If You're An East Texas Company, Are You Now More Prone To Patent Infringement Lawsuits?

from the watch-out dept

Joe Mullin has an interesting story, questioning why PubPat — a group that has fought against bad/questionable patents and bad patent policy — appears to be working closely with a guy who fits the classic definition of a “patent troll” and who just sued Google, Yahoo, MySpace, PayPal, Amazon, Match.com, and AOL over a patent (5,893,120) for storing and retrieving data using a hashing technique.

However, what I actually thought was a lot more interesting is buried a bit down in the article. Beyond suing those seven big name internet companies, the lawsuit also included “the world’s largest futures exchange, CME Group, and two software companies located in the Eastern District of Texas.” Which two software companies? Softlayer Technologies and CitiWare Open Source Technologies — both of which look like web hosting/data center type places with some additional services/software included. Heard of ’em? Probably not. Mullin speculates reasonably that the two companies may have been added as a strategy to fight off any attempt to change the venue outside of East Texas.

As you may have noticed, with courts getting a bit more leeway in moving such cases, a few have been moved out of East Texas — especially when none of the parties involved are really based there. So, now, the patent holders who so love filing there are coming up with new strategies, including suing a whole bunch of different companies so they can argue that Texas is “centrally located” or equally as (in)convenient for everyone. Yet, you have to imagine that with a couple of companies located in East Texas, they’ll be able to make an even stronger case against moving the case. So, if you’re a tech company that’s actually based anywhere in East Texas, you may now have a really big target on your back in patent lawsuits, effectively acting as an anchor to keep the case located there.

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Comments on “If You're An East Texas Company, Are You Now More Prone To Patent Infringement Lawsuits?”

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Anonymous Coward says:

This couldn’t be more perfect…unless you’re a company in east Texas. Here’s how this will play out:
This technique will work so well, that no company will locate in east Texas and all those already located there will move to avoid getting caught in the patent troll trap. All of the tax base there will dry up and all of these judges will lose their jobs. It might take some time, but the situation will resolve itself. Though, I fear it will be a case of curing the infection by killing the host.

Michael L. Slonecker says:

Something seems quite strange here merely from perusing the complaint filed with the court. Beyond its naming numerous parties as defendants, and beyond its unusually casual recitation of actionable items (under our federal system it is sufficient to use “notice pleading”, but this on its face appears to fall far short of the mark), the “Prayer for Relief” provides in pertinent part:

29. that the Court award a compulsory future royalty;

This is not to my knowledge a remedy that a court is empowered to grant under Title 35. Past damages, damages through the period of a lawsuit, pre and post-judgement interest, attorney fees, injunction? Yes, under certain circumstances these are possible remedies.

But…a compulsory license? This is news to me.

angry dude says:

Re: Re:

After reading the complaint I have a strange feeling

(http://thepriorart.typepad.com/files/bedrock_computer_technologies.complaint.pdf )

They sue a couple of tiny Texas companies, probably just shells, and a bunch of huge Delaware multinationals

The complaint DOES NOT name the actual infringing products/services..

Furthermore, I do not get how you can ask for both “be enjoined from making, importing, using…” and “compulsory future royalty”

Strange… to say the least

Do East Texas judges throw out claims of infringement which do not specifically name actual infringing products/services ?
How is discovery going to happen ?
Will they ask for the entire codebase from Google and Amazon ?
All of the hundreds of millions of software codelines ?

Any lawyers here to clarify ?

Anonymous Coward says:

It’s called forum shopping, and it isn’t really unusual. These guys have likely spotted a particular court or group of judges that lean towards patent holders, perhaps they are older and less technically savvy, etc. Finding a group of 80 year old judges that still drive cars from the 70s and hand write all their judgments might be a good place to start.

Since hashing techniques are quite an old concept, A quick search of google also turns up a number of other “hashing” patents, which suggests that the patent owners haven’t been very zealous in protecting their work.

If you take their patent and remove everything that is common computer operations (since the 1950s) there isn’t a whole bunch in the patent that is new or unique.

Michael (profile) says:

Re: Re:

What about the forum area; the issue of patents has been discussed at length however the forum issue isn’t something I noticed when I’d looked at similar topics in the past.

Why isn’t there some electronic courtroom system where you’d only have to visit a local court (with a built in conference room) and it would link up with the remote court. There would have to be some witness of the local jurisdiction there, and the only applicable laws would be shared between jurisdictions (hence it would inherently be either a federal or international level law case even though the courtroom may be local.); how could anyone say someone violated a law in Texas without being there anyway?

With a bridged courtroom like that, the next issue would be judge. I see coin-toss OR availability being the deciding factor there.

Of course why not skip that step and have a national pool of judges outside of any involved states, and thus less likely to be sympathetic to either party.

staff1 (profile) says:

the ganders fight back

what’s good for the goose…

the CAFC’s more stringent rules governing transfers has forced patent holders to evolve. infringers of course would like to be sued in their back yards. inventors want at least a fair fight, suing in a neutral juris with knowledgeable judges and a short time to trial. infringers would rather drag things out til hell freezes over.

Ronald J Riley (profile) says:

East TX New Silicon Valley

Mike Masnick,

Didn’t you know that East Texas is rapidly becoming the hottest area of the country for innovative start up companies? Inventors are flocking there for comradely, culture reasonable real estate prices and country living.

Meanwhile, Silicon Valley has become dominated by Piracy Coalition members who have strangled the area’s inventive spirit. It is not the place for start up companies. The decline will be long and painful.

Eolas is a perfect example of what inventors do for society. It is a shame that they have to sue all these big companies. It doesn’t have to be this way, those companies could change their ways and start licensing rather than trying to steal.

Perhaps both you and Joe Mullin can explain why the two of you constantly root for those who are stealing billions of dollars from America’s inventors. Mullin’s work looks suspiciously like that of Rick Frenkel which raises the question of rather or not Rick Frenkel continues to work in this area.

Ronald J. Riley,

I am speaking only on my own behalf.
President – http://www.PIAUSA.org – RJR at PIAUSA.org
Executive Director – http://www.InventorEd.org – RJR at InvEd.org
Senior Fellow – http://www.PatentPolicy.org
President – Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (810) 597-0194 / (202) 318-1595 – 9 am to 8 pm EST.

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