Putting Press Releases Online? Patented! Lots Of Small Companies Sued

from the sickening dept

Tue, Jul 20th 2010 9:32am — Mike Masnick

Law.com has an article highlighting how incredibly devastating a bogus patent infringement lawsuit can be to small businesses. In this case, someone hiding behind a series of shell companies is using a ridiculously laughable patent that appears to cover the concept of putting press releases online (6,370,535) and suing a bunch of companies that do exactly that. The article highlights the head of one tiny company -- which, it should be noted, has been in business and doing the same thing since before the patent application was filed -- who is debating whether he should go without a salary or company profits for three years to fight this, or just pay up. It's really a sickening display of how patents are used to seriously harm small businesses.

We've had commenters here say in the past that situations like this are "no problem," because the accused can just show the prior art and move on. Not at all. They have to actually go through with a trial, which by itself, can cost in the hundreds of thousands of dollars range (without even counting the time wasted on it). The guy profiled in the article was shocked by this -- figuring he could just file some paperwork to show that this patent is clearly invalid:

Putting aside the validity of the patent, Kennedy notes that the application wasn't even filed until 1999 -- a year after he started his business.

"I said, okay, I precede this," he said. "I thought, I'll just have to file that paperwork, whatever that is. And then I found out there's no paperwork. It's called a trial."

Even more frustrating? The guy has no clue who he's even fighting against. As has become all too common, the company suing is really a shell company, and there's no info about who's actually behind it:

It's additionally frustrating to Kennedy that he can't know who is actually accusing him of patent infringement. Gooseberry Natural Resources, LLC has taken extraordinary steps to hide the identity of its owner. Corporate records held by the Texas Secretary of State show that a second Delaware-based shell company, Vertigo Holding LLC, owns Gooseberry. Since Vertigo Holding is incorporated in Delaware, it is not required to list its officers or owners. Vertigo's address is the same Newark, Delaware address as A.I. Business Services, a company that sets up "virtual offices" to help clients "portray the image of a large corporation." It boasts that its staff "are all trained in sales and customer serice and daily play or act as if they are in Delaware, Florida, or Texas -- regardless of where our offices truly are."

The guy is trying to fight back by setting up website and getting other online press release services to team up, but it's not always so easy, as many of these companies are small shops who are more focused on actually serving their customers (you know, important stuff like that), rather than fighting off ridiculous patent threats for such an obvious idea.

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Filed Under: patents, press releases
Companies: gooseberry, vertigo holding

30 Comments

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jjmsan (profile), 20 Jul 2010 @ 9:51am

Overseas scammers
Perhaps the eastern european scammers are moving into "legal" theft. They use virtual corps to recruit their money mules.
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interval (profile), 20 Jul 2010 @ 9:58am

We in the US could overhaul OUR legal system (like that would ever happen), but would it make a difference considering our jurisdictions (wars & "police actions" aside) end at our borders?
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PaulT (profile), 20 Jul 2010 @ 9:59am

Re: Overseas scammers
Why does it have to be someone from overseas? You have plenty of homegrown scammers willing to do things like this.
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schlecky, 20 Jul 2010 @ 10:00am

Re: Overseas scammers
It's more like they don't need to steal bank accounts when they can use the "justice system" to extort money from people.
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NAMELESS ONE, 20 Jul 2010 @ 10:05am

WHY the cost
ill just represent myself and do all this leg work myself and THEN counter sue as well for criminal harassment , defamation of character, slander liable and anything else i can dream up as a revenge of the nerds fights back
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cc (profile), 20 Jul 2010 @ 10:06am

I loled at the title... but then I realised you were being serious.
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ChurchHatesTucker (profile), 20 Jul 2010 @ 10:20am

Ugh
This is what I'm talking about when I say "the courts aren't a solution, they're a cudgel."
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Small Town Romance, 20 Jul 2010 @ 10:27am

This is insane
Strangest concept I've heard. how come they even approve a patent like that??

