Still Trying To Track Down Who Controls Patent Used Against Reddit, Digg, Fark, Slashdot & TechCrunch

from the making-progress dept

We recently wrote about a patent (6,370,535) around a system for generating a news or press release online, which is being used by a shell company called Gooseberry Natural Resources to sue a ton of companies, including aggregators like Reddit, Fark, Digg & Delicious, as well as blogs like Slashdot and TechCrunch. One of the issues around the patent is that it’s currently held by a shell company, owned by another shell company, and all anyone knows is who the lawyers are, rather than who actually controls the patent. This is all too common in cases of patent trolling, where a series of shell companies are set up to obfuscate who really holds the patent.

We wondered if the enterprising folks at Reddit might be able to dig out some more info, and they took up the challenge. Unfortunately, so far, all they’ve been able to do is suss out a few more shell companies — and lawyers representing them — but no clear info about who’s really pulling the strings here. You can read through that long comment thread, but for a quick summary, the original inventors of the patent, Eileen C. Shapiro and Steven J. Mintz, may or may not still have some association with it. Eileen refuses to comment, saying she was “under NDA” on the matter.

However, others did note that among the pair’s other patents are two (7,725,347 and 7,184,968) that are both being used in another lawsuit, this one filed by “Blackstone River LLC” against eHarmony, Match.com, Plentyoffish and a few other online dating sites.

Meanwhile, the original assignee for the patent, NewsGems LLC (which was apparently owned by Mintz), later assigned the patent to another operation, Kolomoki Mounds LLC. Separately, filed with this lawsuit is the statement of interested parties, which lists Kolomoki Mounds LLC, Gooseberry Natural Resources LLC and a third company Transmogrification Security AG LLC.

Separately, as we had already known originally, the parent company of Gooseberry is Vertigo Holdings LLC. It turns out that Vertigo Holdings also is the parent company of Blackstone River LLC — the same company we mentioned above using two other patents by the same inventors to sue a bunch of dating sites. Hmm.

One of the Reddit comments also lists two other “sibling” companies allegedly owned by Vertigo: Fowler Woods LLC and Wolf Run Hollow LLC. Fowler Woods made some news last year for suing a ton of online radio offerings for patent infringement, including Pandora and Slacker, as well as a bunch of media sites, including the Huffington Post, Glam Media and AH Belo — who is also one of the companies sued in this case that we’ve been discussing. The patent in question (6,351,736) in that lawsuit was not a Shapiro/Mintz invention, but by some others. Meanwhile, Wolf Run Hollow has been suing a ton of banks and credit unions over a different patent (6,115,817), which claims to broadly cover sending secure messages over an insecure network (no, seriously). Wolf Run Hollow appears to have been created by Vertigo.

Unfortunately, that’s about where the sleuthing runs out… and it really doesn’t tell us that much. We already knew that Vertigo was the parent company, and who owns/runs Vertigo is secret. We did learn that another company owned by Vertigo is using more patents from the same inventors to sue more companies, but that’s about it. Either way, as a basic exercise, it certainly teaches you a fair amount about the sneaky and hidden nature of how patent trolls operate, with layer upon layer of shell companies, changing patent assignments and licenses, all of which hide whoever is actually pulling the strings. It really does make you wonder how this kind of thing does anything whatsoever to improve innovation.

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Comments on “Still Trying To Track Down Who Controls Patent Used Against Reddit, Digg, Fark, Slashdot & TechCrunch”

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58 Comments
Not an electronic Rodent says:

Satanic lawyers?

Just to play Devil’s Advocate (and IANAL), if these people suing can’t/won’t point to an actual company with an actual product on which these patents are infringing and yet the companies they are suing have allegedly created something very similar without havign anything to “copy” off…. Doesn’t that mean that the “invention” was clearly obvious and that the patent is invalid anyway?

Jeff says:

Re: Satanic lawyers?

The problem with your theory is that one of the goals of the patent system is to disseminate knowledge via publishing patent applications. In order to receive the monopoly of a patent, the inventor must publically disclose the nature of the invention. Therefore the patentee can argue that the knowledge to copy the innovation came from the patent publication and not from a competing product.

This is obviously an idealistic picture of how companies operate. While scouring patent disclosures, especially of your known competitors, is a common practice for engineering companies, most research is original though often unintentionally duplicative of others.

