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We Own Network Scanning!
January 2, 2013 8:47 AM   Subscribe

Network scanning do cost. Recent patent lawsuits have been praised or condemned as fair or absurd. BlueWave Computing fights back against a lawsuit that initially attempted to charge the company $1,000 per employee for a license to some “distributed computer architecture” patent, or basically, if your employees use a scan to email feature in the office, you have to pay a lot of money. Others have been targeted. Stop Project Paperless results.
posted by juiceCake (28 comments total) 1 user marked this as a favorite

 
Aren't patent trolls opening themselves up to a lot of class action lawsuits? It seems that once the small business owners compare notes, a "pattern of malicious behavior" would become obvious to them and any jury.
posted by wolfdreams01 at 8:52 AM on January 2, 2013 [1 favorite]


I think these trolls probably are savvy enough to move on to the next grift since, like vampires, they abhor sunlight.
posted by Burhanistan at 8:59 AM on January 2, 2013 [1 favorite]


These $#%*head patent trolls make me so angry. The fact that they are now targeting completely innocent users of technology, those with minimal resources to fight back, is absolutely despicable.

But, on the flip side, it makes me really happy to hear about the existence of business owners like Dr. Vicinanza. He's a cool guy, trying to fight the good fight not just for his own benefit but because he feels it is right. Kudos to him.
posted by dubitable at 9:16 AM on January 2, 2013


That first link refers to BlueWave Computing's "legal victory" over the trolls (Project Paperless), and yet BlueWave still had to spend time/money addressing the charges. Cool on them for taking on the fight, but as there's no mention of Project Paperless paying any damages etc, this ultimately strikes me as a situation where the only actual "winners" were the lawyers.
posted by philip-random at 9:24 AM on January 2, 2013 [2 favorites]


Paperless sent a message to future victims that if you appear ready to fight the patent claims in court, they will fold faster than you can blink. That's a win, even if it doesn't come with restitution.
posted by Holy Zarquon's Singing Fish at 9:27 AM on January 2, 2013


The fact that they are now targeting completely innocent users of technology, those with minimal resources to fight back, is absolutely despicable.

Maybe we will see a rise in software purchasers demanding patent infringement indemnification clauses in their license agreements. That puts the burden on the software company rather than the individual users, many of whom won't have the money or inclination to fight a lawsuit over what is a relatively tangential aspect of their business.

That first link refers to BlueWave Computing's "legal victory" over the trolls (Project Paperless), and yet BlueWave still had to spend time/money addressing the charges.

That's a reason why I think greater use of fee-shifting (i.e. loser pays) and sanctions in patent cases would do a lot to reduce the number of questionable patent lawsuits. There have been some promising signs recently. See, e.g., the recent Raylon v. Complus Data Innovations [pdf] case at the Federal Circuit, in which the court held that the patentee's claims were objectively frivolous, essentially forcing the trial court to award sanctions to the defendant.
posted by jedicus at 9:34 AM on January 2, 2013 [2 favorites]


Aren't patent trolls opening themselves up to a lot of class action lawsuits? It seems that once the small business owners compare notes, a "pattern of malicious behavior" would become obvious to them and any jury.

You get a billion dollar judgement, bankrupt the LLC and they reform under a new name with patent #2 on the "technology" they "developed".

Now what?

Paperless sent a message to future victims that if you appear ready to fight the patent claims in court, they will fold faster than you can blink. That's a win, even if it doesn't come with restitution.

IANAL but it seems to me the instant a legal threat is thinly veiled pull them into a courtroom and go straight for declaratory judgment citing the exhaustion doctrine. It would also award costs. So long as the networked MFD/scanner is doing all of the work (i.e. the scanner scans the document and sends it as a PDF and it says it on the box) it shouldn't fall afoul of the incomplete article rule.
posted by Talez at 9:35 AM on January 2, 2013 [1 favorite]


Paperless sent a message to future victims that if you appear ready to fight the patent claims in court, they will fold faster than you can blink. That's a win, even if it doesn't come with restitution.

I would think that reputation is largely irrelevant to Paperless. A patent troll can be a fly-by-night. When your company gets sued next year by some new company named Lesspaper Project, well, maybe they'll roll over as easily as Paperless and maybe they won't.

