Soon, he'll be able to hear YOU. (Photo: Fonesea)

When last we checked in on creepy technologies that wholly encroach on your sense of personal privacy, Microsoft had registered a patent that would allow the Kinect to detect how many people are in a room and stop playback on a movie if it sensed more people than the copyright allowed. But a new patent filed by Verizon takes that concept a step further by allowing a set-top box to observe what's going on in your house and serve you ads based on what it hears.

According to the patent, the device will detect "an ambient action performed by a user during the presentation of the media content program" and during the commercial break run ads based on whatever action you're performing. The patent provides the helpful example of the Verizon box detecting that people are "cuddling" and serving up "a commercial for a romantic getaway vacation, a commercial for a contraceptive, a commercial for flowers, a commercial including a trailer for an upcoming romantic comedy movie, etc." Because nothing says romance like one of those awkward Trojan Fire and Ice commercials.

Ars Technica points out that Verizon is far from the first cable provider to patent such technologies; in 2008, Comcast patented a technology that would target programming based on how many people are in a room.

If this is the future, we kind of want off the ride.

I'm watching you... (Photo: Game Informer)

The Kinect add-on for Microsoft's Xbox, which allows users to play fully-immersive games as the Kinect tracks your movements and translates them to the screen, is a fun alternative to typical couch potato gaming. But did you know it can also help corporations spy on you? America!

Back in 2011, Microsoft applied for a patent that would allow cameras and sensors, much like the ones embedded in the Kinect, to track how many people are in a room. Developed by Microsoft's "incubation team," which is where they test new approaches to hardware, the patent was recently made public. They're calling the invention a "consumer detector" and it's just as frightening as it sounds.

Once it has identified how many people are there--and even who is there--the device will charge for content accordingly. If you pay for one content license but then more viewers join the room, it could halt playback and request that you pay for a different license. That means if you plan to have a movie marathon sleepover, Microsoft would like to charge you extra copyright money for the pleasure of snuggling and watching horror movies.

Like the annoying goodie goodie kid in elementary school, the patent would turn the Kinect into a tattling machine. According to Geekwire, it could even identify the ages of people in a room and refuse to serve up mature content to those under 18.

Of course, tracking could easily be avoided by unplugging your Kinect, turning it away from you, or whispering "snitches gets stitches."

Fig. 1 from patent no. 8,286,236

Apparently the advent of 3D printing technology is scary enough that before we're even able to print out a new pair of shoes, patent trolls Intellectual Ventures have secured a patent that might prevent the use of 3D printing technology for making really fun stuff like cars, or zeppelins.

MIT's Technology Review blog has taken a look at the patent and finds that it is a weirdly comprehensive attempt to enforce digital rights management (DRM) for items no one ever knew might need such protection:

The patent isn't limited to 3-D printing, also known as additive manufacturing. It also covers using digital files in extrusion, ejection, stamping, die casting, printing, painting, and tattooing and with materials that include "skin, textiles, edible substances, paper, and silicon printing."

As the MIT blog points out, Intellectual Ventures, which is run by Microsoft's former Chief Technical Officer Nathan Myhrvold, couldn't have better timing, since MakerBot has already opened their magical, SoHo-based "real-life portal" for people ready to jump into the brave new world of 3D printing.

If Mr. Myhrvold and his company have their way, a trip to the Nolita MakerBot to get a shiny new skin may be out of the question.

Judge Alsup. (Photo: Wikipedia)

These patent cases are really starting to get the goats of America's fine judicial personalities. Back in June, Judge Richard Posner dismissed the Apple v. Motorola battle royale, saying neither could "establish a right to relief."

Now PaidContent reports that William Alsup, who's stuck presiding over the final stages of Oracle's case against Google, is laying down the law on the subject of disclosures. Specifically, he wants the two companies to provide complete lists of any bloggers and/or journalists they might have on the payroll. Shady!

The order says:

The Court is concerned that the parties and/or counsel herein may have retained or paid print or internet authors, journalists, commentators or bloggers who have and/or may publish comments on the issues in this case.

And no, it doesn't matter that the case is close to wrapping up:

Although proceedings in this matter are almost over, they are not fully over yet and, in any event, the disclosure required by this order would be of use on appeal or on any remand to make clear whether any treatise, article, commentary or analysis on the issues posed by the case are possibly influenced bt financial relationships to the parties or counsel.

Both sides and their counsel are required to file "a statement herein clear identifying all authors, journalists, commentators or bloggers who have reported or commented on any issues in this case and who have received money" for doing so.

The deadline is August 17 at noon, and you'd better believe that'll make for some interesting reading.

