Patent Hoarders Hiding Behind Shell Companies In Lawsuits

from the can't-admit-anything dept

While it used to be that patent hoarding companies like Acacia would file their lawsuits under their own names, more recently the trend has been to hide behind a series of shell companies. The latest is Altitude Capital Partners, a company we’ve discussed in the past. It’s raised hundreds of millions of dollars solely to invest in patents. While officially a private equity firm, it’s clear that the company is clearly just a patent hoarder. While it appears to have changed its website somewhat, it used to list “Number and Quality of Potential Infringers” as an investment criteria. It’s clearly taken that to heart in its latest series of lawsuits against companies like Google, Yahoo, AOL, RIM, Palm and many others. The interesting thing, though, is that Altitude is doing its best to hide its involvement in these lawsuits, just like it tried to hide an earlier investment in Visto. Instead, it’s been using a series of shell companies that are clearly formed solely for the purpose of filing these lawsuits. In the case of Altitude, it appears to be quite difficult to even track down that they’re involved at all. Acacia has been doing the same thing as well. There could be a few reasons for the use of such shell companies — but a big one might be to pretend that these really are cases of “little inventors” vs “big companies” instead of the truth, which appears to be big time investors with hundreds of millions of dollars looking to use questionable patents to squeeze money out of successful companies. Just how Jefferson and Madison envisaged things when they set out to create the patent system.

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Companies: altitude capital

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Comments on “Patent Hoarders Hiding Behind Shell Companies In Lawsuits”

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Alfred E. Neuman says:

Want to Play a Game ?

“The shell game (also known as Thimblerig, Three shells and a pea, the old army game) is portrayed as a gambling game, but in reality, when a wager for money is made, it is an illegal confidence trick used to perpetrate fraud. In confidence trick slang, this famous swindle is referred to as a short-con because it is quick and easy to pull off.”

angry dude says:

Mikey going nuts

What’s your f****** problem with shell companies, dude ?

You can have one for under 300 $ in just 5 minutes over the Internet

it’s corporate law in the US
Use it to your advantage or shut up if you can’t
Big corps use shell companies all the time
Not to mention all the money laundering going on…

This is the corporate world today, dude
Patent lawsuits are just a tiny little part of this corporate shell game

Janos Grey says:

Re: Mikey going nuts

What’s your problem with actually contributing something
meaningful instead of whining about Mike’s patent articles?

Nothing in the article said that the practice was illegal, just dishonest. The company goes out of its way to hide its actions and create a false impression to help win patent lawsuits.

“it’s corporate law in the US
Use it to your advantage or shut up if you can’t”

Yes…let’s never criticize or call attention to any law’s shortcomings. In fact, while we’re at it, let’s get rid of judicial review and cross out Article V of the Constitution.

Anonymous Coward says:

The other purpose behind this may be to avoid paying off if the “patent holder” loses the suit and becomes liable for legal fees to the other side. I am sure the “shell” corporation exists one per suit, with little funding or assets. it the company loses, it bankrupts the company, forms a new one, and sues the next victim.

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