Although I discussed the Bilski decision, the latest effort by the Supreme Court of the United States to reconcile patent law with the digital world, in this blog two days after it was issued, I'd like to return to the subject now that the dust is beginning to settle, to look at what the rest of the blogosphere is saying.
Matt Lee, writing for the Free Software Foundation, is both ecstatic and wary.
On the one hand, the ruling "undoubtedly represents a breakthrough," and on the other "software patent attorneys are formulating new incantations...."
Yes, that is their job. Also, the ad hoc nature of the court's opinion rather encourages them to get to work on those new incantations.
Rob Tiller, writing at OpenSource, and with the same PoV as Lee, takes a different, more lawyer-like, tone. Tiller is content that the court "followed the traditional methodology, and addressed only" the fact pattern immediately before it, "the issue of business method patents." When it does get to software, he says, it will find that "the rationale for invalidating the Bilski patent is one that could easily be applied to void some software patents."
Erik Sherman at BNET reports that he recently spoke to one of those tricky patent attorneys Lee mentions. Sherman spoke to Scott Bain, litigation counsel of the Software and Information Industry Assn., who said: "Things are pretty similar if not the same as before Bilski. The Supreme Court decided this single case on these facts, but didn't give much guidance on how other cases will come out."
Meanwhile, the Patent Office is trying to explain the ruling to its own examiners. In essence, their instructions are to stick to the machine-or-transformation test "as a tool for determining whether the claimed invention is a process under section 101."
Steven Seidenberg, of Intellectual Property Watch, gives us a suitable final word.
"The ruling, it appears, will keep patent litigators in the United States very busy for quite some time."
Showing posts with label intellectual property. Show all posts
Showing posts with label intellectual property. Show all posts
Tuesday, July 13, 2010
Wednesday, June 30, 2010
SCOTUS on Bilski
The Supreme Court of the United States decided a much-watched patent-law appeal on Monday, as part of its wrap-up of this term.
The Bilski case, as regular readers of this blog will remember, involves an effort to patent an "energy risk-management method" -- in essence, an application of the familiar idea of commodity hedging.
That would seem to fail under the non-obviousness test. But obviousness is the dog that hasn't barked here. The Bilski case has been litigated almost entirely with reference to what is or isn't a "process."
The Court of Appeals upheld the Patent Office. Both said that the law does not authorize the patenting of an abstract idea, and that the "process" Bilski has devised is a dressed-up abstraction. More specifically, the Court of Appeals said that a process becomes patentable only if it is tied to a "particular machine," or if it transforms a particular article into "a different state or thing." This is known as a matter of shorthand as the machine-or-transformation test.
The Supreme Court has now agreed with every other authority who has looked at the matter in rejecting the notion that Bilski should have a patent on commodity price hedging. But it also rejected the machine-or-transformation test as an answer to the question "why not?". Nor has it substituted any alternative test of its own as to what is a "process" in the relevant sense.
The brief the government -- via solicitor general Elena Kagan -- submitted to the Supreme Court on this matter, asked the court to uphold machine-or-transformation.
The software industry was concerned about this. Software is designed to run on a very general sort of machine, but to read machine to include any digital computer might allow for the patenting of very abstract ideas anyway, precisely what the phrasing is supposed to avoid. The Court of Appeals had refused to address that point: "We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine."
Kagan's brief on appeal to SCOTUS acknowledged that the software industry was unhappy about the test she was embracing. But she took the view that reference to a digital computer is not enough to create patentability, so most software would probably not be patentable. The consolation prize for the software industry is copyright law, and "the other legal doctrines that protect non-technological commercial activities," trademark law, common law notions of contract and tort, etc.
Again: although SCOTUS ruled against Bilski, it did not do so for the reasons the circuit court, or solicitor general suggested. Referring to amici briefs it had received from the Business Software Alliance, the Biotechnology Industry Organization, and the Boston Patent Law Association, Judge Kennedy writing for the court agreed that the machine-or-transformation test would create unacceptable uncertainties in the software industry.
More generally, in the course of applying such a test, "courts may pose questions of such intricacy and refinement that they risk obscuring the larger object of securing patents for valuable inventions without transgressing the public domain." Let's keep our eye on the ball, then! But Kennedy produces no alternative test, except that the courts below should reason by analogy to its various precedents such as Flook, Benson, Diehr, etc.
