Hipmunk, if you're unfamiliar with it, is a wonderful travel search site, which really thought hard about how to make searching for flights and other travel info much more useful and intuitive. For me, personally, it's almost entirely replaced other sites like Expedia. A few weeks back the company announced on its blog that it had received $15 million in funding and also mentioned that it was doing okay in the revenue department. These days, that's both a sign for celebration... and blood in the water for patent trolls. I recently spoke to a lawyer for a decently large startup that isn't making any revenue, who has said that he's been contacted by patent trolls, who basically just keep circling, saying they won't sue until his company is making money, and then they'll pounce. It appears something similar happened with Hipmunk.

Just days after the announcement, a "company" (and I use that term loosely) called i2z contacted them, demanding they obtain a license, according to a report by Jeff Roberts. i2z is already suing a ton of travel/location companies, including Google, Travelocity, TripAdvisor, Yelp and more in Delaware (while not as famous as Eastern Texas for patent lawsuits, Delaware has been getting some attention as a "favorable" venue for patent trolls). It has also sued Hotels.com in a separate action... in Texas (northern district, not eastern) and Microsoft in Oregon. Of course, i2z (like so many patent trolls) appears to just be a patent lawyer, based in California: Rakesh Ramde.

The patent in question (5,345,551) covers a "Method and system for synchronization of simultaneous displays of related data sources." It was originally issued all the way back in 1994 to Brigham Young University... who held onto it until just about a year ago when it was assigned to "Gregory Cuke" who appears to be a real estate guy in Longview, Texas. And, yes, it turns out that i2z, despite actually being a lawyer in California, is technically based in Longview, Texas. Ramde claimed that Hipmunk violated claim one of the patent, which reads (in its entirety):

1. A system for synchronizing the presentation of data on a digital computer display, comprising:

first and second window-controlling means, each of said window-controlling means displaying information in at least one display window,
a synchronization control means, and
means for communications between said synchronization control means and each of said first and second window-controlling means;
wherein said first window-controlling means displays first information from a first source, and said second window-controlling means displays second information from a second source;
wherein said first information and said second information have sections, and at least one section of said second information corresponds to a section of said first information;
wherein said first window-controlling means sends a message to said synchronization control means over said means for communications indicating a change in viewing position to a new section of said first information;
wherein said synchronization control means sends a message to said second window-controlling means over said means for communications requesting a change in viewing position to a section of said second information corresponding to said new section of said first information; and
wherein said second window-controlling means displays said corresponding section of said second information on at least one display window.

In response, rather than letting i2z shop for its favorite forum, Hipmunk went to court in Northern California, asking for a declaratory judgment saying that (1) Hipmunk does not infringe and (2) the patent isn't valid anyway. On that first point, it seems that Hipmunk has a reasonably strong argument, since the whole point of the claim seems to involve multiple windows, and Hipmunk displays everything in a single window.

Either way, this is the kind of crap that tons of companies face. The second they're deemed even slightly successful, they get hit with patent infringement claims from non-practicing entities, wielding broad and vague patents that have nothing to do with what the company is really doing. And people still don't think this is a problem?

If you want to understand local corruption at a really, really deep level, do something simple: fly into a new city, hop into a cab at the airport and ask them about taxi licensing. I've done this a few times, and you'd be amazed at what a ridiculous situation this is. For reasons that still do not make any sense, most cities have very strict regulations on cabs -- which they always position as being for the protection of customers, but in reality are always about limiting the market and keeping competition out. Planet Money's discussion of NYC cab medallions last year highlighted just what a ridiculous system this is. It's almost impossible to find an economist who thinks this setup is good for the public. And yet it's quite common.

Over the last few years, a few startups have tried to disrupt this market -- and they always get attacked for it, either by local cab/limo services or the local officials in charge of regulating the market. The most well known of these companies is Uber, who is looking to really disrupt the market with a service that they admit is more expensive, but which provides really amazing convenience and service in exchange. Users of Uber love the service, in my experience. A couple weeks ago, I was in Chicago to speak at a conference, and Uber's CEO, Travis Kalanick, spoke at the same event, with a really entertaining talk -- much of it about how every time he tries to disrupt a market, legacy players get really, really pissed off at him.

As part of that talk, he discussed the situation in Washington DC, where the local Taxicab Commission Chairman, Ron Linton, ran a "sting" to claim that Uber was violating DC laws. Since then there's been a lot of back and forth in the fight in DC, leading to a new set of regulations that are being introduced. Of course, as is typical of taxi/limo regulations, they often say one thing but mean the exact opposite. In this case, the Taxicab Commission appears to be positioning the new regulations as being designed to make Uber "legal,", but, as Uber's Kalanick notes in a blog post, it includes some really poisonous provisions that require Uber to charge at least 5 times what a taxi charges. They're not even subtle about this. As the text of the bill reads:

(c) (1) The minimum fare for sedan-class vehicles shall be five times the drop rate for taxicabs, as established by 31 DCMR § 801.3 (a).

(2) The time and distance rates for sedan-class vehicles shall be greater than the time and distance rates for taxicabs, as established by as established by 31 DCMR § 801.3 (b) and (c).

The DC Taxicab Commission claims this is to "ensure that sedan service is a premium class of service with a substantially higher cost that does not directly compete with or undercut taxicab service." But why? We don't do this in any other market. We don't tell nice restaurants that they must charge more than fast food restaurants, so as not to compete. We don't tell Apple that it must charge more for computers so that they're seen as "premium" devices. We let the market work things out. That's what enables disruptive innovation and competition to take place.

What's amazing here (and, to a lesser extent, in nearly every major city in the US) is how they effectively admit that they don't want competition, they don't want innovation. They want a protected market that is artificially inflated. Why would the people of DC accept this kind of thing?