

My Encounter With a Patent Troll - spiredigital
http://www.ecommercefuel.com/patent-troll/

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spiredigital
It's a sad state of events when any small merchant using popular shopping cart
software can be harassed and bullied by trolls. I ended up writing my two
Senators and House Representative (yep, single Representative. That's Montana
for you!) in the hope we'll see real patent reform in the future.

For a more "news like" account of the case, with background and comment from
the troll's attorney, see below:

<http://www.ecommercefuel.com/ecommerce-patent-dispute/>

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naner
So when is someone going to start a company offering small startups patent
troll insurance? Obviously, Congress isn't going to fix anything. Other
solutions need to be explored.

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alainbryden
I'm guessing no insurance company wants to get the middle of monitoring
everything a software company does to make sure it isn't deliberately trying
to get away with infringing on a bunch of patents to cut corners because they
know their butt is covered by their insurance. Essentially, it would be too
easy for dishonest people to take advantage of it, and too difficult for
insurance companies to gather relevant metrics and set a reasonable price.

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cedsav
I think you were lucky that the patent was actually fought in court and close
to a resolution. It's not always the case, so ignoring the troll may not be
the best advice. Especially if the troll's lawyers are paid on a contingency
basis. They have all the incentives to sue. It doesn't cost them anything, and
any ruling in their favor reinforce their case.

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spiredigital
I agree. I was very lucky the case was so close to a resolution and that my
research (and that of my wife, who has experience in the legal field) led us
to believe their case was weak.

Also, as I stated in the post, I do not broadly advise ignoring legal claims:

"...if you are contacted about a patent violation, I highly recommend hiring a
lawyer to look things over. The last thing you want is to ignore a legitimate
infringement claim or legal issue".

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sparknlaunch12
Eeek, good article. This is something government needs to step in and help
with. However curious of the patent troll letters to ignore and not ignore?

For example, if you don't pay your mortgage and ignore letters from the bank,
you eventually lose your home. So you would legally need to respond to some
solicitation, no matter how trivial.

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spiredigital
It depends on the action. If we had been immediately sued then, yes, we would
have had to respond. But often patent trolls will contact you first
threatening to sue in an attempt to get a settlement. This isn't a legal
motion filed in the courts, so you aren't required by law to respond.

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chaostheory
"That’s why it’s crucial to be legally protected with some kind of corporate
structure. For most small businesses, this means creating a limited liability
company."

Not all incorporations are made equal. For LLCs, I feel it depends on the
state of incorporation as well as the number of members. I could be wrong, but
an LLC that is either incorporated in states like CA or only has one member,
can have its corporate veil easily pierced.

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spiredigital
I'm not an expert on laws governing LLCs in different states, and I'm sure
that there are loopholes / exceptions for certain circumstances. But being
setup as an LLC vs. a sole proprietorship offers you significantly more
protection. If you're targeted in a lawsuit operating as a sole proprietor, I
believe all your personal assets are at risk. Operating under a LLC makes it
significantly harder to come after your personal assets, especially if you're
good about keeping business & personal assets in separate accounts.

Another thing I've heard recommended / try to do is to always sign as a member
of a LLC (include your company position next to your signature) so it's clear
you're signing on behalf of the LLC and not personally.

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chaostheory
"But being setup as an LLC vs. a sole proprietorship offers you significantly
more protection."

IANAL: I feel this depends on whether or not the LLC has two or more members.
When an LLC has one member who is active, it's not much better than a sole
proprietorship. Having great legal protection is a myth about single member
LLCs that needs to be broken. It's relatively easy to pierce an LLC's
corporate veil. Then again someone may prove me wrong. You need to talk to a
lawyer.

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johnsto19
What is the best way to contact my elected government representatives to
support a change in this area? I am not familiar enough with the laws in this
area and don't really have the background knowledge to speak intelligently
enough about it to be convincing. I'd really like to do my part on this but am
not sure how to be effective.

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protomyth
Just get a pitch you can say about how these patents are making you fearful
and how you cannot possibly take such risks as starting your own business (if
you haven't) and hiring (more?) people. Keep it short, be confident, practice
in mirror. Check various organizations for talking points.

Find a decent suit, get a hair cut, and make yourself look like the
stereotypical successful business man / woman. Find out when your
representative will be in town (most have multiple offices in their district),
and go to a public meeting they are holding. Be pleasant, nice, and state your
point. Followup with a letter and get others to write letters on the same
subject. If you know one of the big campaign donors then get them to state the
same thing.

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leadola
Wow! That's scary, and I'm super impressed by your wife's approach. I have
been the subject of 2 nuisance lawsuits. I won both. But I don't think I'd
have your guts.

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spiredigital
It was / is scary! Luckily, I had a wife familiar with the court system. Plus,
she's a rock star to boot. ;-)

Were the two lawsuits you faced patent related? Or something else?

