Fark Gets Patent Troll To Settle For Nothing... Did Reddit Pay Up?

from the don't-feed-the-trolls dept

Last summer we wrote about an absolutely ridiculous patent troll, named Gooseberry Natural Resources LLC, who holds a ridiculously broad patent (6,370,535) that it claimed covered the basic concept of generating a press release online, which it then used to sue a bunch of companies who had been in business since way before the patent was issued. At the beginning of this year, we noted that Gooseberry tried to expand the definition of what the patent covered, and sued a bunch of tech sites you probably read, including Fark, Reddit, Slashdot, TechCrunch and Digg. As we noted at the time, as with most patent trolls, Gooseberry was just a shell company, and the real owners of the patent were a secret. Tragically, even with the combined investigative power of those sites, no one was able to piece together who really owns that patent.

In February, Drew from Fark explained why patent trolling is so incredibly detrimental. Unlike most other bogus lawsuits, you can't just point out that the patent has absolutely nothing to do with your business and get the case dismissed. You basically have to go to court and spend hundreds of thousands, if not millions, of dollars to fight it. This is what makes patent trolling so successful. It's cheaper to just pay up. In fact, patent trolls totally rely on this, because going to court is expensive for them too -- and they almost always lose. So they have just as much incentive to avoid court as the folks being sued, in many cases.

So it's awesome to hear that Drew stared down Gooseberry and got them to agree to "settle" for absolutely nothing. Even more amazing is that he convinced them to wipe out the "standard" NDA on a patent troll settlement. Almost every settlement includes an ironclad non-disclosure agreement which says you can't say what the amount of the settlement was. This means that even if you pay nothing, they still tell the world that you "settled" and imply it was for millions and talk up how this proves their patent is valid. Not in this case:
Their patent had nothing to do with Fark. The patent troll realized we were going to fight them instead of settle, so they asked for our best offer. I said how about you get nothing and drop the lawsuit? They accepted.

Normally, we wouldn't be able to talk about any of the details. Terms of patent lawsuit settlements are usually bound by ironclad nondisclosure agreements. NDAs allow patent trolls to extract maximum settlements from each entity they've filed lawsuits against - as a result no one knows who paid what. In the last round of settlement negotiations we asked to strike the NDA provision. They agreed (and to the attorneys out there reading this, I'm as baffled as you are).

Striking the NDA was crucial because I wanted to be able to tell everyone what really happened: we didn't pay them a single dime
Unfortunately, Drew also notes that Conde Nast (the owners of Reddit) also "settled" this week, which probably means they paid something (not much), though I wonder if they were able to ditch the NDA as well. It sounds like TechCrunch/AOL is still fighting this (and hopefully will be emboldened by Drew talking publicly about getting them to back down). Still, the bigger point is how much of a toll this kind of thing takes on businesses. Fark is quite successful, but this kind of thing could have destroyed it. As someone who is too often threatened by completely bogus lawsuit threats, I certainly can understand the emotional impact these things can take on someone, which Drew discusses as well:
At any rate, this bullshiat is finally over. It was a nightmare. Imagine someone breaking into your home, then being forced to sit on the couch while their lawyers file motions over how much stuff they can take. My wife Heather said my first draft of this post sounded too angry, probably due to the fact that every third word was an f-bomb (among other things I paraphrased our best one-time settlement offer as "how about jack sh*t and go f*ck yourself", which may be a more accurate depiction of how I really felt at the time). I won't lie though, I was angry and I am still. Too much money was wasted on this, too many sleepless nights, too many hours away from running Fark, and all this because someone else decided that suing companies for bearing a vague resemblance to their patent (patents they don't even appear to use themselves) is a good business model. We're short a full-time employee thanks to these douchebags.
People who cheer on trolls and bogus lawsuits have no idea what a massive emotional impact such bogus lawsuits have on legitimate businesses. Kudos to Drew for not just standing up to one and winning in pretty much every conceivable way, but also being willing to express just what kind of emotional impact these kinds of bullshit lawsuits have on people.

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  1. icon
    Jeffrey Nonken (profile), 10 Aug 2011 @ 2:17pm

    Re:

    Sold! We'll take two hundred to start, and see how they work out.

    We'll provide nightsticks and aluminum bats on arrival.

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