January 3, 2013 at 16:05Patent trolls require $ 1,000 for each scanner user
At the beginning of this year, owners of small companies in Atlanta and Virginia began to receive letters of strange content. The five-page document contains a description of patents for digital document management on the local network and a proposal to issue an unlimited license for the use of patents at the rate of $ 1,000 per employee.
The letter clearly explains that if you have a scanner that is connected to the network and sends a PDF via email, you are violating US patents 6,185,590 , 6,771,381 , 7,477,410 and 7,986,426, the first of them is dated 1997. Naturally, the value of these patents for commonly used technologies and workflow methods is close to zero. But this does not play a special role, because in the event of a lawsuit, the costs will be much higher. Most lawyers will tell you that in such a situation it is better not to take risks and enter into negotiations with the patent owner in order to reduce the amount of royalties and then pay. So many companies do.
Some experts compare such a business with organized crime, racketeering and extortion. But lawyers are behind this "extortion", so everything is done exclusively within the law.
This is another example that patent trolls have recently begun to work not only with large corporations, but also with end users,writes the publication Ars Technica . There have already been similar patent lawsuits against owners of WiFi hotspots and corporate SSL users . If a sufficient percentage of end-users is covered, then the patent owner can get even more profit than from a lawsuit against corporations. Moreover, large corporations have full-time lawyers, and here the patent owner may be left with nothing. It’s much easier to attack small businesses.
Properly executed letters explain the principle of the patent and describe the responsibility that the user bears for infringement. If he refuses to pay for the license, then he faces a lawsuit, a fine and a threefold increase in royalties for "a deliberate attempt to evade payment."
There was only one company that decided, instead of 200 thousand of the license fee, to take millions of losses - but put the patent troll in its place. This is the company BlueWave Computing, which, following the results of the trial, published a winning press release in August 2012.
Unfortunately, that defeat in court did not stop Project Paperless LLC and their partners from the law firm Hill, Kertscher and Wharton . Although, the appearance on the online of the incriminating website Stop Project Paperless forced them to change tactics.
They handed over patents in the name of a certain holding, for which a number of subsidiaries were established, and now they resumed sending letters of similar content. One of these letters is given below.
Emails are sent from AccNum, AllLed, AdzPro, CalNeb, ChaPac, FanPar, FasLan, FulNer, GosNel and HunLos. Perhaps there are other companies. All of them send letters of the same content, where only the amount of deductions varies from $ 900 to $ 1,200 per employee.
The recipient of such requirements has several options. They may ignore the letter, accept claims, or challenge them in court.
In September 2012, the University of Santa Clara Law School published a study on “Startups and Patent Trolls”(pdf), which contains an interesting conclusion: the cheapest way for companies is to ignore such letters. In fact, the copyright holder rarely sues, but prefers to continue to collect money in an easy way. The study showed that the requirements of patent trolls are ignored by 22% of startups, in which case the average costs of companies are $ 3 thousand. About 35% of companies are trying to actively oppose trolls, legal costs are $ 857 thousand on average. If you immediately go to negotiations and conclude a deal, then the average cost of the company is $ 340 thousand.
The letter clearly explains that if you have a scanner that is connected to the network and sends a PDF via email, you are violating US patents 6,185,590 , 6,771,381 , 7,477,410 and 7,986,426, the first of them is dated 1997. Naturally, the value of these patents for commonly used technologies and workflow methods is close to zero. But this does not play a special role, because in the event of a lawsuit, the costs will be much higher. Most lawyers will tell you that in such a situation it is better not to take risks and enter into negotiations with the patent owner in order to reduce the amount of royalties and then pay. So many companies do.
Some experts compare such a business with organized crime, racketeering and extortion. But lawyers are behind this "extortion", so everything is done exclusively within the law.
This is another example that patent trolls have recently begun to work not only with large corporations, but also with end users,writes the publication Ars Technica . There have already been similar patent lawsuits against owners of WiFi hotspots and corporate SSL users . If a sufficient percentage of end-users is covered, then the patent owner can get even more profit than from a lawsuit against corporations. Moreover, large corporations have full-time lawyers, and here the patent owner may be left with nothing. It’s much easier to attack small businesses.
Properly executed letters explain the principle of the patent and describe the responsibility that the user bears for infringement. If he refuses to pay for the license, then he faces a lawsuit, a fine and a threefold increase in royalties for "a deliberate attempt to evade payment."
There was only one company that decided, instead of 200 thousand of the license fee, to take millions of losses - but put the patent troll in its place. This is the company BlueWave Computing, which, following the results of the trial, published a winning press release in August 2012.
Unfortunately, that defeat in court did not stop Project Paperless LLC and their partners from the law firm Hill, Kertscher and Wharton . Although, the appearance on the online of the incriminating website Stop Project Paperless forced them to change tactics.
They handed over patents in the name of a certain holding, for which a number of subsidiaries were established, and now they resumed sending letters of similar content. One of these letters is given below.
Emails are sent from AccNum, AllLed, AdzPro, CalNeb, ChaPac, FanPar, FasLan, FulNer, GosNel and HunLos. Perhaps there are other companies. All of them send letters of the same content, where only the amount of deductions varies from $ 900 to $ 1,200 per employee.
The recipient of such requirements has several options. They may ignore the letter, accept claims, or challenge them in court.
In September 2012, the University of Santa Clara Law School published a study on “Startups and Patent Trolls”(pdf), which contains an interesting conclusion: the cheapest way for companies is to ignore such letters. In fact, the copyright holder rarely sues, but prefers to continue to collect money in an easy way. The study showed that the requirements of patent trolls are ignored by 22% of startups, in which case the average costs of companies are $ 3 thousand. About 35% of companies are trying to actively oppose trolls, legal costs are $ 857 thousand on average. If you immediately go to negotiations and conclude a deal, then the average cost of the company is $ 340 thousand.