A group of four concurring Justices (Stevens, Ginsburg, Breyer, and Sotomayor) put forward their own views. They too agreed that Bilski tried to patent an unpatentable abstraction. They also agreed that machine-or-transformation is nopt a good rule for the meaning of "process." But they did want to give the lower courts more guidance than Kennedy had.
In an opinion written, as a cap to his judicial career, by Justice Stevens, these four argued for a bright-line rule against "business method" patents: "[A] claim that merely describes a method of doing business does not qualify as a 'process' under §101." This rule would overturn a good deal of what has been regarded as established law, going back to State Street.
The State Street case, a 1998 Circuit Court decision that SCOTUS did not review, and which has been very influential since, involved a patent for software used in administering a "hub and spoke financial services configuration." The spokes were investment funds that served as "feeders" of assets into one broader, master fund.
Although the decision in State Street can be read narrowly as upholding the patent on software, it has usually be read as if it upheld a patent on the hub-and-spoke system itself ... a business method. Stevens wants to put an end to that reading of State Street, at least, and to patents issued on that basis.
"If business methods could be patented," he writes, "then many business decisions, no matter how small, could be potential patent violations. Businesses would either live in constant fear of litigation or would need to undertake the costs of searching through patents that describe methods of doing business, attempting to decide whether their innovation is one that remains in the public domain."
The only thing wrong with that passage is the hypothetical construction. Business decisions can be patented, since they have been for several years and Stevens was unable toget the five votes to stop it. Furthermore, for this very reason, business in ther US do live in constant fear of litigation.
The Bilski case, as regular readers of this blog will remember, involves an effort to patent an "energy risk-management method" -- in essence, an application of the familiar idea of commodity hedging.
That would seem to fail under the non-obviousness test. But obviousness is the dog that hasn't barked here. The Bilski case has been litigated almost entirely with reference to what is or isn't a "process."
The Court of Appeals upheld the Patent Office. Both said that the law does not authorize the patenting of an abstract idea, and that the "process" Bilski has devised is a dressed-up abstraction. More specifically, the Court of Appeals said that a process becomes patentable only if it is tied to a "particular machine," or if it transforms a particular article into "a different state or thing." This is known as a matter of shorthand as the machine-or-transformation test.
The Supreme Court has now agreed with every other authority who has looked at the matter in rejecting the notion that Bilski should have a patent on commodity price hedging. But it also rejected the machine-or-transformation test as an answer to the question "why not?". Nor has it substituted any alternative test of its own as to what is a "process" in the relevant sense.
The brief the government -- via solicitor general Elena Kagan -- submitted to the Supreme Court on this matter, asked the court to uphold machine-or-transformation.
The software industry was concerned about this. Software is designed to run on a very general sort of machine, but to read machine to include any digital computer might allow for the patenting of very abstract ideas anyway, precisely what the phrasing is supposed to avoid. The Court of Appeals had refused to address that point: "We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine."
Kagan's brief on appeal to SCOTUS acknowledged that the software industry was unhappy about the test she was embracing. But she took the view that reference to a digital computer is not enough to create patentability, so most software would probably not be patentable. The consolation prize for the software industry is copyright law, and "the other legal doctrines that protect non-technological commercial activities," trademark law, common law notions of contract and tort, etc.
Again: although SCOTUS ruled against Bilski, it did not do so for the reasons the circuit court, or solicitor general suggested. Referring to amici briefs it had received from the Business Software Alliance, the Biotechnology Industry Organization, and the Boston Patent Law Association, Judge Kennedy writing for the court agreed that the machine-or-transformation test would create unacceptable uncertainties in the software industry.
More generally, in the course of applying such a test, "courts may pose questions of such intricacy and refinement that they risk obscuring the larger object of securing patents for valuable inventions without transgressing the public domain." Let's keep our eye on the ball, then! But Kennedy produces no alternative test, except that the courts below should reason by analogy to its various precedents such as Flook, Benson, Diehr, etc.
A group of four concurring Justices (Stevens, Ginsburg, Breyer, and Sotomayor) put forward their own views. They too agreed that Bilski tried to patent an unpatentable abstraction. They also agreed that machine-or-transformation is nopt a good rule for the meaning of "process." But they did want to give the lower courts more guidance than Kennedy had.
