Patent trolls are the bane of nearly any tech business’ existence. While it is certainly true that there are patents that are infringed on, it is also true that a new breed of “business”, the extortion of money by companies whose sole business is to buy up patents, and then to use their patent portfolio to extort monies from companies – in other words, patent trolls – is burgeoning. These patent trolls demand amounts just below what they figure it will cost the target company – or themselves – to go to court, the theory being that the victim will roll over and pay rather than risk expensive litigation.
But the patent trolls (or as some of them prefer to be called, ‘patent assertion entities’) may have just met their match, and patent troll Lumens View may have bit off more than they can chew when they decided to try to extort $50,000 from startup Find the Best (FindTheBest.com). FindTheBest CEO Kevin O’Connor and Director of Operations Daniel Seigle are determined to fight back, and fight back they are.
Kevin O’Connor & Daniel Seigle sport t-Shirts reading
“Don’t Settle. Settling Feeds Trolls.”
It started when O’Connor received the suit filed by Lumens View, for a patent that they had acquired which described “multilateral decision-making”. Rather than rolling over, O’Connor decided to call the lead inventor on the original patent, Eileen Shapiro of Hillcrest Group. Ms. Shapiro, who received her MBA from Harvard Business School, has said that she is under NDA and cannot discuss the case. It also turns out that Shapiro is a part-owner of Lumens.
Lumens’ attorney, however, had plenty to say, including about O’Connor’s calling Ms. Shapiro.
It’s a “hate crime”, blustered Damian Wasserbaur, Lumens’ attorney, threatening O’Connor with a criminal action for calling Shapiro.
Apparently that’s when O’Connor decided to fight back.
“From a business perspective, it makes 100 percent sense to settle. I decided to take it out of the business realm, and into the personal. There’s one thing I love and that’s technology, and there’s one thing I hate, and that’s injustice – people abusing the system,” explained O’Connor.
In fact, he so hates it, that he has pledged $1million of his own personal funds to fight the lawsuit.
In their counter-claim, FindTheBest cites the RICO act (RICO stands for ‘Racketeer Influenced Corrupt Organizations’), a law which, among other offenses, defines extortion as racketeering.
This is by no means Lumens’ or Shapiro’s first rodeo. In fact, they have filed more than 20 patent lawsuits, including against companies who offered online press release distribution, and, in 2011, a company called Gooseberry sued TechCrunch, Reddit, Digg, and several others – the inventor on the original patent? Eileen Shapiro.
Lumens has also sued online job sites, and ride-sharing sites.
For his part, Lumens attorney Damian Wasserbaur is of counsel with Aeton Law Partners, a law firm that specializes in patent litigation (and, apparently, bluster). They also, somewhat unusually, offer a contingency fee option for certain patent claim clients, making it even more attractive to pursue an infringement claim. Aeton says on their site that “Unlike larger firms, Aeton offers select clients the benefits of patent infringement contingency fee arrangements and hybrid fee arrangements (a combination of a reduced hour rate and reduced contingency rate).”
Still, according to O’Connor, his impression of Damien Wasserbaur is that he doesn’t really want to end up in court. Says O’Connor, “It was clear Damian only wanted to talk about the settlement. He refused to tell us how we were infringing. Every sentence ended in, let’s settle.”
That, of course, is probably because patent trolls don’t expect anyone to actually fight back.
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