Business

Patent troll asks court for gag order to keep defendant quiet

Image Credit: gmcmullen

Patent trolls not only want to take your money, they want you to keep quiet while they’re doing it.

But FindTheBest’s CEO Kevin O’Connor won’t easily be silenced.

Patent Assertion Entity (PAE) Lumen View Technology filed a “Motion for Protective Order” to prevent FindTheBest, an e-commerce company it sued for patent infringement, from publicly sharing details about the case.

“We believe this is an injustice to society and a blatant attempt to keep details of how these patent trolls operate out of the public eye,” FindTheBest spokeswoman Hillary Foss told VentureBeat.

This gag order would prohibit FindTheBest and its attorney from communicating with members of the media and posting information on social media. It would also have to take steps to remove prior media disclosures, blog posts, and press releases that contain details about the case.

Lumen View’s order claims that “FTB and its counsel have inappropriately used discussions of settlement and/or “offers of compromise,” alleging that FindTheBest’s lawyer Joseph Leventhal agreed that settlement discussions and negotiations would be kept confidential.

FindTheBest said it agreed to no such thing, and that the “408 Letter” Lumen View said it violated actually has no bearing here. Ars Technica reported that 408 just means that offers of compromise or settlement are often not admissible as evidence in court.  

Considering that FindTheBest is publicly and aggressively going after Lumen View in an effort to raise awareness and stimulate action against patent trolling, it would be odd if they had, in fact, agreed to any sort of confidentiality agreement.

One of the issues with patent trolling is that victims are rarely vocal about it. Trolls, of course, want to keep their actions quiet, and companies are afraid of sticking their necks out lest they catch a patent troll’s eye.

A gag order would be a huge blow for any business trying to defend itself in this situation.

Plaintiffs Eileen Shapiro and Steven Mintz, acting under Lumen View Technology LLC, sued FindTheBest in May 2013 for infringing on patent no. 8,069,073 — “system and method for facilitating bilateral and multilateral decision-making,” which basically means any technology that uses a matching algorithm to help people make buying decisions. They asked for a $50,000 settlement.

FindTheBest’s CEO and founder Kevin O’Connor and FTB director of operations Danny Seigle said that FindTheBest doesn’t even violate this patent because its engine only takes one set of preferences into account.

But that minor detail doesn’t matter to Lumen View.

Unlike a vast majority of startups, FindTheBest decided to fight back. It sued Lumen View under the RICO (Racketeer Influenced and Corrupt Organizations) Act, which was designed to fight the Mafia.

“[The] patent trolling issue has been a growing problem, and it will hit epidemic proportions here very shortly,” O’Connor said. “These evil geniuses have figured out that for very little work, they can extract a tax on our industry. I’ve been in tech for 30 years and to have these guys come in steps over an ethical and moral line. I don’t like it and we figured we would fight it.”

Patent trolls make money by buying up patents and suing companies for violating them.

The American patent system has issued some pretty absurd patents over the years, such as those for human genes, online press releases, and hyperlinking. Trolls take advantage of this system to scare businesses into making hefty financial settlements out of court, just to avoid paying the costly legal fees and embroiling themselves in litigation.

Defendants settle out of court 90 percent of the time, even though the odds of winning in court are high — software-patent holders win just 13 percent of their court cases.

When FindTheBest first got hit with the suit, O’Connor said he called Eileen Shapiro to get more information and explain that his company does not infringe on that patent. He used the term “patent troll” in a voicemail, and she accused him of committing a hate crime.

Her attorney called O’Connor’s attorney, and then FindTheBest received what O’Connor described as a “threatening” demand letter. The letter said that if FindTheBest didn’t do what Lumen wanted, Lumen would be forced to “reevaluate and likely increase Plaintiff’s settlement demand,” meaning don’t fight back — or else.

O’Connor fought back by pledging $1 million of his personal money to the case, retaliating with the RICO Act, and heading to Capitol Hill to meet with a series of elected officials to push for patent reform.

He has been a remarkably vocal player in the ongoing battle against patent trolls, and the trolls don’t like it.

Fortunately, progress is being made to protect businesses from patent trolling.

Earlier this week a patent reform bill hit the House of Representatives that has wide bipartisan support and includes six key elements that would help neutralize patent trolls. Also, the FTC recently began collecting information as part of an investigation into patent assertion entities, and President Barack Obama has released five executive orders aimed at reforming the patent industry.

People who make their living unjustly bringing patent suits against legitimate companies should be afraid.

Of course, Lumen View considers itself the victim in this situation.

“In an effort to taint the public’s perception of this case and to paint Lumen View in a negative light, both Mr. O’Connor and Counsel Leventhal disclosed and manipulated confidential information that should not have been revealed,” Wasserbauer said in his memorandum. “Worse still, this information was used by FTB to base a retaliatory and frivolous RICO lawsuit as a bargaining position […]“

It’s like a vampire freaking out when the sun starts to emerge.

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