Today we’re pleased to announce that the litigation against Sable has finally concluded on terms that we believe send a strong message to patent trolls everywhere — if you bring meritless patent claims against Cloudflare, we will fight back and we will win.

We’re also pleased to announce additional prizes in Project Jengo, and to make a final call for submissions before we determine the winners of the Final Awards. As a reminder, Project Jengo is Cloudflare’s effort to fight back against patent trolls by flipping the incentive structure that has encouraged the growth of patent trolls who extract settlements out of companies using frivolous lawsuits. We do this by asking the public to help identify prior art that can invalidate any of the patents that a troll holds, not just the ones that are asserted against Cloudflare. We’ve already given out over $125,000 to individuals since the launch of Project Jengo in 2017, and we’re looking forward to celebrating the successful end of the Sable iteration of Project Jengo with our Final Awards!

To learn more about how things concluded with Sable and next steps in Project Jengo, read on.  

For anyone just joining us on this odyssey, here is a little background on how we got here:

Sable sued Cloudflare back in March 2021. Sable is a patent troll. It doesn’t make, develop, innovate, or sell anything. Sable IP is merely a shell entity formed to monetize (make money from) an ancient patent portfolio acquired by Sable Networks from Caspian Networks in 2006. Caspian Networks was a router company that went out of business nearly 20 years ago. Using Caspian’s old patents, Sable sued Cloudflare and many other companies, including Cisco, Fortinet, Check Point, SonicWall, and Juniper Networks, alleging patent infringement. While these other companies resolved their disputes with Sable out of court, Cloudflare fought back. 

Sable initially asserted around 100 claims from four different patents against Cloudflare, accusing multiple Cloudflare products and features of infringement. Sable’s patents — the old Caspian Networks patents — related to hardware-based router technologies common over 20 years ago. Sable’s infringement arguments stretched these patent claims to their limits (and beyond) as Sable tried to apply Caspian’s hardware-based technologies to Cloudflare’s modern software-defined services delivered on the cloud.

Cloudflare fought back against Sable by launching a new round of Project Jengo, Cloudflare’s prior art contest, seeking prior art to invalidate all of Sable’s patents.

After years of Cloudflare aggressively litigating against Sable’s patents before the U.S. Patent and Trademark Office and the district court, Sable was left with only one claim from one patent to assert against Cloudflare at trial. If you’d like to know more, we described those battles, in which Cloudflare successfully eliminated around 99% of Sable’s claims, in more detail in a prior blog post.

Sable and Cloudflare came together in a five-day jury trial in Waco, Texas in February 2024. At trial, Sable did its best to try to map its decades-old router technology onto Cloudflare’s modern software-based architecture. But Sable’s case was riddled with technical issues and its efforts backed only by the desire for a payout.

To defeat Sable’s claim of infringement we needed to explain to the jury — in clear and understandable terms — why what Cloudflare does is different from what was covered by claim 25 of Sable’s remaining patent, U.S. Patent No. 7,012,919 (the ’919 patent). To do this, we enlisted the help of one of our talented Cloudflare engineers, Eric Reeves, as well as Dr. Paul Min, Senior Professor of Electrical & Systems Engineering at Washington University, an expert in the field of computer networking. Eric and Dr. Min helped us explain to the jury the multiple reasons we didn’t infringe.

^{From slide deck presented by Cloudflare to the jury during the trial}

First, we explained that the accused Cloudflare products (Magic Transit and Argo for Packets) do not route “flows” or “micro-flows” as required by claim 25. Instead, they handle packets individually, on a packet-by-packet basis. Indeed, processing each packet individually is important to the functioning of these products and Cloudflare’s DDoS and security services as a whole.

Eric also helped to tell our invention story to the jury. He explained how the Cloudflare team saw problems that needed to be solved, and built unique and innovative new products to solve them. He described the work that went into developing Magic Transit and Argo for Packets, and how these products are part of Cloudflare’s modern software-based approach, which is fundamentally different from the hardware-based technology of the ’919 patent. Together, Eric and Dr. Min explained how the benefits of Magic Transit and Argo for Packets enjoyed by Cloudflare’s customers are not attributable to any technology claimed by the ’919 patent.

^{From slide deck presented by Cloudflare to the jury during the trial}

Second, we explained that Cloudflare doesn’t infringe because claim 25 of the ’919 patent requires certain processes to occur “at” ingress and egress line cards, and Cloudflare’s accused servers do not include line cards.

^{From slide deck presented by Cloudflare to the jury during the trial}

As Dr. Min explained, “line cards” are a specific type of hardware — a physical hardware “card” — that are commonly used in routers. Sable’s witnesses could not deny that the technology of the ’919 patent was tied to old router technology. After all, Caspian Networks Inc. (where the ’919 patent inventors worked) was a router company. Caspian’s core products were routers, and we showed the jury documents describing Caspian’s routers, which used “flow-based” technology on physical hardware line cards.

^{Trial exhibit, image of sample line card}

While Sable’s technical expert tried his hardest to convince the jury that various software and hardware components of Cloudflare’s servers constitute “line cards,” his explanations defied credibility. The simple fact is that Cloudflare’s servers do not have line cards.

Ultimately, the jury understood, returning a verdict that Cloudflare does not infringe claim 25 of the ‘919 patent.

^{Excerpt from Verdict Form completed by the jury}

In addition to proving that we do not infringe, we also took on the challenge of proving to the jury that claim 25 of the ’919 patent is invalid and never should have been issued.

Proving invalidity to a jury is hard. The burden on the defendant is high: Cloudflare needed to prove by clear and convincing evidence that claim 25 is invalid.  And, proving it by describing how the claim is obvious in light of the prior art is complicated.

To do this, we again relied on our technical expert, Dr. Min, to explain how two prior art references, U.S. Patent No. 6,584,071 (Kodialam) and U.S. Patent No. 6,680,933 (Cheeseman) together render claim 25 of the ’919 patent obvious. Kodialam and Cheeseman are patents from Nortel Networks and Lucent relating to router technology developed in the late 1990s. Both are prior art to the ’919 patent (i.e., they pre-date the priority date of the ’919 patent), and when considered together by a person skilled in the area of computer engineering and computer networking technology, they rendered obvious the so-called invention of claim 25.

^{Excerpt from Verdict Form completed by the jury} 

Sable’s real motivation for suing Cloudflare — its desire for a payout — was made clear by Sable’s trial witnesses, who were unified only by their desire to present a wildly inflated view of the alleged “value” of the Sable patent and the damages allegedly owed by Cloudflare. 

Sable’s attorneys tried their best to present their clients as reasonable businessmen, just trying to get what they’re owed for Cloudflare’s purported use of Sable’s patent. But Sable couldn’t hide its true colors from the jury. When Sable presented testimony from Brooks Borchers, the founder of Sable IP, Mr. Borchers was forced to admit that Sable IP is in the “business” of filing lawsuits.

^{Excerpt from Borchers trial testimony}

 In fact, Mr. Borchers was forced to admit that Sable’s approach is to sue first and ask questions later. Even among patent trolls, this is hardly a noble business practice.

^{Excerpts from Borchers trial testimony}

What's more, Mr. Borchers and his lawyers have teamed up on cases like this before, following the same sue-first-and-ask-questions-later playbook in hopes of a payout. Sable’s true motivations for suing Cloudflare were on full display after this testimony, making Sable’s damages demand all the more galling.

Sable’s damages expert, Stephen Dell, told the jury that Sable was owed somewhere between $25 million and $94.2 million in damages. But, Mr. Dell was forced to admit to multiple flaws in his damages calculation, and Cloudflare’s damages expert Chris Bakewell explained to the jury how bad inputs and faulty assumptions led Mr. Dell to a wildly inflated damages figure. Indeed, after hearing Sable’s expert’s testimony, Judge Albright said he was “very skeptical” of Mr. Dell’s opinions, explaining that he was “very concerned that there’s not support for his methodology.”

In the end, Mr. Dell’s outsized damages demand didn’t matter because the jury found that Cloudflare did not infringe and that the asserted patent claim is invalid. But, it was revealing of Sable’s motivation (greed) and the lengths that it would go to try to get a payout.

When all was said and done, after all the testimony and argument, we were thrilled when the jury returned its verdict — after less than two hours of deliberations — finding across the board for Cloudflare. The jury’s verdict is truly a validation of our strong belief in the importance of standing up to patent trolls like Sable, and we are grateful for the jury’s time, attention and consideration!

A jury verdict is not the end of the road in a patent case ... there are post-trial motions, appeals, and other procedural hurdles to jump through before a case is truly over. Tired from the fight, and smarting from its loss, Sable decided it wanted to throw in the towel and end the fight once and for all.

In the end, Sable agreed to pay Cloudflare $225,000, grant Cloudflare a royalty-free license to its entire patent portfolio, and to dedicate its patents to the public, ensuring that Sable can never again assert them against another company.

Let’s repeat that first part, just to make sure everyone understands: 

Sable, the patent troll that sued Cloudflare back in March 2021 asserting around 100 claims across four patents, in the end wound up paying Cloudflare. While this $225,000 can’t fully compensate us for the time, energy and frustration of having to deal with this litigation for nearly three years, it does help to even the score a bit. And we hope that it sends an important message to patent trolls everywhere to beware before taking on Cloudflare.

 ^{Excerpt from the Dedication to the Public and Royalty Free License Agreement between Sable and Cloudflare}

And, let’s talk a bit more about that final part:

Sable has agreed to dedicate its entire patent portfolio to the public. This means that Sable will tell the U.S. Patent and Trademark Office that it gives up all of its legal rights to its patent portfolio. Sable can never again use these patents to sue for infringement; they can never again use these patents to try to make a quick buck.

^{Excerpt from the Dedication to the Public and Royalty Free License Agreement between Sable and Cloudflare}

Cloudflare fought back against the patent troll and we won. We not only defeated Sable's claims in court, we forced Sable to pay Cloudflare for the trouble, and we got Sable's patents dedicated to the public, ensuring that it can never assert these patents against any other company ever again. It was admittedly a lot of work for Cloudflare, but totally worth it.

A crucial part of our efforts to secure this across-the-board win are our Project Jengo participants.

Since the launch of the Project Jengo for the Sable case, we’ve received hundreds of prior art references from dedicated Project Jengo participants. So far we have awarded $70,000 in prizes to the winners of Chapters 1 through 8. And we still have $30,000 in prizes to award in the Final Awards.

This blog post marks the official “Conclusion of the Case” under the Project Jengo Sable Rules. We will continue to accept submissions during the 30-day Grace Period, which lasts until November 2, 2024, and then will move on to selecting winners of the Final Awards.

We publicly celebrated the Chapter 1, Chapter 2, Chapter 3 and Chapters 4-6 winners in previous blog posts. However, as the trial approached in the Sable case, we chose not to make public announcements for the Chapter 7 and 8 winners out of respect for the judicial process. Now that the case is over, we are delighted to give a big public shout out to the winners of Project Jengo Chapters 7 and 8!

We selected four total winners in Chapters 7 and 8, each receiving prizes of $5,000, for a grand total of $20,000. Our Chapter 7 winners, George W. and Madhu, each provided helpful and detailed charts containing element-by-element comparisons of the prior art to the relevant Sable patents. George W. is an electrical engineer and lawyer, who is active in the intellectual property community. He learned about Project Jengo in an article posted online, and thought it was a clever idea. The Chapter 8 winners, Jatin and Ketan, also provided thoughtful and detailed submissions. Jatin submitted two pieces of prior art that were particularly good references for Sable’s U.S. Patent No. 7,012,919, which contains the one claim that remained asserted against Cloudflare at trial.

We also want to again thank our prior chapter winners and everyone who participated in Project Jengo! We look forward to selecting the Final Awards winners — it will be fun to take a walk down memory lane re-reviewing the fantastic prior art submitted by our prior winners, and we can’t wait to check out the new submissions, too! Please use the “Submit Prior Art” link on this page for your final entries. Once we’ve announced our Final Awards, we will also update the Sable patents prior art listing on our website, to share all the prior art submitted by our Project Jengo participants.

Project Jengo is a Cloudflare effort to fight back against patent trolls by flipping the incentive structure that has encouraged the growth of patent trolls who extract settlements out of companies using frivolous lawsuits. We do this by asking the public to identify prior art that can invalidate any of the patents that a troll holds – not just the ones that are asserted against Cloudflare.

Since we launched Project Jengo over five years ago, we’ve given out over $135,000 to individuals who helped us find prior art to invalidate patents owned by patent trolls. By invalidating those patents – many of which are so blatantly marginal or broad that they never should have been granted in the first place – we hope to decrease the amount of harassment and frivolous lawsuits that patent trolls bring against innovative technology companies.

Today, we’re excited to announce three new Project Jengo winners. These individuals have helped us push forward our effort to take down patent trolls, and continue to fight trolling in favor of innovation.

The current case involves a patent troll called Sable Networks who asserted four patents that generally describe a flow-based router or a mechanism for identifying and penalizing misbehaving flows against Cloudflare. We’ve implemented Project Jengo against Sable on those four patents and their six other patents, which they haven’t asserted against Cloudflare. Today’s recipients have helped us in that fight.

And we continue to fight Sable Networks before the Court and the U.S. Patent Office as well. We have a major case update in that regard as the U.S. Patent Office agreed that most of the claims from Sable’s ’593 patent should have never been issued in the first place, which means Sable is down to two patents in their lawsuit against Cloudflare. More on that later, but first, here are the three winners from Chapters 4, 5, and 6 of Project Jengo!

We are excited to announce Chris Wheeler as the winner of the 4th chapter of Project Jengo! Chris is the CTO and a co-founder of a software startup in Macon, Georgia called Tier2 Technologies, and he is now $5,000 richer!

When we asked where he had heard about Project Jengo, Chris told us:

“I heard about Project Jengo from one of your blog posts. I often read your blog on my phone from my children’s bedroom at night while I’m waiting for them to fall asleep. I’m a huge fan of Cloudflare and use your services myself extensively.”

As for why he submitted, Chris holds a patent, and submitted to Project Jengo in part because he was “drawn to the idea of helping protect the integrity of the patent system.”

