A Growing Plague

Like a plague of locusts, patent trolls are on the loose and although this is nothing new, industry professionals estimate that ‘trolling’ is costing the economy billions and threatens to ram down whatever hope of an economic recovery that we could hope for. As reported in Ars Technica (October 11th, 2012):

new study helps to fill the gap by providing systematic data on the growth of patent troll litigation. Robin Feldman, a professor at UC Hastings College of Law, teamed up with Lex Machina, a Stanford Law spinoff that collects data on patent litigation, to compile a systematic survey of patent litigation. Their results are striking: the fraction of lawsuits filed by troll-like entities grew from 22 percent in 2007 to 40 percent in 2011.

Ars Technica goes on to point out,…

…the overall volume of litigation has also been increasing. Second, anecdotal evidence suggests only a small fraction of troll threats ever lead to lawsuits. In most cases, targets settle without going to trial. “From all appearances, lawsuits filed are only the tip of the iceberg, and a major operating company may face hundreds of invitations to license for every lawsuit,” the authors write.

Ah, yes: out of court settlements. Marvelous. Who knows how deep the damage is when it’s below the legal waterline, so to speak? And coincidentally, a majority of these trolls also happen to be based out of a series of offices in East Texas (as in the Texas Chainsaw Massacre). And not to disparage an entire geographical locale, it’s discouraging how a state with a history of self-reliance and a strong history of ‘boot-strapping’ is home to some of the funkiest, self-serving, laziest suck ups trolls conducting some of the biggest rip-offs in the United States of America (yet another example of how some folks abuse states right privileges; just our opinion, nothing more,…).

And, as TechDirt reported today (October 16th, 2012) in their excellent article, “Digital River Loses Patent Suit Despite Doing What Was In The Patent Two Years Before Patent Was Filed”:

Last week a jury in the federal district court in Marshall, Texas (patent trolls’ favorite court) gave a ruling that was a clear miscarriage of justice — and this is a case where I actually know quite a lot about the details and have firsthand knowledge that the patents are 100% bogus. The case involves a patent troll called DDR, which was built out of the ashes of a failed dotcom called Nexchange, which tried to build affiliate style stores that could be embedded in other websites, with their look and feel. DDR sued a few companies, including Expedia, Travelocity, Orbitz, Digital River and World Travel Holdings. Everyone but Digital River and World Travel Holdings settled. The main company here is Digital River — and the key patent, 6,993,572 is ridiculous and never should have been granted. Even Nexchange admitted it wasn’t doing anything new — though it insists it was the first to do it “on the internet.”

It wasn’t.

Digital River pointed out that it had been doing the same thing since its founding more than two years before Nexchange filed for its patents. I can confirm this first hand. In June of 1998, I started working for a company called Release Software. Our main competitor? Digital River. We were always up against each other in trying to do deals to build exactly these kinds of stores. In fact, by the time I started (months before these patents were filed), Release was already supplying “store within a site” offerings to a number of sites, including Egghead (remember them?), Canadian electronics giant Futureshop, and had also done download “kiosk” sites for software companies like Adobe and Intuit — all of which were designed to match the look and feel of the original site exactly.

So let’s get this right: you file a patent, get it approved and then you’re sued for the products and services associated with this patent despite having it two years in advance of the claim – and still the judge rules against you?!? And coincidently, this takes place in the very same locale as where the claimant operates? Gee, is the judge in on the action, so to speak? I’d like to see the public disclosure on the judge who made the ruling – oh, that’s right: in Texas, they’re not obligated to! 

You simply can’t make this stuff up – but nowadays, as it’s becoming more and more painfully evident, we’re facing not only a growing trend of patent trolls on the lose, but also a notable rise of significant failures in the court system. We’ll talk more about this in later postings,…


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