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If You're Selling Gift Cards Over The Internet, There's A Patent Troll Coming For You

from the let's-just-forget-about-all-that-'music'-stuff-that's-so-integra dept

An integral aspect of the dark art of patent trolling is knowing an exploitable patent inside and out. Patent 6,233,682 (the '682 patent, as it's referred to in lawsuits [which is pretty much the only place it's being referred to]) is titled "Distribution of musical products by a web site vendor over the internet." It was originally granted to its creator, New York businessman Bernard Fritsch, in 2001 and was actually used in the creation and delivery of a music service.

At the time of the patent's issuance, its listed inventor Fritsch worked for a subsidiary of MCY.com Inc., a company founded in 1995 that tried to sell music online.

The patents were intended to help MCY market a proprietary system for the digital delivery of music and other media products, according to MCY.

Though MCY made an effort to sell music for some time, it no longer exists, at least online — its site is occupied by a domain-name placeholder and has been since January 2005.
In March of 2010, the '682 patent was acquired by a patent troll d/b/a Sharing Sound, LLC. Naturally, Sharing Sound was located in Longview, Texas, from where it could avail itself of the friendly east Texas court system. It used this patent (along with another, very similar patent originally obtained by Fritsch -- patent 6,247,130, also titled "Distribution of musical products by a web site vendor over the internet") to extract settlements from Wal-Mart, Amazon, Gamestop, Netflix and several others before exhausting the patents' apparent "usefulness."

Another patent troll, also "located" in the east Texas region, acquired both patents in July of this year. The timeline looks like this:
06/25/2015 - Batarga, LLC files as domestic limited liability corporation in Texas.
07/20/2015 - Batarga acquires both of Sharing Sound's patents.
08/21/2015 - Batarga files first patent infringement suit.
Seeing as the previous troll had already wrung the market dry of settlements and licensing fees by targeting big players in the media distribution, these two "music distribution, but on the internet" patents would seemingly be of little use.

But hope springs eternal when the barrier to entry is just a nominal filing fee. Batarga, LLC has found an exploitable claim in the '682 patent (a claim that's not included in the nearly-identical '130 patent).
12. A method for distributing products over the Internet, comprising:

displaying a login screen on a video monitor that allows a user to enter an unique identifier for accessing database information;

confirming the validity of the entered unique identifier; and

displaying a shopping list that lists items for purchase as selected by said user, the listed items being in digital format suitable for downloading to a user's computer connected to the Internet and being in other media format suitable for shipping to said user.
By cherry-picking this claim from the numerous music-related claims surrounding it, Batarga feels it has a legal basis for extracting licensing fees/settlements from a number of entities who don't offer music for sale via their websites.

Batarga is filing lawsuit after lawsuit in the East Texas district -- 20 of them as of August 24th. And all of them targeting... clothing retailers?


So, if music is no longer the lynchpin of trolling with this nominally music-related patent, what's the angle? GIFT CARDS. But on the internet.
Defendant has directly infringed, and continues to directly infringe, at least Claim 12 of the ’682 Patent in violation of 35 U.S.C. § 271(a), either literally and/or under the doctrine of equivalents, by offering for sale on its website (shopjustice.com) gift cards in both digital and physical forms, thereby illegally using the patented method of distributing products over the Internet encompassed by the ’682 Patent.
The "doctrine of equivalents" allows patent trolls to indulge in more speculation when speculatively invoicing. In this case, Batarga can't really claim these non-music-selling entities are infringing on its "internet music distribution" patent, but it can claim that things they do are somewhat similar to a single claim within the entirety of a music sales-related patent.

And it's not as though the original patents weren't of questionable validity to begin with. By the time Fritsch had applied for his patents, online music sales already existed and there were plenty of previous patents that covered the same ground his did. At least Fritsch used his to start an online music distribution platform. These two companies have done nothing more than secure mailboxes and empty offices in the dusty East Texas towns, and their sole interaction with the parties affected are filings delivered by local lawyers.

