Why Is A Charity For Abused Kids Suing A Bunch Of Tech Companies For Patent Infringement?

from the questions-that-need-to-be-asked dept

Mon, Jan 3rd 2011 12:34pm — Mike Masnick

Really not sure what to make of this. A typical patent trolling type organization named Azure Networks filed two separate lawsuits right before Christmas, against a bunch of semiconductor companies, including Texas Instruments, Freescale, Atmel, Alereon, Samsung, Synopsis and others. At first glance, these lawsuits seem pretty typical: filed in Eastern Texas, filed by a small company whose only purpose is to sue, suing a bunch of big tech companies who actually do something. It meets all the standard checkmarks of these types of lawsuits.

But some folks have noticed one oddity: named as co-plaintiff along with Azure Networks is a local Texas charity. The Tri-County Excelsior Foundation is named as a plaintiff, with a note that it is a non-profit corporation that is "a supporting organization" to a charity called Casa of Harrison County. Casa of Harrison County appears to be a perfectly admirable charity -- based in Marshall Texas -- focused on training "community volunteers to be advocates for abused and neglected children in the custody of Child Protective Services."

So why are they a co-plaintiff in the lawsuit? That's not clear at all. I've embedded one of the two lawsuits below. It says that Tri-County Excelsior Foundation is a plaintiff, but does not explain its relationship to the patent. The filing does say that Azure has a license on the patent, but does not say from whom. The patent in question (7,020,501) lists BBNT Solutions LLC as the assignee, but it's possible that the patent has since been handed off to others.

I have no idea if the patent is valid or not. I have no idea if the companies are infringing or not. But it does seem... odd, to see a non-profit charity supposedly focused on helping abused children, somehow getting involved in a typical patent trolling lawsuit.

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Filed Under: charity, patents
Companies: azure networks, tri-county excelsior foundation

30 Comments

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vivaelamor (profile), 3 Jan 2011 @ 12:21pm

Donated
Considering how many law firms seem to be associated with that foundation, it wouldn't surprise me if it had been a donation. Although, I'm unsure why a case would be filed if the patent was just donated for tax reasons..
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:Lobo Santo (profile), 3 Jan 2011 @ 12:51pm

Sympathy Vote?
Perhaps it's so one of the lawyers can argue about how the infringing company is "stealing from a charity organization" (or some such BS).
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David (profile), 3 Jan 2011 @ 12:53pm

Re: Donated
Makes a certain amount our sense this way. Pretty smooth move on the part of the patent troll. If they donated the patent to the charity or assigned partial income to them, it really gives them a lever to use in settlements, forcing companies to settle, so they don't have the PR of ripping off the poor abused children.
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Anonymous Coward, 3 Jan 2011 @ 12:55pm

Are they in East Texas? Do they need justification to stay in that court?
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Transbot9, 3 Jan 2011 @ 1:01pm

Re: Sympathy Vote?
"You must rule in our favor, for of the children"
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:Lobo Santo (profile), 3 Jan 2011 @ 1:03pm

Re: Re: Sympathy Vote?
Perfect! Now, say that in a Darth Vader voice...
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Ccomp5950 (profile), 3 Jan 2011 @ 1:11pm

Re: Donated
I was in attendance at the Black Gold Benefit, I don't believe any patents were donated. They made a pretty penny from that event. I'll ask one of my reporter friends to look into it.
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Chronno S. Trigger (profile), 3 Jan 2011 @ 1:16pm

Re: Re: Donated
Plus the fact that the charity is "based in Marshall Texas". I seem to remember a lot of cases being moved out of Texas due to no party actually being based in Texas. Though, I assume my comment is the obvious comment.
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Ccomp5950 (profile), 3 Jan 2011 @ 1:17pm

Re:
Azure is an LLC based in Longview Texas.
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Anonymous Coward, 3 Jan 2011 @ 1:18pm

For the children, of course. Won't someone think of the children?
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Anonymous Coward, 3 Jan 2011 @ 1:27pm

This looks like a classic money laundering set up. The charity launders the money in the form of "donations" through a non-profit. That means no taxes to be paid on earnings disbursed by the charity's patent trolling enterprise. Of course they keep a portion to fund the charity to keep up appearances.
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Marcus Carab (profile), 3 Jan 2011 @ 1:30pm

