Well said and thought out. Succinct and to the point.

    So Pch101, if I leave off from commenting in TTAC by force or by choice, you’ll be free to prostheletize your political viewpoints without any rebutals, eh? Have at it. Politics is life. Or death, if you pick the wrong horses and are later viewed as a no longer useful idiot.

    On the other hand, we can civilly agree to disagree on what we can’t see eye to eye on, and enjoy discussing cars and life and agree what we do agree on, with mutual respect.

    We don’t live in a vacuum of cars, only.

    On vacation, I went to the Flying W ranch near Colorado Springs for music & dinner, “hokey western style” and this is what was on my ticket.

    My Creed by Dean Alfange

    “I do not choose to be a common man. It is my right to be uncommon. I seek opportunity to develop whatever talents God gave me – not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I want to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole. I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to that stale calm of utopia. I will not trade freedom for beneficience nor my dignity for a handout. I will never cower before any earthly master nor bend to any threat. It is my heritage to stand erect, proud and unafraid; to think and act myself, enjoy the benefit of my creations and to face the world boldly and say – ‘This, with God’s help, I have done’. All this is what is means to be an American.”

    How many can agree with him on that creed? I sure do.

    Just that sort of creed is what brought us the car companies we enjoy reading and arguing about.

    Without taking chances, there wouldn’t have been a Studebaker brothers who did carriages then cars, nor a Willam Crapo Durant who bought Buick and Cadillac and formed General Motors then later started Chevrolet with which to re-wrest control of GM, there wouldn’t have been a Charles Nash or Walter P. Chrysler or Dunbar Buick, or Henry Leland, or Henry Ford.

  • avatar
    Pch101

    we can civilly agree to disagree on what we can’t see eye to eye on, and enjoy discussing cars and life and agree what we do agree on, with mutual respect.

    You frequently make outlandish statements, many of which are clearly paranoid and with no basis in fact. You clearly don’t know the basics of many of the things about which you opine. You hold your opinions dear, but God forbid that you find a decent, credible source to support any of them.

    It’s one thing to have differences of opinion. But it’s quite another to get the facts wrong as you do, in the process of selling your doomsday version of Christianity.

    Your efforts harm discourse, because you spew falsehoods, ignorance and disinformation. You can’t build a fair debate on a foundation of nonsense and animal dung.

  • avatar
    Edward Niedermeyer

    OK, let’s keep things civil folks…

  • avatar

    Daanii2, I’m not sure if my earlier post was lost in the ether or a casualty of something else, but I do remember one request I wrote worth repeating. Would you consider submitting an article to TTAC on patent, trade secret, and intellectual property law? As you’ve said, it’s difficult to discuss your thoughts on the matter in a comment thread, and you seem to have some expertise in the field.

    I know I’d read it, and with new technologies coming into play in the automotive arena, an article about technology ownership seems appropriate. Think about it.


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