And as long as we're checking villains for hearts of pyrite, at least Sharing Sound's abuse of the lousy, unoriginal patents was limited to the "music" aspects integral to the bulk of the claims. Batarga is stripping down the entire patent to a single paragraph -- one that would seemingly make anyone selling anything over the internet a target for infringement allegations.

Filed Under: downloadable music, gift cards, music streaming, patent troll, prior art
Companies: batarga, sharing sound


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  • icon
    That One Guy (profile), 26 Aug 2015 @ 3:58pm

    Oh patent office, when will you ever NOT screw up?

    12. A method for distributing products over the Internet, comprising:

    displaying a login screen on a video monitor that allows a user to enter an unique identifier for accessing database information;

    confirming the validity of the entered unique identifier; and

    displaying a shopping list that lists items for purchase as selected by said user, the listed items being in digital format suitable for downloading to a user's computer connected to the Internet and being in other media format suitable for shipping to said user.


    Online shopping.

    This claim is describing online shopping, the ability to purchase something online and either download it directly or have it shipped to you. But of course since it involves a computer, the idiots in the patent office thought it was 'innovative' enough to warrant a patent. And of course given how insanely broken the system is(especially in patent troll heaven, East Texas), it really does't matter how stupid a patent is, it will still be used as a tool for extortion against companies who can't or won't fight back.

    Ah what great innovation and progress the US patent system drives... /s

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

    • icon
      nasch (profile), 27 Aug 2015 @ 6:53am

      Re: Oh patent office, when will you ever NOT screw up?

      This claim is describing online shopping, the ability to purchase something online and either download it directly or have it shipped to you.

      Notice the claim says the goods are in digital format suitable for downloading and other format suitable for shipping. That doesn't describe any physical goods (you can't download socks, lawn chairs, or Tylenol), so it's considerably narrower than "online shopping".

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

      • icon
        That One Guy (profile), 27 Aug 2015 @ 4:26pm

        Re: Re: Oh patent office, when will you ever NOT screw up?

        I read it as two claims, one for items the customer can download, one for items that need to be shipped. Even if it was just talking about items that can be both downloaded and shipped(CD's/movies), it still talking about online shipping, albeit a narrow part of it.

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

    • identicon
      Anonymous Coward, 27 Aug 2015 @ 9:23am

      Re: Oh patent office, when will you ever NOT screw up?

      They can't stop screwing up until the definition of a patent is reset to it's very literal: a physical object, even if the object is a component that is useless by itself but usable as part of an assembly. When the definition of a patent starting including non-physical objects is when the whole system started going to hell.

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

  • identicon
    Anonymous Coward, 26 Aug 2015 @ 4:05pm

    An app for that.

    There's a troll for that.

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

  • icon
    JoeCool (profile), 26 Aug 2015 @ 4:21pm

    WTF?

    How can you infringe a patent if you're only doing ONE CLAIM from the patent while the rest don't pertain to your product at all?!?! This sort of shit should be illegal.

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

    • icon
      nasch (profile), 27 Aug 2015 @ 6:56am

      Re: WTF?

      How can you infringe a patent if you're only doing ONE CLAIM from the patent while the rest don't pertain to your product at all?!?!

      That's what I was going to ask. Doesn't an action have to violate every claim of a patent for it to be patent infringement? So shouldn't these lawsuits get tossed instantly?

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

  • identicon
    Nigel, 26 Aug 2015 @ 4:47pm

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

  • identicon
    dr evil, 26 Aug 2015 @ 6:03pm

    time for two class action lawsuits

    first to start going after all patents that are 'on the internet' and invalidate the patents. Very slowly respond to the patent lawsuit and start accumulating the massive pile of prior art to dump onto the court.

    second: sue to enforce RICO statutes on the East Texas courts...mainly racketeering activity as set out at 18 U.S.C. ยง 1961. mainly extortion

    extreme? maybe, just maybe, the absurdity of the second will get attention from somewhere.

