
Angry entrepreneur replies to patent troll with racketeering lawsuit - Suraj-Sun
http://arstechnica.com/tech-policy/2013/09/angry-entrepreneur-replies-to-patent-troll-with-racketeering-lawsuit/
======
nlh
This points to an interesting strategy folks could take when taking on Patent
Trolls ... cutting through the corporate veil of the holding companies and
personally identifying the people who are behind the trolls....the inventors,
the patent owners, the lawyers, etc.

Not to cross the line by slandering them, but just shining a light on them --
shaming them, basically.

I'm sure plenty don't and won't care, but I wonder whether it might make a
dent. Maybe that inventor who figured "sure, why not - free money from my
patent" might have a different feeling if the whole world knows what they're
up to and doing so damages their reputation.

~~~
paulsutter
There's no need to pierce the corporate veil - RICO charges are against the
individuals involved, not the corporation. Their personal assets can be seized
even prior to prosecution. It's a brutal law and this is a wonderful way to
apply it.

From
[http://en.m.wikipedia.org/wiki/Racketeer_Influenced_and_Corr...](http://en.m.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act)

"The RICO Act focuses specifically on racketeering, and it allows the leaders
of a syndicate to be tried for the crimes which they ordered others to do or
assisted them, closing a perceived loophole that allowed someone who told a
man to, for example, murder, to be exempt from the trial because he did not
actually commit the crime personally."

For example in the case that a corporation commits the covered crimes, such as
extortion, the individuals driving the actions are subject to RICO
prosecution.

The penalties are brutal, it's fantastic for trolls:

[http://www.law.cornell.edu/uscode/text/18/1963](http://www.law.cornell.edu/uscode/text/18/1963)

~~~
huhtenberg
> The penalties are brutal

And, regretfully, it's likely the reason why RICO won't be applied against
patent trolls.

------
adamtj
I find it hard to reconcile the idea that courts provide justice with the
extremely high cost to the interested parties.

I see nothing inherently wrong with being a patent "troll". The idea behind
patents is to provide financial incentives to innovation. A little guy with a
legitimate patent may have difficulty convincing large corporations to pay a
license fee. One way for such a person to reap that benefit is to sell the
patent to a holding company that does the work of monetizing the patent. Or to
seek settlements and avoid long legal battles that he or she may not have the
resources to endure. Patent "trolls" are just the market at work, and that is
normally a good thing.

The problem is, the high cost of litigation makes it a very easy system to
abuse. That high cost imbues patents with a substantial value regardless of
their merit. It's very easy to disagree about whether a patent applies in a
particular situation, or is even valid generally, but very costly to resolve
such disagreements.

Unfortunately, you can't just shift the cost burden to the trolls, because
then you also have to stick the little guy with the cost of sueing a giant
multinational corporation for any wrongdoing. It's hard enough as is. It may
seem easy to tell the difference between those situations, but it's difficult
to encode those ideas in laws that apply universally. Other solutions tend to
have similar problems. This RICO thing could potentially affect future class
action suits against Big Evil.

My point, I guess, is this: the real problem isn't the "trolls" but the high
cost of justice. Short of eliminating patents, to attack the problem from any
direction other than the cost of justice tends to turn it into the same sort
of thing as pornographers and free speech. You can't easily attack patent
trolls or pornographers without damaging other users of the courts or of free
speech.

~~~
AndrewKemendo
> A little guy with a legitimate patent may have difficulty convincing large
> corporations to pay a license fee.

I think the key distinction is that "legitimate patent" would seem to have a
different definition for the USPTO than it does for the technology industry.

For example USPTO considers sending a scan to an e-mail a legitimate patent,
while I would venture to guess the tech world does not:
[http://arstechnica.com/tech-policy/2013/04/meet-the-nice-
guy...](http://arstechnica.com/tech-policy/2013/04/meet-the-nice-guy-lawyers-
who-want-1000-per-worker-for-using-scanners/)

So yes, some of these are so broad and obviously just there to make a buck -
like the swipe option.

The idea of a patent was to ensure that the creator who had spent considerable
time, energy and money creating the invention was ensured that for some period
he could benefit from that. Being the first person to patent something which
is simple and often thought up does not in my opinion meet that threshold.

~~~
reginaldjcooper
There needs to be a cheaper way to challenge patents and force the USPTO to do
a thorough job of it. If the obvious option is always, "nope, challenge", and
the usual outcome is, "hm on second thought it doesn't take a rocket scientist
to come up with scan-to-email"; patent trolls would find some copyrights to
troll or move into a related field like blackmail.

