Guy Who Inspired The Term 'Patent Troll' May Be Leaving The Patent Trolling Business

from the but-watch-out-for-those-trade-secrets dept

Anyone remember Ray Niro? He's the lawyer who so perfected patent trolling that the term "patent trolling" was first used (by future patent troll Peter Detkin) back in the 1990s to describe... Ray Niro for his lawsuits. Niro was the original uber patent troll, demanding settlements and suing all sorts of people. Perhaps his most famous move was that he had control over a patent that he argued covered any use of a JPEG image -- and would use it to go after basically anyone who displeased him (if they had any JPEGs on their websites). This included the Green Bay Packers and a resort in Florida. When noted patent system critic Greg Aharonian described that patent as "crap," Niro sued him for infringing on it as well. Niro also put a bounty on the identify of an (at the time) anonymous blogger who called himself the "Patent Troll Tracker."

Either way, Niro apparently claims that he's getting out of the patent trolling business. He's blaming the Supreme Court's ruling in the Octane Fitness case that made it easier for the victims of patent trolls to seek fees. While many people point to last year's ruling in the Alice case, which has been used to kill a bunch of software patents, as shifting the balance against patent trolling, the Octane Fitness ruling may be having an even bigger impact, because it can directly hit patent trolls in their wallets. And that's what's happening with Niro:

Niro and his firm have been ordered to pay fees in a patent suit he brought against HTC on behalf of Intellect Wireless and an inventor. The parties are still litigating over the amount, but HTC is seeking $4.1 million.

The fee order was "a wake-up call," Niro told Crain's. "I can take it once, twice, but am I going to take it three or four times? No. Why should I?"

The Ars Technica article linked above notes that another prominent patent troll, Erich Spangenberg, has been pointing to the Octane Fitness ruling for why he's moving out of the business as well:

"You invested up front to buy the patent, did the research and found infringement," Spangenberg explained to Ars in an interview last year, shortly after he made the decision to move on from IPNav. "Over and above that, you go through an IPR and spend another million there, and then you get hit with a $2 million to $3 million fee award. I don't want to be working on cases where that's what I'm worried about."

But, fear not for Niro. He's moving on to other lucrative trolling areas. The Crain's article where he initially claimed to be moving out of the patent trolling business notes that he's moving more aggressively into trade secrets:

Changes in patent law in the past year have gutted the business model that made it possible for law firms to represent “little guy” clients whose patents were being infringed, says Raymond Niro, founder of Niro Haller & Niro, one of the country's highest-profile plaintiff-side intellectual property boutiques. The firm, which has shrunk to 18 lawyers from 30, is considering taking more cases involving alleged breach of contract, nondisclosure agreements and misappropriation of trade secrets.

I've been meaning to write more about this (and I promise I will get to it eventually)... but over the last few years, there's been a big move to ratchet up laws around "protected trade secrets" with a big push coming from the US. Because of this, there is some evidence that we're already starting to see some "trade secret trolling" going on -- and given Niro's nose for early trolling opportunities, it's little surprise that he's exploring that as a new area for business.

Filed Under: fee shifting, jpeg patent, patent troll, patent trolling, ray niro, trade secrets
Companies: octane fitness