Chris submitted a paper titled “A Framework for Alternate Queueing: Towards Traffic Management by PC-UNIX Based Routers” as prior art to Sable’s ’932 patent. This paper was published in 1998. On the other hand, Sable’s ’932 patent was filed in 2002 and is alleged to cover routers utilizing aggregate flow blocks that include tunnel-specific information for selected network paths. The aggregate flow blocks are also alleged to store statistics pertaining to the selected network paths. This paper, published nearly four years prior to the filing of the ’932 patent, describes a PC-UNIX based router that implements a FreeBSD Alternate Queueing (ALTQ) driver with traffic management functionalities to select network paths. ALTQ traffic management uses queueing disciplines based on stored statistical analysis of selected paths for network traffic, and this is a great prior art reference to the ’932 patent.

His breakdown of his submission is interesting too:

“When I saw the claims in 6,977,932 I immediately thought ‘They are just describing QoS in a weird convoluted way’ and I knew QoS had existed long before the patent date of 2002. I have used the ALTQ packet scheduler in pfSense a lot in the past throughout my career, and that was the first thing that came to my mind. I did a quick Google search for ‘ALTQ’ and found the oldest reference I could find, which was from 1998.”

We appreciate his efforts, as he managed to find useful prior art from four years before the patent in question. Thank you, Chris!

Additionally, we are awarding $5,000 to Peter S. for finding us a valuable thesis paper! This is Peter’s first foray into patent law, and we are so thankful for his time and effort.​​

The thesis of Rena Whei-Ming Yang found by Peter describes the solution of the ʼ593 patent almost five years before Sable even filed for the patent! The ʼ593 patent is the Sable patent concerning the detection of “bad” flows. Yang—years before Sable—developed the same thing: “This thesis studies a means of using such mechanisms to identify nonadaptive network flows, and proposes a protocol to push this information, along with penalization responsibility, towards the flows’ sources.” What Sable calls “bad,” Yang labels “nonadaptive.” The important thing is that Yang’s work predates the ’593 patent’s alleged new solutions by years, making it a great find. Thank you, Peter!

Finally, we are excited to announce the winner from the 6th Chapter of Project Jengo, and that is David H. who is receiving a $5,000 prize! David’s background is in accounting/finance, but became interested in patents and IP back in 2010. He heard about Project Jengo through a LinkedIn post and thought it was an excellent idea, so he put his search skills to task.

David identified U.S. Patent No. 6,859,438 for us, which is a patent entitled “Policy Based Quality of Service.” This ’438 patent discloses the same “quality of service” (or QoS) technology claimed in Sable’s ’431 patent, with one important difference: the disclosure of the ’438 patent dates back to an application filed on February 3, 1998, but the disclosure in the ’431 patent wasn’t filed until (at the earliest), April 19, 2000. So the technology explained in the ’438 patent—a flexible, policy-based, mechanism for managing, monitoring, and prioritizing traffic within a network and allocating bandwidth to achieve true QoS—beat Sable to the punch on the “new” switching technology claimed in the ’431 patent that purports to provide a previously “unavailable” degree of quality of service, by more than two years! Excellent find, David!

He also shared his thoughts on the current state of the U.S. patent system:

“The US Patent Office continues to issue patents that are likely invalid on a number of grounds with a large proportion to big tech. The USPTO has a nice fee generating business, being able to get paid issuing patents and subsequently canceling them in post grant proceedings. I am hopeful the USPTO adopts new technology to aid examiners in their prosecution efforts.”

Thank you, David!

* * *

Congratulations and our deep gratitude to all three winners from Chapters 4-6 of Project Jengo. Remember, we have committed \$100,000 to this prior art search, and we still have $50,000 to give out! The search is still ongoing, so please help us beat the patent troll by submitting prior art references here. The submission deadline for Chapter 7 is January 31, 2023, so don’t delay your search!

When Sable sued us almost two years ago in March 2021, they accused us of infringing four different patents, which included a total of 134 claims. We previously shared how we successfully killed off one of the four patents, known as the ’932 patent.

Today, we have more great news to share. The U.S. Patent Office agreed with us that all the claims from the ’593 patent that Sable asserted against us are invalid. This means we were able to get yet another patent – the ’593 patent – dropped out of Sable’s case against us.

A single U.S. patent usually has somewhere around 10 to 20 claims (here’s a Wiki page explaining what a “claim” is in patents), but Sable’s ’593 patent included a whopping number of claims – 44 to be exact. As we previously shared back in January 2022, the Patent Office ruled that we would likely be successful in invalidating all 44 claims of the ’593 patent and instituted a trial proceeding known as inter partes review (IPR). Since then, Sable voluntarily canceled 17 of the claims – presumably because they themselves knew those claims were invalid. Of the remaining 27 claims, the Patent Office determined that 23 claims were invalid. Because none of the four surviving claims – which escaped invalidation only by virtue of a procedural technicality – are part of Sable’s case against us, the ’593 patent is no longer asserted against us. And given the record we have established before the Patent Office, we don’t think Sable will try asserting those four surviving claims from the ’593 patent against any of our peer companies. But even if Sable does, they should be able to leverage what we’ve done and kill off the patent completely.

Our victory was covered by multiple legal news outlets such as Bloomberg Law and Law360 (unfortunately, subscription required). A special shoutout to our attorney Jim Day of Farella Braun + Martel, who fought hard to get rid of these toxic claims that should have never been issued! With two patents completely out of the case, there are now only two patents at issue in Sable’s case against us.

We have even more good news to share! In October 2022, the Court found nine claims from one of the two remaining patents – the ’431 patent – to be invalid for failure to meet certain statutory requirements. This means Sable only has 14 claims from two patents in the case. Considering that we started this journey with Sable asserting 131 claims from four patents against us, we are proud of what we have accomplished thus far. We successfully persuaded the Court and the Patent Office to cancel, or forced Sable to voluntarily cancel, almost 90% of those 131 claims. Those victories not only help us in our case against Sable, they will also protect all innovative companies from being accused frivolously of infringing those invalid claims.

Our trial is scheduled for November 2023, but we will have more updates for you before then. Stay tuned, and remember to go look for prior art references to help us in our fight against this patent troll!

We are excited to announce another Project Jengo winner, and provide you with an important update on our fight against Sable Networks.

As a reminder, Project Jengo is Cloudflare’s efforts to flip the incentive structure that has encouraged the growth of patent trolls that seek to leverage overbroad and unpracticed patents to extract settlements from operating entities. We do this by refusing to settle patent cases brought against us by trolls, and instead, use a crowdsourced bounty to identify prior art that undermines the value of the troll’s patents, and not just the ones asserted against Cloudflare. This is the second iteration of Project Jengo, which is focused on a patent troll called Sable.

Even though the case against Sable has been active for over a year now, and we’ve already achieved some great results, we haven’t let up the pressure. We’re now also giving out Cloudflare T-shirts to new Project Jengo participants – all you need to do is submit prior art related to any of the Sable patents this year and the first 100 participants with a U.S. mailing address will receive a Cloudflare t-shirt.

We have already awarded $30,000 so far to winners of the Sable-focused Project Jengo. Last quarter, we awarded $10,000 to a former R&D engineer from Rennes, France who heard about Project Jengo through Hacker News. This round, we are excited to announce that we’ll be awarding Curtis Carter with $5,000!

In explaining why he participated in Project Jengo, Curtis said:

“As a maintainer/contributor for several open source projects (NuGetDefense being my main project), I'm always afraid some troll is going to attack one of my projects or a project I contribute to, and I may not be able to afford stopping it.”

That is why we started Project Jengo – to help support and protect innovators against malicious patent trolls. They hinder innovation of productive companies, and trade in fear as currency. As Curtis highlighted, the future is brighter without trolls:

“I think what you are doing is for the good of future generations, and I'm proud I got to participate even if I hadn't won anything.”

Developers and innovators should not work in fear that trolls will target them for frivolous settlements. The patent system was built to promote innovation, not destroy it.

Not only does Curtis maintain NuGetDefense (a known vulnerability scanner for the .Net NuGet ecosystem), he’s also an engineer at Tech Friends, Inc., a software development company that he claims is the best employer for software developers in Northeast Arkansas. Impressively, he is self-taught.

“This was the first time in a while that I dug into old research documents and patents. Honestly, the people who originally put this stuff together were often brilliant, and their work is a joy to read (even if it's a bit dry).”

As for his submission, Curtis Carter took on the challenge of finding prior art for United States Patent No. 8,085,775, an over broad patent that Sable owns and generally covers a mechanism for identifying, classifying, and controlling flows over a network.

Sable chose not to assert that patent against Cloudflare in our ongoing litigation. The prior art he found specifically addresses “methods, apparatuses and systems directed to a flow-based, traffic-classification-aware data collection and reporting system…” according to its abstract (US Patent No. 7,385,924). Furthermore, the prior art Curtis found pre-dates Sable’s patent by just over three years.

Curtis's discovery has the added benefit of teaching many concepts to the narrower ’593 patent that Sable is asserting in the lawsuit. The narrower patent specifically addresses a method for identifying and penalizing misbehaving flows in a network. Side note: the patent is so old that its background description references some ancient applications:

“With the advent of file sharing applications such as KaZaA, Gnutella, BearShare, and Winny, the amount of peer-to-peer (P2P) traffic on the Internet has grown immensely in recent years.”

The prior art found by Curtis demonstrates TCP’s use of a sliding window scheme in which flow control is exercised over incoming flows. This is exactly the type of flow control both patents purport to cover. Furthermore, we were impressed with Curtis’ efforts to find prior art related to one of the narrower patents owned by Sable – well done, Mr. Carter!

As for what his discovery looks like, take a look at the first sentence of the patent’s abstract to get an idea.

Methods, apparatuses and systems directed to a flow-based, traffic-classification-aware data collection and reporting system that combine flow-based data collection technologies with enhanced traffic classification functionality to allow for analysis and reporting into aspects of network operations that prior art systems cannot provide.

If you haven’t won yet, don’t be discouraged. We have committed \$100,000 to this prior art search, so we still have \$65,000 to give out!

As part of our fight against Sable, we’ve been involved in a year-long process before the US Patent Office called Inter Partes Review (or “IPR”) with the goal of invalidating patents held by Sable Networks. You can check out our blog post from 2017 that outlines how the IPR process works. In our last blog post, we were pleased to announce that the Patent Office agreed to institute IPR on some of Sable’s patents. Today, we’re even happier to announce that we’ve officially killed off Sable’s ‘932 patent.

Once the Patent Office agrees to review the validity of a patent, the owner of the patent typically files a brief defending the validity of its patent (because if you own it you should think it’s valid, right?). But in this case, instead of explaining to the Patent Office why its ’932 patent is valid (or why Cloudflare is wrong), Sable simply decided to voluntarily cancel all claims of the patent. Since there is no claim left for the Patent Office to review, the IPR should be terminated soon, and we’ve effectively obtained the full relief requested!

This is a big win for anyone concerned with abuse of the patent system, including all the companies that Sable Networks previously attacked with this patent, including Dell, Cisco Systems, Hewlett Packard, Palo Alto Networks, Juniper Networks, Aruba Networks, amongst others. Yes, as absurd as it sounds, this patent has been used by Sable Networks to help squeeze out settlements from numerous productive technology companies. This victory means that Sable has one less patent to try to leverage in its attempts to abuse the patent system.

As we mentioned in our February blog post, part of our goal with Project Jengo is to spread the word that targets of these trolls can and should fight back and win. That’s why we were thrilled to see a recent blog post from Coinbase announcing that the company is following Cloudflare’s lead when it comes to pushing back on patent trolls. Trolls count on easy targets to fund their operations through settlements, so it’s great news that a major company like Coinbase has made clear that it will refuse to capitulate and will instead fight back.

We could not have gotten to this point without the help of the many Project Jengo participants. We have received hundreds of prior art references on Sable’s ten patents, and we have used many of those references in our efforts to kill off the patents that Sable asserted against us.

Thank you to everyone who has participated in Project Jengo for supporting the broader community and helping us take down a patent troll. If you haven’t participated yet, please consider submitting to our prior art contest.

The classic children’s fairy tale The Three Billy Goats Gruff tells the story of three goats trying to cross a bridge to a field of yummy grass, despite the monstrous troll that lives underneath the bridge and threatens to eat them. To beat the troll, the goats played on his greed and proceeded across the bridge in order from smallest to largest – and holding the troll at bay each time with promises of a larger meal if he waited for the larger goat to follow. In the end, the troll passed on attacking the smaller goats and was left to do battle with the largest goat who was able to defeat the troll, toss him off the bridge, and watch him float downstream. The goats were then able to enjoy the yummy grass, troll-free. In our fight against Sable Networks (patent troll), we plan on being that third goat, and our recent wins suggest we might be on track to do just that.

We started Project Jengo 2 last year as a prior art search contest, so we could enlist your help in the battle against Sable Networks. We committed $100,000 in cash prizes to be shared by the winners who were successful in finding such prior art, and last quarter, we gave out $20,000 to three lucky winners. This quarter, we are excited to announce our second round winner who will take home $10,000! The winner submitted prior art related to the asserted ’431 patent.

We are happy to announce the winner for this round is Jean-Pierre Le Rouzic. Although Jean-Pierre is retired and living in Rennes, France, he decided to put his patent knowledge to work when he saw Project Jengo discussed on Hacker News. Jean-Pierre is a former telecommunications R&D engineer who wrote twelve patents in the 2000s that relate to online authentication and identity management. Impressively, he was one of the first users of Java at his company, and recalls using Java as early as 1996!

Jean-Pierre’s career experience certainly helped in his research – his Jengo submission was 24 pages and included a meticulously detailed claim chart. In particular, he addressed vulnerabilities in Sable’s extremely large scope for the ’431 patent addressing “micro-flow management.” You can read more detailed information about Jean-Pierre’s findings in the appendix to this blog post or all of the findings of Jean-Pierre and other submissions are available to anyone who may face a challenge from Sable’s claims here.

We enjoyed Jean-Pierre’s response to the good news:

I do not master enough English to express how happy I am, and how happy I am for Cloudflare if my work is useful. I find the idea of patent trolls hideous. The patent regulations should really be updated to enter the XXI century.