------
jlgreco
_" That set in motion a bizarre series of events. Lumen View's lawyer accused
O'Connor of committing a "hate crime" by calling the inventor, Eileen Shapiro
of Hillcrest Group. ("I didn't know patent trolls were a protected class,"
quips O'Connor.) Then the lawyer threatened criminal charges (again, for
calling an inventor). From there, it got personal."_

I'm getting flashbacks to that "The Oatmeal" incident and, in a less extreme
way, Jack Thompson. These people sound positively mental. Is there a term for
when lawyers meltdown like this?

~~~
tripzilch
> These people sound positively mental. Is there a term for when lawyers
> meltdown like this?

If not ... are they drafting for the DSM-6 already? :)

~~~
mehmehshoe
The first lawyer I witnessed publicly losing it was Charles Carreon during the
Oatmeal lawsuit. The term could be "oatmealing" =)

~~~
noonespecial
Feeling their oats. Ha!

[http://en.wiktionary.org/wiki/feel_one's_oats](http://en.wiktionary.org/wiki/feel_one's_oats)

------
nashequilibrium
Is there a database of patent trolls, like a wikipedia where everyone
documents their experiences or lists these people? Searching for Mrs Shapiro
shows that she is a VC in Boston, should the people behind the shell companies
be unearthed and put in a database?

EDIT: This was found on reddit from 2yrs ago, "So, Shapiro and Mintz (whom I'm
still trying to track down) have some other patents with associated LLCs, all
colocated with Hillcrest: System and method for authenticating and registering
personal background data, assigned to VeriVita; and System and method for
facilitating bilateral and multilateral decision-making, assigned to
DecisionSorter LLC. There are also some patent applications, which haven't
been granted and therefore don't have assignees yet. See this google search.
With another partner, Shapiro also has Apparatus and method for authenticated
multi-user personal information database assigned to Gold Standard
Technologies, again colocated with Hillcrest. Given that she's an MBA, and
seems to collect patents and LLCs, I'm thinking "IP entrepreneur"/patent
troll."

[http://www.reddit.com/r/AskReddit/comments/fog7u/hey_reddit_...](http://www.reddit.com/r/AskReddit/comments/fog7u/hey_reddit_hows_the_lawsuit_going/)

~~~
rxl
It would be awesome if someone set up a db like the one you're describing,
where users could identify trolls anonymously and submit other information
about them, including links to parent companies.

~~~
karmajunkie
I don't think it should be anonymous. Patent claims should be required to be
public and searchable, prior to legal filings.

~~~
Kliment
Anonymous for the submitter of the information, not the assholes exposed by
it.

~~~
karmajunkie
Well yeah, i get that, but they shouldn't have to be anonymous about the fact
they're getting trolled. this should be all out in the open.

------
koconnor
Appreciate all the support. I'm on my way to Washington DC to meet with some
members of Congress in hopes of influencing some legislation to minimize the
huge negative effects these trolls have on our industry. I'm also on a panel
tomorrow night with the chief lobbyist for "intellectual" ventures. Should be
fun.

The bad news is these huge, institutional patent troll companies will be
influencing legislation via "contributions" which is hard to overcome. There's
_billions_ at stake here.

------
jlarocco
The last few ArsTechnica articles posted to HN have had really terrible
writing.

This one doesn't even introduce the patent troll (Lumen View), but just
mentions their name with no introduction, as if everybody will know who they
are and that they're the patent troll.

Ars used to be really good, it's unfortunate their writing quality is getting
so bad.

~~~
eksith
I don't know if the article was edited after you made this post, but Lumen
View was introduced further down the article.

    
    
      Lumen View is owned, at least in part, by Eileen Shapiro, a Boston 
      executive who works at a company called the Hillcrest Group. She 
      has a co-inventor named Steven Mintz, who FindTheView also believes 
      is involved with the operation.

------
reader5000
If going for RICO, why not ethics type complaints with the attorney's bar? I
have no idea what type of success one might expect, but clearly baseless
threats of criminal charges and what have you is out of line. I would also
think "escalator clauses" for filing a response in court is also illegal or at
least unethical, and could potentially get the lawyer(s) suspended or
reprimanded. Probably the fastest way to kill a patent troll is to take out
their legal!

~~~
larrys
I would say the same thing but remember we are talking about attorneys here
and they are good at getting a leg to stand on when their ass is on the line.

Not to mention the fact that one strategy is simply to flood the deciding
party with so much information at once that the main points get lost and
diluted with other issues that don't matter.

One of the reasons criminal trials take so long. If you were a defense
attorney and had a jury wouldn't you try to string out the trial as long as
possible to numb the jury so that the main points against your client were
buried with a bunch of less relevant data?

(Similar to a kid getting into a dispute with a sibling where the parent gets
so frustrated they don't even want to decide the issue they just punished both
parties?)

------
thinkcomp
Eileen Shapiro's shell companies:

[http://www.plainsite.org/tags/index.html?id=704](http://www.plainsite.org/tags/index.html?id=704)

It's not clear to me where the case mentioned here was actually filed. I can't
find it on PACER. Anyone?

