Posts about IP

According to a brief by the Georgetown Climate Center, "ArrivalStar has brought suit against at least ten transit entities, and at least eight more have received demand letters." GCC, which convenes the Transportation Climate Initiative, worries that the suits can create a chilling effect, discouraging agencies from employing vehicle tracking technologies. Real-time bus arrival information has been shown to increase ridership, taking cars off the road and reducing vehicle emissions.

Jones' strategy is not to sue transit agencies for all they're worth, but to offer them a relatively low-cost way to keep these cases out of court. In fact, not one of his lawsuits has gone all the way through trial. They always end up settling, usually for $50,000 to $75,000, though the demands can go as high as $200,000.

"That's $75,000 of taxpayer money that's going into ArrivalStar's pockets without the validity of the patent ever being challenged," said attorney Babak Siavoshy, who represents the Electronic Frontier Foundation. "If they make the settlement amount low enough, where the costs and benefits favor settling, then most municipalities are going to settle, and it costs them a lot of money, because the cost of litigation is a big stick."

Siavoshy and EFF want the US Patent and Trademark Office to review Jones' patents. EFF is looking for what's known as "prior art": examples of real-time vehicle tracking being discussed before Jones took out the patent, to show that he wasn't the first one with the idea. Advocates also think they can prove that the systems Jones patented were too "obvious" or "non-novel"—that they were logical extensions of existing technology. Abstract ideas, with no technology or product attached, are not patentable.

ArrivalStar attorney Anthony Dowell contends that the patents are defensible and that Jones has the right to seek money from the agencies. "Just because an entity is funded with taxpayer dollars doesn't give them the right to steal property," said Dowell in a recent interview with ArsTechnica. "My client now owns 34 patents that are being infringed, and what else is he to do?"

The transit agencies I called couldn't comment, since the case was pending. But the general counsel of the Monterey-Salinas Transit Corporation, David Laredo, said that they're not challenging the validity of the patents. Their strategy is to assert that the vendor who sold the technology to the transit agency (Trapeze, a spinoff of Siemens) does hold a license from ArrivalStar, and if they don't, that's the vendor's problem, not theirs.

To date, ArrivalStar has reached settlements with the city of Fairfax, Virginia; Boston's MBTA; New York City's MTA; Chicago's Metra; and the Maryland Transit Authority. Suits are pending against the Port Authority of New York and New Jersey's PATH; King County, Washington; the Monterey-Salinas Transit Corporation; the Greater Cleveland Regional Transit Authority; and Portland's TriMet.

In the past, transit agencies may not have talked to each other about these lawsuits because Jones reportedly insists on a nondisclosure agreement as part of the settlement. He only brings a few suits at a time, using a divide-and-conquer strategy, taking care not to demand so much from these public entities that they would pursue litigation.

The recent focus of Jones' lawsuits on transit agencies has inspired Georgetown Climate Center and the American Public Transit Association to get these entities to communicate more and to develop a more cohesive strategy. So far, though, Jones' strategy has been working.

But since Jones brought a suit against the U.S. Postal Service last November, the federal government is now affected. His suit charges the post office with violating his patents with its package tracking services.

Since USPS is a federal agency, the Department of Justice is now involved, defending the post office against ArrivalStar's claims by saying the patents are invalid and that no infringement occurred. Advocates and attorneys are trying to persuade the feds to broaden their interest in ArrivalStar from just USPS to all the transit agencies that have been affected.

After all, the transit agencies, by and large, bought the GPS tracking devices with federal dollars, in pursuit of federal transportation goals. Publicly available real-time transit information—on smartphone apps, transit agency websites, or on screens in bus stops and train stations—makes transit a more attractive option, with the potential to reduce congestion and pollution. SAFETEA-LU, the transportation authorization the country is still (amazingly) working under, specifically requires states to identify ways to deliver real-time transit information to the public.