Re: Re: Donated
Interestingly, here is a post on an law blog by an lawyer from another East Texas IP firm, talking about making donations to CASA:

http://mcsmith.blogs.com/eastern_district_of_texas/2009/12/courthouse-colors-sbps-marshall- christmas-card.html
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Marcus Carab (profile), 3 Jan 2011 @ 1:31pm

Re: Re: Re: Donated
Never mind, just realized that was one of viva's links above
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Marcus Carab (profile), 3 Jan 2011 @ 1:31pm

Re: Re: Re: Donated
Never mind, just realized that was one of viva's links above
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Anonymous Coward, 3 Jan 2011 @ 1:51pm

This article shines more light on Casa of Harrison County: http://www.marshallnewsmessenger.com/lifestyle/news/article_da1c9bec-ea28-11df-93cb-001cc4c002e0.htm l

I'd say the Black & Gold Benefit is no longer the group's biggest fundraiser!

Some of the names in the article seem familiar, but I cant figgure out why
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Anonymous Coward, 3 Jan 2011 @ 2:24pm

I am supposing that there is always a chance a defendant will allege that an east Texas court has no business in this, so the additional connection to that area might help the plaintiff?
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Anonymous Coward, 3 Jan 2011 @ 2:24pm

This probably creates more sympathy for the plaintiff
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Mark, 3 Jan 2011 @ 3:10pm

Their homepage has a united way logo on it. One of the biggest rip offs in the non profit realm. That should explain everything.
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Anonymous Coward, 3 Jan 2011 @ 3:14pm

According to the court filing, the patent is owned by the charitable foundation. How it got to them from BBNT (a Raytheon subsidiary) is not stated.

The other company, Azure, is stated as having been granted an exclusive license under the patent.
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abc gum, 3 Jan 2011 @ 4:27pm

Has anyone bought a cow yet?
Just curious.
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Anonymous Coward, 3 Jan 2011 @ 5:58pm

Re: Re: Re: Sympathy Vote?
Try the Joey voice for that, you can also pass that voice through some filters and voila! instant Dart Vader :)
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Anonymous Coward, 3 Jan 2011 @ 6:07pm

I saw in my time many people using charities as patsy's for whatever they intent was.

Some used desperate charities to get a lot of donations and keep 90% of all the proceeds(converting material donations to money along the way), and making the guy sign for everything and let him deal with taxes and any other improprieties that may arise, very popular to make campaigns for the poor countries. So my guess is that as a charity if there is ever a counter measure deployed by the other side, that would amount to nothing plus the bad publicity for trying to destroy a charity.

This may suggest that the patents are not that good and someone they are suing may have something that could hurt them.
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Jeff, 4 Jan 2011 @ 3:30am

Re: ownership
The current owner (assignee) is TRI-COUNTY EXCELSIOR FOUNDATION. Here is the whole chain of custody from the USPTO's assignment database...

12/07/2001
Inventors: ELLIOTT, BRIG BARNUM;PEARSON, DAVID SPENCER
Assignee: BBNT SOLUTIONS LLC
----------------------
01/03/2006
Assignor: BBNT SOLUTIONS LLC
Assignee: BBN TECHNOLOGIES CORP.
----------------------
07/07/2008
Assignor: BBN TECHNOLOGIES CORP.
Assignee: STRAGENT, LLC
----------------------
10/10/2008
Assignor: STRAGENT, LLC
Assignee: POWER MESH NETWORKS, LLC
----------------------
08/20/2009
Assignor: POWER MESH NETWORKS, LLC
Assignee: AZURE NETWORKS, LLC
----------------------
06/10/2010
Assignor: AZURE NETWORKS, LLC
Assignee: TRI-COUNTY EXCELSIOR FOUNDATION
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Anonymous Coward, 4 Jan 2011 @ 7:52am

The assignment from BBNT to BBN Technologies makes sense since BBNT changed its name to BBN Technologies, and the recordation of an assignment seems a prudent act to keep all of the names straight in the USPTO records.

