If you’ve been following the patent troll epidemic in the news at all, you’ve probably also heard of the company I work for. Six months ago, I started working at FindTheBest — the Santa Barbara-based online research engine that helps people make big decisions in everything from electronics to education. I had just graduated from college and was ready to work at a young startup, tackling big problems and making an impact. Two days after I started, we were served with our first demand letter from Lumen View Technology LLC. The next A day, Lumen View Technology filed a lawsuit in the U.S. District Court for the Southern District of New York.
At this point, I still didn’t fully understand the concept of non-practicing entities, or “patent trolls.” I assumed that it was pretty normal for startups to receive letters like this; I also assumed that if someone was taking the time to sue us, they must have good reason. What I didn’t understand at the time was that the people behind these demand letters were operating shell companies for the singular purpose of collecting licensing fees on patents they didn’t even always own. In our case, Lumen View licensed a patent for the sole purpose of using it to sue companies for a quick settlement.
It didn’t take long for us to determine that we did not infringe the patent, but that wasn’t the end of it. I had no idea that this would turn into an ongoing dialogue with an unreasonable entity unable to discuss anything but a settlement. A month after receiving the demand letter, our director of operations, Danny Seigle, was ripped away from his primary function at the company so that he could deal with the day-to-day movements of this case. At this point, I decided it was time to read the letter and attempt to get a better understanding of what we were going through.
I got my hands on the letter and was astonished. It was five pages of threatening statements with the declaration that the plaintiff was “prepared for full-scale litigation to enforce its rights.” It went on to state that if we decided not to settle, the patent troll would be forced to “reevaluate and likely increase Plaintiff’s settlement demand.”The message was clear: if you don’t settle, we will take you to court and the settlement figure will continue to rise until you settle. Give us money now or give us more money later. It was extortion! How were they getting away with this?
As I continued to educate myself on the practices of patent trolls, I suddenly realized how these entities continued to get away with this morally abhorrent behavior. Nobody was willing to stand up to them. More often than not, patent trolls choose their targets carefully. They go after young companies and time the lawsuits so that the demand letter arrives shortly after a funding round. They know these companies can’t afford the millions of dollars it takes to go to court and fight back, but they can afford a one-time $50,000 licensing fee, or whatever arbitrary number the patent troll determines appropriate. It makes more financial-sense to settle and move on.
But our story is different. Our CEO, Kevin O’Connor, recognized the larger moral issue and decided he wasn’t going to sit back and let another patent troll get away with their deceptive practices. He wanted to stand up and fight back — but not at the expensive of our growing businesses. So, Kevin personally pledged $1 million to bring this case to court and seek justice. We also made the decision to file a civil RICO case against those behind the patent infringement case as a result of the blatant extortion and deceptive practices of the individuals we were dealing with. It wasn’t an easy decision – the daily movements of the case still take away time from building our product, but the individuals at FindTheBest that are involved in the case believe in the fight. We are proud to be part of a changing narrative in the patent troll story.
Six months later, I have to laugh at my initial naïvety, but sometimes still don’t fully understand how these patent trolls, a name I feel comfortable using after more than six months of dealing with one, get away with these practices. The fight is long from over, but we’re taking a step in the right direction.
Sponsored by VB
Championed by startup advocacy groups like Engine, the fight against the patent troll epidemic has slowly been gathering attention: in the press, among the American people, and finally in Congress too. Tomorrow, the House of Representatives will be marking up the Innovation Act introduced just a few weeks ago. And today, Engine sent a letter to the House and Senate Judiciary Committees signed by 50 engineers and inventors urging comprehensive patent reform. Last week, a different letter signed by America’s most prominent venture investors was delivered, and right now we are looking at a number of legislative proposals from both houses of Congress.
The issue has bipartisan support in Congress, states are starting to take action, and the American people are getting behind the reform movement. Together we can change the ending to this story once and for all.
You can hear more about FindTheBest’s experience with patent troll Lumen View from FindTheBest’s director of operations Danny Seigle below:
Hillary Foss is a senior marketing associate at FindTheBest. Hillary is responsible for interacting with the press regarding the patent infringement and RICO cases and works closely with those involved in the day-to-day movements of the case.
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