Georgetown Climate Center Director Vicki Arroyo told Streetsblog that she's had some "early but hopeful discussions" with senior USDOT officials.

"Earlier, some of the more junior people within the federal government were not keen to take this on, saying they didn't have a dog in the fight. Now they do," she said, referring to the suit against the postal service. "We're hoping they won't just look at this as a one-off matter. There's a much higher public stake here."

A version of this article was originally posted at Streetsblog Capitol Hill.

Editor's note: The MBTA's response brief to ArrivalStar rebuts the company's actions with powerful rhetoric that's unusual for a legal filing:

This lawsuit offends any notion of justice. The mission of Defendant Massachusetts Bay Transportation Authority ("MBTA") is to transport its 1.1 million riders safely and on time every day. As a service to the riding public, the MBTA alterts riders via its website, text message or email whether one of its vehicles is running late or has otherwise encountered some difficulty or delay. Though the MBTA is a cash-strapped public entity, its notification service is free of charge to anyone who wishes to subscribe. The MBTA makes no money from this service. The service provides a benefit to the riding public, by whom it has been well received.

Plaintiffs ArrivalStar S.A. and Melvino Technologies Limited (collectively, "Plaintiffs" or "Arrivalstar"), two offshore companies, allege, in a conclusory and unspecified manner, that the technology underpinning the MBTA's alert system infringes on two patents that they claim to own. Plaintiffs do not allege they produce or manufacture anything. They do not allege they sell anything. The primary, if not sole, purpose of Arrivalstar is to exact tribute from any person that Arrivalstar asserts is using inventions claimed in patents that they purport to own, either in the form of royalties or a strike suit such as this one. The Court may take notice of the fifteen suits Plaintiffs, or a related entity, have brought in federal district courts involving the same two patents at issue in this dispute. ...

In any event, the practice of monetizing patents through serial litigation by "non-practicing entities" or "NPEs," as they are euphemistically known, is unseemly and inimical to the fundamental purpose of United States patent laws of encouraging innovation and its introduction into the economy. The business model of Plaintiffs is no less obvious than the patents themselves, and shakedowns such as this one should be outlawed.

Chris Zimmerman first explored the issue of indemnification. In a nutshell, New York and Chicago have negotiated contracts where they don't indemnify Google for anything. Staff have claimed that's a sticking point, but since these other agencies have gotten past that, Zimmerman suggested that Metro try to get the same.

Sarah Wilson, the Metro staff member working on this issue, replied to Zimmerman's question about indemnification by bringing up an unrelated argument:

We did an anlysis of the ten major transit properties, and we are the only ones who solicit advertising on our own website. What that means is that to the extent that we are driving traffic to our website that is helpful towards revenues that we derive.

Zimmerman interrupted Wilson to ask her to focus on the question he asked, about indemnification. Wilson then told the Board that Metro hasn't tried to negotiate away the indemnification since we found out that other transit agencies have removed the clause.

Zimmerman continued:

A far as the revenue side goes I certainly agree that we should explore, and I think we have a duty to explore, any possibility for revenue. And I agree with Mr. Linton that transit agencies dont always do that and we should. And I support your efforts to find out the value of any intellectual property that we have including those provided by the internet.

On the other hand, I don't see any reaason for us not take advantage of opportunities right now, today, to provide more information to customers that doesn't cost us anything, as long as we protect the long term value. In other words, we don't have to say that, now and forever, we're going to do something for free. Mr. Linton, in an earlier meeting, cited our example of car sharing, and I think it is instructive. He correctly pointed out that we are now getting some rev back from that contract, as we should because someone is making money off it. And that was right. But we just started out by saying, let's just get car sharing started, and the people coming in weren't making a lot of money on it, and we didn't expect to make any money on it. And after a few years we were able to do that.

Right now it seems to me there's an opportunity to provide benfit to customers, both those who live here and those who come from around the country, to be able to sue our system more effectively in a way that it looks like doesn't cost anything. If there's a way to do that and, again, hold out the possibility in the future... This is a very dynamic environment. The Internet changes all the time. You dont want to bind yourself well into the future. But
why not do something now.