Jean-Pierre’s reasons for participating in Jengo were different from most other participants. As his current interest is in neurodegenerative diseases, specially ALS, and he said part of his motive stemmed from what he has seen in the medical industry:

The challenge faced by Cloudflare is close to my heart, because of its similarity to what is happening in the world of medical drugs. Cloudflare is facing an entity which is unreasonably stretching the meaning of their patent claims.

We could not agree more -- we think Sable is beyond unreasonable, which is why we intend to change the incentive structure that makes things so easy for them, and we are so grateful for Jean-Pierre’s support (and all the other Jengo participants).

Also, worth noting, we were excited to see that both he and one of his daughters is a current user of Cloudflare!

My blog (padiracinnovation.org) uses Cloudflare, and I am a very satisfied user. The online shop of one of my daughter’s also uses Cloudflare.

Last year, we announced that we were facing a challenge from a patent troll called Sable Networks that was trying to weaponize decades-old and unused patents against us. With your help through the relaunch of Project Jengo, we became determined to outsmart the troll.

One of the steps we are taking, as Ethan mentioned in our August blog post, is seeking to invalidate the four asserted patents in the lawsuit through a procedure with the U.S. Patent and Trademark Office (Patent Office) known as inter partes review (IPR). As we previously explained, IPR is a trial proceeding that lasts for one year, conducted before the Patent Office, to determine whether or not a patent (or some of its constituent claims) should be invalidated. Importantly, the IPR process is only instituted after a party files an extensive petition that is reviewed by a panel of three administrative patent judges -- who will only institute an IPR, if they believe a petitioner has a reasonable likelihood of succeeding in invalidating at least one claim from the challenged patent.

In December, after months of hard work and considerable attorney’s fees and expenses, we found out the efforts Ethan described last August had paid off -- the first two of our four IPR petitions were granted by the Patent Office! For each of the challenged patents -- the ’593 and the ’932 patents -- an IPR proceeding has been instituted on every single claim -- a total of 76 claims between the two patents. This is exceptional news for us, as the Patent Office has made a preliminary determination that we are likely to succeed on invalidating a vast majority of those claims, giving us a chance to invalidate those two patents in their entirety. This provides an independent path for defeating Sable’s lawsuit, because if the Patent Office declares a patent to be invalid -- meaning that patent never should have been issued in the first place -- the patent no longer exists, and we have effectively pushed the troll off the bridge. Now that we have two IPRs instituted, the Patent Office has one year from the date of institution to make their final decision on whether the challenged claims are valid or not.

And, by the way, it was pretty nice to see our diligence recognized:

“Moreover, the undisputed evidence here shows that [Cloudflare] acted diligently, filing its Petition only seven weeks after service of the complaint and well before preliminary infringement contentions were served.”

Decision Granting Institution of Inter Partes Review at p. 12 (IPR2021-00909) (Nov. 19, 2021)

But this was only half the battle. There are four Sable patents at issue in the litigation. For the ’919 and ’431 patents, we filed separate IPR petitions on all 38 claims from those two patents last year. In response to our petitions, Sable voluntarily canceled 34 out of 38 claims from its own patents, which says a lot about what they think about the quality of their decades-old patents. The Patent Office subsequently declined to institute IPR on the four remaining claims. Sable is now left with only 4 out of the 38 claims to pursue in the litigation, and those four claims are far removed from Cloudflare’s products and services.

We are happy to see some more press coverage on the fight against Sable Networks. More press means that more people become aware of this issue and can help put a stop to future patent trolls. Most trolls merely send threatening letters and hope they can get a quick settlement from their threats without having to see the light of day by going to court or to the Patent Office to defend their claims. We are just one entity (that has enlisted your help) fighting against a villainous patent troll -- but would it not be great to see other big companies fight back when they encounter their next troll?

• “Cloudflare Lands Tribunal Review of Data Transmission Patent” -- Bloomberg Law

• “PTAB To Eye Patent Cloudflare Offered 'Bounty' To Help Kill” -- Law 360

• “Recently, Cloudflare Inc. succeeded in convincing the PTAB to institute in IPR2021-00969 against a Sable Network, Inc.’s patent directed toward data flow” -- JD Supra

We could not have gotten to this point without the help of the many Project Jengo participants. We have received hundreds of prior art references on Sable’s ten patents, and we have used many of those references to help kill off the four patents that Sable asserted against us. While we have made some great progress together, we cannot let our guard down now. We will continue to fight vigorously, but just as in the Three Billy Goats Gruff, we need your support to take down a ravenous troll. Please consider submitting to our prior art contest, and please share the contest with co-workers, family and friends. On behalf of the Cloudflare community, thanks to everyone who has participated so far!

The ’431 patent leveraged by Sable is titled “Micro-Flow Management” and concerns Internet switching technology for network service providers. The patent claims priority all the way back to April 19, 2000. The ’431 patent discloses a router that puts a label on packets for a given “microflow,” and forwards all the packets in that same microflow based on the label.

Our first blog post about Sable’s claims explained that the ’431 patent assertions were so broad, they could stretch to possibly even the “conventional routers” from the 2000s that routed each packet independently.

Thankfully, Jean-Pierre noted some similarities between the asserted ’431 patent and the patent he tracked down. US Patent No. 7,406,098 was first publicly available as early as 1999. The ’098 patent is related to the allocation of communication resources of a single node among a multitude of subscribers. In Jean-Pierre’s words, both the asserted patent and the ’098 patent concern “the need to allocate switched packets resources to a single communication among many.”

The first claim in ’431 is for “a method for managing data traffic through a network”, while the first claim in the ’098 is for “a method of allocating a resource in a communication system” -- both of which Jean-Pierre found to read quite similar. As he described, in both cases there is a need to “allocate Internet (switched packets) resources to a single communication among many, this allocation is based on a classification.” Ultimately, the ’098 patent is noteworthy in that it demonstrates the obviousness of what Sable claims the ’431 patent covers. People of skill in the art (like the Qualcomm inventors from the ’098 patent), long before the ’431 patent, knew how to manage the flow of data using queues.

Take a look at the snapshot from the claim chart Jean-Pierre submitted:

The language in Claim 1 of the ’431 patent deals with the “delegating” of “microflows”, while Claim 14 of the ’098 patent deals with the “assigning” of “application flows”. We have hardly scraped the surface here, as there are plenty of other similarities between the two patents -- take a look for yourselves!

We are grateful for Jean-Pierre’s participation in Project Jengo, and we are looking forward to receiving more prior art as we continue to fight Sable Networks!

This past April we announced the revival of Project Jengo in response to a patent troll called Sable Networks that sued Cloudflare even though our technology and products are nothing like what’s described in Sable’s patents. This is only one part of Sable’s larger campaign against innovative technology companies — Sable sued five other technology companies earlier this year, and had sued seven other technology companies under the same patents last year.

Just as we have done in the past, we decided to fight back rather than feed the troll — which would only make it stronger. You see, unlike Cloudflare and other operating companies that were sued, Sable Networks isn’t in the business of providing products and services to the market. Rather, it exists to extract settlements out of productive companies that are creating value to the society.

Project Jengo is a prior art search contest where we ask the Cloudflare community for help in finding evidence (“prior art”) that shows Sable’s patents are invalid because they claim something that was already known at the time the patent application was filed. We committed $100,000 in cash prizes to be shared by the winners who were successful in finding such prior art.

The first chapter of this contest has now ended, and we received almost 400 prior art references on Sable’s ten patents. And over 80% of those references were submitted to kill off the four patents that Sable asserted against us. Let me first say thank you to everyone who submitted these! Here at Cloudflare, we are constantly energized and motivated by the support from our community, and we are heartened by our community’s participation in Project Jengo.

We reviewed every eligible submission and scored them based on the strength of the prior art reference(s), difficulty, the story provided by the entrant, and the clarity and thoroughness of the explanation. Today, we are announcing the selection of three great submissions as cash prize winners in this round. The first winner will receive \$10,000, and the other two will each receive \$5,000.

As you’ll recall, Sable is using a set of patents from the early 2000’s related to a flow-based router called Apeiro, which was never widely adopted and eventually failed in the marketplace over a decade ago. Sable is now stretching those patents way beyond what they were meant to cover. Sable’s flawed reading of these patents extends infringement to basic routing and switching functionality known long before any alleged invention date, including “conventional routers” from the 2000s that routed each packet independently without any regard to flows. The way Sable is interpreting its patents so broadly and the fact that Sable has gone after numerous technology companies selling a wide range of different products worry us — by its current standard, Sable could target anyone using a router, and that would include anyone with a WiFi router in their home. You can help stop this madness by participating in this contest and finding prior art on any of Sable’s ten patents that we’ve identified — not just on the four patents that Sable asserted against us.

The contest is ongoing, and we still have $80,000 to give out. The sooner you send us quality prior-art references, the more helpful they will be in invalidating Sable’s patents, so please make your submissions here as soon as possible. Already made a submission, but you aren’t one of the three winners today? It isn’t over — we will consider your submission again when we announce our next round of winners in November (and you can, of course, also enter a new and better submission). We have many more rounds to go as long as Sable’s case is pending against us, which means earlier submissions benefit from being considered in multiple rounds of this contest, so please don’t delay and make your submission now.

If this were a boxing match, then we would still be in the first round, sparring in the ring, with Sable up against the ropes. So jump in, win some cash, and help us KO Sable Networks.

This document is one of the 17 prior-art references sent to us by Matthew M. We are highlighting the Internet Engineering Task Force (“IETF”) Request for Comments (“RFC”) 2702. An RFC is something like a step in an industry-wide brainstorming session where an idea or ideas are floated to others in the industry with the aim of building something great everyone can use. The RFC found by Matthew M. is a good example of the process in which engineers from MCI Worldcom are building on the work of engineers from companies like Cisco, IBM, Juniper, and Ascend. All of these companies were well aware of the concepts Sable is now trying to claim its patents cover, including “micro-flows,” label-switched paths, and the basic concept of choosing a path through the network based on QoS information in a packet. The IETF’s records of these industry-wide brainstorming sessions are great evidence of Sable’s overreaching interpretations of its patents.

As for the winner, Matthew has a degree in Computer Networking & Cybersecurity, and manages a small team of developers at a FinTech company. Like most Project Jengo participants, he wasn’t motivated solely by the money. He told us, “I quickly learned just how vague you can make a patent and it’s quite disgusting.” We agree! Matthew shared that he thinks patent trolls “provide no value to society and only exist to strip true business men and women of their hard-earned craft.” He underscored this point when we reached out to congratulate him on the $10,000 prize:

I can’t stand blockers to true American ingenuity and patent trolls stand to destroy hard-earned work using minuscule technicalities in our broken justice system. I am happy to do my part in helping Cloudflare get the upper hand in this lawsuit and hopefully flip it on its head and take down Sable Networks altogether.

Matthew also highlighted the tremendous damage that patent trolls can do to companies and innovation:

I think patent trolls are one of the biggest stiflers of innovation. Companies like Cloudflare could be spending all their time working on new products that provide value but instead, they must allocate resources to fight off cowardly lawsuits like this one.

This submission will be put to good use in our fight against Sable, and we were happy to award Matthew with his prize money. We smiled when Matthew exclaimed he was “speechless” after finding out that he won. Congratulations, Matthew!

This winning submission also included an RFC from the IETF. These records from the important work of the IETF members ensure Sable won’t be able to take credit for things it simply didn’t invent. The neat thing about RFC 1953 is that the submitter connected it with actual products from companies called Ipsilon Networks, Inc. and Ascend Communications. There appear to be similarities between those products and the technology Sable is now claiming to have made, like the inventions of the ’919 patent. The problem for Sable is that Ipsilon and Ascend appear to have done it first! Ipsilon and Ascend were acquired by other companies so finding details about their innovative products and technology may be difficult, but we’re going to try. It may be that the submitter or someone reading this post can help.

The submission came from Pedro S., who heard about Project Jengo on the Security Now podcast. Pedro has spent 20 years in various technical roles, including a position at Ascend Communications in the 1990’s where he became familiar with their products. Today he is working at a cybersecurity company in the Bay Area. When asked why he chose to participate, he bluntly responded with “I hate patent trolls — I also enjoyed the trip down memory lane as some of the stuff I submitted comes from my days at Lucent.” We are happy to hear he enjoyed participating in the fight! We’re enjoying it too, thanks to the participation of folks like Pedro.

Congratulations, Pedro!

This submission pointed us to U.S. Patent No. 7,107,356 (“’356 patent”) for its relevance to Sable’s U.S. Patent No. 7,630,358 (Mechanism for implementing multiple logical routers within a single physical router). The ’358 patent hasn’t been asserted against Cloudflare (at least not yet), and this is a good example of the enthusiasm of our community to comprehensively search for prior art relevant to both Sable’s currently asserted patents and those it may use to sue other companies later down the road. The ’356 patent found by our final winner in this round of Project Jengo carefully describes the guts of a router, and this relatively straight-forward patent makes short work of Sable’s overreaching claims of invention. Rest assured, if Sable is looking to assert the ’358 patent against Cloudflare or some other company down the road, our community is well-prepared to meet the challenge.

The submission comes from Stephen F., a web developer at a managed IT company working on custom websites. When his IT coworker shared the Project Jengo announcement in the office chat, he decided to participate. Stephen has never done prior art search before, but he was eager to participate and spent an entire day looking for prior art:

I'm submitting because I love Cloudflare and how it has made my life easier as a web developer … I've had to learn a lot more about routing and patent law today, and spent several hours looking at documents, scholarly journals, etc.

Even though this was his first time researching something like this, he understood the importance of beating Sable Networks:

I stand firmly against patent trolls like Sable, and decided to spend my day looking into prior art for the sake of Cloudflare's continued success.

Not only did Stephen understand the importance of beating Sable, he also understood the challenges in doing a prior art search, but that didn’t stop him! We admire his tenacity and are impressed with his efforts, and some of the challenges he had to overcome during his search:

I needed to find where the patents could have been stolen/read from each other and what the offending points of the patents would be. During my research I learned a LOT about patent law, which was pretty challenging!

Congratulations, Stephen!

