Patent Troll Lodsys Dismisses Suit Against Kaspersky Labs Rather Than Go To Trial

from the won't-test-merit-of-claims-because-claims-have-no-merit dept

The ultimate patent troll, Lodsys, has filed to dismiss with prejudice its lawsuit against the only defendant (out of 55) not to settle, Kaspersky Labs. This follows 18 months of defendant after defendant (including big names like Symantec, Samsung and HP) settling rather than taking this to court.

I’m not sure how many of those defendants are kicking themselves now (perhaps not many — defending against patent trolls can be prohibitively expensive), but it’s apparent Lodsys has no desire to actually defend the merit of its claims in court. That’s a risky proposition even in the friendly confines of East Texas courtrooms. All it would take is one loss and a profitable settlement business is ruined.

And of all the shaky patent troll claims out there, Lodsys had some of the shakiest, according to the EFF.

We believe that Lodsys is unlikely to prevail on the merits of its claims. First, the principle of patent exhaustion should protect developers using Google and Apple’s APIs. Lodsys purchased its patents from Intellectual Ventures, who many believe is the biggest troll of all. (When “selling” its patents to supposedly “independent” companies like Lodsys, Intellectual Ventures has retained as much as 90 percent of ongoing profits.) Apple and Google both licensed the patents when they belonged to Intellectual Ventures. By suing individual app developers for using Apple and Google services, Lodsys is attempting to get to two bites of the apple, so to speak.

Second, Lodsys’ patents have nothing to do with the hardware or software of today’s smartphones and tablets. To the extent they are even comprehensible, the patents discuss a method for providing remote customer feedback for early 90s technology like fax machines. Using intentionally vague claim language like “trigger event” and “perception information,” Lodsys argues that the patents cover today’s technology. This is an abuse of the patent system.

Lodsys isn’t likely to stop with its trolling, though. In this case alone, it secured settlements from 54 defendants. Kaspersky is just the one that got away. It’s still pursuing thousands of iOS app developers and since the merits of these patents weren’t tested, it can deploy them against any companies and developers it didn’t think to include during its initial mass suings.

The upside is that Lodsys obviously knows its patents won’t hold up in court, even when argued in front of the “home crowd.” This should give more companies the confidence to stand up to its legal threats in the future (something Lodsys obviously fears, considering its efforts to block Apple from intervening in its suits against iOS developers). Defending against patent trolls is still expensive (something a “loser pays” system would help mitigate), but at least it’s not unwinnable, as Twitter, Newegg and Kaspersky Labs have proven.

Filed Under:
Companies: intellectual ventures, kasperseky, lodsys

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Comments on “Patent Troll Lodsys Dismisses Suit Against Kaspersky Labs Rather Than Go To Trial”

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Michael Ward (profile) says:


OK, so why aren’t those 54 companies suing Lodsys for fraud? Presumably the contract they signed for patent rights (or to keep from being sued) includes a proviso that they give up their right to sue later on. But a clear case of fraud obviates the terms of the contract, if they can prove that Lodsys fraudulently obtained their signatures by their fraudulent patent claims. While they’re at it, they should see if they can sue for punitive damages.

That One Guy (profile) says:

To settle or fight?

I think the biggest problem, and what allows such parasites to not only live, but thrive, is that companies too often look to the short term, rather than long term when the trolls come knocking.

Now I can understand why smaller companies might settle, in their cases, with how the system is set up, a fight is quite likely to flat out destroy them, taking up so much time and money that they just cannot continue to stay in business, so they get a pass, but larger companies have no such excuse.

While in the short term it might indeed cost far more to fight than settle, it also shows the troll in question that the company is willing to fight, making them a much less attractive target for any future shakedowns.

Not only that, but if the fight is public enough, other trolls will also see that the company in question won’t just hand over money to get rid of the problem, but are willing to make it expensive for the trolls as well, and as their entire ‘business model’ relies on sending letters and getting checks, and never setting foot in a court room if they can avoid it, they too are likely to avoid that company.

Conversely, if a company just hands over the money without any fuss, they’ve made it quite clear that they have no problem throwing money away to the parasites, making them a much more attractive target to other parasites, who are likely to also try and get a cut.

So while in the short term it might make more financial sense to just pay the leeches, in the long term all that’s doing is advertising a cheap, easy source of money to the other parasites, making fighting infinity smarter, and the sooner more companies realize this the better off they all will be.

mattshow (profile) says:

This was a joint motion?

There’s one thing it would be nice to get some clarification on. The Kaspersky blog reads as if they just woke up one day and: “Our lawyers in the court reported that Lodsys has withdrawn its lawsuit and the judge dismissed the case ?with prejudice?, meaning they can?t bring a similar case against us again.”

And this is certainly the way the narrative has been so far: Lodsys dismisses their claim to avoid having to test it in court. I remember in the comments on the last article many people were speculating if there was any way Kaspersky could have forced the court to consider the validity of the patent, rather than just letting Lodsys get away to sue another day.

But the order states that it in response to both parties joint order to dismiss, which to me sounds like Kaspersky agreed to allow Lodsys to dismiss the case. Not that I blame them. It’s not their job to chase down bad patents, and it gave them exactly what they want: they get to end this without having to give Lodsys a single dime. But if that’s the case, it’s very different from Lodsys just getting to choose to slink away. Can anyone dig up the original motion?

Eric says:

Insurance model to fight patent trolls?

Is there some sort of insurance model that could be put in place specifically for patent lawsuits? As much as I hate that this is needed, I do wonder if it could help curtail the problem until useful legislation is done. Companies join an insurance program to explicitly protect them from trolls. This insurance program, of course, would need to commit to fighting and never settle. If this is in place these trolls might think twice. And of course membership would be confidential, so before suing the troll would have no idea. Instead of wasting money on settlements you’d waste it on patent troll insurance – but maybe in the long run this will help reduce the occurrence of frivolousness cases as they would always have to litigate.

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