In an opinion written, as a cap to his judicial career, by Justice Stevens, these four argued for a bright-line rule against "business method" patents: "[A] claim that merely describes a method of doing business does not qualify as a 'process' under §101." This rule would overturn a good deal of what has been regarded as established law, going back to State Street.
The State Street case, a 1998 Circuit Court decision that SCOTUS did not review, and which has been very influential since, involved a patent for software used in administering a "hub and spoke financial services configuration." The spokes were investment funds that served as "feeders" of assets into one broader, master fund.
Although the decision in State Street can be read narrowly as upholding the patent on software, it has usually be read as if it upheld a patent on the hub-and-spoke system itself ... a business method. Stevens wants to put an end to that reading of State Street, at least, and to patents issued on that basis.
"If business methods could be patented," he writes, "then many business decisions, no matter how small, could be potential patent violations. Businesses would either live in constant fear of litigation or would need to undertake the costs of searching through patents that describe methods of doing business, attempting to decide whether their innovation is one that remains in the public domain."
The only thing wrong with that passage is the hypothetical construction. Business decisions can be patented, since they have been for several years and Stevens was unable toget the five votes to stop it. Furthermore, for this very reason, business in ther US do live in constant fear of litigation.
Tuesday, November 10, 2009
The Bilski arguments
The US Supreme Court heard arguments yesterday on the Bilski case, i.e. on the statutory appropriateness of patents for "business methods."
My own view is that the doctrinal development of patent law in the United States some time ago took a wrong turn. There are just too many artificially created "property" rights erected by bureaucratic decree and judicial laxity, and the result has been the development of a lot of intellectual fences, which have broken up the grazing plains of creativity. [Okay, that isn't a great metaphor. But it's mine.]
Consider the meaning of the word "obvious." An advance can not be patented if it was obvious. And that is a simple enough word, of transparent (self-referential!) significance, right? Maybe not. The U.S. Supreme Court wrestled with that one two years ago, in the case of KSR v. Teleflex.
This year's struggle was with the word "process." The relevant statutory language says: "Whoever invents or discovers any new or useful process, machine, manufacture, or composition of matter, or any new or useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." Bilski and an associate have attempted to patent a means of hedging the price of natural gas. This method is obviously not a "machine, manufacture, or composition of matter...." If it is any of the above, it must be a process.
As I noted here back in January, the Court of Appeals upheld the Patent Office. They have both said that the law does not authorize the patenting of an abstract idea, and the "process" Bilski has devised is a dressed-up abstraction. More specifically, the Court of Appeals said that a process becomes patentable only if it is tied to a "particular machine," or if it transforms a particular article into "a different state or thing."
This immediately raised the question: has the Court of Appeals nixed the patenting of software altogether? Any software is designed to run on some hardware, but it is not clear that "any digital computer" would satisfy the Court of Appeals' understanding of the phrase "particular machine." That court punted this question of application in a footnote: "We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine."
I suspect that footnote earned this decision its grant of certiorari to the Supreme Court of the United States.
At arguments yesterday, the Justices seemed unhappy with the idea of granting Bilski his patent, but they also seemed unhappy with the reasoning of the court below. Chief Justice Roberts asked Bilski's attorney, "How is that not an abstract idea? You initiate a series of transactions between commodity providers and commodity consumers. You set a fixed price at the consumer end, you set a fixed price at the other end, and that's it."
My own expectation is as follows: (a) the Justices will uphold the court below in its finding that Bilski's 'process' is really an abstract idea and thus not patentable; and (b) they will work harder than the court did below in order to define what is or isn't an abstract idea. After all, digital computers are a pretty integral part of the US economy these days, and pretending to decide such a question while saying "we'll think about computers later" borders on insincerity.
My own view is that the doctrinal development of patent law in the United States some time ago took a wrong turn. There are just too many artificially created "property" rights erected by bureaucratic decree and judicial laxity, and the result has been the development of a lot of intellectual fences, which have broken up the grazing plains of creativity. [Okay, that isn't a great metaphor. But it's mine.]
Consider the meaning of the word "obvious." An advance can not be patented if it was obvious. And that is a simple enough word, of transparent (self-referential!) significance, right? Maybe not. The U.S. Supreme Court wrestled with that one two years ago, in the case of KSR v. Teleflex.