This issue is muddied somewhat by so-called submarine patents http://en.wikipedia.org/wiki/Submarine_patent where a patent disclosure does not get published until years after the first application. Reforms implemented in the ’90s have significantly addressed this issue. However, like these patents, there are still a few applications kicking around in the patent office that were filed prior to the reforms that can be granted as patents many years after an initial filing date. As I pointed out a few days ago, the oldest of these patents allegedly claims* a filing date in 1981! *support for this filing date will certainly be a point of contention if this case ever gets litigated.

Anonymous Coward says:

Re: Re: Re:2 Satanic lawyers?

I’m still not seeing evidence that says this is common among engineering companies. The first site claims that economists are using it to try and predict trends and create patent statistics on various patented technologies. The second site claims that patent data isn’t sufficient to predict your competitors next moves. We already knew that. Patents are often obtained for patent trolling purposes or they’re obtained for defensive purposes and not for the purpose encouraging one to innovate.

I’m not going to go through each and every site. You still haven’t provided a citation.

johnjac (profile) says:

Is Reddit and 4chan the a model for a new form of "Investigative News"?

People are always questioning “Who is going to pay for investigative news?” when the Newspapers go away.

I’m not saying this is a total replacement, but I can see, online communities passionate about particular topics doing their own research.

Bundling investigative news with classifieds, and printing and distributing it on paper isn’t the only way. New solutions sometimes come from the most unlikely places.

Anonymous Coward says:

Re: Is Reddit and 4chan the a model for a new form of "Investigative News"?

Which is nice, but the research as a result would be entirely one sided, attempting to prove what the community wants to know, while ignoring contra indications.

I hate to say it, but it is classic TD operating procedure.

Chris in Utah (profile) says:

Re: Re: Is Reddit and 4chan the a model for a new form of "Investigative News"?

[citations needed] I hate to say it, but it is classic TD operating procedure.

If you have examples of the contra indications feel free to point them out and let us discuss them. It becomes a logic error when Axioms and Dogma become standard operating procedure. We know its not a black and white world but we can at the very least use civility to find the common denominator of a solution. Even if it is hard to find one.

Anonymous Coward says:

Re: Re: Re: Is Reddit and 4chan the a model for a new form of "Investigative News"?

Citations needed?

http://www.techdirt.com

start at the top, and keep reading. They are all over the place.

One sided stories, conclusions drawn where none is possible, assigning blame where things aren’t clear. It’s all there.

Enjoy 🙂

ltlw0lf (profile) says:

Re: Re: Re:3 Is Reddit and 4chan the a model for a new form of "Investigative News"?

Wait, I know, you’re going to respond and say I’m doing the same thing too.

Anything that does not jive with his point of view is classic TD standard operating procedure.

The sad thing is that there is enough industry trolls here that even if a story is one sided from Mike (which I doubt very seriously is the case,) there are usually four or five Anonymous Cowards that will pop in and offer a different opinion (and about twenty that pop in and bad-mouth Mike/TD for not spouting their particular point of view.) There is a lot of friendly discourse here, even if this particular Troll doesn’t see it.

Anonymous Coward says:

Re: Is Reddit and 4chan the a model for a new form of "Investigative News"?

johnjac:

there is a vast gulf between investigative journalism and background research using open documents.

an invetigative journalist would do something like call 400 people, get hung up on 380 times, get a few soundbites and ‘cannot discuss’ and/or PR BS from 10 of those left, and from the remaining 10, get semi-useful background info that was ‘off the record’ so the report could only say ‘officials familiar with the matter’ or ‘unnamed sources say that’.

then some of those stories wouldnt match each other, so the reporter has to go back and follow-up interview

and on top of all that, it might turn out some of the sources were outright lying. if that gets printed, the journalist is guilty of defamation.

sooo let me know when a bunch of anonymous people can accomplish that.

fogbugzd (profile) says:

Let's hope Reddit et. al. stand up

None of these look like they are strong patents and there is a strong possibility that they would be tossed out if they had to face scrutiny in court.

It looks like Reddit, at least, is willing to fight the suit. However, I doubt they will actually go to trial. If any of the defendants hold out for a trial it is likely that the plaintiffs will be the ones to fold rather than risk invalidation.

Anonymous Coward says:

Re: Let's hope Reddit et. al. stand up

“None of these look like they are strong patents and there is a strong possibility that they would be tossed out if they had to face scrutiny in court.”

Yet the patent office still granted these bad patents. The result is a bunch of wasted time and effort responding to potentially baseless threats or (if the defendants don’t hold out) the paying of settlement money to avoid lawsuits or the process of an expensive lawsuit for the sake of invalidating a bad patent (if it gets invalidated. With our legal system, who knows).