Google CEO Larry Page (Google+)

After a partial ruling on the question of copyright infringement, the Oracle v. Google saga continues. But as of yet, there's no answer to the question everyone's asking: Are APIs copyrightable? And if they are, what does that mean for the tech industry?

Background: Oracle claims that, when Google built the Android platform, the company infringed on Java-related copyrights and patents (acquired by Oracle when it bought Sun). This first phase of the case deals specifically with the copyright allegations and, as Wired points out, Judge William Alsup has instructed the jury to assume for the purposes of the trial that APIs can be copyrighted. Mr. Alsup will ultimately have to make that call himself.

Then the jury's response on that copyright question is a mixed bag. On the question of whether Google has "infringed the overall structure, sequence and organization" of the 37 Java API packages at issue, CNET reports the jury returned a unanimous yes. So Google is guilty of using code written by Sun to build the Android platform. But--and this is very important--the jurors were unable to reach a decision whether Google's actions were fair use, which vastly changes the damages question. (That's probably because fair use is a tricky call even in situations like music, with which jurors are likely more familiar than programming languages.) This make the verdict something of a wash, though Oracle is definitely ahead.

Google, meanwhile, has moved for a mistrial, on the grounds the jury can't rule on infringement and ignore the question of fair use. But so far that's not even slowing the trial down. Wired's Caleb Garling reports from the courtroom:

Alsup doesn't mess around. Read verdicts on copyrights. Whamo. On to patent phase. Not even a recess.

— Caleb Garling (@CalebGarling) May 7, 2012

Betabeat offers condolences to the jurors stuck hashing this out, as opposed to ruling the seXXXy Tumblr lawsuit.

Mr. Walker. (Photo: Inside the Internet Garage)

In Connecticut in 1997, Jay Walker, inventor, created the idea for a "demand collection system," which is how he describes the mechanism behind Priceline.com. Priceline, of course, lets customers name their own price and other conditions, input their credit cards and agree to rent a hotel, flight, car or whatever, typically sight unseen.

At the time, the New York Times called Priceline a "reverse auction," a term that has stuck around long enough to work its way into the consciousness of moderator and adjunct professor Aaron Cohen, who made the mistake of employing it during an interview on Tuesday night at NYU for a series called Inside the Internet Garage produced by NYU Steinhardt.

Priceline is not a reverse auction, emphasized Mr. Walker—a slight, grey-haired man with dark eyebrows and a sense of righteousness—before an audience of students. "Saul Hansell, who was the journalist for the New York Times, was lazy and stupid," he declared, "and I told him so numerous times."

The quibble was the beginning of an at-times contentious look back at the history of Priceline, now one of the most valuable Internet companies based in New York with a market cap of $37.21 billion, and whether Mr. Walker's numerous lawsuits over patent infringement constitute a tax on innovation.

Priceline, which went public in 1999, first spiked spectacularly and then dove spectacularly, at one time considered just another dot-com flop. Mr. Walker exited the company in 2000. Since then, he's been tinkering at Walker Digital, his privately-held "innovation and development" lab founded in 1994 and based in Stamford, which has filed a lot of patents. Walker Digital, which says it has spent $100 million on research and development, holds between 800 and 1,000 patents, Mr. Walker estimated.

Betabeat found 483 patents assigned to Walker Digital in the U.S. Patent and Trademark Office's online database. Those patents cover a sweeping range of business models, from a method to remind consumers to take their medicine to a system for instant online lotteries. Many of the ideas were never built into companies.

Mr. Walker himself is named on 633 patents, which Wikipedia says makes him one of the world's most prolific inventors. "We only work at Walker Digital on inventions that we can patent," a younger Mr. Walker told Charlie Rose in 1999. "If you look on the Internet today, there are no patented business methods other than ours to speak of... what makes our business different is literally over 20 patents."

Unfortunately for Mr. Walker, Walker Digital's patents aren't getting the respect he'd hoped for. The lab brought a few cases related to Priceline in 1999, 2000 and 2001, then laid low for years. During this period, Mr. Walker said he approached companies such as Microsoft, Facebook, Google, Apple, and Zynga in order to strike licensing deals for activity he said infringed on Walker Digital's patents. The companies blew him off, he said. In order to be taken seriously, he had to take them to court. "They said, 'if you don't sue us, you're not serious,'" he recalled.

In October 2009, Walker Digital sued Microsoft, Hewlett-Packard, and Dell, Inc. over infringements that included "the function in Microsoft Word that allows a user to look up information about a user-selected term or terms located in a document being created without having to stop work on the document." In 2011, a judge ruled there was no infringement.