We received almost 400 prior art references thus far, and as promised we are making them public. As a reminder, we are collecting prior art on any of the patents owned by Sable, not just the ones asserted against Cloudflare. You can go to the webpage we’ve set up to see them, and we hope this information is of use to anyone who is sued by Sable down the road.

Project Jengo continues to capture the attention of tech media. It’s important to us to keep the narrative alive — the more awareness we can spread about the true harm of patent trolls, the more likely we are to inspire other well-resourced companies to refuse to capitulate. If we do this together, we’re far more likely to set a new standard, and ultimately, find the antidote to the ever-growing number of patent trolls that plague productive companies. If we enter the battle alone we are strong, but if we fight together we are unstoppable! Here’s what we’ve seen since our initial blog post was published (news outlets appear to be just as enthusiastic as we are!):

• “Cloudflare offers $100,000 for prior art to nuke networking patents a troll has accused it of ripping off,” – The Register

• “Instead of just saying it wouldn't settle, Cloudflare set out to completely destroy the patent troll who sued it, ” – Techdirt

• “The idea is to deal a big enough blow to Sable that not only is its case against Cloudflare hobbled but also future cases against other entities.” – Techcrunch

It has been five months since Sable Networks sued us in Waco, Texas, and we want to share a quick update on the litigation front. Since then, we have filed four petitions with the U.S. Patent and Trademark Office for inter partes review (“IPR”), seeking to invalidate the four asserted patents. As we previously explained, IPR is a procedure for challenging the validity of a patent before the U.S. Patent and Trademark Office, and it is supposed to be faster and cheaper than litigating before a U.S. district court. Of course, faster and cheaper are relative — it still takes about 18 months to invalidate a patent using this procedure, and the filing fees alone for the four petitions were over $200,000. It is easy to see how the exorbitant cost involved in patent litigation allows patent trolls to flourish and why so many companies are willing to quickly settle.

Aside from the IPRs, our litigation is moving forward in district court. Sable served us with its preliminary infringement contentions, which are supposed to explain why it believes we infringe its four asserted patents, and we will be serving our preliminary invalidity contentions to Sable soon.

Sable went after six companies earlier this year, and three of them have already settled and dropped out of the fight. We will continue to fight against Sable, and we hope to see our peers continue fighting against this patent troll with us. Please stay tuned for our next update in three months!

Here we go again.

On March 15, Cloudflare was sued by a patent troll called Sable Networks — a company that doesn’t appear to have operated a real business in nearly ten years — relying on patents that don’t come close to the nature of our business or the services we provide. This is the second time we’ve faced a patent troll lawsuit.

As readers of the blog (or followers of tech press such as ZDNet and TechCrunch) will remember, back in 2017 Cloudflare responded aggressively to our first encounter with a patent troll, Blackbird Technologies, making clear we wouldn’t simply go along and agree to a nuisance settlement as part of what we considered an unfair, unjust, and inefficient system that throttled innovation and threatened emerging companies. If you don’t want to read all of our previous blog posts on the issue, you can watch the scathing criticisms of patent trolling provided by John Oliver or the writers of Silicon Valley.

We committed to fighting back against patent trolls in a way that would turn the normal incentive structure on its head. In addition to defending the case aggressively in the courts, we also founded Project Jengo — a crowdsourced effort to find evidence of prior art to invalidate all of Blackbird’s patents, not only the one asserted against Cloudflare. It was a great success — we won the lawsuit, invalidated one of the patent troll’s other patents, and published prior art on 31 of Blackbird’s patents that anyone could use to challenge those patents or to make it easier to defend against over broad assertion of those patents. And most importantly, Blackbird Technologies went from being one of the most prolific patent trolls in the United States to shrinking its staff and filing many fewer cases.

We’re going to do it again. And we need your help.

Sable Networks and its lawsuit fit neatly within the same troubling trends we were trying to address the first time we launched Project Jengo. Sable is taking ancient, 20-year-old patents and trying to stretch those patents light years beyond what they were meant to cover. It has already sued over a dozen technology companies targeting a wide range of different products and services, and by extending its claims to a company like Cloudflare suggests it may next try to stretch its claims to people that merely use routers … namely, anyone that uses the Internet.

We think Sable’s choice to bring these lawsuits on such a tenuous basis should come with some risk related to the underlying merits of its patents and its arguments, so we are sponsoring another prior-art contest seeking submissions to identify prior art for all of Sable’s active patents. We are seeking the help of the Cloudflare community to identify prior art — i.e., evidence that the patented technology was already in use or known before the patent application was filed — that can be used to invalidate Sable’s patents. And we will make it worth your while, by offering $100,000 to be shared by the winners who are successful in finding such prior art.

Again this time, we are committing $100,000 to be split among entrants who provide what we determine to be the most useful prior-art references that can be used in challenging the validity of Sable’s patents. You can submit prior-art references as long as Sable’s case is pending against us (Sable Networks, Inc. v. Cloudflare, Inc., No. 6:21-cv-00261-ADA (W.D. Tex.)), which means until Sable drops the case fully (and with prejudice — meaning Sable can’t re-file later), there’s a settlement, or the case has been resolved by the court and all appeal rights are exhausted.

Every three months for two years or until the case ends, whichever comes first, we will select winners from the submissions to date, and give out a portion of the $100,000 as awards. Once the case ends, we will select final winners from all submissions and award the remaining funds. We will also make all relevant submissions available to the public.

Here are the four Sable patents asserted against us:

And here are the six remaining Sable patents:

In addition to helping with our case, we hope that making prior art public on all of Sable’s patents will provide a head start and decrease the costs for others who want to fight back against Sable’s patent trolling. The significant decrease we saw in Blackbird’s staff and filings after publishing prior art on Blackbird’s patents suggests this approach can be an effective way to undermine the threat posed by those patents.

Last time, we received 275 submissions from 155 different people on 49 of the Blackbird patents. In the end, we made payments to 18 participants. We were heartened by how many members of the Cloudflare community not only participated in this effort, but expressed great gusto and appreciation for the opportunity to be involved:

Over the years I've been disappointed and angered by a number of patent cases where I feel that the patent system has been abused by so-called ‘patent trolls’ in order to stifle innovation and profit from litigation. With Jengo in particular, I was a fan of what Cloudflare had done previously with Universal SSL. When the opportunity arose to potentially make a difference with a real patent troll case, I was happy to try and help.— Adam, Security Engineer

I'm pretty excited, I've never won a single thing in my life before. And to do it in service of taking down evil patent trolls? This is one of the best days of my life, no joke. I submitted because software patents are garbage and clearly designed to extort money from productive innovators for vague and obvious claims. Also, I was homeless at the time I submitted and was spending all day at the library anyway.— Garrett, San Francisco

To understand why we are asking again for your help fighting back, it’s worth taking a closer look at this case and the fundamental problems it represents.

The patents at issue in this case started with Caspian Networks, a company that tried to commercialize what it called a “flow-based router” in the early 2000s. Caspian was originally founded as Packetcom in 1998, and revealed to the public its flow-based router named Apeiro in 2003. A press story from that time explained that Apeiro routers worked like traditional routers already in existence, but with additional memory and logic for handling packets from the same “flow.” A 2003 slide deck from Caspian distinguished its “flow-based” router from the already existing conventional routers in the following way:

Despite its attempts to tout the benefits of its router, Caspian went out of business in 2006.

That’s when Sable Networks, the company that is suing Cloudflare, enters the picture. Though it doesn’t appear to be much of an entrance. As best we can tell, Sable briefly picked up where Caspian left off and tried to commercialize Caspian’s flow-based routing technology. Sable was equally unsuccessful in doing so, and the last activity of any sort that we could find was from 2011. After a long period of apparent inactivity, Sable’s focus shifted last year to trying to extract money by filing lawsuits through broad application of patents filed on Caspian’s flow-based router technology twenty years ago. In other words, Sable became a patent troll.

In the first round of litigation, Sable filed, and later promptly settled, eight lawsuits asserting infringement of Sable’s router patents. The defendants in those cases (including Cisco and Juniper Networks) provide a range of Internet services, but they all at least manufacture and sell network equipment.

Interestingly, all of those cases were settled just before Sable would have had to do two things that would have actually put its legal claims to the test: (1) respond to an administrative proceeding before the US Patent & Trademark Office (“USPTO”) challenging the validity of its patents; and (2) attend a hearing before the district court where the judge would have determined the proper interpretation and scope of the patent claims. So Sable filed cookie-cutter cases against eight defendants, waited for the defendants to respond, then settled the cases before meaningfully litigating its claims or facing a binding court or administrative ruling, which may have addressed, or likely undermined, Sable’s overly-broad assertion of those patents.

Shortly after settling the original eight cases earlier this year, Sable turned around and filed six new lawsuits against a new batch of technology companies, this time including Cloudflare. Unlike the earlier named defendants, Cloudflare is not in the business of making or selling routers or switches. Sable’s infringement claim therefore is not a close one, and now it’s picked a defendant that is eager to fight back.

This case is a good illustration of how patent trolls operate. All four patents asserted by Sable against Cloudflare were filed between 2000 and 2004, when dial-up Internet access was still common, and are based on Caspian’s “flow-based routing” technology, which is nothing like the technology Cloudflare’s products and services employ. To take one example, one of the patents Sable asserts is U.S. Patent No. 6,954,431, entitled “Micro-Flow Management.” This patent is from April 19, 2000 — almost exactly 21 years ago. Just like Caspian’s Apeiro routers from 2003, the ’431 patent discloses a router that puts a label on the packets for a given flow, and forwards all the packets in that same flow based on the label:

’431 Patent, Fig. 3A‌‌

It claims to teach a “[n]ew switching technology [that] relies upon state information for providing a previously unavailable degree of quality of service” — presumably, Caspian’s flow-based routing technology featured in its 2003 Apeiro, which the market rejected over a decade ago.

Sable is now trying to stretch the patents way beyond what they were ever meant to cover. Many of Sable’s infringement claims appear to extend to basic routing and switching functionality known long before any alleged invention date. For the ’431 patent, Sable’s interpretation of the patent appears to stretch the scope so broadly as to cover any kind of packet processing, possibly even the “conventional routers” from the 2000s that routed each packet independently.

Having made this leap, Sable has demonstrated an intent to apply its patents far afield. It’s now a small step for Sable to assert claims against any person or business using a firewall or even a router. On the basis of its logic, any person using a WiFi router in their home may be in Sable’s cross-hairs. And Sable has already claimed that its patents cover firewalls — including firewall software and firewall devices. Again, its wildly broad interpretation threatens not just large companies; anyone trying to protect their networks from outside threats is potentially at risk.

If you think you or your small business are safe because you haven’t really done anything wrong, and no court would ever hold you liable, then you haven’t been paying attention to the current state of patent litigation where small businesses are sued for using copy machines. Without some of us fighting back, the incentives for patent trolls won’t change.

Patent trolls like Sable proliferate because of a distorted incentive structure fuelled by the astronomical costs associated with defending against even bogus patent claims. According to the 2019 Report of the Economic Survey by the American Intellectual Property Law Association, the median litigation cost for defending claims of patent infringement brought by a non-practicing entity through trial and appeal was staggering \$4,500,000 for big cases (i.e., cases with more than \$25 million at risk). Even for small cases that had less than $1 million at stake, the median defense cost was \$750,000.

Knowing that most defendants will settle at a percentage of their expected litigation costs long before infringement claims see the inside of a courtroom, patent trolls see only upside from each additional lawsuit they file. Their business model is built around filing as many lawsuits as possible regardless of the strength of their legal claims, because they know most defendants will pay to settle before the merits of their case are put to the test. They therefore take vague technology patents issued years ago and apply them as broadly as imaginable to new technologies and new companies. Most of these trolls are non-practicing entities who don’t have their own products in the marketplace but merely exist to extract a tax on other companies.

After declining in numbers for a few years, patent lawsuits were up last year about 12% over 2019, and increased activity by non-practicing entities buying patents suggested even further growth among such lawsuits in the future. The Electronic Frontier Foundation observed similar increases in patent troll filings in 2020, highlighted a case where one patent troll decided that the middle of a pandemic was a good time to sue a company that makes COVID-19 tests, and noted that “some patent owners actually saw the rise of the COVID-19 health emergency as a business opportunity.” This trend is showing no signs of slowing down — according to a recent report, there was a 43.3% increase in patent litigation in Q1 of 2021 compared to the same period a year ago, and non-practicing entities had their busiest Q1 since 2015, fuelled by the litigation finance industry that is flush with capital.

To reaffirm what we’ve always said: Cloudflare is a strong supporter of the patent system. The 160+ patents we’ve been issued to date give us the ability to run our business with confidence by marketing and providing our services around the world, innovating on our existing products, and developing new products. But patent trolls live in a world where they allege fictional potential uses of their patents without having to make the investment to hire and pay employees or identify and satisfy the demands of the marketplace. Project Jengo is intended to address this distorted incentive structure by imposing real costs on the filing of meritless patent lawsuits. With your help, we can again send the message that by filing the wrong case, patent trolls risk losing not just a single lawsuit but a lot more.

We hope you’re all rested and ready to begin again the hunt for prior art!

US Court of Appeals for the Federal Circuit

Frequent readers of the Cloudflare blog are aware of the efforts we’ve undertaken in response to our first encounter with a patent troll. We’re happy to report that on Wednesday, the U.S. Court of Appeals for the Federal Circuit issued an opinion affirming a lower court decision dismissing the case brought by Blackbird Tech. This is the last step in the process ¹, we’ve won.

In addition to vigorously opposing this case in court, we created and sponsored Project Jengo to push back against the incentives that empower patent trolls like Blackbird Tech. Now that the case is over, we will be wrapping up Project Jengo and will report back with a summary of the Project’s successes in the near future.

But before we move on from the litigation, I want to share a few reflections on this case.

We noted from the very beginning: “The infringement claim is not a close one … if the ‘335 patent is read broadly enough to cover our system (which shouldn’t happen), it would also cover any system where electronic communications are examined and redacted or modified.”