Yair
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Patrick Goff, 20 Jul 2010 @ 10:28am

Re: Laws
Problem is that teh US legalk system does not stop at teh borders. Also they can claim harm in say Nevada is you only have one readers there - then sue under US law and you have to defend or settle. US law is the problem not East European crooks
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Jack Repenning (profile), 20 Jul 2010 @ 10:29am

It could, at the least, keep you out of court in the US. Of course, if they want to file against you additionally in some other jurisdiction, you might have to forgo that vacation to Estonia you've always wanted.
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Jack Repenning (profile), 20 Jul 2010 @ 10:30am

Re: WHY the cost
Only if you can find someone to sue. And cover the costs up front, until (and if) you win your judgement.
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Michael Long (profile), 20 Jul 2010 @ 10:43am

New rule
New rule for the USPTO: Any patent application with [existing process] "online", or [something we do everyday] "on a computer" shall be immediately denied.
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Anonymous Coward, 20 Jul 2010 @ 10:46am

Re: New rule
No kidding. If they don't pass that rule, I'm patenting "Expressing and conveying ideas in text form......on a computer!"
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Anonymous Coward, 20 Jul 2010 @ 10:47am

Re: Re: Overseas scammers
Foreigners are evil. Haven't you heard?
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Anonymous Coward, 20 Jul 2010 @ 10:47am

LLC's the best criminal shields the money can buy.

Statutory damages? Why they do exist?

If someone wants to sue others to protect something that thing should be really valuable and making him money otherwise is not worth it is it?

Injunctions, granted to shell/umbrella companies are just wrong.
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eclecticdave (profile), 20 Jul 2010 @ 11:01am

Re: New rule
Whenever a court overturns an obviously bogus patent, court costs should be paid by the USPTO.

That should put a stop to them just rubber-stamping this crap through.
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Richard Corsale, 20 Jul 2010 @ 11:05am

Re: New rule
I think they have (for the most part) addressed these types of patents going forward. However there are over 100k bogus patents mucking up the system. Patents like this were rubber stamped during the "idea economy". A time when every front page headline billowed with newly minted 19 year old kajillionaires with half of an idea (but on the INTERNET!).

Aaaaand now were left with the bloated corpse of the intellectual pigs.
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Anonymous Coward, 20 Jul 2010 @ 12:01pm

title misleading
The patent is not quite as broad as the article would have you believe. The patent is specifically about *generating* press releases over a network, where there are predetermined sections of the press release and parts of the content come from different computers over a network. That is not the same as writing (writing it, not generating it) a press release and putting it on a web site.

I'm not saying that this is a good patent or that I support it. Further while the patent has limitations that does not prevent the owner from suing in cases where the patent does not apply - which is not good. My point really is that techdirt over-simplified what the patent is about which I find slightly disingenuous. The patent does not 'cover the concept of putting press releases online', it covers the process of automatically generating those press releases, not exactly the same thing.
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Anonymous Coward, 20 Jul 2010 @ 12:51pm

Creativity has absolutely been stifled by the draconian patent and copyright laws. The patent office doesn't even seem to look at the filings or even have a clue if it violates another patent currently in force. The system is antiquated and offers no real protection which is typical of all government run agencies. You pay money and all they do is give you a piece of paper saying you own an idea and if you have the know how you are then free to sue anyone and everyone that uses anything resembling your idea. It's time to return to the old west and settle matters like honest people.
Patents have become stupid because of all the other patents required to complete an idea. Case in point: Look up the patent for Second Life. They even had to include the patent for the screen that you would be viewing it on. Those screens are obsolete but yet we still have to acknowledge / pay them. It took 21 other patents to complete the Second Life patent which everyone agrees is innovative and has not been replicated in power or popularity. This is wasteful and a burden on the entire capitalistic system.
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Anonymous Coward, 20 Jul 2010 @ 1:11pm

Re: New rule
New rule for the USPTO: Any patent application with [existing process] "online", or [something we do everyday] "on a computer" shall be immediately denied.

