Fark's Drew Curtis Explains How To Beat A Patent Troll (And Live To Tell The Tale)

from the don't-negotiate-with-terrorists dept

A few years ago, we wrote about a patent troll known as Gooseberry Natural Resources LLC who claimed to hold a patent (US Patent 6,370,535) which it believed broadly covered putting press releases online. It then sued a ton of companies, including Fark, Reddit, Slashdot, Digg, TechCrunch and others. While most of the companies played into Gooseberry’s hands and “settled” along with the standard non-disclosure agreement (NDA), we pointed out that Drew Curtis at Fark stood his ground, and got Gooseberry to settle for nothing and (even better) to agree to no NDA — meaning he’d be free to talk about it. This is important, because trolls rely on claims that they “settled” with others to insist that other companies recognize the validity of their patent. This isn’t true. Many (perhaps most) companies settle because even if you were to win, it’s usually cheaper to settle than to go through with the lawsuit.

Of course, unburdened by an NDA, Drew is making sure lots of people know what happened, and he recently did a TED talk in which he explains how he won, including some key suggestions for others in his shoes:

The key lesson: don’t negotiate with terrorists. As he points out, patent trolls have cost the US economy significantly more than terrorist attacks. He has three other points:

• Don’t fight the patent, fight the infringement. Basically: overturning a bogus patent is crazy expensive and takes forever. It’s generally much easier to show you didn’t infringe — yes, even if the patent is ridiculous. This is a problem with patent law today, but it’s not one that anyone seems interested in fixing.
• Make it clear from the beginning that you have no money, or you’d much rather spend it on your own lawyers fighting this than giving it to the troll: the law firms that represent trolls almost always work on a contingency basis, meaning they only get paid if money comes through from the people they’re suing. If that seems unlikely, the lawyers are much less interested in fighting, and are happier to “settle” often for little or no money.
• Let them know you’ll make the process as annoying and as painful as possible: Basically flip the patent troll strategy back on the trolls themselves. Remember, the lawyers are on a contingency basis. Why bother with the annoying small company when they can be shaking down big companies who already have budgets set aside to settle such bogus lawsuits.

It’s good to see Drew continuing to speak out about this and spread the lessons of his experience.

Filed Under: drew curtis, nda, patent troll
Companies: fark, gooseberry natural resources

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.

Filed Under: drew curtis, fark, patents, press releases, reddit
Companies: aol, conde nast, digg, fark, gooseberry natural resources, reddit, slashdot, techcrunch