In November 2010, Walker Digital sued Facebook over the concept of "friending," or a "method and system for establishing and maintaining user-controlled anonymous communications."

In April 2011, Walker Digital filed 15 lawsuits against more than 100 companies.

Walker Digital has brought about 80 lawsuits for patent infringement, according to the federal courts database PACER. The vast majority of the cases are outstanding, but seven have been dismissed with prejudice—meaning the judge forbade Walker Digital from attempting to bring the suit again—including a case against Facebook, a case against the game maker Activision, and a case against Mastercard. It's unclear whether Walker Digital has won any victories on the settlement side, though eight more cases were dismissed or voluntarily dismissed. Walker Digital did not respond to request for comment.

"The patent is the most public of all documents," Mr. Walker extolled on stage. "Is Jay Walker jealous of Paul Allen?" wrote PaidContent at the time, invoking the Microsoft cofounder who drew ridicule for his 11 lawsuits over "related links" and other blindingly obvious ideas.

"A patent is a teaching, so a patent is a bargain between the inventor and society where the inventor, in return for disclosing his or her complete operating details of how to build the invention, receives a limited period of exclusivity from the government."

Companies should all be checking the public U.S.P.T.O. database, Mr. Walker said, to verify that their own inventions have not been previously patented. The companies that infringe on Walker Digital's patents have a policy of not checking the patent database, he said, because intentionally infringing on a patent can be punishable by three times the damage of unintentionally infringing. "Anybody who wants to can search the patent files and see, 'are we practicing something which somebody else has invented, in which case we probably ought to contact them and get a license, or are we not?'"

The fact that it was possible for someone else to independently think of and execute an idea Mr. Walker once had did not sway Mr. Walker from asserting that the idea still merits protection.

"Last year, you got into some litigation with some gaming companies," Mr. Cohen said, prodding his subject toward the issue. "Walker Digital, I think in the year 2000, got a patent for, and I'm paraphrasing here, the ability to share the results of a game with a central repository for the purpose of comparing those results with others, a kind of leaderboard-like construct. Is that fair?"

"I don't want to characterize any one patent, because that's unfortunately legally admissible in court," Mr. Walker said.

Before the Internet became popular, the businessmen at Walker Digital—Mr. Walker doesn't employ technologists, he has no use for them, he said—sat down and said, "What problems might the Internet solve in the video game space?" It was such thought experiments that led to Walker Digital's portfolio of patents, which take between three and seven years to get granted.

Mr. Walker acknowledges that patent trolls, companies that use their patents only to extort money from legitimate businesses, are a problem. The issue is that in the early days of the Internet, the patent office was stuffed with time-crunched examiners who granted sloppy patents because they didn't understand the Internet and probably didn't speak English very well. "The problem is that very few of them are born in America. Almost all patent examiners are foreign," he said. "That's a real problem when they're examining English patents."

Lumping Walker Digital in with poorly-described patents is unfair, he said. "It's a bit like blaming knife manufacturers for knife murders," he said.

"As inventors, we risk capital and resources and time. When we invent something that turns out to be useful, there's absolutely no reason we shouldn't get an economic rent for that invention," Mr. Walker said. "There's nothing wrong with inventing things and paying the cost... to seek a patent, if you've really invented something."

Mr. Rosebaum and patent.

Looks like much-maligned U.S. Patent and Trademark Office is getting into the holiday spirit and trying to make entrepreneurs swoon. After six years, the agency has suddenly decided to give Steve Rosenbaum, founder and CEO of Magnify.net, the gift he's been waiting for—U.S. Patent No. 8,117,545, covering a hosted video discovery and publishing platform—complete with a Valentine's issuance date.

It's a "big thumpy one too :), " Mr. Rosenbaum told Betabeat over Skype. Thumpy? "Makes noise when you put in on the desk... thump," he explained.

Considering Mr. Rosenbaum, author of "Curation Nation," had to suffer through three rejections and two years of straight silence along the way, we say it should've come a bag of Sweethearts®, at least.

While consumers may not be familiar with Magnify, its video platform powers sites like New York magazine, TEDxTALKS, and Mediaite. It allows publishers to populate their sites with video from around the web and create their own video channels.

We talked to Mr. Rosenbaum, who was recently named entrepreneur-in-residence by the New York City Economic Development Corporation and also built the 9/11 Memorial iPad app, about why Fred Wilson calls patents "the Anti-Christ" and the three ways a company can respond once its been granted a patent.

Mr. Rosenbaum founded Magnify back in 2006, the same year Google purchased YouTube. “Web video was a mere trickle,” he said. “We had this idea that it would be a massive river.” In the early days, Magnify was preoccupied with the idea of discovery. “If there's way too much video... and you want to find what you care about... what's the technology to do that?”