This year's struggle was with the word "process." The relevant statutory language says: "Whoever invents or discovers any new or useful process, machine, manufacture, or composition of matter, or any new or useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." Bilski and an associate have attempted to patent a means of hedging the price of natural gas. This method is obviously not a "machine, manufacture, or composition of matter...." If it is any of the above, it must be a process.
As I noted here back in January, the Court of Appeals upheld the Patent Office. They have both said that the law does not authorize the patenting of an abstract idea, and the "process" Bilski has devised is a dressed-up abstraction. More specifically, the Court of Appeals said that a process becomes patentable only if it is tied to a "particular machine," or if it transforms a particular article into "a different state or thing."
This immediately raised the question: has the Court of Appeals nixed the patenting of software altogether? Any software is designed to run on some hardware, but it is not clear that "any digital computer" would satisfy the Court of Appeals' understanding of the phrase "particular machine." That court punted this question of application in a footnote: "We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine."
I suspect that footnote earned this decision its grant of certiorari to the Supreme Court of the United States.
At arguments yesterday, the Justices seemed unhappy with the idea of granting Bilski his patent, but they also seemed unhappy with the reasoning of the court below. Chief Justice Roberts asked Bilski's attorney, "How is that not an abstract idea? You initiate a series of transactions between commodity providers and commodity consumers. You set a fixed price at the consumer end, you set a fixed price at the other end, and that's it."
My own expectation is as follows: (a) the Justices will uphold the court below in its finding that Bilski's 'process' is really an abstract idea and thus not patentable; and (b) they will work harder than the court did below in order to define what is or isn't an abstract idea. After all, digital computers are a pretty integral part of the US economy these days, and pretending to decide such a question while saying "we'll think about computers later" borders on insincerity.
Tuesday, February 10, 2009
Selectica Goes Nuclear?
When we checked in January, Selectica had "exercised the poison pill" as the expression goes. Logically, shouldn't one say that it has swallowed the poison pill, thereby carrying the metaphor forward?
Anyway, it had doubled the number of shares of common stock held by all of its shareholders except for the would-be acquirers, Versata and Trinity.
It had also decided that it would be the plaintiff in the inevitable litigation, rather than waiting to become the defendant. Selectica filed in Delaware Chancery Court looking for a declaratory judgment patting it on the back for this.
On January 16, Versata and Trilogy jointly filed their answer to the complaint.
As I read the answer, the lawyers involved seem to ave worked rather hard to come up with an intensified form of the "poison pill" metaphor for what Selectica has done. They came up with "nuclear pill" and "reloaded nuclear pill." Sounds rather awkward, but hey ... I'm sure they gave this literary endeavor their best shot.
Appended to the Answer is a Counterclaim, which is the course in such a battle.
Here's some emphatic language from the Counterclaim.
"The case of Selectica reflects a 'how-to' for directors seeking to breach and rebreach the fiduciary obligations owed to shareholders of a public company. Selectica has a long and undistinguished history. It began auspiciously in March 2000, however, when the company commenced an initial public offering at an offering price of $30.00 per share. On the first day of public trading, per share prices increased over 371% and closed at $141.23 per share. Since that promising beginning, the company has executed a poorly-managed business strategy and has experienced consistent losses. Indeed, the nearly nine-year public company record of Selectica is replete with unfulfilled and unrealized promises. From a trading high of $154.44 in March 2000, Selectica’s stock price has utterly disintegrated, reaching a record-low closing price of $.69 on January 5, 2009 (since that date, trading in Selectica stock has been halted)."
Part of the problem, the defendants continue, is that Selectica has spent "time and resources resolving patent infringement claims related to its use, licensing and sales of its sales configuration software. Between April 2004 and October 2007, Selectica was required to defend itself in two suits claiming infringement of patents held by Trilogy and Versata."
Whoa! I hadn't been aware that patent infringement was a part of this case at all. My bad.
Frankly it seems bizaare to me that party A, owning an equity interest in party B, should sue B for patent infringement and then complain in a shareholders' lawsuit that B violated its fiduciary duty by spending time and money to resist that lawsuit. It means what? that the defendant in a patent infringement lawsuit can have a fiduciary duty to allow a default judgment?
Anyway, it had doubled the number of shares of common stock held by all of its shareholders except for the would-be acquirers, Versata and Trinity.
