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IP, Patent

Major Law Firm Caught Patent Trolling

Got your attention?  During the 2006 oral argument in eBay v Mercexchange, Justice Kennedy famously asked about patent trolls:

Is the troll the scary thing under the bridge, or is it a fishing technique?

eBay’s lawyer claimed that it was the “scary thing under the bridge,” but if you were ever curious about what patent trolling as a fishing technique would look like, look no further than Patton Boggs.

In an upcoming print edition of Transport Topics, two Patton Boggs partners have an article introducing the trucking industry to a new boogeyman: PJC Logistics.

PJC Logistics LLC, a company based in Hewitt, Texas, recently launched an attack on the trucking industry by filing nine lawsuits for patent infringement in federal courts around the country, naming 237 transportation companies as defendants and alleging infringement of U.S. Patent 5,223,844 — also known as the “844 Patent” — which is titled “Vehicle Tracking and Security System.” The allegation of infringement against each defendant was based on its use of “electronic position-based fleet management and tracking systems in its fleet of trucks, vans or other vehicles.”

via Opinion: Passing Through the Patent ‘Troll’ Booth

The authors are Kevin Bell and Richard Oparil, both partners with the international mega-firm.  Much of their article provides a patent litigation primer for the transportation industry, which may be necessary since most industry players are not as likely to be familiar with dealing with these accusations.  But these anglers (Bell and Oparil) do our entire profession a disservice by sowing the seeds of mistrust and suspicion between patent owner PJC and their potential new licensing partners.

The question asked more frequently by all the defendants is, “Who does something like this?” The answer is: a “patent troll” — a company that invents nothing itself, instead buying patents from others for the sole purpose of suing businesses to obtain money. And the warning is: Get used to it.

Referring to PJC as a “patent troll” is not only unprofessional and counter-productive, but in the context used by here, it’s intellectually dishonest.  Their other attempts to strike fear and anger are sadly all too common.

Laying the bait:

As one company executive asked during a recent series of presentations conducted by members of our firm, “You’re telling me that I can be sued for patent infringement for something I bought and paid for?”

The answer is yes, if the person you bought it from did not have a license to the patent being asserted against you.

Are you liable for patent infringement if you make, use, or sell a patented article? Sure. But if you’re accused of using commercial goods purchased in the ordinary course of business, you may have a warranty from the merchant under UCC 2-312.  Curious that partners of a firm “concentrating in global business and trade” since 1962 would neglect to mention this at all.  But the next paragraph sheds some light on why this might have been omitted.

Drawing the lure:

Patent trolls prefer quick money settlements and are almost always represented by attorneys working on a contingent fee basis. Defendants who settle early once run the risk of becoming an easy mark for the next troll. In fact, some defendants already have faced patent litigation filed by ArrivalStar SA — a company with a similar business model to PJC Logistics that our firm is litigating against actively.

In other words, PJC and their ilk are evil, greedy trolls.  They hire ambulance chasing lawyers to find quick settlements and identify new “marks.”  Instead of settling, hire us to fight these guys for all their worth.  Of course, in the end, the vast majority of these companies will settle because that’s what happens in litigation.

But I do wish the lawyers luck in their own version of patent trolling … by casting their line out to an industry unfamiliar with the basics of patent licensing, I’m sure they’ll be able to swoop up a couple of targets clients eager to jump at the bait. But not to worry, this fishing technique is the “catch and release” style.  After a quarter or two (if they’re lucky, a whole fiscal year), the clients will be tossed back into the water as the lawyers inevitably recommend the client takes the settlement offer so vigorously “negotiated” by the firm.

But remember, only the patent owners trolls, right?

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