Our initial observation, which we thought was obvious, was borne out. And we were able to prevail on our arguments as swiftly and cleanly as is possible in the federal court system. The U.S. District Court resolved the case on a motion to dismiss, meaning the court didn’t even consider the factual circumstances of the case, but looked at the face of the complaint and the language of the patent itself and determined that the claims in the patent were too vague to allow anyone to enforce it. It was so obvious to the court that Judge Chabbria’s decision was little more than a single page. You can read our discussion of the lower court decision in a previous blog.

Yet Blackbird appealed that dismissal to the U.S. Court of Appeals for the Federal Circuit, a specialized court based in Washington, DC that hears appeals of all patent cases. A panel of three judges from that court heard arguments on the appeal last Friday, but didn’t ask our attorney a single question about the substance of our argument on the abstractness of the patent. He sat down with almost half of his 15 minutes of argument time left because there was nothing more to say. Yesterday, just three business days after that hearing, the court affirmed the lower court’s decision in summary fashion, which means they didn’t even write about the claims or arguments, they just said “Affirmed” (see below).  

If it were a boxing match, it would have been called by the referee in the first minute of the first round after three knockdowns. It was easy and painless, right?  

Not at all.  

Blackbird filed this case in March 16, 2017. For nearly two years, anyone doing due diligence on Cloudflare might have had questions about whether there was a cloud over our rights to our technology. And we had to go through a lot of briefing, and the related legal expenses, to get to this point. Blackbird’s combined legal filings at the district court and appellate court amounted to more than 650 pages, our responsive briefs were more than 900 pages.

The two courts spent less than two pages describing a result that was obvious to them, but it took us two years of uncertainty and cost to get there. Federal court litigation doesn’t make anything easy. Even if Blackbird had won the case, it is not clear they would have been able to collect significant damages. Our allegedly infringing use was not a product or feature that we charged for or made money from – it was essentially posting interstitial messages for various errors. Even though we were able to win this case early in the legal process and keep our costs as low as possible, it’s possible we spent more money resolving this matter than Blackbird would have been able to collect from us after trial.

This is the dysfunction that makes patent trolling possible. It is why the option for a quick settlement, in the short term, is always so appealing to parties sued by patent trolls. It’s why we exerted efforts on Project Jengo to try and change the long-term calculus and help out others in the community who may soon find themselves in a similar predicament.  

A final note…

Anthony Garza and Steven Callahan of Charhon Callahan Robson & Garza, a litigation boutique in Dallas, are great lawyers. They provided exceptional counseling, perfect legal work, and strong arguments at every step of this process. In every hearing, I was extremely happy that Anthony was the lawyer on our side -- he demonstrated complete control of both the relevant legal authorities and the intricate details of the patent and its various claims. He had the advantage of being right, but he never left any doubt who was making the better argument.  My thanks for their hard work and guidance.

Footnote

[1] Yes, I am aware that Blackbird could seek discretionary review of this decision at the U.S. Supreme Court. But the Supreme Court accepts less than 5% of the cases presented to it, so there isn’t even a request to that court in most cases unless the case is particularly significant or reflects a disagreement among federal courts. I don’t reasonably expect they would take this case.

Courtesty of PublicDomainPictures.net

As we have talked about repeatedly in this blog, we at Cloudflare are not fans of the behavior of patent trolls. They prey upon innovative companies using overly-broad patents in an attempt to bleed settlements out of their targets. When we were first sued by a patent troll called Blackbird Technologies last spring, we decided that we weren’t going along with their game by agreeing to a modest settlement in lieu of going through the considerable effort and expense of litigation. We decided to fight.

We’re happy to report that earlier today, the United States District Court for the Northern District of California dismissed the case that Blackbird brought against Cloudflare. In a two-page order (copied below) Judge Vince Chhabria noted that “[a]bstract ideas are not patentable” and then held that Blackbird’s attempted assertion of the patent “attempts to monopolize the abstract idea of monitoring a preexisting data stream between a server” and is invalid as a matter of law. That means that Blackbird loses no matter what the facts of the case would have been.

The court’s ruling comes in response to a preliminary motion filed by Cloudflare under Section 101 of the U.S. Patent Act. That section defines what sort of things can be patented. Such motions are generally referred to as “Alice” motions because the U.S. Supreme Court held in a 2014 case (Alice Corp. v. CLS Bank Int’l) that a two-part test could be used to determine patent eligibility based on whether something is more than merely an abstract idea or at least creates an inventive use for an abstract principle. The Alice test helps to determine whether something is patentable subject matter or an unpatentable fundamental concept. Judge Chhabria found that Blackbird’s ‘355 patent was too abstract to be patentable subject matter.

Before the court ever even considered Cloudflare’s actions, it found that the supposed innovation reflected in Blackbird’s patent was too abstract to have been protectable in the first place. This means that the case against Cloudflare could not continue, but further, that the patent is completely invalid and Blackbird cannot use it to sue ANYONE in the future.

All of this only confirms the position we’ve taken from the beginning with regard to the way that Blackbird and other patent trolls operate. Blackbird acquired an absurdly broad patent from an inventor that had apparently never attempted to turn that patent into a business that made products, hired people, or paid taxes. And Blackbird used that patent to harass at least three companies that are in the business of making products and contributing to the economy.

Blackbird still has a right to appeal the court’s order, and we’ll be ready to respond in case they do. We will also report back soon to review our related efforts under Project Jengo.

via Giphy

The constitutionality of the IPR process is one of the biggest legal issues facing innovative technology companies, as the availability of this process has greatly reduced the anticipated costs, and thereby lessened the threat, of patent troll litigation. As we discuss in this blog post, it is ironic that the outcome of a case that is of such great importance to the technology community today may hinge on what courts in Britain were and were not doing more than 200 years ago.

Thomas Rowlandson [Public domain], via Wikimedia Commons

As we have discussed in prior blog posts, the stakes are high: if the Supreme Court finds IPR unconstitutional, then the entire system of administrative review by the USPTO — including IPR and ex parte processes — will be shuttered. This would be a mistake, as administrative recourse at the USPTO is one of the few ways to avoid the considerable costs and delays of federal court litigation, which can take years and run into the millions of dollars. Those heavy costs are often leveraged by patent trolls when they threaten litigation in the effort to procure easy and lucrative settlements from their targets.

Cloudflare joined Dell, Facebook, and a number of other companies, all practicing entities with large patent portfolios, in a brief amici curiae (or ‘friend of the court’ brief) in support of the IPR process, because it has a substantial positive impact on technological innovation in the United States. Amicus briefs allow parties who are interested in the outcome of a case, but are not parties to the immediate dispute before the court, to have input into the court’s deliberations.

As many of you are aware, we were sued by Blackbird Technologies, a notorious patent troll, earlier this year for patent infringement, and initiated Project Jengo to crowd source prior art searches and invalidate Blackbird’s patents. One of our strategies for quickly and efficiently invalidating Blackbird’s patents is to take advantage of the IPR process at the USPTO, which can be completed in about half the time and at one tenth of the cost of a federal court case, and to initiate ex parte proceedings against Blackbird’s other patents that are overly broad and invalid.

A full copy of the Amicus Brief we joined in the Oil States case is available here, and a summary of the argument follows.

Oil States is an oilfield services and drilling equipment manufacturing company. The USPTO invalidated one of its patents related to oil drilling technology in an IPR proceeding while Oil States had a lawsuit pending against one of its competitors claiming infringement of its patent. After it lost the IPR, Oil States lost an appeal in a lower federal court based on the findings of the IPR proceeding. The Supreme Court agreed to hear the case to determine whether once the USPTO issues a patent, an inventor has a constitutionally protected property right that — under Article III of the U.S. Constitution (which outlines the powers of the judicial branch of the government), and the 7th Amendment (which addresses the right to a jury trial in certain types of cases) — cannot be revoked without intervention by the court system.

Image by Paul Lowry

As the patent owner, Oil States argues that the IPR process violates the relevant provisions of the constitution by allowing an administrative body, the Patent Trial and Appeal Board (PTAB)--a non-judicial forum, to decide a matter which was historically handled by the judiciary. This argument rests upon the premise that there was a historical analogue to cancellation of patent claims available in the judiciary. Since cancellation of patent claims was historically available in the judiciary, the cancellation of patent claims today must be consistent with that history and done exclusively by courts.

This argument is flawed on multiple counts, which are set forth in the “friend of the court” brief we joined.

As the amicus brief we joined points out, patent revocation did not historically rest within the exclusive province of the common law and chancery courts, the historical equivalents in Britain to the judiciary in the United States. Rather, prior to the Founding of the United States, patent revocation rested entirely with the Crown of England’s Privy Council, a non-judicial body comprising of advisors to the king or queen of England. It wasn’t until later that the Privy Council granted the chancery court (the judiciary branch) concurrent authority to revoke patents. Because a non-judicial body had the authority to revoke patents when the US Constitution was framed, the general principles of separation of powers and the right to trial in the Constitution do not require that patentability challenges be decided solely by courts.

Not only did British courts share the power to address patent rights historically, the part shared by the the courts was significantly limited. Historically, the common-law and chancery courts only received a partial delegation of the Privy Council’s authority to invalidate patents. Courts only had the authority to invalidate patents for issues related to things like inequitable conduct (e.g., making false statements in the original patent application). The limited authority delegated to the England Courts did not include the authority to seek claim cancellation based on elements intrinsic to the patent or patent application, like lack of novelty or obviousness as done under an IPR proceeding. Rather, such authority remained with the Privy Council, a non-court authority, which decided questions like whether the invention was really new. Thus, like the PTAB, the Privy Council was a non-judicial body charged with responsibility to assess patent validity based on criteria that included the novelty of the invention.

We think these arguments are compelling and provide very strong reasons why the Supreme Court should resist the request that such matters be resolved exclusively in federal courts. We hope that’s the position they do take because the real world implications are significant.

The IPR process is not only consistent with the US Constitution, but it also advances the Patent Clause’s objective of promoting the progress of science and useful arts. That is, the “quid pro quo of the patent system; the public must receive meaningful disclosure in exchange for being excluded from practicing the invention for a limited period of time” by patent rights. (Enzo Biochem, Inc. v. Gen-probe Inc.) Congress created the IPR process in the America Invents Act in 2011 to use administrative review to weed out poor-quality patents that did not satisfy this quid pro quo because they had not actually disclosed very much. Congress sought to provide quick and cost effective administrative procedures for challenging the validity of patent claims that did not disclose novel inventions, or that claimed to disclose substantially more innovation than they actually did, to improve patent quality and restore confidence in the presumption of validity. In other words, Congress created a system to specifically permit the efficient challenge of the zealous assertion of vague and overly broad patents.

As a recent study by the Congressional Research Service found, non-practicing entity (i.e., patent troll) patent litigation “activity cost defendants and licensees $29 billion in 2011, a 400 percent increase over $7 billion in 2005” and “the losses are mostly deadweight, with less than 25 percent flowing to innovation and at least that much going towards legal fees.” (see Brian T. Yeh, Cong. Research sERV., R42668) The IPR process enables innovative companies to navigate patent troll activity in an efficient manner and devote a greater proportion of their resources to research and development, rather than litigation or cost-of-litigation settlement fees for invalid patents.

By EFF-Graphics (Own work), via Wikimedia Commons

Additionally, the IPR process reduces the total number and associated costs of patent disputes in a number of ways.

• Patent owners, especially patent trolls, are less likely to threaten litigation or file an infringement suit based on patent claims that they know or suspect to be invalid. In fact, patent owners who threaten or file suit merely to seek cost-of-litigation settlements have become far less prevalent because of the availability of the IPR process to reduce the cost of litigation.

• Patent owners are less likely to initiate litigation out of concerns that the IPR proceedings may culminate in PTAB’s cancellation of all patent claims asserted in the infringement suit.

• Where the PTAB does not cancel all asserted claims, statutory estoppel and the PTAB’s claim construction may serve to narrow the infringement issues to be resolved by the district court.

Our hope is that the US Supreme Court justices take into full consideration the larger community of innovative companies that are helped by the IPR system in battling patent trolls, and do not limit their consideration to the implications on the parties to Oil States (neither of which is a non-practicing entity). As we have explained, not only does the IPR process enable innovative companies to focus their resources on technological innovation, instead of legal fees, but allowing the USPTO to administer IPR and ex parte proceedings is entirely consistent with the US Constitution.

While we await a decision in Oil States, expect to see Cloudflare initiate IPR and ex parte proceedings against Blackbird Technologies patents in the coming months.

We will make sure to keep you updated.

Since its inception, Project Jengo has doubled in size and provided us with a good amount of high quality prior art submissions. We have received more than 230 submissions so far, and have only just begun to scratch the surface. We have already come across a number of standouts that appear to be strong contenders for invalidating many of the Blackbird Tech patents. This means it is time for us to launch the first formal challenge against a Blackbird patent (besides our own), AND distribute the first round of the bounty to 15 recipients totaling $7,500.

We’re just warming up. We provide information below on how you can identify the next set of patents to challenge, help us find prior art to invalidate those targets, and collect a bit of the bounty for yourselves.

We wrote previously about the avenues available to challenge patents short of the remarkable cost and delay of federal court litigation; the exact cost and delay that some Blackbird targets are looking to avoid through settlement. Specifically, we explained the process of challenging patents through inter partes review (“IPR”) and ex parte reexamination (“EPR”).

Based on the stellar Prior Art submissions, we have identified the first challenge against a Blackbird patent.

U.S. Patent 7,797,448 (“GPS-internet Linkage”)

The patent, which has a priority date of October 28, 1999, describes in broad and generic terms “[a]n integrated system comprising the Global Positioning System and the Internet wherein the integrated system can identify the precise geographic location of both sender and receiver communicating computer terminals.” It is not hard to imagine that such a broadly-worded patent could potentially be applied against a massive range of tech products that involve any GPS functionality. The alarmingly simplistic description of the patented innovation is confirmed by the only image submitted in support of the patent application, which shows only two desktop computers, a hovering satellite, and a triangle of dotted lines connecting the three items.

Blackbird filed suit in July 2016 against six companies asserting this ‘448 patent. All of those cases were voluntarily dismissed by Blackbird within three months -- fitting a pattern where Blackbird was only looking for small settlements from defendants who sought to avoid the costs and delays of litigation. A successful challenge that invalidates or limits the scope of this patent could put an end to such practices.