~~~
hillaryfoss
The RICO case was filed before the US District Court of the Southern District
of NY.

~~~
thinkcomp
I wonder why it isn't showing up? Do you know the case number?

------
coopdog
I thought it was interesting that they named companies who'd settled.

It would be interesting to make a site isettled.com where people could leak
that a company had settled to trolls. The idea being that you'd have to weigh
the cost of fighting the troll against the risk of bringing a flood of
secondary trolls. If the secrecy was removed it would start to make business
sense to fight

------
pdfcollect
Double Click, Which was known to being a privacy nightmare in its time -- if i
remember right; - Glad to see $1m of that money is going in fighting a patent
troll.

~~~
karmajunkie
Everything doubleclick was doing is still happening. We've just gotten more
comfortable with the idea—or people have forgotten its going on.

~~~
yuhong
On this matter, this needs to be traced:

[http://slashdot.org/comments.pl?sid=3891677&cid=44076497](http://slashdot.org/comments.pl?sid=3891677&cid=44076497)

An important information from the "confidential" studies here for example
would be what kind of monitors were tested.

------
pron
O'Connor's own words:

[http://pandodaily.com/2013/07/26/how-to-slaughter-a-
patent-t...](http://pandodaily.com/2013/07/26/how-to-slaughter-a-patent-troll-
in-5-steps/)

------
mathattack
It's a shame that it comes to this - someone fighting with their personal
wealth. The patent trolls are very well funded.

~~~
reader5000
It's not that they are well funded, it's just that most people without a pile
of cash are very risk averse, and doing what the big mean patent troll says
is, to many people, the least risky option.

~~~
mathattack
In general the trolls make a lot of money. 20-50k multiplied by a lot of
victims. I recall a news article describing their multi million dollar
lifestyles.

------
jonaldomo
More power to these guys. I hope they get some legislation going to protect
entrepreneurs soon.

~~~
taproot
There wasn't really any other outcome its why trolling works in the first
place. While govts are starting to take note (its affecting non geek
industries now...) They're a while off fixing it.

And also on the topic, piss enough people off eventually you'll find one of us
willing to throw business "logic" out the window n fight back.

------
louischatriot
The article says it makes 100% sense from a business perspective to settle.
That's not true, at least not in a collective way, where we should fight to
make these scumbags disappear. It's a situation where the personal and the
collective are at odd.

------
shortcj
Lawyers are a "racket." They show up when you have just enough money.

------
taproot
I knew almost nothing about this guy before reading this but I must say, karma
be damned, this guy is legend... wait for it... dary!

------
PatentTroll
I don't know what this guy is getting so upset about, he claims his company
isn't infringing the patent, so all that he'll have to do is file a DJ for
non-infringement. If he's not infringing, he'll win. Then if the 'troll'
really didn't do any pre-filing research there are sanctions the judge can use
to get the company all their attorney's fees back. This is pretty simple
stuff, assuming the patent isn't even close to being infringed like the guy
says. Nothing to get all upset about. The system seems to be working just
fine. If the patent really is infringed and is valid, why shouldn't he have to
pay a license? Also, pledging $1mm to defend a patent infringement suit is
kind of funny, I think the average is more like ~$6mm.

~~~
pantaril
>I don't know what this guy is getting so upset about, he claims his company
isn't infringing the patent, so all that he'll have to do is file a DJ for
non-infringement. If he's not infringing, he'll win

I gues this is how it should work in any modern country with working juridical
system. Unfortunately it seems to me (note that i'm not from USA) that in
U.S., justice is available only to the rich and/or powerfull.

From the article: "Perhaps not coincidentally, $50,000 is just about what it
costs to hire a lawyer and file the initial set of paperwork to defend a
patent case"

~~~
PatentTroll
You say that the legal system only works for the rich and powerful, but don't
back it up. It's just a blind accusation, bare cynicism.

Money and power can't change facts, and if the infringement accusation is as
thin as the article says it is, there is no way a court could find
infringement. and as far as the money, that's what rule 11 sanctions are for.

I just don't see anything interesting here, assuming its all as egregious as
the article says. now, if its a closer case, then why get all upset? you are
infringing someone patent! part them!

~~~
pantaril
>You say that the legal system only works for the rich and powerful, but don't
back it up.

I cited from the article that $50000 is required to hire lawyer and fill the
required paperwork to defend the case. As i said i'm not from U.S. so i don't
know if it is actualy true.

I could probably give you another example... if i'm not mistaken there is very
high rate of cases in U.S. which end with some kind of settlement without ever
getting to the trial. Often fears of financial expenses play a big role in
those settlements which seems hardly fair to me.