I've got a trip coming up to another city. I'm going to Boston for a conference, and I ... was able to have it tell me how to use transit in the city of Boston to get from the airport to the location of the conference. The kind of thing everybody here's probably done on the Web when you're driving somewhere. It seems to me that it's a very tangible benefit we could have and I don't see anything that I've heard told that says we can't do that without causing some kind of long-term damage. I don't see what the loss to us is, assuming we can clear up this indemnification issue, what significant cost there would be to us of allowing that to happen in Washington, DC and its surroundings just like right now it is in New York, Chicago, Boston, and most of the major cities in the country.

Next: Who's right? Both, and neither, but mostly Zimmerman is spot on.

Zimmerman:

While it's always good to be looking for how we can make any revenue we can to offset the cost of subsidies and fares, it would be a shame to get ourselves so tied up in what might not be a significant revenue stream that we miss the larger thing. Getting a customer on that pays a fare to fill a bus that's not full could be worth a lot more to us, potentially.

Many of of these kinds of applications aren't making a lot of money for anybody. One example that I heard of is some graduate student; basically it's a hobby. They do i for fun. Somebody sometimes money and a lot of them don't. Our fundamental biz is transportation, and to the extent that we can do that better and get more customers, that's where our emphasis ought to be.

Linton, a former FTA administrator and now private transportation consultant, didn't agree.

That is our fundamental business, but we don't have that business unless we have revenue to support it. My experience has always been that we tend to underestimate and overlook the revenue implications of this. When we were looking at the idea to have car rental services, I suggested that we explore it and what I heard was that this was a service that we provide to our users. Just by exploring it we found that there was revenue.

We always need to look and not assume that just because you provide a service that someobdy's not generating income. And since I am on the other side of this equation I know how people are out there generating income. Transit agencies I have supported for my entire career are always begging for money, but do not value their resources, and others do who are lining their pockets.

Zimmerman:

I would point out, though that your example is instructive. You're talking about car sharing. When we started that we just provided the space, and we didnt get any money back. More recently, we have been able to make arrangements that do provide us some money back, but when they first walked in here to do car sharing, there was no money to be made. Nobody was making anything. It was important to get it seeded and started to a point where someondey is making money and we can share in it.

If nobody is doing it then nobody is making any money on it. It's very important to protect our long-term interests. But again, if it doesn't get started, if it doesn't happen, then there's no value created. And I think we need to find a way to get these things started. In the long term if there is a flow of revenue that's significant, we should be tapping some of it. But this won't happen if we don't help stimulate it in the first place.

Linton:

It's not a matter of not starting it, it's a matter of how you structure your deal. [It's fine if] the deal allows you to get the revenue that's generated, recognizing that for startups there's no revenue. I created public-private partnerships when I was at the FTA. They create a structure for innovation but at the same time recognize that at a point of innovation when we have a spinoff and rev starts to be generated, you should therefore start sharing in the revenues at that time.

Next: The debate over Google Transit, a few hours later.

They have to deal with hundreds of transit agencies. It doesn't make sense for Google to negotiate individual agreements with those agencies. It also would not make sense for Google to allow various transit agencies to have some sort of prior approval or veto power over the look and feel of their website. Negotiating how the data is displayed with hundreds of organizations would not be feasible. Other terms like how to terminate the agreement, or providing for confidentiality do not appear to be objectionable.

So either Google budges and signs Metro's "take it or leave it" agreement, or Metro budges and signs Google's. There doesn't seem to be much of a compromise position between them. Metro is accountable to local governments, who are accountable to the transit riders who are clamoring for Metro to partner with Google. Google is accountable to executives and shareholders, who are not likely to make an exception for one transit agency when they have been successful in obtaining agreement from the vast majority of the transit agencies in the US and many agencies abroad.