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

  • icon
    Sheogorath (profile), 26 Aug 2015 @ 7:12pm

    Sharing Sound was 'located' in a vacant building in Longview, Texas, from where it could avail itself of the friendly East Texas court system.
    FTFY, Tim. ;)

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

  • identicon
    Anonymous Coward, 26 Aug 2015 @ 8:00pm

    Stagnation is the best policy. At the current rate the patent & copyright system are free falling at, we'll all be living in drab grey world free from the tyranny of innovation.

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

  • identicon
    Anonymous Coward, 26 Aug 2015 @ 8:38pm

    Can't we just tar and feather these patent troll lawyers? And maybe the judges in east Texas? And run them out of Texas on a railroad? Or at least figuratively do this over the internet? Or is that patented, too?

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

    • identicon
      Anonymous Coward, 27 Aug 2015 @ 8:47am

      Re:

      I'm sorry, but all tar-and-feather people go to East Texas. It is the Last Stop, the Omega Point, the Oculus of Unreason. It is the place where the damned go for jury duty.

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

  • identicon
    Anonymous Coward, 27 Aug 2015 @ 1:09am

    The way patents should be given out is this:

    First person to monetize something gets the patent. Companies should decide what is right, not the courts.


    Am I on board here with y'all Techdirt folk? Getting "your drift"?

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

    • identicon
      Anonymous Coward, 27 Aug 2015 @ 5:10am

      Re:

      They should probably be non transferrable too!

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

    • identicon
      Anonymous Coward, 27 Aug 2015 @ 10:30am

      Re:

      Terrible IDEA! Patent should go to the first to file!

      But these rules should apply too.
      #1. A working prototype described by the Patent proving its validity along with becoming the legally defining example of said patent.
      #2. A functional business model able to successfully monetizes said patent.
      #3. Patents may not be owned by a business owner with more than 1 employee. In the case of a business with 5 persons or less all person employed at the time shall be co-holders of patent with all royalties being equally divided.
      #4. Patents can only be transferred (not sold or purchased) with a 10% royalty that will always be provided to the original patent holders.
      #5. All monetization shall be calculated in such a way as that if a business waits two years to monetize said patent, those additionaly two years shall be added unto the royalties pay time after the legal expiration of said patent.
      #6. Any business monetizing a patent in the public domain that has not been previously monetized shall be required to provide the original holder a 10% royalty for two years beginning at the time when the first product is made available to the market. Any delays or shortages in product will additionally increase the royalty period matching the length of any production delays/shortages.
      #7. If a patent holder is deceased within the expiration of a valid Royalty Period, then all royalties shall be either provided to heirs or estates or escrow until such time a suitable heir can be discovered. Under no circumstance shall any organization or its executives paying royalties be able to acquire royalties and neither shall organization be able to influence in any way the distribution of said royalties.

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

      • icon
        John Fenderson (profile), 28 Aug 2015 @ 8:12am

        Re: Re:

        "Patent should go to the first to file!"

        This is a terrible idea. Patent should go to earliest inventor.

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

        • icon
          JoeCool (profile), 29 Aug 2015 @ 11:55pm

          Re: Re: Re:

          I've never liked first to file, mainly because it makes patents into a race, and you get half-done ideas. It wouldn't be a problem if the USPTO actually did their job, but they don't. Stats prove they're little more than a rubber stamp, and that means first to file makes patents even worse than usual in an effort to "scoop" the competition. It's like a bad thread where a dozen people race to post "FIRST!".

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

  • icon
    Wyrm (profile), 27 Aug 2015 @ 10:05am

    Patent abuse

    Once again, signs that the patent system is broken.
    Nice example for a case study, too. It really stacks many common flaws in a patent lawsuit...
    - Abusive type: software patent.
    - Abusive concept: "do x over Internet", where "x" is something as old as civilization.
    - Abusive location: East Texas.
    - Abusive exploitation: no actual use of patent aside from suing others.
    - Abusive use: cherry-picking lines in the patent and interpreting them very broadly.

    And yet, this is not just laughed out of court.
    Moreover, you will find so many companies still advocating that the patent system is just fine, sometimes even as they are the target of such lawsuits.

    A sign that "evolution" doesn't rhyme with "improvement".

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


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