Patent Hoarder Caught Shuffling Patents Around Has To Pay $4 Million

from the hoarding-doesn't-always-pay dept

You may recall earlier this month that we wrote about Erich Spangenberg, who had set up a series of shell corporations for patent hoarding (and suing). Unfortunately, it appears he got greedy after a big win against DaimlerChrysler. As part of that settlement, he agreed not to sue the automaker again over the same issues -- but by using the various shell corporations, he had a different shell sue Daimler. Daimler saw this as a violation of the settlement and sued back. Now comes the news that Spangenberg has lost and has to pay nearly $4 million in legal fees to Daimler. It's good to see courts finally pushing back on some of the overreaching by patent holders.

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Legal Issues

by Mike Masnick

Wed, Jun 4th 2008 9:36am

Patent Hoarder Caught Shuffling Patents Around To Sue Multiple Times

from the whoops dept

Last year, we noted the trend for various patent hoarding entities to set up a group of shell companies with which to sue companies. Part of the reason for doing so was to make it that much more difficult for the companies being sued to even know who they were fighting against. However, one big patent hoarding organization had another plan too... which just backfired. Plutus IP is a somewhat secretive patent holding company that has set up a bunch of shell companies all named after stars -- and apparently it tried to pull a little trick by shuffling patents around among the shells.

You see, the company had sued Daimler Chrysler over patent infringement, and rather than fight it (as too often happens in these sorts of suits), Daimler felt it was cheaper to settle up. Of course, part of that $2.3 million settlement was an agreement that there wouldn't be any more lawsuits over the patents in question. So what does Plutus do? It shuffles the patents among its various subsidiaries and sues DaimlerChrysler three more times. A court made quick work of the case, finding that Plutus had violated its settlement terms with DaimlerChrysler, and the company (run by Erich Spangenberg) may be on the hook for millions of dollars.

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Patent Hoarder Caught Shuffling Patents Around Has To Pay $4 Million

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