On preview, what Talez said.
posted by justsomebodythatyouusedtoknow at 9:37 AM on January 2, 2013


You get a billion dollar judgement, bankrupt the LLC and they reform under a new name with patent #2 on the "technology" they "developed".


If that's their modus operandi, don't you have any way past the limitation of liability thing?
posted by ocschwar at 9:42 AM on January 2, 2013


Clandestine porn users have been submitted to this type of scam for a long time. They surf to a site that infects them in any number of ways that warn of malware or set homepages to smut peddlers anything they can do to blackmail the "guilty" into paying for a "cleaning" session guaranteed to reinfect the machine at a later date (going to the same well). I know one guy bought a new computer to cover his sins only to have that infected too. The same scam was run under a dozen different names with the same program skinned differently. I can't help but wonder how many millions of dollars this pulled in as the infections provided me steady work. Then there are the porn producers who upload titles to public torrent trackers and harvest IP addresses for DMCA nuisance suits. They rattle mailboxes to see who feels guilty enough to avoid the threatened law suit and exposure. There has to be a special circle of hell for these extortionists.
posted by pdxpogo at 9:47 AM on January 2, 2013


pull them into a courtroom and go straight for declaratory judgment citing the exhaustion doctrine.

That's not the way patent exhaustion works, unless the scanner manufacturer licensed the patent from Project Paperless. Patent exhaustion is a defense against being sued for infringement if the manufacturer of the article had a license (or was the patentee). If the manufacturer didn't have a license, then the patentee can sue the individual users just as well as the manufacturer.

If that's their modus operandi, don't you have any way past the limitation of liability thing?

It's more of a bankruptcy issue than a corporate liability issue. If Paperless goes bankrupt for some reason, its assets (including the patents in question) are part of the bankruptcy estate. They would likely get sold to creditors, including potentially the class action plaintiffs if there were no creditors higher up the chain. If Paperless saw the writing on the wall and tried to sell the patents to a successor company in advance of the bankruptcy, then that could be considered a fraudulent conveyance and the transfer voided. The bottom line is that it's actually pretty hard to pull that "declare bankruptcy and reform under a new name" trick.
posted by jedicus at 9:48 AM on January 2, 2013 [4 favorites]


You get a billion dollar judgement, bankrupt the LLC and they reform under a new name with patent #2 on the "technology" they "developed".

Would the patent they own and are suing you based on be an asset that needs to get liquidated?

Or I guess it's more like:
Holding Company owns lots of shitty patents.
They "sell" patent 1 to Litigation Company 1.
LC1 loses that patent.
HC sells patent 2 to LC2?

LC is protected from patent claims because they are not using the patents they own.
posted by Lemurrhea at 9:49 AM on January 2, 2013 [1 favorite]


The bottom line is that it's actually pretty hard to pull that "declare bankruptcy and reform under a new name" trick.

You're assuming these assholes are bastions of registering patents that aren't overly broad in good faith.
posted by Talez at 9:59 AM on January 2, 2013


You're assuming these assholes are bastions of registering patents that aren't overly broad in good faith.


What do you mean by register? If the LLC goes bankrupt, all its patents are sold for liquidation, including ones that weren't used.
posted by ocschwar at 10:06 AM on January 2, 2013


Holding Company owns lots of shitty patents.
They "sell" patent 1 to Litigation Company 1.
LC1 loses that patent.
HC sells patent 2 to LC2?


That's allegedly part of Intellectual Ventures's business model. They do maintain a large number of holding companies, but IV claims that the purpose is to allow anonymous investment, not anonymous litigation.

You're assuming these assholes are bastions of registering patents that aren't overly broad in good faith.

As a practical matter, the worst thing that typically comes from trying to get an overly broad patent is a waste of time and money. The worst thing that typically comes from frivolous litigation is paying the other sides attorney's fees, maybe some sanctions or a malicious prosecution judgment, at absolute worst maybe some ethical punishment for the attorneys. But the worst thing that comes from trying to defraud creditors is prison. These companies may be run by people of questionable ethics, but they aren't typically run by fools.
posted by jedicus at 10:08 AM on January 2, 2013 [2 favorites]


So, using commercial products in the way documented by manufacturers like HP, Xerox, etc and facilitated by their utilities makes you a patent infringer and liable for damages?