Project Jengo’s Discovery - The patent claims priority to a provisional application filed October 28, 1999, but Project Jengo participants sourced four different submissions that raise serious questions about the novelty of the ‘448 patent when it was filed:

• Research literature from April 1999 describing a system utilizing GPS cards for addressing terminals connected to the internet. “GPS-Based Geographic Addressing, Routing, and ResourceDiscovery,” Tomasz Imielinski and Julio C. Navos, Vol 42, No. 4 COMMUNICATIONS OF THE ACM (pgs. 86-92).

• A request for comment from the Internet Engineering Task Force on a draft research paper from November 1996 on “integrating GPS-based geographic information into the Internet Protocol.” IETF RFC 2009

• One submission included seven patents that all pre-date the priority date of the ‘448 patent (as early as July 1997) and address similar--yet more specific--efforts to use GPS location systems with computer systems.

• And on a less-specific but still relevant basis, one submitter points to the APRS system that has been used by Ham Radio enthusiasts and has tagged communications with GPS location for decades.

Project Jengo participants who provided these submissions will each be given an award of $500!

What we plan to do -- Because this patent is written (and illustrated) in such broad terms, Blackbird has shown a willingness to sue under this patent, and Project Jengo has uncovered significant prior art, we think this case provides a promising basis to challenge the ‘448 patent. We are preparing an ex parte reexamination of the ‘448 patent, which we expect to file with the US Patent and Trademark Office in October. Again, you can read about an ex parte challenge here. We expect that after review, the USPTO will invalidate the patent. Although future challenges may be funded through crowdsourcing or other efforts, we will be able to fund this challenge fully through funds already set aside for Project Jengo, even though this patent doesn’t implicate Cloudflare’s services.

US Patent 6,453,335 (the one asserted against Cloudflare)

Project Jengo participants have also done an incredible job identifying relevant prior art on the patent asserted against Cloudflare by Blackbird Tech. Blackbird claims that the patent describes a system for monitoring an existing data channel and inserting error pages when transmission rates fall below a certain level. We received a great number of submissions on that patent and are continuing our analysis.

Cloudflare recently filed a brief with the U.S. District Court in which we pointed to eleven pieces of prior art submitted by Jengo participants that we expect will support invalidity in the litigation:

• World-Wide Web Proxies, by Ari Loutonen and Kevin Altis;

• Intermediaries: New Places for Producing and Manipulating Web Content, by Rob Barrett and Paul P. Maglio;

• U.S. Patent No. 5,933,811, “System and method for delivering customized advertisements within interactive communications systems;”

• U.S. Patent No. 5,826,025, “System for annotation overlay proxy configured to retrieve associated overlays associated with a document request from annotation directory created from list of overlay groups;”

• U.S. Patent No. 5,937,404, “Apparatus for bleaching a de-activated link in web page of any distinguishing color or feature representing an active link;”

• U.S. Patent No. 6,115,384, “Gateway architecture for data communication bandwidth-constrained and charge-by-use networks;”

• Performance Issues of Enterprise Level Web Proxies, by Carlos Maltzahn, Kathy Richardson, and Dirk Grunwald

• Microsoft’s Proxy Server 1.0

• U.S. Patent No. 5,991,306, “Pull based, intelligent caching system and method for delivering data over a network;”

• Novell’s BorderManager server

• Exploring the Bounds of Web Latency Reduction from Caching and Prefetching, by Thomas Kroeger, Darrell Long, and Jeffrey Mogul.

Bounty hunters who first submitted this prior art that was already used in the case will each receive $500. The Project Jengo Team at Cloudflare is continuing analysis of all the prior art submissions, and we still need your help! The litigation is ongoing, and we will continue to provide a bounty to prior art submissions that are used to invalidate the Blackbird patents.

The Search Goes On… with new armor

These challenges to Blackbird patents are only the start. Later in this blog post, we provide an extensive report on the status of the search for prior art on all the Blackbird patents, and include a number of new patents we’ve uncovered. Keep looking for prior art on the Blackbird patents, we still have plenty of bounties to award and a number of patents ripe for a challenge. You can send us your prior art submissions here.

Even if you didn’t receive a cash award (yet), our t-shirts are about to hit the streets! Everyone who submitted prior art to Project Jengo will be receiving a t-shirt. If you previously made a submission, we’ve emailed you instructions for ordering your shirt. This offer will remain open for the duration of Project Jengo for anyone that submits new prior art on any of the Blackbird patents. Enjoy your new armor!

Ethics complaint update

We know Blackbird’s “new model” is dangerous to innovation and merits scrutiny, so we previously lodged ethics complaints against Blackbird Tech with the bar disciplinary committees in Massachusetts and Illinois. This week, we sent an additional letter to the USPTO’s Office of Enrollment and Discipline asking them to look into possible violations of the USPTO Rules of Professional Conduct. As with the other jurisdictions, the USPTO Rules of Professional Conduct prohibit attorneys from acquiring a proprietary interest in the lawsuit (Rule §11.108(i)), sharing fees or equity with non-lawyers (Rules 11.504(a) and 11.504(d). Blackbird’s “new model” seems to violate these ethical standards.

Getting the word out

Cloudflare’s Project Jengo continues to drive conversation about the corrosive problem of patent trolls. Since our last blog update, our efforts have continued to draw attention in the press. For the latest, you can see...

“The hunted becomes the hunter: How Cloudflare’s fight with a ‘patent troll’ could alter the game,” -- TechCrunch

“Cloudflare gets another $50,000, to fight ‘new breed of patent troll,’”-Ars Technica

“This 32-year-old state senator is trying to get patent trolls out of Massachusetts,” -- TechCrunch

As you continue your search for prior art as part of Project Jengo, we’ve updated our chart of Blackbird patents, and identified a number of new patents and applications we’ve found that Blackbird has acquired.

As reflected on the chart (in red), so far 5 of the patents are being challenged or have been invalidated. In addition to our pending challenge of the ‘448 patent:

• In June 2016, Blackbird Tech sued software maker kCura LLC and nine of its resellers for allegedly infringing U.S. Patent 7,809717, which was described as a Method and Apparatus for Concept-based Visual Presentation of Search Results. kCura makes specialized software used by law firms during document review. The judge in kCura’s case invalidated every claim in the ‘717 patent because the “abstract idea” of using a computer instead of a lawyer to perform document review cannot be patented.

• US Patent 6,434,212 -- This patent seeks protection for “a pedometer having improved accuracy by calculating actual stride lengths.” Numerous challenges to this patent have been filed with the Patent Trial and Appeal Board (PTAB), which adjudicates some IPR challenges. There are currently challenges against this “Pedometer” patent that have been filed by Garmin, TomTom and Fitbit.

• US Patent 7,129,931 -- This patent for a “multipurpose computer display system” is undergoing IPR challenge brought by Lenovo, Inc.

• US Patent 7,174,362 -- This patent for a “method and system for supplying products from pre-stored digital data in response to demands transmitted via computer network” was challenged by Unified Patents, Inc.

In the charts below, we’ve highlighted 11 Blackbird patents (in green) that seem ripe for challenge -- based on a combination of the fact that they seem broadly applicable to important industries, may have already been the basis of a Blackbird lawsuit, and/or already have some valuable prior art sourced through Project Jengo. We’ll take submissions on any Blackbird patent, but these are the patents we’re focused on and should get extra attention from Project Jengo participants seeking a bounty.

After our review is a bit further down the road, we’ll make all the prior art we’ve received on these patents available to the public so that anyone facing a challenge from Blackbird can defend themselves. We hope to have that information posted by the end of October.

And finally, Cloudflare is funding the first ex parte challenge fully out of funds it has set aside or had donated to Project Jengo. Should any of these patents hit home for you, and you are interested in supporting this fight financially, please reach out to Jengo@cloudflare.com.

-Happy Hunting!

Moderator: Doug Kramer, General Counsel, Cloudflare

DK: Patent--IP issues and challenges are accelerating important supreme court cases. there’s also a flurry of legislative activity about patents. Good idea to talk about this topic: where is this going? How to push world in virtuous direction?

DK: current state of affairs. Vera: at the core is the patent itself, which is issued by and often adjudged by the patent office… is this where the problem lies?

VR: I like to blame everyone. How does someone get a patent in the first place? Someone comes up with an invention, patent attorney, documents it with opaque language, and files. The examiner then interprets the patent and searches for prior art, and says “I think this is what the patent owner is trying to claim.”

In the software space, it’s especially difficult. A lot of where inventing happens in software is right here, in businesses. People have a problem and find a solution by developing software. They don’t patent and publish.

Patent office tends to focus on patents.

DK: Talk about the incentive structure for those.

VR: Patent examiners are part of a union and their deal includes doing work and get credit for issuing patents. There’s no way to reject a patent because the applicant can come back over and over again. So most patent officers will issue the patent and let people deal with it later.

DK: Is there anything in this system that could change the dynamic?

VR: I’d give patent examiners more time, which they lack. There is also currently incentives at the patent office to not search the Internet. Patents don't become public until 18 months after a patent application is filed.

DK: So then how do enforcement proceedings work? Is that where the fault should lie?

LC: Patent trolling is a manifestation of litigation abuse. If you look at the problem historically, it’s far too easy in america to sue someone and almost impossible to hold someone accountable. It’s costly to defend against assertions of patent abuse.

One of the reasons we were able to embark on the strategy we did is that there were already signs at higher levels of the judiciary that this was a problem. So there have been a lot of cases over the years that have been rationalizing patent law. It’s incredibly slow and easy to find loopholes. We still have trolling today; the best we can hope for is to drive it to a sustainable nuisance level.

DK: So this is a moving target; do you have any examples of new and expanded challenges of creative assertion of patents?

LC: You can think of trolling as part of the litigation industry. There’s so much money at stake. So, it’s not surprising that you have creative human beings on the complainant side. They’re protecting their livelihoods and will evolve their tactics. We see developments; recently there has been news about [a medical company] selling to an indian tribe and making an argument that the tribe is protected against litigation. It’s a cat and mouse game.

DK: IP is property; the question becomes how do you allocate or set up an incentive structure that leads to optimal allocation for societal good? At the administrative level, how do you set up patent application or process in a way that could lead to optimal allocation?

VR: Don’t be confused. I don't think we should be doing a thorough job in the patent office. The vast amount of patents have no economic value and only certain patents case the problem. If a patent becomes economically important, maybe charge those owners more money to weed out others that aren’t economically important. Prove its worth. We should say to patent owners: “If you want to keep this patent, prove it by paying for it.” Right now a lot of the costs are on the people who have ostensibly infringed.

DK: Reallocation of costs or raise review to prove value. Is there a reasonable way to get companies in the game before they get sued?

VR: They way the system is setup right now is that if competitors try to participate, they will hurt themselves. The public should be a patent office customer; I’d like to see lower costs in challenging patents. Patent owners are pushing back because it’s taking away some of their leverage.

DK: The country issues patents and congress later finds a flaw in that, and sets up their own process. But now there is a challenge about whether or not they can do that.

Do you sympathize with the argument that these are important rights?

VR: I’d have more sympathy if there was more rigorous evaluation at the outset. What I see is not that rigorous of an evaluation by allowing someone to say “I have a very strong property” right after the office only spent 19 hours looking at it. There’s an imbalance right now.

LC: It’s already a high bar to file an IPR. Better than going through court, I see the solution as economic: Achieving end of patent application which is a benefit to society.

DK: Is there a way that you could define the genuine attempt to practice a patent?

LC: I’d love to see compromise: If something’s not practiced, you get your filing fee back.Patents are monopolies and monopolies are bad for society. We shouldn’t have an arm of the government handing them out like candy. You can reward the garage inventors, but they don’t deserve a gigantic windfall if they don't bring the economic advantages to society.

DK: Let’s talk about wins in other direction: People who win litigation have their own patents. How do you think about achieving balance between company innovation & value as an individual with own IP?

LC: I’m a purist and idealist; I think that for the people who start companies, none of those successful companies became successful initially. They made products and services that added tremendous value to society and to everyone’s lives. They eventually developed robust portfolios. I would hope that their founders keep in mind the importance of preserving the ability to start companies. I want them to maintain that sense of idealism about what patents represent.

DK: The paradigm is the pharmaceutical industry. In twenty years and one day the price of a pill goes to pennies. It’s hard to imagine a corollary in the tech world where you just wait 20 years and a day and then you can use all of Facebook’s patents.

What is one change you could make that would move the needle toward positive changes in patents?

VR: I was thinking if I lived in a perfect world, everyone would get free lawyers. The rationale is that litigation is really expensive; what I see is that people aren’t winning or losing patent suits not because of merits or demerits but because of the cost of their lawyers. When you know you’re in the right but your lawyer tells you it’ll cost $200,000 and they can’t promise anything, it’s a wise business decision to just pay the $50,000 to the patent office instead.

LC: One of my wishes was granted: “TC Hartland” was decided. We have impacted 40-50% abuse of patent cases.

DK: Before TC Hartland, you could sue a company anywhere they were selling their product, and a lot of these cases were centered in East Texas. Was this about home field advantage?

LC: It wasn’t even a home field advantage. Judges wanted to make sure these communities were economically stimulated and these cases could drive a lot of revenue. So East Texas ended up becoming a place where about 45% of all patent cases in the US were being filed.

One decision addresses potential huge volume of frivolous patent litigation.

LC: I would also reform damages.

Q&A

Q: I have two questions: 1) There hasn’t been much discussion about post-grant review and I’d love to hear your thoughts. 2) There was discussion of the Oil States case; I’d like your thoughts on that.

VR: Post-grant review can be very helpful in one or two areas, but not really in the software space. There are too many to search through.

Post-grant review is a procedure for newly issued patents where a third-party can come in and say it shouldn't have been issued. But you have to do it pretty quickly. Unless you are a large company with legal resources, I don't see much of an impact in software.

DK: if you're in software, you don’t know how the patent is going to get applied.