It had also decided that it would be the plaintiff in the inevitable litigation, rather than waiting to become the defendant. Selectica filed in Delaware Chancery Court looking for a declaratory judgment patting it on the back for this.
On January 16, Versata and Trilogy jointly filed their answer to the complaint.
As I read the answer, the lawyers involved seem to ave worked rather hard to come up with an intensified form of the "poison pill" metaphor for what Selectica has done. They came up with "nuclear pill" and "reloaded nuclear pill." Sounds rather awkward, but hey ... I'm sure they gave this literary endeavor their best shot.
Appended to the Answer is a Counterclaim, which is the course in such a battle.
Here's some emphatic language from the Counterclaim.
"The case of Selectica reflects a 'how-to' for directors seeking to breach and rebreach the fiduciary obligations owed to shareholders of a public company. Selectica has a long and undistinguished history. It began auspiciously in March 2000, however, when the company commenced an initial public offering at an offering price of $30.00 per share. On the first day of public trading, per share prices increased over 371% and closed at $141.23 per share. Since that promising beginning, the company has executed a poorly-managed business strategy and has experienced consistent losses. Indeed, the nearly nine-year public company record of Selectica is replete with unfulfilled and unrealized promises. From a trading high of $154.44 in March 2000, Selectica’s stock price has utterly disintegrated, reaching a record-low closing price of $.69 on January 5, 2009 (since that date, trading in Selectica stock has been halted)."
Part of the problem, the defendants continue, is that Selectica has spent "time and resources resolving patent infringement claims related to its use, licensing and sales of its sales configuration software. Between April 2004 and October 2007, Selectica was required to defend itself in two suits claiming infringement of patents held by Trilogy and Versata."
Whoa! I hadn't been aware that patent infringement was a part of this case at all. My bad.
Frankly it seems bizaare to me that party A, owning an equity interest in party B, should sue B for patent infringement and then complain in a shareholders' lawsuit that B violated its fiduciary duty by spending time and money to resist that lawsuit. It means what? that the defendant in a patent infringement lawsuit can have a fiduciary duty to allow a default judgment?
Tuesday, January 20, 2009
Patent trolls and trading algorithms
US patent law may have turned away from a cliff in recent months.
Bernard L. Bilski had tried to patent an "energy risk-management method." Basically, he was seeking to claim rights to the idea of commodity hedging, as a "method of managing the consumption risk costs of a commodity [such as heating oil] sold by a commodity provider at a fixed price."
This was not a frivolous claim, either. There was some language in the precedents that seemed to encourage it. The more's the pity.
Fortunately, the US Court of Appeals has upheld the Patent Office in rejecting Bilski's claims.
The court said that a business process is eligible for a patent if and only if it is (a) tied to a particular machine or apparatus, or (b) involves the transformation of particular article into a different state or thing.
Anyone have any illuminating comments on business process patents, trading algorithms, etc. in this context? I'm all ears.
Bernard L. Bilski had tried to patent an "energy risk-management method." Basically, he was seeking to claim rights to the idea of commodity hedging, as a "method of managing the consumption risk costs of a commodity [such as heating oil] sold by a commodity provider at a fixed price."
This was not a frivolous claim, either. There was some language in the precedents that seemed to encourage it. The more's the pity.
Fortunately, the US Court of Appeals has upheld the Patent Office in rejecting Bilski's claims.
The court said that a business process is eligible for a patent if and only if it is (a) tied to a particular machine or apparatus, or (b) involves the transformation of particular article into a different state or thing.
Anyone have any illuminating comments on business process patents, trading algorithms, etc. in this context? I'm all ears.
Wednesday, September 24, 2008
New board for InSite
InSite Vision Inc. is a developer of eye-care related products, based in California and chartered in Delaware.
It held its annual meeting Monday. At that time, shareholders had the opportunity to vote on a chalenge slate -- six nominees for the InSite board put forward by a venture capital firm, PTV Sciences. Six seats constitutes the whole of the board.
Yesterday, in a press release, InSite acknowledged based on prelim figures that PTV appears to have won. "It is time for management and the new Board to focus on the road ahead and work together to transform the company into a successful, multiple-product organization," said the good sports.
PTV has claimed that InSite hasn't delivered on the profit potential of its products, especially in light of its $5.8 million loss in the second quarter of this year.