You'd think that these manufacturers would get involved before someone goes after them.
posted by w.fugawe at 10:28 AM on January 2, 2013


What do you mean by register? If the LLC goes bankrupt, all its patents are sold for liquidation, including ones that weren't used.

Sure. Unless they don't keep all their eggs in one basket or if they just register a whole new set of overly broad, borderline fraudulent patents under the new LLC's name.
posted by Talez at 10:32 AM on January 2, 2013


Uh, guys, your premise is all wrong:

Aren't patent trolls opening themselves up to a lot of class action lawsuits? It seems that once the small business owners compare notes, a "pattern of malicious behavior" would become obvious to them and any jury.

No, they are not. Asserting a valid patent (and the patent is valid until it is invalidated) is not per se malicious behavior.
The flaw in the system is that defending yourself against an infringement charge can be more expensive than simply paying the license fee. Exploiting such a flaw may be morally questionable, just like Mitt Romney exploiting every tax loophole there is, but it is nonetheless legal, like it or not.

Maybe the patent troll just got greedy. What if they demanded just 10000$ or only 1000$ instead of 100k$. At some point it makes more economic sense for the defendant to pay up than to challenge the patent.
posted by sour cream at 10:57 AM on January 2, 2013 [1 favorite]


So, using commercial products in the way documented by manufacturers like HP, Xerox, etc and facilitated by their utilities makes you a patent infringer and liable for damages?

Yes.

You'd think that these manufacturers would get involved before someone goes after them.

It's a common strategy for a patentee to threaten to go after the customers. Of course, you don't want to go after individuals or even small businesses, because there's not too much money to be made there and sometimes things get unpredictable, as the article shows. But by threatening to go after the customers you create enough legal unsecurity that the real target (HP, Xerox...) may pay up, because they don't want the customers scared away.
posted by sour cream at 11:01 AM on January 2, 2013


Network scanning do cost.

That makes no sense. Was this post machine-translated from French or something?
posted by w0mbat at 11:42 AM on January 2, 2013 [1 favorite]


Conscience do cost.
posted by juiceCake at 12:25 PM on January 2, 2013 [2 favorites]


Man, thank you for that. I've been coming back here all day trying to half-heartedly figure out what that sentence means.
posted by something something at 12:42 PM on January 2, 2013 [1 favorite]


I know Steve Vicinanza, and I've done consulting work for BlueWave in the past. I didn't know this was going on, but I'm going to thank him for standing up to these tools next time I see him.
posted by deadmessenger at 1:35 PM on January 2, 2013


Ah OK. Thanks JuiceCake for explaining that it's a reference to The Wire. I swear I will get around to watching the DVD boxed set on my shelf one day.
posted by w0mbat at 2:24 PM on January 2, 2013


So much evil and suffering in the world, why is it the patent trolls that trigger my injustice rage so much? I remember reading Cryptonomicon and thinking it was funny how Stephenson had made the modern day lawyers seem so much more evil than the actual WW2 Nazis. But reading stuff like this I feel the same way.
posted by straight at 4:21 PM on January 2, 2013


Aren't patent trolls opening themselves up to a lot of class action lawsuits? It seems that once the small business owners compare notes…

I think the settlements that patent trolls seek generally include a clause prohibiting the victim from telling anyone what just happened.
posted by hattifattener at 5:22 PM on January 2, 2013


And the "right" to file a class-action lawsuit against an LLC is rapidly going the way of the dodo anyway. I'm sure they can work an arbitration clause into those licensing agreements.
posted by Holy Zarquon's Singing Fish at 5:26 PM on January 2, 2013


Say what you will about the patent troll business model, one major underlying problem is the patent procurement process. Next time you are irritated about a patent that you insist is invalid, go to Public Pair, look up that patent, and check out the back and forth that was involved in convincing the PTO to grant the patent. Sometimes there were arguments made that shed light into what those seemingly broad claims really mean, but more often there are patent examiners who do a horrible job of articulating why the invention is non-obvious in order to get a first rejection, then a final rejection, and after that it's just a war of attrition until the patent is allowed.

I've got a history in patent litigation (not prosecution), so a lot of this patent prosecution technique is greek to me, but when you start seeing the level of conversation that happens in that process you begin to see the root of the bad patents that eventually become troll-ammo.
posted by nickgb at 12:49 PM on January 3, 2013


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