From there it does get a bit strange. Stragent is a holding company, Power Mesh Networks is a holding company, and Azure Networks is a holding company. Looks as if the patent was being assigned among them for strategic reasons since all three are to my understanding under the common control of a law firm located in San Jose.

What also seems strange is that Azure assigned the patent to the foundation, and then apparently received back an exclusive license encompassing essentially all rights associated with actual ownership of the patent, not to mention that the license itself is stated in the court filings of being worldwide in scope...an interesting choice of words for a right that is territorially limited to the US.
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staff, 4 Jan 2011 @ 1:36pm

dissembling
'filed by a small company whose only purpose is to sue, suing a bunch of big tech companies who actually do something'

Prior to eBay v Mercexchange, small entities had a viable chance at commercializing. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don�t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.

Call it what you will...patent hoarder, patent troll, non-practicing entity, etc. It all means one thing: �we�re using your invention and we�re not going to pay�.

For the truth about trolls, please see http://truereform.piausa.org.
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Vic Kley, 4 Jan 2011 @ 2:50pm

Masnick on Charity's Case
Masnick have you no shame? Do you actually get paid for writing this dreck? The standing of a Plaintiff is a subject for the Judge in the case if and only if the defendant makes a motion. Please go interrupt the proceedings Masnick, and explain why one of the Plaintiffs has no standing. Tell us how your stay in an East Texas jail went when you get out. Maybe you won't be able to post anymore inane commentary from jail.

So it's any excuse to use the "T" word eh? Let's get something new, something just for you Masnick. How about MMD shorter and neater then the overworked "T" word it stands for More Masnick Dreck. This makes you Masnick the DreckMaster or DM.

So bring it on DM. Care for another helping of MMD?
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Justin Olbrantz (Quantam) (profile), 4 Jan 2011 @ 3:45pm

Re: Masnick on Charity's Case
I have a medical suggestion for you: stop reading TechDirt. It's very obvious that it makes your blood pressure go through the roof, and that's unhealthy and generally life-shortening.

Or, alternately, you could leave it to your significant other or children to file a class-action lawsuit against him after you die. You could use the cases against cigarette manufacturers to build your case.

I guess which of those is preferable is a matter of taste.
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Mike Masnick (profile), 4 Jan 2011 @ 11:00pm

Re: dissembling
Prior to eBay v Mercexchange, small entities had a viable chance at commercializing. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions.

This is amazingly inaccurate. Why would you lie? I can only take a guess...

The result of the Mercexchange ruling is only to stop injunctions in cases where the patent holders IS NOT COMMERCIALIZING the product, so the entire premise of your comment is wrong.
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Mike Masnick (profile), 4 Jan 2011 @ 11:03pm

Re: Masnick on Charity's Case
asnick have you no shame? Do you actually get paid for writing this dreck? The standing of a Plaintiff is a subject for the Judge in the case if and only if the defendant makes a motion.

I made no claim that the charity had no standing.

Before attacking me, perhaps you should read what I actually write. It might make you seem slightly more in touch with reality.

Please go interrupt the proceedings Masnick, and explain why one of the Plaintiffs has no standing. Tell us how your stay in an East Texas jail went when you get out. Maybe you won't be able to post anymore inane commentary from jail.

Once again, I did not question the standing of the charity.

I questioned why a charity got the patent and why it was suing over it.

So it's any excuse to use the "T" word eh?

No, this is actually a big issue. It looks like some of your friends are trying to hide behind a charity. And you accuse *me* of having no shame?

I find this practice sickening. Glad to know you support this patent laundering.
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Ronald J Riley, 5 Jan 2011 @ 4:41am

More idiotic crap from a third rate software hack.
More idiotic crap from a third rate software hack who spends their life cranking out repetitive code.

I have often wondered how people can go through life without ever having an original thought. The answer is that they rationalize that they really are not as dull as they are.

It is clear that TechDIRT lemmings are the ones whose blood pressure is rising.

Ronald J. Riley,

President - www.PIAUSA.org - RJR at PIAUSA.org

Other Affiliations:
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.PatentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (202) 318-1595 - 9 am to 9 pm EST.
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