“We came up with a word, and code, and a process, and wrote a pattern application while we wrote the code. The word was ‘curation.’ Video curation, to be specific. Then we waited.” Two years later, the PTO responded with an ‘office action.’ Mr. Rosenbaum called it “polite talk for rejection.”

So Magnify re-filed, narrowing its claims and honing the language. In 2008, it was rejected again. In 2009, more of the same. “No fun at all,” he noted. In the meantime, Magnify was growing. “The practice was starting to get traction, and the patent claims were getting more carefully worded.” The PTO’s response? “Two years of silence,” said Mr. Rosenbaum. “Yeah, your government dollars at work.”

According to Mr. Rosenbaum’s “patent guy,” who did much of the IP work for Akamai, Magnify had a particularly arduous road, until “ta da—we get notice of allowance, with an issuance day of Valentines Day (love that!).” To celebrate, Mr. Rosenbaum said he was going drinking for Social Media Week at Bowlmor Lanes.

But now, comes the hard part. “It means that we have to decide how we want to proceed,” explained Mr. Rosenbaum. “There are flavors—Patent Troll (ugh), Licensing (not predatory), Business Partnerships (always). This the conundrum.”

As he framed it, it's almost a conflict of ideologies. “I believe in the freedom of innovation, and clearly the problem with patents is that they are little more than permission to sue. Which means the big pockets can ignore a claim of infringement, or suit up for battle.  While the small startups end up paying the freight. This is why Fred Wilson calls patents the Anti-Christ.”

Magnify has never faced an intellectual property lawsuit, but having a patent means, “Revenue, partnerships, potential suitors—it validates our take on the space and gives us real running room...our investors are pretty darn pleased.”

Had Mr. Rosenbaum heard of fellow New Yorkers facing the same slog with the PTO?  “No, but it's a little like asking someone how much they earn—the whole patent topic is kinda hush-hush, which I think is crap.”

In the patent wars, startups are also expected to behave differently than corporations, he noted. “No one says that Google shouldn’t file a patent, or Apple, or Microsoft, or Amazon, right? But startups are told that patents 'stifle innovation.' So big companies buy patent portfolios from each other,  trade them like baseball cards, and startups are told they should win on 'traction,’ which is fine, but really for B2C tech, not enterprise.”

In enterprise, he explained, “You need to sell your service to big companies (not consumers) and they often can be your competitors... with the resources to compete and reverse engineer your tech.”

For now, he thinks startups have to operate by the those guidelines if they want to compete. “Don't get me wrong," said Mr. Rosenbaum. "If we all agreed to abolish technology patents, including the big players, that would be cool. But until then, I think we should all play by the same rules.”

"I want a piece of myself." Image by David Saracino

If there was ever a question about the absurdity of Intellectual Ventures and the patent protection racket it's running, the recent news that IV is suing Motorola Mobility, over patents related to Google's Android OS, settles things once and for all.

From FOSS Patents:

Intellectual Ventures, the world's largest non-practicing entity (holding more than 35,000 patents and pending patent applications), announced the filing of a federal lawsuit (in the District of Delaware) against Motorola Mobility. It also published the complaint.

The press release and the complaint say that IV approached MMI to negotiate a license deal, but decided to sue because of MMI's continued refusal to take a license on unspecified terms that IV would consider "reasonable". According to the complaint, those discussions started in January 2011. IV asks the court for damages and an injunction.

While this looks like the umpteenth NPE lawsuit against an Android device maker, this is remarkable and adds to existing intellectual property concerns related to Android. Intellectual Ventures isn't just another NPE. Intellectual Ventures has received funding from Google itself, and is now suing Google's most expensive acquisition target ever for the infringement of patents, some of which are software patents that read on Google's Android, or at least on MMI's extensions running on top of Android. In other words, Google does not even protect Android device makers against NPEs it invests in.

The one reasonable claim to existence that IV had was that it acted as a patent pool that protected its members from frivolous lawsuits. But this suit puts the lie to even that flimsy facade. Google funds IV, but if it doesn't agree to pay extra licensing fees, it finds itself the target of a lawsuit, which, let's not forget, comes from a company with no business  model outside collecting patents, receiving tithes from big tech companies, and suing for infringement.

For a deep dive into the absurd world of patent trolls, check out our feature on IQ Biometrix.