LC: it doesn't bother me at all…

Q: one of the problems with post-grant review is that if youlose, you increase your damages.IPRs can consider 101 grounds as prior artStandard of proof is much higher on art that patent office didnt considerPatent owner has long time to write infringement report; tremendous disadvantae to… with 3-week turnaround

DK: part of the thread we’ve been running through is the idea that the playing field is tilgin

We’re not really dealing with one rule here, but a series of different rules…

VR: On 101 issue: Supreme Court recently reaffirmed that you can't get patent on abstract idea. This is important to software patents because many are abstract ideas, not any technical explanation of how to implement an idea.To have a way to decide that is important.

LC: hopefully everyone in the audience will take a stand against the injustice of the patent system

All our sessions will be streamed live! If you can't make it to Summit, here's the link: cloudflare.com/summit17

The patent system exists to reward inventors, so it is no surprise that a patent has to claim something new — an “invention.” Sometimes the United States Patent and Trademark Office (USPTO) — the agency that administers the patent system — mistakenly issues patents that do not claim anything particularly new. The patent examiner may not be aware that the proposed “invention” was already in use in the industry, and the patent applicant (the only party in the process) doesn’t have an incentive to share that information. Often, the USPTO issues patents that are too vague and can later be broadly interpreted by patent owners to cover different and subsequent technologies that could not otherwise have been patented in the first place and couldn’t have been anticipated by the patent examiner.

The first step to invalidating the Blackbird Tech patents is to collect prior art on the patents. Prior art can include almost any type of evidence showing that the “invention” described in a patent already existed when the patent was filed. Common types of prior art include earlier-filed patents, journal articles, and commercial products (e.g., computer programs) that predate the challenged patent.

Prior art can be used to challenge the validity of the patent in several ways. First, we can challenge the validity of the patent asserted against us (the ‘335 patent) in the patent infringement case that Blackbird Tech filed against us. We can also challenge any of Blackbird’s patent in proceedings at the USPTO, through either a petition for inter partes review (IPR) or ex parte reexamination.

In this blog post, we walk through the administrative challenges to patents at the USPTO, especially the IPR, which we consider to be one of the most effective ways to shield ourselves and others from patent troll attacks on innovation.

The IPR process was created by Congress in 2011 through the America Invents Act with overwhelming bipartisan support, passing the House by a vote of 304 to 117 and the Senate 89 to 9, and was signed by President Obama on September 16, 2011. The law was based on a growing awareness that it had become too easy to obtain low quality patents and too hard to challenge them in expensive and long court proceedings. As technologies continued to grow and develop, the patent system became inundated with bad patents issued during the dot-com era, many of which included vague claims relating to rudimentary web technologies. Over a decade later, these claims were being applied out of context and asserted broadly to shake down innovative companies using vastly more sophisticated technologies.

While few of the patents used in these shake-downs would have survived an invalidity challenge in front of a judge, the prohibitively high cost and delay of litigation meant that the vast majority of patent infringement claims settled outside of court for nuisance value. Defending a patent lawsuit in federal court costs millions of dollars (regardless of whether you ultimately have to pay a Plaintiff) and can take 2-3 years to resolve. As a result, courts rarely had an opportunity to invalidate bad patents. The patents lived on, and the nefarious cycle continued.

Seeking to break the cycle of misuse, Congress stepped in and created IPR to provide a streamlined process for invalidating bad patents. IPR is an administrative proceeding conducted by the USPTO itself, rather than a federal court. IPR proceedings have a limited scope and harness the USPTO’s special expertise in resolving questions of patent validity. As a result, a typical IPR proceeding can be completed in about half the time and at one tenth of the cost of a federal court case.

To date, over 6,000 IPR petitions have been filed, of which over 1,600 have resulted in written decisions by the USPTO. Many other cases either settled or remain pending. IPR petitioners have had a high rate of success. Of the 1,600 cases that reached a written decision, 1,300 of those cases were successful in having the USPTO invalidate at least one claim, and 1,000 were successful in having the entire patent invalidated.

To initiate an IPR, the party challenging the patent files a petition with the USPTO identifying the patents, explaining why the patents should be found invalid, and presenting the relevant prior art. The owner of the challenged patent has an opportunity file a written response to the petition.

Image by Katherine Tompkins

The USPTO actually makes two major decisions during an IPR. The first is a threshold determination of whether to institute the IPR at all. The USPTO will institute an IPR if the petition (combined with the patent owner’s response, if one was filed) establishes a “reasonable likelihood that the petitioner will prevail” in invalidating one or more claims. One unusual feature of the IPR process is that the USPTO’s institution decision cannot be appealed. Both parties must live with whatever institution decision the USPTO makes. Since 2015, the USPTO has instituted about two thirds of all IPR petitions.

After an IPR is instituted, both sides have an opportunity to gather evidence, file motions, and present arguments. The USPTO then issues a final written decision on the validity of the patent. Unlike the institution decision, the final written decision of an IPR is appealable to the Federal Circuit Court of Appeals (a specialized appeals court that, among other things, hears appeals in most cases that involve patents). The time between the institution decision and the final written decision should not exceed a year, making IPR exceptionally compact compared to most full court proceedings.

In addition to speed, the legal standards that the USPTO applies in IPR proceedings are more favorable to the patent challenger than those applied in federal court:

• The burden of proof for invalidating a patent in an IPR is lower than in federal court. The petitioner in an IPR proceeding must meet the “preponderance of the evidence” standard. This is the same standard of proof that applies in the vast majority of civil (non-criminal) cases. Simply put, whichever side has more convincing evidence wins. By contrast, a party raising an invalidity challenge in federal court must meet a higher “clear and convincing evidence” standard to prove that the patent is invalid.

• The “strike zone” for prior art is bigger in an IPR than in federal court. The USPTO interprets challenged patents broadly — using the “broadest reasonable interpretation” standard — making it relatively easy to find prior art that falls within the scope of the patent. This makes sense as patent trolls often take the broadest possible interpretation of their patents when they decide whom to sue, thereby creating pressure for those parties to settle. Federal courts, on the other hand, interpret the challenged patent more narrowly, through the eyes of a hypothetical “person of ordinary skill in the art” (POSITA). A POSITA is someone who has experience in the technological field of the patent and can use technical context to narrow the scope of the patent. This narrower scope makes it harder to find prior art that falls within the scope of the patent.

• Although the legal standards in an IPR proceeding tend to favor the challenger, other aspects of IPR proceedings can favor the patent owners. For example, unlike federal courts, IPR proceedings provide an opportunity for patent owners to amend their claims to circumvent the challenger’s prior art.

For all of the built-in efficiencies of the IPR process, an IPR still closely resembles a traditional court case in many important respects. For example, an IPR generally requires a petitioner to undertake a full slate of heavy-duty legal tasks, like writing briefs, filing motions, and making oral arguments. As a result, even though going through an IPR process is far less painful and expensive than being dragged through the federal courts, it still involves significant legal fees and demands a high level of attention that could otherwise be spent innovating.

Enter ex parte reexamination, which strips down the process for challenging patent validity even further. In ex parte reexamination, the party challenging the patent files a petition with the USPTO in much the same manner as an IPR. However, once the petition is filed, the petitioner steps out of the picture entirely. Instead, the USPTO reassesses the validity of the challenged patent by engaging in a semi-collaborative back-and-forth between the USPTO and the patent owner, without the challenger’s continued involvement. This back-and-forth is virtually identical to the original examination process between the USPTO and applicant that led to the patent being issued in the first place.

Like an IPR petition, the petition for ex parte reexamination has to cast sufficient doubt on the validity of the patent before the USPTO will order an ex parte reexamination. In this case, the legal standard that the USPTO uses is whether the petition establishes a “substantial new question of patentability.” To date, over 90% of petitions for ex parte reexamination have been granted.

With a relatively low up-front investment and no continuing costs incurred by the petitioner, an ex parte reexamination has the advantage of forcing patent owners back to the USPTO to defend their patents or risk invalidation. And more often than not, the patent owner in an ex parte reexamination will end up making significant concessions along the way -- amendments that narrow the scope of a patent. To date, 67% of ex parte reexaminations have resulted in at least an amendment to the patent, and another 12% have been successful in having an entire patent invalidated. These concessions, even seemingly minor ones, can successfully thwart a dubious claim of patent infringement and severely limit the owner’s ability to pursue future claims of infringement.

In a surprise decision last week, the U.S. Supreme Court announced that it has decided to hear the case of Oil States vs. Greene’s Energy Group, et al. The key questions that the Court will decide is whether or not the IPR process is constitutional. The stakes are significant: if the Supreme Court finds IPR unconstitutional, then the entire system of administrative review by the USPTO — including IPR and ex parte — will be abandoned.

Oil States had a patent related to — you guessed it — oil drilling technology invalidated in an IPR proceeding and subsequently lost an appeal in a lower federal court. It has asked the Supreme Court to hear the case because it feels that once the USPTO issues a patent, an inventor has a constitutionally protected property right that — under Article III of the U.S. Constitution (which outlines the powers of the judicial branch of the government), and the 7th Amendment (which addresses the right to a jury trial in certain types of cases) — cannot be revoked without judicial intervention.

Image by Eric Kounce

It’s important to understand what it means for the Supreme Court to agree to hear a case — or as lawyers would insist: grant a writ of certiorari. The Supreme Court only hears the case it wants to in order to resolve issues of sufficient importance or disagreement. Over the past several years, the Court has only agreed to hear about 1% of the cases submitted to it. Four Justices have to vote in favor before a writ of certiorari is granted. Grants are almost always made where there is disagreement among the federal appellate courts or on issues taken from the front page.

Oil States is not the first case to make its arguments against the IPR system, but it is the first that the Supreme Court has agreed to hear. Notably, lower courts have repeatedly rejected the stance taken by the petitioner in Oil States. This is more problematic than it seems because if the Supreme Court was comfortable with the status quo, there would be no reason for them to hear the case. The decision to hear the case suggests that at least the four justices who voted to grant the writ of certiorari are considering going in another direction (though perhaps predicting the Supreme Court’s views is better left to science).

Because Congressional action creating the IPR was a prudent and resoundingly popular action to blunt abuses of the patent system, there are several concerning aspects of a potential invalidation of the IPR system by the Supreme Court. The patent troll system is based on the idea that American companies would rather pay billions of dollars to resolve meritless claims of infringement than suffer the delay and expense of pursuing those claims in federal court.

In response, members of Congress set up a better--though still not perfect--system for having these disputes resolved. The court system should have taken steps to improve its own processes to make them less susceptible to being used to distort the ability to have legitimate disputes resolved. Instead, a decision by the Court to invalidate the IPR process would be the equivalent of the Court failing to clean up its own mess and then prohibiting anyone else from doing so.

And it seems a bit incongruous that rights granted through a system created by statute which gave decision making authority to a patent examiner at the USPTO—the patent system—cannot be modified or altered through a system created by a subsequent statute and using the benefit of actual experience. USPTO reviewers grant patent rights, so why are other USPTO reviewers prohibited from changing that designation?

CC BY-SA 2.0 image by meanie

We will be closely monitoring developments in Oil States and expect that we will contribute to an Amicus (or “friend of the court”) brief making sure the justices are aware of our position on this issue. Our hope is that the justices voting to grant the writ of certiorari were only considering the implications on the parties to that case (neither of which is an NPE), and not fully considering the larger community of innovative companies that are helped by the IPR system.

While we await a decision in Oil States, expect to see Cloudflare initiate IPR and ex parte proceedings against Blackbird Tech patents in the coming months. In the meantime, you can continue to support our efforts by searching for prior art on the Blackbird Tech patents, and you can engage in the political process by supporting efforts to improve the patent litigation process.

In a little over a week since we started the program, we’ve received 141 separate prior art submissions. But we know there’s an opportunity to find a lot more.

We’ve been impressed with the exceptionally high quality of the submissions. The Cloudflare community of users and readers of our blog are an accomplished bunch, so we have a number of searches that were done by expert engineers and programmers. In one case that stood out to us, someone wrote in about a project they personally had worked on as an engineer back in 1993, which they are convinced is conclusive prior art to a Blackbird Tech patent. We will continue to collect and review these submissions.

The submissions so far relate to 18 of the 38 Blackbird Tech patents and applications. You can see a summary of the number of submissions per patent here (PDF). You'll see there are still 20 Blackbird Tech patents and applications we’ve yet to receive a submission for.

We’re looking for prior art on 100% of the Blackbird Tech patents. If you are interested in helping, take some time to look into those patents where we don’t have anything yet. We’ll update the chart as we review the submissions with additional information about the number we receive, and their quality, to help focus the search. After the initial review, we’ll start to color code the patents (i.e., red/yellow/green) to demonstrate the number and quality of submissions we’ve received on each patent.

And our efforts to cover the field have been re-doubled. We’re excited to report that a friend in the industry who read our blog post and shares our concerns about the corrosive impact of patent trolls has made an anonymous donation of $50,000 to support our efforts to invalidate the Blackbird Tech patents. That means that we are now committing at least $100,000 to the effort to find prior art on and initiate actions to invalidate the Blackbird Tech patents.

We initially dedicated a \$50,000 bounty to invalidate Blackbird Tech's patents. We split the bounty so \$20,000 was to invalidate the particular patent Blackbird Tech sued us on and \$30,000 was to help invalidate any other Blackbird Tech patent. We've received so many prior art submissions on the patent in question in Cloudflare's case that we don't believe we need an additional incentive there. Instead, we're dedicating 100% of the anonymously donated \$50,000 to invalidating the other Blackbird Tech patents. This will be used both to boost the bounty we pay to researchers as well as to fund invalidation cases we file with the USPTO. Our goal remains invalidating every one of Blackbird Tech's patents. Again if you want more information about how you can participate, you can find the description here.

And it wouldn’t be a cooperative effort in the tech community if we didn’t give out T-shirts to commemorate your participation in the process. You can see the T-shirt design above, all you have to do is provide a legitimate entry of prior art on any of the Blackbird Tech patents and we’ll send one to you (limit one shirt per participant).

We think the business operations of the Blackbird Tech attorneys may violate the Rules of Professional Conduct in both Illinois and Massachusetts, where Blackbird Tech’s offices are located and where its co-founders work, and we have asked ethics regulators in those states to undertake a review. But we think it’s worth going a step further and working with innovation-supporting legislators in the states where Blackbird Tech operates to make it absolutely clear this new breed of patent troll is not welcome.

