‘Doing what’s right’
Before FindTheBest, O’Connor founded online advertising firm DoubleClick, which Google bought for $3.1 billion in 2007. So rather than use FindTheBest’s money for this lawsuit, O’Connor pledged $1 million of his own money to fight this battle in court.
“Business isn’t always about making money,” O’Connor said. “It’s also about doing what’s right, which is why I am using my own money. Most startups don’t have that luxury, but we are getting a ton of support. I am not sure if we are going to see a fix, but I don’t like this uncertainty. These court cases have doubled in the past few years, and they will double again. When does it end?”
Unsurprisingly, “doing what’s right” doesn’t go over so well with the patent trolls.
“When I called Eileen Shapiro to get more information and explain that we do not infringe on the patent, I used the term ‘patent troll’ in a voicemail,” O’Connor said. “She accused me 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 they wanted, Lumen would be forced to “reevaluate and likely increase Plaintiff’s settlement demand,” meaning don’t fight back — or else.
The letter also said that “electronically stored information” on FindTheBest’s computer systems and other media and devices (including personal phones and digital assistants) would be subject to disclosure.
Neither Shapiro or Mintz answered their phones or responded to VentureBeat’s request for comment.
After all of this went down, O’Connor decided to take the issue a step further. Rather than just defending his company in court, he is filing a civil RICO suit against Lumen for engaging in mail fraud, wire fraud, and extortion, “attacking the defendant’s attempts to extort money out of the company based upon false, objectively unreasonable, and baseless claims of patent infringement.”
RICO was initially used to prosecute organized crime. Its use in patent litigation is virtually unprecedented. O’Connor said that RICO has only been used twice before on the patent side.
FindTheBest also names Dalton Sentry LLC, DecisionSorter LLC, and The Hillcrest Group as defendants. The three companies were formed by Shapiro and the patent’s co-inventor Steven Mintz “to hide involvement in racketeering activity,” the FTB lawsuit alleges.
“There are a lot of hurdles before a case can get near RICO, you have to show that the patent itself isn’t valid,” Silbermann said. “It can’t just be considered a frivolous action, but a corrupt one. The behavior needs to be pretty extreme. This is something that is very hard to win, but if the behavior is truly egregious, and someone has the money and fortitude to see it through, he will be a hero.”
Patent trolls cost the U.S. economy $29 billion each year. The Georgetown Law Journal said that in an estimated 90 percent of cases, the defendants settle before going to trial. However, software-patent holders win just 13 percent of their court cases, meaning if you go to trial, the odds are good.
The plague of patent trolls has been a hot button issue over the past year. Earlier this year, two members of the House of Representatives introduced the SHIELD Act to thwart patent trolls, and in early June President Barack Obama released five executive orders and seven legislative recommendations aimed at reforming the patent industry. One of the proposals said that if patent trolls lose in court, they would have to pay the attorney’s fees of the businesses they sue.
This would hopefully force patent trolls to think a little more carefully about the suits that they bring and encourage companies to be bolder about standing up against “egregious” disputes.
Around 20 companies been sued in past 18 months over patent no. 8,069,073.
Even if O’Connor acknowledges that taking on patent trolls with RICO is unorthodox, he’s optimistic about FindTheBest’s chances. If FindTheBest wins the suit, Lumen could appeal and the case could go on to a higher court and someday even create a legislative precedent. In the meantime, O’Connor just wants to hold the trolls accountable for “crushing innovation.”
“Companies don’t talk about this because they are afraid of sticking their necks out,” he said. “I want to shine a light on these trolls. If i was a patent troll, I wouldn’t want to tell my kids or mother that’s what I did. I would say I cooked meth instead.”