Apple Ordered to Pay Caltech $838 Million for Infringing on WiFi Patents

[Analog Kid]

You said:


That is not true. The money that royalties and other unrestricted funds pay for is stuff that the government finds is not an important part of the university's core mission of education and research and is not a responsible use of taxpayer dollars.

As a true example: purchasing beer for Friday afternoon get-togethers or student recruitment events with an open bar. Another true example: swanky dorms for athletes, or as pointed out above, paying a coach $9 Million a year.

If they didn't have this money, they wouldn't have spent it.

Oh, that’s not at all what you said in response to me the first time which is probably a lot of the confusion:

Caltech will pay the professor and the "kids", the graduate students, on the patent around 1/3 of the money they get. (It's 35% in the UC System). Regardless, the "kids" will be rich now.

If you replace "is stuff" with "can be stuff", then what you’re saying is factually true-- but are you suggesting that after Caltech pays their coach’s salary this year they’re planing to spend $750m on beer?

Sure, there are probably some discretionary expenditures that wax and wane in good times and bad but the broader point remains. “Beer money” is almost a synonym for “spare change” and I don’t think the campus is going dry if they fail to license their turbo coding patent— if it’s not an open bar, people will pay it out of pocket, which was precisely my point.

I’m not a forensic accountant, but Clemson at least claims that their football program pays for itself and their coach’s salary is paid for out of their $53m in revenue rather than out of legal settlements over patents for efficient signal coding. A bit over a million dollars of that revenue comes from concessions which, I suspect, include beer— so if the information theory department at Caltech consumes as much beer as the Clemson football stadium, Apple has them set for at least the next 700 years.

Departments plow the majority of their discretionary budget into research related expenses. It also goes to staff salaries, conference attendance, budget overruns and, yes, the occasional social function.

Are you taking the position that if research universities stop receiving royalties for IP they will be equally effective at their research and education mission while requiring no offsetting sources of revenue?

 

[code-m]

Obviously I mean the dollars not tucked away in Ireland... The ones in Ireland aren't lost, they're tucked away. But like I said, the policy isn't specific to Apple, it's the policy for all business whether they have elaborate tax avoidance schemes or not.

The point is that the goverment isn't investing it's own money. It doesn't have money. It invests tax revenues on behalf of the citizens. It doesn't lose while companies do not-- companies lose because the government does. And that's how research works-- win some, lose most.

The government spends money on a lot of projects whether the tax payers like it or not, may it be the minority or majority that agree with the governments decisions or not. This is all besides the point, companies and educational institutes apply for federal grants if awarded there are conditions involved. CalTech applies for the grant got awarded, it used either private donation in full or part to apply for the patent. It was awarded the patent and now private companies are using it without any initial investment or post royalties. To me it seems the companies believe it is part of the federal government grant, which I assure you they are not. If these companies are posting they fair share of taxes that does not make them an automatic benefactor of any educational R&D product or patent.

On the flip side when private companies apply for government grants and that private company uses those grants for R&D and to patent its idea does that make portion or the private companies patent free use by all taxpayers including other tax paying corporations. I think not.

 

[konqerror]

Are you taking the position that if research universities stop receiving royalties for IP they will be equally effective at their research and education mission while requiring no offsetting sources of revenue?

Exactly. 100% guarantee it.

Private schools dole out a nice chunk of endowment and donation funds to each PI every year. The vast majority of those go to things like expensive furniture ($1000 mesh office chairs, electric standing desks), fancy meals with booze or a new Apple laptop every year. I have never seen unrestricted/discretionary funds used on direct research costs by a PI.

Some donations do go to seed grants, but in all seed grants are a trivial amount (<5%), and are essentially for PIs who are screwed and failed to get grants.

The ability to use unrestricted funds for unallowable expenses means that they will be used for unallowable expenses first.

If you replace "is stuff" with "can be stuff", then what you’re saying is factually true-- but are you suggesting that after Caltech pays their coach’s salary this year they’re planing to spend $750m on beer?

They're going to find $75m of unallowable expenses to spend each year over 10 years. You think that's hard? Caltech has a $3.4 billion annual budget.

 

[code-m]

The big waste to me seems to me to be sports.

Should the football coach of Celmson get paid $9M when the President of the college gets $400,000? Going to guess they have a great stadium and sports facility also. So much for institute of higher education.

Subjective, Steve Jobs took a salary of $1 USD while having millions in stock options. Paying no taxes on income and being taxed differently on cashed out stock would indicate that for his proposes it was the right financial move with lower taxes.

Not everything is as clean cut as it may seem.
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Exactly. 100% guarantee it.