I also heard from sources in the transit industry that Metro is concerned about losing revenue from their website, which includes a trip planner. From various sources I've heard that the amount at stake is anywhere from around $70,000 to $200,000 per year. This is essentially a rounding error in Metro's budget of almost $2,000,000,000 ($2 billion) per year. According to my discussion with Bibiana McHugh of Portland's TriMet, the agency that first pioneered Google Transit, they have not seen a decrease in traffic to their website after partnering with Google, but instead they've seen many visitors driven to their website by links provided within the Google Transit service.

It hurts Metro's riders more to not be a part of Google Transit than it hurts Google to have almost every other transit agency in the country except Metro.

Metro should negotiate the best terms from Google it can. It should work with Google to upgrade the specification to allow time-based fare information. Then, it should sign the agreement Washington area transit riders can enjoy the benefits Google Transit.

Metro stated that they would provide comment after publication.

Metro should leave it; Google should take it

by David Alpert

We don't know exactly what the sticking point is between Google and Metro. If Metro is holding out for some revenue, then I agree with Michael that they need to drop the issue. Just as it wouldn't be appropriate to charge money for people to look at the bus map, so is it inappropriate for Metro to try to monetize the schedules. It's public data from a public agency. We're all entitled to know when and where buses and trains will stop.

It's also in our region's best interest to make it as easy as possible for people to find information on as many types of technology as possible. That means letting anyone build an application, whether they're a multibillion-dollar company or a guy in a garage. Putting the data online for free is the best way to encourage innovation. And anyone who builds something useful to riders is furthering Metro's mission.

However, if the sticking point is indemnification, then both agencies need to give in. As Michael argued before, it's silly for Metro to demand that a guy in a garage who hacked together an iPhone application pay for all attorney's fees and any settlement if someone decides to sue WMATA over something in the application. At the same time, though, it'd be wrong for Google to demand that Metro pay all of their costs if someone sues Google.

The copyright and trademark indemnification makes sense. Unfortunately, record companies have pressured Congress to keep increasing the penalties for even small copyright infringements, so that if Google broke an IP law, they could suffer huge costs way out of proportion to the harm. But we know Metro can promise Google that Metro has the rights to Metro's logo. That's not the issue.

The other indemnification, on the other hand, doesn't make a lot of sense. Google does have a disclaimer on Google Maps denying responsibility for anything a user might do based on the information there, but that doesn't stop frivolous lawsuits. Google will just have to defend itself against frivolous lawsuits. They already do that all the time.

Instead, Metro should provide the data under "take it or leave it" terms. Here's the data. Use it, don't use it, it's up to you. And Google already takes data under those terms. They take Greater Greater Washington's data to include in their search engine, for example. We don't have to sign an agreement indemnifying them. Some people have sued Google over the content of their search engine because they weren't happy with the results. Fortunately, those people lost. Google, or anyone else, ought to be able to grab some data off the Web and make a search engine without needing permission for everything.

Everyone benefits when information gets shared without complicated legal agreements. If only big companies with lots of lawyers can negotiate to use information, then the little guy can't keep up. Ideally, Google wouldn't be negotiating all these agreements; instead, all transit agencies would just put their data on the Web, and anyone could use it. But transit agencies are used to dealing with big suppliers that have big legal departments and negotiating agreements over everything.

Google has a lot of lawyers too, and I don't believe it's too hard for them to adjust the agreement. In fact, I have absolutely no insider knowledge about this, but I suspect they already modified some of the agreements with other large transit agencies like New York City's. My guess is that the indemnification isn't the sticking point in the negotiations, anyway.

What should Metro do? It's simple. They need to release their data with no complicated terms, with no price tag, and with no indemnification requirement. Then, the ball's in Google's court to accept the "take it or leave it" data. If Google doesn't take the data under those circumstances, we can run a letter-writing campaign pressuring Google to give in. But I suspect it wouldn't ever come to that.