There is already such a rule. To eligible for a patent something is supposed to be "new and non-obvious". Such rules, however, don't do much good when they're routinely ignored.
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Richard, 20 Jul 2010 @ 3:42pm

Re: title misleading
No, clearly in the claims starting at 22 they are describing the multiple components as being a client and server, as in your browser and the host server. Additionally they claim a database as being a separate host and thats every web hosting setup on the planet. They describe using a template in the first claims, granted... but thats widely misinterpreted and obvious in general.

http://www.google.com/patents?id=EOELAAAAEBAJ&pg=PA3&dq=6,370,535&source=gbs_selecte d_pages&cad=4#v=onepage&q&f=false
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Anonymous Coward, 20 Jul 2010 @ 5:06pm

Re: Re: title misleading
Look, its bad patent and I don't support. However, it is specific to the *generation* of press releases. It does not 'cover the concept of putting press releases online', it covers *generating* press releases, it is a subtle difference that you do not seem to understand.
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Anonymous Coward, 20 Jul 2010 @ 8:52pm

Re: Re: Re: title misleading
I do not know if it is a good, bad, or intermediate patent, but you are correct in noting that the patent is directed to the generation of news releases. Thus, the headline is misleading.

Personally, I am less concerned about the patent(s), and much more concerned about the lack of transparency into who is in charge of the spate of companies that are mentioned.

Obviously, all the names will come to the fore if this matter proceeds to discovery, but that does seem a day late and a dollar short.
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Rehana, 22 Jul 2010 @ 2:56am

Re: Re: Re: title misleading
If it is generating the press release and not the concept of putting press releases online, then, the sued sites only put Pr live on web and not generating.

Then, how could they infringe the patent? Any idea?
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Anonymous Coward, 22 Jul 2010 @ 3:22am

The *generating* part is misleading in my mind; it could be interpreted as combining a Title field, Text field and Logo field into a single paged document.

Absolutely disgusting that this still stands and small companies are being targeted.
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staff, 22 Jul 2010 @ 5:35am

patent bashing
"Not at all. They have to actually go through with a trial..."

Ever hear of reexamination? The PTO sure has. They grant 95% of requests. Then again, maybe it's only 95% of large infringers. If the small infringer really has good prior art (make that art which someone legally blind would consider close enough for hand grenades) then they should have no problem cobbling together a request and getting it granted with a reexam happy PTO. The court likely will then grant a stay and bingo!, the infringer will be off the hook for at least 5 years while the PTO knits themselves a king sized muffler for those cold DC winters. Try again o' patent basher.
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Anonymous Coward, 22 Jul 2010 @ 10:03am

Re: patent bashing
Good job blindly supporting a terrible patent, as usual. RJR would be proud. Now all you need is a signature longer than your comment.
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Jane Q. Public, 22 Jul 2010 @ 1:29pm

It's probably not as bad as it sounds.
The victim here does not necessarily have to spend lots of money defending himself. The courts do not like to waste time on frivolous lawsuits. There is nothing preventing him from filing a pretrial motion to dismiss the suit, based on the fact that given the date of the patent application, there is absolutely no basis to sue. And if he finds a couple of good examples online, and uses a good template for the document, he probably doesn't even need a lawyer to do it.

Any reasonable court would then dismiss the suit.
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Stephan Kinsella (profile), 22 Jul 2010 @ 2:04pm

This is a natural result of having a patent system. It's not abuse at all.
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aikiwolfie, 22 Jul 2010 @ 4:01pm

Does the US patent office simply rubber stamp every patent application that comes through the mail and wait for someone to be sued as a test of it's validity? This case would be laughable if it wasn't so tragic.

It's little wonder why the US economy does so poorly. Who'd want to do business there?
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