Private schools dole out a nice chunk of endowment and donation funds to each PI every year. The vast majority of those go to things like expensive furniture ($1000 mesh office chairs, electric standing desks), fancy meals with booze or a new Apple laptop every year. I have never seen unrestricted/discretionary funds used on direct research costs by a PI.

Some donations do go to seed grants, but in all seed grants are a trivial amount (<5%), and are essentially for PIs who are screwed and failed to get grants.

The ability to use unrestricted funds for unallowable expenses means that they will be used for unallowable expenses first.

I am not making a connection on how an educational institute has opted to spend its money as opposed to patent infringement for which a court has decided in its favour.

If you have a grievance on how a university or college spend’s it’s grant money take it up with the appellate board or State or Federal educational authorities. What does it have to do with the topic at hand. What next discussing frat parties subsidies.

 

[jw2002]

By the use of your Wi-Fi, you are infringing and you can be sued by Caltech.

Then this is clear evidence of how broken US Patent Law is. To underscore how ridiculous this interpretation is, consider the following example: some server on the internet through which terabytes of data are transmitted daily happens to be composed of some patent infringing item. Thus all the millions of users whose data packets transited unknowingly through that server are now infringing as well according to the "users are infringers" interpretation. US Patent Law can't be gutted soon enough.

 

[cmaier]

Then this is clear evidence of how broken US Patent Law is. To underscore how ridiculous this interpretation is, consider the following example: some server on the internet through which terabytes of data are transmitted daily happens to be composed of some patent infringing item. Thus all the millions of users whose data packets transited unknowingly through that server are now infringing as well according to the "users are infringers" interpretation. US Patent Law can't be gutted soon enough.

No, the user’s wouldn’t likely be infringing under that particular scenario.

 

[iPadified]

Exactly. 100% guarantee it.

Private schools dole out a nice chunk of endowment and donation funds to each PI every year. The vast majority of those go to things like expensive furniture ($1000 mesh office chairs, electric standing desks), fancy meals with booze or a new Apple laptop every year. I have never seen unrestricted/discretionary funds used on direct research costs by a PI.

Some donations do go to seed grants, but in all seed grants are a trivial amount (<5%), and are essentially for PIs who are screwed and failed to get grants.

The ability to use unrestricted funds for unallowable expenses means that they will be used for unallowable expenses first.



They're going to find $75m of unallowable expenses to spend each year over 10 years. You think that's hard? Caltech has a $3.4 billion annual budget.

I doubt the majority of PI uses the majority of funds on luxury. If they do, they are out of the game of research pretty quickly. Most PI I know, including me, are very careful with what we use funding on to maximise the scientific output. True, I buy the odd iPad Pro (cheapest one, now four years old) and MP (now six years old) and use these devices daily for 8h-10h/day. In my book this is not luxury, but necessity.

There are always examples of researchers misusing money, but compared to the private sector spendings, researchers as a group are well-behaved. You see, a publication in Nature or Science (usually expensive research is reported here) provides far more respect that a trip in a private jet in our community!

 

[Codpeace]

Paying employees is absolutely a reason to license their work for royalties. Not everyone demanding payment for their invention is a “troll”, any more than a farmer demanding payment for their soybeans is a troll.

One difference between invention and farming is that there is a physical token that changes hands in a soybean transaction while inventions can be stolen from the fields, or simply taken without knowing (may contain soy or soy byproducts). Another difference is that being told you have an invention by the Patent Office doesn't mean you have an invention-- the Patent Office is often overworked, underqualified, and less-than-fully informed so their judgements are subject to review by the courts.

Patent trolling isn't demanding someone pay you for an invention you own (either because you invented it or bought it from the inventor)-- trolling is asserting a dubious patent hoping that the company you're suing would rather pay you than the lawyers it would take to fend you off.

If a court judgement has been made in favor of the patent holder against a company with the ability to mount a strong defense (like Apple), that's a pretty strong argument that the patent is not dubious and thus the claimant is not a troll.


Most inventors don't have the capacity to create a product. Knowing enough information theory to optimally code a radio transmission doesn't mean you know how to mold plastic, refine aluminum, manage a supply chain or even write the software necessary to implement your coding algorithm. In most companies, the inventors are in engineering and products are made by operations. Apple doesn't make any hardware products, for example, they ask contract manufacturers to.

Aside from the ambiguity of what it means to “create an actual product”, restricting patents only to inventors under the same corporate umbrella as the manufacturing dramatically limits your pool of available innovators and therefore the rate of innovation. There are maybe 4 companies capable of making smartphones at The scale Apple does— saying you can’t develop technology useful to smartphones if you don’t work for one of those 4 companies is a bad idea...

The patent is the product in this case.

Another outstanding comment in a long line of the same. Really appreciating the care you’re bringing, here.