Developer Claims Patent Troll Lodsys Demanded To Be Paid Via Swedish Bank To Avoid Taxes

from the no-that's-not-scammy-at-all... dept

In the past few months, we wrote about how patent troll Lodsys sued app developer Todd Moore because he called Lodsys a "patent troll." Stunningly, Lodsys' lawyer more or less admitted this to Moore's lawyer, and that allowed Moore to hit Lodsys with an anti-SLAPP motion for trying to stifle free speech. Lodsys quickly ran away, which happens semi-frequently. If you don't recall, Lodsys, which got some patents from Intellectual Ventures (though it's unclear if IV still gets a cut of any proceeds), likes to claim that a very large percentage of mobile apps infringe on its patents, and has spent the past few years sending around demand letters to shake down app developers.

However, at a lunchtime talk in DC recently, Todd Moore spoke about the legal battle with Lodsys, and apparently added a fascinating tidbit that I had not seen anywhere before. As reported by Rob Pegoraro, who was in attendance, Lodsys apparently demanded Moore pay up to a Swedish bank:
Moore noted the fundamental asymmetry of patent trolling, saying he could only fight because he had pro bono representation: "Most people who can't get a free lawyer like me will settle."

He also described some blunt bargaining by Lodsys--"how much will you give us so we go away?"--with the funds to be deposited in a Swedish bank account to avoid U.S. taxes.
So, not only is Lodsys up to some fairly questionable practices concerning demanding payment over a highly questionable patent -- and sometimes going after people for exercising their free speech rights -- according to Moore's statements at this event, the company may also be trying to dodge US taxes to boot. It makes you hope that perhaps Lodsys is on the list of 25 companies that the FTC plans to investigate in detail, to understand how they operate.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Oct 16th, 2013 @ 4:33pm

    Pitiful

    Patent troll? More like a waste of life.

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Anonymous Coward, Oct 16th, 2013 @ 6:49pm

    That seems to be the downfall of most criminal organizations, and yes, I consider Lodsys and most of the troll firms criminal, tax evasion. Turn the IRS loose on them and they won't last long - I hope.

     

    reply to this | link to this | view in thread ]

  3.  
    icon
    Not an Electronic Rodent (profile), Oct 17th, 2013 @ 1:57am

    "Justice" = cash

    Moore noted the fundamental asymmetry of patent trolling, saying he could only fight because he had pro bono representation: "Most people who can't get a free lawyer like me will settle."
    Not just patent law, this is a fundamental problem with all civil law - it's completely biased towards the party with the money.
    You can accuse anyone of anything more or less without fear of reprisal and if you're rich and they are (relatively) poor, they'll be almost forced to settle because they can't afford to fight it in court.
    I don't know how this gets fixed (or perhaps it's by design since it totally favours corporations). Perhaps for civil disputes there should be the option of a state-provided lawyer for the defendant as for criminal law but with costs being owed by the defendant if they loose and by the plaintiff if they win...

     

    reply to this | link to this | view in thread ]

  4.  
    icon
    That One Guy (profile), Oct 17th, 2013 @ 1:59am

    Re:

    Quite, this little tidbit, as long as it's backed up by some verifiable evidence, could spell a whole heap of trouble for this particular parasite. Send out shakedown letters disguised as 'patent/copyright licensing offers', the legal system doesn't even bat an eye. Try and dodge your taxes on the other hand...

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Oct 17th, 2013 @ 2:49am

    How should that work? You pay much more taxes in Sweden than in the US. Would they try to not pay taxes in Sweden also?

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Anonymous Coward, Oct 17th, 2013 @ 3:25am

    Re: Pitiful

    Patent trolls or smart lawyers... Eventually it is not a problem with these people but with the construct they operate in (legal setting or institutions).

    Moral is no longer specific in our society. It may be in an isolated monoculture, but not in anywhere with internet and some migration. You cannot discourage patent trolls by harsh words or moral preachings. The only way to change things is to change the system they are gaming.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Anonymous Coward, Oct 17th, 2013 @ 5:46am

    Re: Re: Pitiful

    Immoral behavior predates the internet.
    The internet provides a means to view what has always been there. I doubt it can be easily removed.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Anonymous Coward, Oct 17th, 2013 @ 5:48am

    Re: Re:

    Of course.
    Steal from little people, no big deal.
    Steal from the man and you'll have a bad time.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Anonymous Coward, Oct 17th, 2013 @ 8:03am

    I'm sure we'll get real patent reform now that it might affect tax hungry bureaucrats revenue streams.

     

    reply to this | link to this | view in thread ]

  10.  
    icon
    John Fenderson (profile), Oct 17th, 2013 @ 9:09am

    Re: Re: Pitiful

    This.

    My business attorney once remarked that there is no room for ethics or morality in the conventional sense in law. The law is a set of rules, he said, and what is OK to do is purely defined by what those rules arguably allow. The intention of the law and considerations like fairness or justice simply don't enter into it.

    In one short statement, he summed up exactly why people tend to hate lawyers and the field of law generally.

     

    reply to this | link to this | view in thread ]

  11.  
    icon
    John Fenderson (profile), Oct 17th, 2013 @ 9:17am

    Re:

    Taxes are incredibly complex, so it can be hard to determine who pays more in taxes. For individuals, generally, the total tax burden tends not to vary that much between developed countries -- they just pay them differently.

    Corporate taxes can be lower in Sweden than the US. Officially federal corporate tax rates in the US are between 15% and 39%, in Sweden they are 22%. But it depends on the particular company's situation. Some companies pay nothing.

     

    reply to this | link to this | view in thread ]

  12.  
    icon
    Sunhawk (profile), Oct 17th, 2013 @ 11:49am

    Well now...

    As everyone knows, breaking laws is fine... but evading taxes results in bad things happening to you.

    C'mon IRS!

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Oct 17th, 2013 @ 12:01pm

    The obvious response would have been, "So, how much will you give *me* not to forward the contents of this conversation to the IRS? I was thinking [10x whatever Lodsys asked for]."

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    anon e mouse, Oct 23rd, 2013 @ 8:46pm

    maybe they they just wanted lots of ...

    seks

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Ben J Benson, Jan 28th, 2014 @ 10:24pm

    Very easy way to nail the patent troll's balls to the wall

    1) Get bitcoins ANONYMOUSLY
    2) Use Bitcoins to order heroin on silk road
    3) get it sent to patent trolls corporate offices and CEOs home
    4) Phone in a DEA tip ANONYMOUSLY
    5) do steps 3 and 4 several times, just to make sure DEA won't ignore it

    6) watch patent troll's offices get SWAT raided and the jerkoff get a 50 year sentence for EVIL DRUGS!!!1111!!!

    A few bags of silk roads finest is still cheaper than "settling" with these psychopaths

    Fight fire with fire
    fight psychopathy with psycopathy

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This