Not to mention the money wasted to get the patent in the first place, money (and effort) that could be used for more economically productive activities.

and if they do fold to avoid getting the patent invalidated it’s because they want to use it to extort other entities that may be more willing to pay up, another misuse of the patent system. Or they want to use the patent to give them some sort of leverage (ie: cross patent licensing leverage), again, another misuse of the patent system.

Anonymous Coward says:

Re: Re: Let's hope Reddit et. al. stand up

One issue of patents is that looking back on them, they often look weak or very general. But at the time they were originally issued, they may have been forward thinking. We have the luxury and the benefit of time, which the patent office does not have at the time of review.

The issues you express are more to do with the expense of the legal system, and not the failings of the patent system. You should address the issues of overly expensive legal action, rather than the marginal effects of good or bad patents.

Anonymous Coward says:

Re: Re: Re: Let's hope Reddit et. al. stand up

“One issue of patents is that looking back on them, they often look weak or very general.”

and they look weak and general at the time they were issued.

“But at the time they were originally issued, they may have been forward thinking.”

but were probably not.

“The issues you express are more to do with the expense of the legal system, and not the failings of the patent system. “

The patent system is part of the legal system and it’s part of the reason why the legal system is so expensive.

“You should address the issues of overly expensive legal action”

Patents are a reason for that expense.

“rather than the marginal effects of good or bad patents.”

Bad patents contribute to the expense of our legal system and they do have a huge effect.

Scott (profile) says:

Re: Vertigo and Hubert Pototschnig

Pototschnig has large civil judgments against him, and is fighting them. Is it possible that he needs to remain hidden to protect his “winnings” from creditors? See these links:

https://www.lexisone.com/lx1/caselaw/freecaselaw?action=OCLGetCaseDetail&format=FULL&sourceID=bcddf&searchTerm=hYWO.KUNa.ZDbh.XabN&searchFlag=y&l1loc=FCLOW

and

http://www.jhpropertyguide.com/News.do?cmd=doNewsDetail&newsid=107

and fraudulent conveyance claim:

http://www2.tetonwyo.org/tmp/0773479.pdf

and judgment:

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=UWYCV104022052S

another one:

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=UWYCV104022656S

foreclosure being fought:

http://civilinquiry.jud.ct.gov/CaseDetail/PublicCaseDetail.aspx?DocketNo=UWYCV085010546S

Interesting….. Pototschnig is from Austria, lives in CT, and it appears as though possibly he has created Delaware and Austrian companies to protect from creditors. Just conjecture.

anonymous says:

easy

go to the secretary of state for the state where the company is located in. then lookup the LLC “Members” – these are the people who get limited liability due to the LLC formation, and so should be on public record somewhere.

and for patent trolls, remember – while it’s relatively easy to win an infringement lawsuit, the damages award is pretty negligible. Still, it does require time and expense on the part of the defendant, but for a company like Reddit, Fark, Techdirt, a few mil dropped on attorneys should be nothing – right?

NeoTycoon (profile) says:

Following the trail

Here’s some research I’ve done on this suit:

Since we do know who the inventors of the patent are, let’s start with them – Eileen C. Shapiro, and Steven J. Mintz. There’s plenty to go on with just their names and the entities associated with them. Ms. Shapiro appears to have an interest and acumen for providing “business leverage” with “intellectual property” (see her linkedin profile here: http://www.linkedin.com/pub/eileen-c-shapiro/0/93/425). It’s quite possible one of her linkedin connections is the source of the original suit.

How do I know that’s her? The NewsGems LLC office address listed in the Massachusetts Secretary of State records is 20 UNIVERSITY RD.
C/O THE HILLCREST GROUP, INC.
Ms. Shapiro is listed as the President, Sec’y, Treasurer of The HillCrest Group, Inc. in MA records. A look at her zoominfo profile confirms this and her Harvard MBA, which links back to the Linkedin Profile: http://www.zoominfo.com/people/Shapiro_Eileen_9679986.aspx

It is interesting to note that NewGems LLC was Dissolved by Court Order or by the Sec’y of the Commonwealth on 4/30/2009. The same happened to Shastev Investment LLC (dissolved by Court Order or SOC on 4/30/2009), in which Shapiro was also a member of the board.

Note also, that Shapiro’s profile contains a recommendation for Sunstein, the lawyer who served as correspondent for the reassignment of the patent to Kolomoki Mounds LLC. If we do some further digging with the lawyers involved in all correspondence available, some further triangulation can be made.

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