You'll be funding my next project, like it or not

As first reported by PaidContent, Kickstarter is embroiled in a legal battle with musician and entrepreneur named Brian Camelio, who's notable achievements include playing on a Journey record. In their claim, Kickstarter says Mr. Camelio has shown up multiple times to demand they pay to license his technology. He currently runs the site ArtistShare, where users can contribute to musicians and participate in the creative process. He obtained a patent for this process earlier this year.

Mr. Camelio's claim seems absurd on several levels. First and foremost, Kickstarter can clearly show that they were in business before his patent was approved. Second, there is very little complex technology at work here. The concept of crowdsourcing funds predates both this patent and Kickstarter by many years, even on the web. The fact that both focus on creative projects seems completely irrelevant to the software or business method.

But in the absurdist universe of our current patent system, this kind of thing can become a serious legal problem. The terrifying truth, as we have reported at length earlier this year, is that any company which gets too visible in the press or raises too much money is more than likely going to be hit with a patent infringement claim. And it's often cheaper to settle than to fight, so it's admirable Kickstarter is choosing not to roll over.

Here is the abstract of Mr. Camelio's patent:

The present invention is directed to a system and method for raising financing and/or revenue by artist for a project, where the project may be a creative work of the artist. The method including registering, by at least one artist, with a centralized database, at least one or more projects, offering, by the at least one artist, an entitlement related to the artist in exchange for capital for the project of the artist. The method and system may also include searching, by an interested party, the centralized database, for the least one artist, registering, by the interested party, with the centralized database and accepting the offer by the interested party for the entitlement related to the project. The capital may then be forwarded to the artist and the entitlement provided to the interested party.

The only reason such an obvious and non-technical claim can become a patent is because our current system allow for business method patents on almost anything, so long as the claim somehow involves the exchange of money and the use of a computer.

We've reached out to Mr. Camelio and Kickstarter and will update with comment.

Let there be light, and let me patent it.

This is a guest post by Steve Rubin, a patent attorney specializing in computer science at Dilworth & Barrese.

The America Invents Act became law last week. It is touted as creating jobs and fostering innovation. Those are great sound bites. However, a close read of the Act reveals it will hurt innovation and will be especially harmful to startup companies. In fact, the new law leaves open the possibility that an entire class of patents may be invalidated by corporations with the money to lobby Congress.

A quick breakdown on the changes:
First to File: The United States was unique in that patent rights were awarded to the first "inventor". Now the first entity to file a patent application will be awarded the rights. Things like sales, publications, etc. that occur before your filing date, anywhere in the world, will preclude patent protection. Bottom line: file a patent application before you publish.

Post-grant Review: allows someone to challenge a patent on any invalidity ground if the request is filed within 9 months of a patent issuing. These grounds include novelty, statutory subject matter, challenges to the description, the clarity of the claims, etc. This type of challenge is much broader than what was available before.

Business method patent review:

Why make patent examination and enforcement more nebulous? One of the supposed goals in the Act was to make examination quicker – not create more complexities. Combine this with other provisions stating that tax avoidance strategies are not patentable, and a rule that you cannot get a patent directed to or encompassing a human organism, and basically Congress is saying that with enough lobbying money, you can invalidate a whole class of inventions. There is no logical reason for these types of provisions except that large companies lobbied to get them removed.

There was clear existing law in this area. A patent is awarded for something that is not too abstract (statutory subject matter) and which is new to the world (novelty). We already went through issues regarding statutory subject matter in conjunction with the Bilski case last year. In Bilski, a patent application was appealed all the way to the Supreme Court because the claimed process was said to be so abstract that it was not worthy of patent protection. The Supreme Court articulated a pretty good test for abstractness – generally if a process is tied to a machine or causes a transformation of subject matter, it is not too abstract. We did not need further law.

A big factor here is the negative connotation surrounding "business method" or sometimes "software" patents and people assume that these patents (whatever they are)must be invalid. There is no good definition of a "business method" patent and so much innovation relates to software it seems almost ridiculous to even suggest that software should not be patentable. I would even argue that all patents relate to someone's business. The real test for patentability should simply be – is this new to the world? If it is new, why bother trying to shove the patent into arbitrary categories?

If you have been sued on a "business method patent", you may file a challenge in the Patent Office, at any time on any invalidity ground. Basically, this is a – let's get rid of those bad business method patents – law. This provision is particularly troubling because a "business method patent" is necessarily defined too broadly. Briefly, it includes any patent with a claim relating to a financial product or service but specifically excludes technological inventions. Does this mean that banks can no longer get patents on their software or hardware improvements? What is a "technological invention"? Is "software" or "stuff I don't like" next? The new law leaves open the possibility that an entire class of patents may be invalidated by corporations with the money to lobby Congress.