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.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Alfred E. Neuman, Dec 5th, 2007 @ 5:14am

    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."

    reply to this | link to this | view in thread ]

  2. identicon
    angry dude, Dec 5th, 2007 @ 6:42am

    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

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, Dec 5th, 2007 @ 7:36am

    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.

    reply to this | link to this | view in thread ]

  4. identicon
    DCX2, Dec 5th, 2007 @ 7:43am

    Re: Mikey going nuts

    Mike clearly stated that the problem is patent hoarders using shell companies to obscure their participation in lawsuits. I see nothing against shell companies in specific.

    reply to this | link to this | view in thread ]

  5. identicon
    Janos Grey, Dec 5th, 2007 @ 7:50am

    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.

    reply to this | link to this | view in thread ]

  6. identicon
    OBINNA ENYIOMA, Feb 15th, 2009 @ 8:04am

    to help and maintain futher lifestyle

    officially a private equity firm, and honesty to be a rich man in future.

    reply to this | link to this | view in thread ]

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