Patent Trolls Harass Print Service Providers12 Jan, 2016
James Hanlon, Analyst, InfoTrends (Div. Buyers Lab) cites in his recent blog: Starting in the fall of 2015, Dr. Harvey R. Levenson, Cal Poly Professor Emeritus, presented multiple conference sessions or webinars dedicated to the issue of patent lawsuits targeted at print service providers. These patent licensing operations, colloquially known as “patent trolls” or NPEs (non-practicing entities), are individuals or business entities that persistently purchase or file for patents, with the sole purpose of charging licensing and royalty fees. This blog builds on some of the key concepts in one of Dr. Levenson’s webinars and also summarizes some recent developments related to patent trolls.
Patent trolls are an increasing international issue, and continue to be active in almost every industry. According to UnifiedPatents in their Q3 Patent Dispute Report, over 67% of all patent litigation in the United States are filed by NPEs seeking monetary gain.
In 2013 the non-practicing entity Digitech filed a patent suit against EFI and 34 others claiming infringement related to their patent on digital image processing technology. EFI chose not to settle with Digitech and took the case to court. On August 6, 2013 the court ruled in favor of EFI, and concluded that the, “…asserted claims are intangible, possess no meaningful non-abstract limitations, and are therefore ineligible for patent protection.” EFI’s General Counsel Bryan Ko, though pleased with the outcome, was quoted at the time as saying that the case, “…is yet another illustration of how patent trolls are clogging the judicial system and wasting public resources. Until the system changes, however, EFI won’t be bullied into settling these abusive lawsuits.” According to Levenson the two most common areas of patenting are pharmaceuticals and software. Due to the proliferation of digital communication technologies, software has become a prime target for trolls. Methods used by patent trolls are almost identical across many industries. These individuals or entities are called non-practicing entities because they will often purchase or file for a patent for technologies that they have nothing to do with. Their primary focus is suing other companies and organizations. When a suspected target is acquired, the troll files a lawsuit, suing the company for patent infringement with the hope of scaring the target into paying a settlement fee. The alleged violators may give in to these troll plaintiffs because it often costs less to give in than to enter into lengthy lawsuits.
When a patent troll sends a claim for patent infringement to a smaller organization, company survival can be at stake because of the financial impact. These trolls can ask upwards of one hundred thousand dollars for the company to just use the technology that the patent addresses. This is a huge issue for any company, but it is particularly onerous for small companies as they generally do not have the funds for a legal battle, and have few options but to pay the settlement.
In the graphics and print industry, patent trolls are proving to be a daunting problem. A print service provider may not have even heard about patent trolls until they are hit with a patent infringement suit on a technology that they use every day, including printing technologies, software, and solutions that they themselves have purchased from reputable companies. They would hardly expect to be sued for using one of these products and asked for thousands of dollars in settlement fees. They may choose to pay a settlement or licensing fee because paying a lawyer and entering into litigation would be too costly. At the same time, says Dr. Levenson, patents owned by trolls can be invalidated by the Courts as much as up to 85 percent of the time through the discovery and presentation of Prior Art demonstrating that what these patents teach was already known prior to the patent’s application date.
It may seem hopeless for companies harassed by patent trolls, but there are an increasing number of ways trolls can be fought. According to Dr. Levenson, the main way to combat these trolls is through invalidity hearings. This is the process of developing counter lawsuits that go after the patents that the trolls have, and attempting to invalidate them with Prior Art. The concept of Prior Art is simple, it is any public information that shows the patented invention was not original. When a patent is initially filed, patent examiners are expected to take all Prior Art into account when examining a patent, however, they are not always knowledgeable with all the intricacies of a technology and are under time constraints so they may approve a patent without completely checking for all prior art.
The most common types of Prior Art are: other patents, industry publications, conference proceedings, and advertising. In order to invalidate a lawsuit by a patent troll, United States courts usually call for five or six items of prior art. However, many more may be presented. These pieces must relate to the patent in question, be published prior the patents approval, and when put in front of a person of ordinary skill in the art they should be able to see the correlations and prior infringement, thus invalidating what the patent trolls patent teaches. Obtaining enough pieces of Prior Art is the biggest issue of this method. Thankfully, institutions such as California Polytechnic State University in San Luis Obispo, are working hard to make the search easier for all in the industry.
At Cal Poly, members of the Graphic Communication Institute have been creating a searchable and physical database of prior art. Named the Raymond J. Prince Graphic Arts Collection, it is comprised of multiple specialized graphic arts collections all donated to the university, with the goal to preserve the history and knowledge of the printing and imaging industry. The collection, comprising over 30,000 documents spanning over 200 years, is available to anyone in the industry, not just students and professors, and it is constantly growing.
In a currently developing story, an increasing number of lawsuits are being filed by a Delaware based NPE, High Quality Printing Inventions LLC., regarding a patent they recently acquired that supposedly teaches Web-to-Print functionality. Adam Dewitz from WhatTheyThink has uncovered a list of over 30 patent infringement cases filed by High Quality Printing Inventions LLC against many top Web-to-Print providers such as, Office Depot, Shutterfly, Staples, and Zazzle. This is a very common strategy among patent trolls, filing suits against as many companies as possible that could be “infringing” on their patent in hopes that one will bite. The current list of lawsuits covers a wide range of companies from small to large, and if this story follows the path of other patent trolls, licensing and royalty fees might be paid until one of the defendants decides to bring High Quality Printing Inventions LLC to court.
Patent trolls will continue to prey on businesses of all sizes, and there will continue to be lawsuits filed and settlements paid every day. This is a growing issue in countless industries, and it is something that effects both the big and small. As the number of patent litigation cases continues to rise in the US, increased media attention and the need for further developed legislation is going to become ever important.
For information from or by Mr. Hanlon or InfoTrends visit http://www.infotrends.com