As we mentioned in the original blog post, there have already been several proposals at both the state and federal level to push back and limit the ability of patent trolls to use the courts to bring cases against successful companies. Yet Blackbird Tech is pushing in the other direction and attempting to come up with novel ways to increase the efficiency and effectiveness of patent trolls.

On May 23, 2017, Rep. Keith Wheeler of Illinois introduced a bill (the “Ethics in Patent Litigation Act”) that would make it the public policy of the State of Illinois that attorneys in the state, like Blackbird co-founder Chris Freeman (LinkedIn), should not be able to buy patents themselves for the purpose of suing on them if they are not in the business of any other productive activity. We appreciate Rep. Wheeler’s support of innovation and his stance against patent trolls, feel free to show your support via Twitter below (form no longer available).

In Massachusetts, where Blackbird's other attorney co-founder, Wendy Verlander (@bbirdtech_CEO; LinkedIn) is based, Sen. Eric Lesser has specifically targeted patent trolls in a bill he introduced earlier this year.

Well done. It's time to stand up to patent trolls. We have a bill in @MA_Senate that will do just that. @ScottKirsner @jonchesto @epaley https://t.co/O2hHB1R3DT

— Eric Lesser (@EricLesser) May 19, 2017

You can show your support for Sen. Lesser’s stance on these issues using the Twitter generator below (form no longer available). We will be working with Sen. Lesser in the weeks and months ahead to address our concern about Blackbird Tech’s “new model” of patent troll.

Even though the patent system may be based on Federal law, states have the ability to set rules for how businesses, and especially lawyers, behave in their jurisdictions. So we’re happy to work with interested lawmakers in other states, including Delaware, to advance new laws that limit the practices of patent trolls, including Blackbird Tech’s “new model.” We can share the information we’ve learned and pull together model legislation. If you are interested or know a legislator who may be, feel free to email us.

As we wrote before, we believe Blackbird Tech's dangerous new model of patent trolling — where they buy patents and then act their own attorneys in cases — may be a violation of the rules of professional ethics. In particular, we are concerned that they may be splitting fees with non-attorneys and that they may be acquiring causes of action. Both practices run counter to the rules of professional ethics for lawyers and law firms.

It is increasingly clear to us that Blackbird’s response to questions about their compliance with the rules of professional conduct will be, at best, based on simple agreements that merely create a shortcut around their ethical obligations, and at worst, directly contradictory.

Blackbird Tech wants to have it both ways. In response to the original blog post, Blackbird Tech denied both that it was a law firm and that it used contingency fee agreements. Specifically:

In a phone conversation with Fortune, Blackbird CEO Wendy Verlander said the company is not a law firm and that it doesn't use contingency fee arrangements for the patents it buys, but conceded "it's a similar arrangement."

Ms. Verlander objects to being characterized as a law firm because if Blackbird is found to be one then their practices would be governed by, and may be a violation of, the rules of professional ethics. Ms. Verlander’s denial that Blackbird Tech doesn’t use contingency agreements, only to quickly concede that what they do is “a similar arrangement” suggests again that Blackbird Tech is finding it convenient to work around the ethical rules.

This runs fundamentally counter to the concept of ethical rules, which are meant to be driven by the spirit of those obligations. Anyone out to intentionally “cut corners” or do the “bare minimum” to comply with only the letter of such obligations are by default in violation of the “special responsibilities” which should be driven by “personal conscience” as described in the preamble of the ABA Model Rules.

And Ms. Verlander’s unequivocal assertion that Blackbird Tech is not a law firm can be contrasted with sworn statements submitted by Blackbird Tech attorneys to courts last May asserting how much they operate like a law firm. In Blackbird Tech v. Service Lighting and Electrical Supplies, Blackbird Tech CEO Wendy Verlander, Blackbird Tech co-founder Chris Freeman, and Blackbird Tech employee Sean Thompson, each filed declarations in opposition to a proposed protective order.

Protective orders are important in patent litigation. Often, discovery in those cases involves companies handing over highly confidential information about their most important trade secrets or the history of how they developed valuable intellectual property. In most cases, courts limit access to such materials only to outside counsel, as opposed to the parties’ employees and in-house counsel. In-house counsel generally serve a number of functions at a business that include competitive decision-making, either directly or indirectly. Because in-house counsel may benefit from the additional perspective and insight gained by exposure to sensitive trade secrets of a competitor, and are unable to simply wipe their memories clean, courts in patent litigation cases often limit their review of particularly sensitive documents. In such cases, documents classified as “HIGHLY CONFIDENTIAL—ATTORNEY EYES ONLY” are limited to review by outside counsel, who are less likely to face the same sort of business decisions in the future.

When it served their purposes in opposition to a proposed protective order, the Blackbird Tech attorneys were quick to point out how much they operated only like a law firm and distance themselves from their business roles. Their sworn declarations specifically asserted:

• “Although the structure of Blackbird is unique, the realities of patent litigation at Blackbird are very much the same as patent litigation on behalf of clients at law firms.” (Verlander at ¶13, Freeman at ¶14)

• “Thus, in many ways, my role at Blackbird as a member of the Litigation Group is identical to my previous role as outside counsel at a law firm.” (Verlander at ¶13, Freeman at ¶14)(emphasis added)

• “Blackbird’s Litigation Group operates almost identically to outside law firm counsel. Blackbird’s litigators are presented with patents and possible infringers, just as clients bring to law firms. The Blackbird litigators then bring their litigation expertise to bear and thoroughly analyze the patent and the potential infringement case, ultimately deciding whether to move forward with litigation — just as a law firm would evaluate a case. If the Blackbird litigation team identifies a strong infringement case, the litigators draft Complaints and conduct litigation, acting in the same role as outside counsel.” (Verlander at ¶14, Freeman at ¶15)(emphasis added).

• “On a day-to-day basis, what I do at Blackbird is the same as what I did when practicing at a firm.” (Thompson at ¶2).

This inconsistency points out once again how Blackbird is attempting to gain an advantage by turning traditional roles on their head. If they were a typical company, that was looking to make products using the patents they own, then we’d be able to seek discovery on their products and operations. Instead, they function as a law firm with no business operations that would be subject to the same sort of scrutiny they will apply to a company like Cloudflare.

And they say that they’re not a law firm, yet they expect all their employees, including their CEO, to be permitted to exercise the special role of an attorney “identical to [their] previous role as outside counsel at a law firm.” But it would be difficult for them to deny that their employees, including their CEO, are engaged in impermissible attorney practices like buying causes of actions and giving a financial interest in litigation to non-parties, which are clearly not “identical” to what they would have done “as outside counsel at a firm.” They can’t have it both ways.

In our previous blog posts on patent trolls, we thought we’d said about everything there was to say, or at least exhausted anyone who might have something else to say. But we found that most of the reports about our efforts did much more than merely parrot our statements and ask Blackbird Tech for a response. These reports raise some excellent additional points that we expect to use in our ongoing efforts to defend the case brought by Blackbird Tech.

Several of the reporters noted that Blackbird Tech’s claims seem a bit farfetched and found their own factual basis for contesting those claims. Joe Mullin (@joemullin) at Ars Technica noted that the Blackbird Tech patent—particularly in the overbroad way it is applying it in the case against Cloudflare—has prior art that dates back to the beginning of the last century:

The suggestion that intercepting and modifying electronic communications is a 1998 “invention” is a preposterous one. By World War I, numerous state governments had systems in place to censor and edit telegraph and telephone conversations.

Similarly, Shaun Nichols (@shaundnichols) of the Register notes that the differences between the Blackbird Tech patent and our operations are “remarkable”:

In our view, from a quick read of the documentation, Blackbird's design sounds remarkably different to Cloudflare's approach. Critically, the server-side includes described in the patent have been around well before the patent was filed: Apache, for example, had them as early as 1996, meaning the design may be derailed by prior art.

And beyond the legal arguments in the patent case, Techdirt felt that our arguments questioning the operations of Blackbird Tech itself sounded strikingly familiar to another operation that was found to be legally improper:

Righthaven. As you may recall, that was a copyright trolling operation that effectively "bought" the bare right to sue from newspapers. They pretended they bought the copyright (since you can't just buy a right to sue), but the transfer agreement left all the actual power with the newspapers, and courts eventually realized that all Righthaven really obtained was the right to sue. That resulted in the collapse of Righthaven. This isn't exactly analogous, but there are some clear similarities, in having a "company," rather than a law firm (but still run completely by lawyers), "purchase" patents or copyrights solely for the purpose of suing, while setting up arrangements to share the proceeds with the previous holder of those copyrights or patents. It's a pretty sleazy business no matter what — and with Righthaven it proved to be its undoing. Blackbird may face a similar challenge.

It’s probably best to close this post with a statement from Mike Masnick (@mmasnick) of Techdirt that we may save for a closing argument down the road because it summarized the situation better than we had:

Kudos to Cloudflare for hitting back against patent trolling that serves no purpose whatsoever, other than to shake down innovative companies and stifle their services. But, really, the true travesty here is that the company needs to do this at all. Our patent (and copyright) systems seem almost perfectly designed for this kind of shakedown game, having nothing whatsoever to do with the stated purpose of supporting actual innovators and creators. Instead, it's become a paper game abused by lawyers to enrich themselves at the expense of actual innovators and creators.

We will keep you updated. In the meantime, you can contribute to our efforts by continuing to participate in the search for prior art on the Blackbird Tech patents, or you can engage in the political process by supporting efforts to change the patent litigation process. And support folks like Rep. Wheeler or Sen. Lesser with their proposals to limit the power of patent trolls.

Patent trolls take advantage of a system they assume is tilted in their favor, where they can take vague technology patents issued years ago and apply them as broadly as imaginable to the latest technology. And they do this without the limitations of having to show the original patent holder would have actually exercised the patent, because most of them don’t, at all. Patent trolls think they can sit back and pick off settlements from companies because their lawsuits are a nuisance and the costs of defending those suits are considerable.

Changing this dynamic and leveling the playing field is going to require an entirely new approach. Fighting such strong, though perverse, economic incentives is going to require a groundswell. It calls for a large and active group of innovative folks who are willing to join the cause of helping expose the weakness in the patents held by these patent trolls. Exposing the weakness of these patents means finding prior art that demonstrates the patents were issued improperly and working to have the USPTO invalidate those patents before they can be weaponized against legitimate companies that are working to innovate, to provide a livelihood to their employees and their families, and to make good products.

At Cloudflare, we’re lucky to have the best and most loyal customers on the Internet, a whole bunch of fans who are ridiculously smart and don’t take kindly to lazy trolls who try to take advantage by exploiting bugs in the judicial system. And of course, we’re more than happy to give them a bit of a nudge.

Cloudflare is committing up to \$50,000 to support a search for prior art that can be used to invalidate patents held by Blackbird Tech…all of them. By filing 107 lawsuits against companies since September 2014, Blackbird has demonstrated that it is going to use its patents to sue productive companies. And patent trolls often target newer and more innovative companies, so it is important to investigate and research to discover whether prior art existed on the Blackbird patents and to keep them from filing additional cases against us or against other companies.

By “prior art,” we mean evidence that the patented technology was in use or known before the inventor conceived of or filed for his patent. Often, prior art consists of academic papers, technical websites describing current technology, other patents/patent applications—or, really, any other evidence showing that the technology was in use or known. For example, for the ‘335 patent, we are only asking for evidence that pre-dates the filing date of the patent—July 21, 1998. We will also accept information and arguments which invalidate Blackbird patents such as a showing of obviousness or material defects in the patent application. And, for our purposes, the “patented technology” is defined by the claims that are listed at the end of the ’355 patent.

The \$50,000 will fund two separate awards.

The first bounty (up to \$20,000) is for prior art which reads on the patent Blackbird is using to sue Cloudflare, the ‘335 patent. \$10,000 is guaranteed and will be divided among prior art submissions that raise substantive questions on the ‘335 patent. The remaining $10,000 will be used to compensate prior art submissions that Cloudflare uses as evidence in an invalidation procedure at the USPTO or invalidation at trial. The latest date of prior art on the ‘335 patent would be July 20, 1998.

The larger bounty (up to \$30,000) will be spread among those submitting substantial prior art which reads on any of the 34 other outstanding Blackbird patents or their 3 in-flight patent applications and could lead to the invalidation of these dubious patents. Cloudflare will pay the second bounty to people who submit relevant and substantive prior art which, in Cloudflare’s opinion, reads on any other Blackbird patent. The money will be distributed based on the quality of the prior art, the perceived value of the patent, and the extent to which the evidence is used in a proceeding to invalidate one of the Blackbird patents.

We will maintain a list of all the Blackbird patents at cloudflare.com/blackbirdpatents/. The list will provide the number of each patent, the relevant latest date of prior art, and will list germane already-identified prior art. We will update the list periodically as we get new information submitted.

You may submit your suggestion for prior art either through cloudflare.com/priorartsearch/. Cloudflare’s experts and attorneys will review each submission for its value in invalidating each patent. Again, the money will be awarded based on relevance and usefulness. Cloudflare will keep the award will be open until the end of our litigation, but we may start making initial partial awards as early as within 90 days.

In order to be eligible for any bounty you need to be the first person to submit a particular piece of prior art and the prior art must not be known to Cloudflare (e.g., the prior art must not be listed on the face of the Blackbird patent or in the patent prosecution’s history). For each submission of prior art, you will need to give us your name and contact information. In your submission, you will need to document:

• Your name and email address

• The number of the Blackbird patent at issue

• What the prior art is.

• Where you found it.

• When it was first publicly available.

• Where it was first publicly available.

• Why you think it reads on a Blackbird’s patent.

• Any other information which you think is helpful to our review.

Big hint: don’t go to Google’s patent page and click on the prior art button, we’ve already done that. We will then use our outside patent counsel to evaluate the responses and divide the award based on relevance and usefulness. See here https://www.cloudflare.com/jengo/sable-prior-art-search/ for official rules and details.

Patent trolls like Blackbird have demonstrated that they can’t be trusted to act responsibly or take the public good into account when asserting patents against practicing companies. Making clear that its patents are invalid, or significantly narrower than Blackbird is likely to assert, is another way we can limit Blackbird’s ability to create economic harm.