Don’t Be Bullied by a Patent Troll

Intellectual Property Newsletter

Client Alert


A Tale of Goats and a Troll

One of our favorite stories growing up was the “Three Billy Goats Gruff,” the main character of which is a terrible troll who lived under a bridge. The troll tried to terrorize and eat three goats who just wanted to cross a bridge to the greener pastures on the other side. The troll’s greed was his downfall. The first two goats convinced him to wait until the largest (and more appetizing) of the three goats came along. But, when the troll confronted the largest goat, he met his match. The largest goat butted him over the bridge, he was never heard from again, and all the goats lived happily ever after.

A Troll in the Land of Patents

One can see the analogies between the troll in “Gruff” and a recent patent troll who is terrorizing honest enterprises seeking to conduct business in green pastures around the country. The bridge that this latest troll purports to guard is a process referred to as “paperless copying” or “virtual copying.” Unfortunately for the business community, this troll has lawyered-up, hiring a Texas firm to send a series of letters (sometimes enclosing a signed, but unfiled, complaint) that accuse businesses of infringement by engaging in the basic administrative task of “scanning paper into a digitally-formatted file that is automatically emailed to the intended recipient’s email address.”

One might ask, how is it possible to patent the sending of an electronic copy of a document to an email recipient using a scanner? It is a good question, and one perhaps answerable only by the over-worked staff at the United States Patent and Trademark Office (“USPTO”). Reading the actual patents the troll and its lawyers rely upon will not provide much of an explanation.

The threatened lawsuits actually reference two United States patents -- 7,477,410 and 7,986,426, both issued to Laurence Klein; however, there appear to be other related patents and several applications in the pipeline. The USPTO’s records reveal that both the ‘410 and ‘426 patents have been assigned and sublicensed multiple times and that strangely named entities, such as AdzPro, AllLed, BarMas, GosNel, IntPar, and JudPur, have been the recipients of these licensed rights. All of this appears to be based on the patent troll’s strategy to divide and conquer by industry group. As is well known, patent trolls often threaten dozens of alleged infringers in the hope of scoring quick license fees from those who understandably prefer to provide a (relatively) modest payoff, thereby avoiding expensive and protracted litigation.

Interpretation of the virtual copying patents is an exercise in futility. Take this clause from Claim 1 in the ‘410 patent:

…at least one processor responsively connectable to said at least one memory, and implementing the plurality of interface protocols as a software application for interfacing and communicating with the plurality of external destinations including the one or more of the external devices and applications, wherein the computer data management system includes the capability to integrate an image using software so that the image gets seamlessly replicated and transmitted to at least one of other devices and applications, and via the Internet.

So, what is a business to do when confronted with nasty letters threatening suit over such indecipherable patent claims? One strategy is to mimic the first two goats in “Gruff,” or what one might call a “go-after-the-bigger-guy” approach. This approach takes various forms, all of which are intended primarily to avoid a fight. For instance, some businesses negotiate and quickly pay a license fee to the patent troll. Others sometimes “lay low” and avoid responding to the demand at all, assuming that the troll is not planning (or able) to pursue every target. This approach, however, is not without risk.

The Patent Troll Meets His Match

On the other hand, in the spirit of what the third goat did in “Gruff,” at least one business has decided to butt heads with the virtual copying troll. A company called Engineering & Inspection Services (“E&I”) recently filed a preemptory lawsuit in federal court in Louisiana against IntPar, the patent licensee that had sent threatening letters to E&I. E&I says in its complaint that it is in the engineering, design, and inspection business and that it maintains and operates standard equipment such as copiers, scanners, and servers much like many businesses across the world. E&I’s lawsuit attacks the ‘410 and ‘426 (and other related) patents on several fronts, including the claim that the patents do not remotely cover what the attorney’s letters say they cover, and claims of invalidity, unfair competition, antitrust, and extortion. A copy of E&I’s complaint (Case No. 2:13-CV-00801-JCZ-SS) can be accessed on-line. Click here.

Whatever approach one decides upon, it is wise to consult qualified patent litigation counsel. A potential willfulness claim can arise from a reckless disregard of a valid patent, and thus, a decision not to respond needs to be carefully evaluated. And, as with other claims against your business, it is also prudent to consider evaluating potential insurance coverage.

The Moral to Our Tale

Just like the goats in “Gruff,” there are several ways to deal with a troll.