InSite is perhaps best known for the eye-infection treatment AzaSite, which contains azithromycin. Insite scored something of a coup in early 2007 when it concluded a patent-licensing deal with Pfizer, becoming the licensee of all Pfizer's azithromycin related patents.
Back in those balmy days, the company's stock was selling for $1.50 a share. But investors have a habit of askling, "what have you done for me lately," and the stock has been sliding since last summer. These days it trades around $0.50.
Hence the new board.
It held its annual meeting Monday. At that time, shareholders had the opportunity to vote on a chalenge slate -- six nominees for the InSite board put forward by a venture capital firm, PTV Sciences. Six seats constitutes the whole of the board.
Yesterday, in a press release, InSite acknowledged based on prelim figures that PTV appears to have won. "It is time for management and the new Board to focus on the road ahead and work together to transform the company into a successful, multiple-product organization," said the good sports.
PTV has claimed that InSite hasn't delivered on the profit potential of its products, especially in light of its $5.8 million loss in the second quarter of this year.
InSite is perhaps best known for the eye-infection treatment AzaSite, which contains azithromycin. Insite scored something of a coup in early 2007 when it concluded a patent-licensing deal with Pfizer, becoming the licensee of all Pfizer's azithromycin related patents.
Back in those balmy days, the company's stock was selling for $1.50 a share. But investors have a habit of askling, "what have you done for me lately," and the stock has been sliding since last summer. These days it trades around $0.50.
Hence the new board.
Monday, September 1, 2008
Napster faces proxy contest
Napster ... there's a name redolent of history.
In the speeded-up cyberspatial sense of the word "history" of course.
It began in 1999 as a cool idea in the head of Shawn Fanning. Fanning was 18 years old at the time, and I understand the term "napster" itself was first his hair-related nickname.
He sparked an intense debate over peer-to-peer networks and intellectual property, and redefined the market for music.
Ah, those were the days. Unfortunately, that Napster shut down in July 2001as the result of a court order. The company now known as Napster was formally Roxio Inc., having purchased the original firm's brand and logos at a bankruptcy auction.
Roxio/Napster launched its service, Napster 2.0 in October 2003.
The reborn company's stock price hit a high of $10 in December 2004. But for the subsequent three and a half year, it's been skidding. In early July of this year it was selling for less than $1.25 a share. It has since rebounded a bit. Not much.
Hence, the dissatisfaction of many of its investors, and the present proxy contest. The demands? This from a filing.
"We believe the current classified board structure, the board’s continued support of its poison pill takeover defense, the dilution of shareholder ownership through restricted stock grants for 'performance' and the new 'change of control' severance package awarded to the CEO/chairman have misaligned the interests of the board from those of stockholders. In fact, we believe Napster’s generous senior executive compensation practices overall have created incentives for management NOT to sell the company. It is time for stockholders to exercise owner oversight and force entrenched directors to step aside by casting your vote with us."
Now THERE's a song they've taken from their peers.
In the speeded-up cyberspatial sense of the word "history" of course.
It began in 1999 as a cool idea in the head of Shawn Fanning. Fanning was 18 years old at the time, and I understand the term "napster" itself was first his hair-related nickname.
He sparked an intense debate over peer-to-peer networks and intellectual property, and redefined the market for music.
Ah, those were the days. Unfortunately, that Napster shut down in July 2001as the result of a court order. The company now known as Napster was formally Roxio Inc., having purchased the original firm's brand and logos at a bankruptcy auction.
Roxio/Napster launched its service, Napster 2.0 in October 2003.
The reborn company's stock price hit a high of $10 in December 2004. But for the subsequent three and a half year, it's been skidding. In early July of this year it was selling for less than $1.25 a share. It has since rebounded a bit. Not much.
Hence, the dissatisfaction of many of its investors, and the present proxy contest. The demands? This from a filing.
"We believe the current classified board structure, the board’s continued support of its poison pill takeover defense, the dilution of shareholder ownership through restricted stock grants for 'performance' and the new 'change of control' severance package awarded to the CEO/chairman have misaligned the interests of the board from those of stockholders. In fact, we believe Napster’s generous senior executive compensation practices overall have created incentives for management NOT to sell the company. It is time for stockholders to exercise owner oversight and force entrenched directors to step aside by casting your vote with us."
Now THERE's a song they've taken from their peers.
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