Putting Press Releases Online? Patented! Lots Of Small Companies Sued

from the sickening dept

Law.com has an article highlighting how incredibly devastating a bogus patent infringement lawsuit can be to small businesses. In this case, someone hiding behind a series of shell companies is using a ridiculously laughable patent that appears to cover the concept of putting press releases online (6,370,535) and suing a bunch of companies that do exactly that. The article highlights the head of one tiny company — which, it should be noted, has been in business and doing the same thing since before the patent application was filed — who is debating whether he should go without a salary or company profits for three years to fight this, or just pay up. It’s really a sickening display of how patents are used to seriously harm small businesses.

We’ve had commenters here say in the past that situations like this are “no problem,” because the accused can just show the prior art and move on. Not at all. They have to actually go through with a trial, which by itself, can cost in the hundreds of thousands of dollars range (without even counting the time wasted on it). The guy profiled in the article was shocked by this — figuring he could just file some paperwork to show that this patent is clearly invalid:

Putting aside the validity of the patent, Kennedy notes that the application wasn’t even filed until 1999 — a year after he started his business.

“I said, okay, I precede this,” he said. “I thought, I’ll just have to file that paperwork, whatever that is. And then I found out there’s no paperwork. It’s called a trial.”

Even more frustrating? The guy has no clue who he’s even fighting against. As has become all too common, the company suing is really a shell company, and there’s no info about who’s actually behind it:

It’s additionally frustrating to Kennedy that he can’t know who is actually accusing him of patent infringement. Gooseberry Natural Resources, LLC has taken extraordinary steps to hide the identity of its owner. Corporate records held by the Texas Secretary of State show that a second Delaware-based shell company, Vertigo Holding LLC, owns Gooseberry. Since Vertigo Holding is incorporated in Delaware, it is not required to list its officers or owners. Vertigo’s address is the same Newark, Delaware address as A.I. Business Services, a company that sets up “virtual offices” to help clients “portray the image of a large corporation.” It boasts that its staff “are all trained in sales and customer serice and daily play or act as if they are in Delaware, Florida, or Texas — regardless of where our offices truly are.”

The guy is trying to fight back by setting up website and getting other online press release services to team up, but it’s not always so easy, as many of these companies are small shops who are more focused on actually serving their customers (you know, important stuff like that), rather than fighting off ridiculous patent threats for such an obvious idea.

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Companies: gooseberry, vertigo holding

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Comments on “Putting Press Releases Online? Patented! Lots Of Small Companies Sued”

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30 Comments
Richard Corsale (profile) says:

Re: New rule

I think they have (for the most part) addressed these types of patents going forward. However there are over 100k bogus patents mucking up the system. Patents like this were rubber stamped during the “idea economy”. A time when every front page headline billowed with newly minted 19 year old kajillionaires with half of an idea (but on the INTERNET!).

Aaaaand now were left with the bloated corpse of the intellectual pigs.

Anonymous Coward says:

Re: New rule

New rule for the USPTO: Any patent application with [existing process] “online”, or [something we do everyday] “on a computer” shall be immediately denied.

There is already such a rule. To eligible for a patent something is supposed to be “new and non-obvious”. Such rules, however, don’t do much good when they’re routinely ignored.

Anonymous Coward says:

title misleading

The patent is not quite as broad as the article would have you believe. The patent is specifically about *generating* press releases over a network, where there are predetermined sections of the press release and parts of the content come from different computers over a network. That is not the same as writing (writing it, not generating it) a press release and putting it on a web site.

I’m not saying that this is a good patent or that I support it. Further while the patent has limitations that does not prevent the owner from suing in cases where the patent does not apply – which is not good. My point really is that techdirt over-simplified what the patent is about which I find slightly disingenuous. The patent does not ‘cover the concept of putting press releases online’, it covers the process of automatically generating those press releases, not exactly the same thing.

Richard (profile) says:

Re: title misleading

No, clearly in the claims starting at 22 they are describing the multiple components as being a client and server, as in your browser and the host server. Additionally they claim a database as being a separate host and thats every web hosting setup on the planet. They describe using a template in the first claims, granted… but thats widely misinterpreted and obvious in general.

http://www.google.com/patents?id=EOELAAAAEBAJ&pg=PA3&dq=6,370,535&source=gbs_selected_pages&cad=4#v=onepage&q&f=false

Anonymous Coward says:

Re: Re: title misleading

Look, its bad patent and I don’t support. However, it is specific to the *generation* of press releases. It does not ‘cover the concept of putting press releases online’, it covers *generating* press releases, it is a subtle difference that you do not seem to understand.

Anonymous Coward says:

Re: Re: Re: title misleading

I do not know if it is a good, bad, or intermediate patent, but you are correct in noting that the patent is directed to the generation of news releases. Thus, the headline is misleading.

Personally, I am less concerned about the patent(s), and much more concerned about the lack of transparency into who is in charge of the spate of companies that are mentioned.

Obviously, all the names will come to the fore if this matter proceeds to discovery, but that does seem a day late and a dollar short.

Anonymous Coward says:

Creativity has absolutely been stifled by the draconian patent and copyright laws. The patent office doesn’t even seem to look at the filings or even have a clue if it violates another patent currently in force. The system is antiquated and offers no real protection which is typical of all government run agencies. You pay money and all they do is give you a piece of paper saying you own an idea and if you have the know how you are then free to sue anyone and everyone that uses anything resembling your idea. It’s time to return to the old west and settle matters like honest people.
Patents have become stupid because of all the other patents required to complete an idea. Case in point: Look up the patent for Second Life. They even had to include the patent for the screen that you would be viewing it on. Those screens are obsolete but yet we still have to acknowledge / pay them. It took 21 other patents to complete the Second Life patent which everyone agrees is innovative and has not been replicated in power or popularity. This is wasteful and a burden on the entire capitalistic system.

staff says:

patent bashing

“Not at all. They have to actually go through with a trial…”

Ever hear of reexamination? The PTO sure has. They grant 95% of requests. Then again, maybe it’s only 95% of large infringers. If the small infringer really has good prior art (make that art which someone legally blind would consider close enough for hand grenades) then they should have no problem cobbling together a request and getting it granted with a reexam happy PTO. The court likely will then grant a stay and bingo!, the infringer will be off the hook for at least 5 years while the PTO knits themselves a king sized muffler for those cold DC winters. Try again o’ patent basher.

Jane Q. Public says:

It's probably not as bad as it sounds.

The victim here does not necessarily have to spend lots of money defending himself. The courts do not like to waste time on frivolous lawsuits. There is nothing preventing him from filing a pretrial motion to dismiss the suit, based on the fact that given the date of the patent application, there is absolutely no basis to sue. And if he finds a couple of good examples online, and uses a good template for the document, he probably doesn’t even need a lawyer to do it.

Any reasonable court would then dismiss the suit.

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