Bitmovin Takes A Scorched Earth Approach To Patent Troll, Who Limps Away Quickly
from the the-best-defense dept
A few years back, e-commerce company Newegg decided to take something of a scorched earth approach to all of the various patent trolls that came after it: it would never settle with a patent troll. While many trolls rely on the fact that it's cheaper to settle than to fight in court (even if you win), Newegg did the longer term calculation, and recognized that even if it cost more to defeat trolls in court, by being very public with its stance in fighting it would likely scare off trolls from continuing to sue the company. It took a few years, but the strategy mostly worked. Trolls have mostly learned to steer clear of Newegg.
Last year, Cloudflare decided to up the ante a bit on such a strategy. After a patent troll went after it, Cloudflare didn't just promise to fight back, it promised to effectively burn the patent troll into the ground. It set up a bounty looking for prior art on every patent held by that patent troll (Blackbird Technologies), and also filed ethics complaints against the lawyers who ran the company, arguing that they were pretending not to practice law when they clearly were. That strategy has resulted in an easy win over Blackbird in court while various Blackbird patents are being challenged.
It appears that approach is inspiring other companies as well. Streaming infrastructure company Bitmovin's General Counsel Ken Carter (who, notably, used to work at Cloudflare) put up a blog post describing just how it dealt with a recent patent troll. After first pointing out that patents can be important, and noting that the company itself holds some patents, the post reminds everyone that it's possible to abuse the patent system.
Patent trolls tend to be at the bottom of the IP food chain. If the patents they held were really valuable, the patents would have already wound up in the hands of someone who could make the invention. These trolls behave like bullies, threatening companies actually servicing customers, hoping to pick up some quick cash. The troll knows about and takes advantage of the fact that it is cheaper for those companies to pay it off than to endure the cost of litigating the case. By contrast, patent holders who are making products for customers tend to be more rational. Sure, sometimes the likes of Apple, Google, Microsoft, and Samsung get one another involved in multi-year, multi-million dollar lawsuits, but for the most part these companies don’t extort one another. It’s a better use of their time to make products than to sue.
Bitmovin didn't just hit back at this patent troll: it promised a similar scorched earth approach to the one that Cloudflare took against Blackbird:
We threatened to counter sue the troll, win the case on the merits, and then seek recovery of our fees and costs from the troll and its lawyers. Further, we pledged that Bitmovin would, as a public service, reinvest any recovery in invalidating all of the troll’s other patents. Through our initial investigation, we found the person behind the troll who had acquired some 15 patents originally held by a European technology company. This person then placed these patents in at least two other LLCs. In turn, those LLCs were asserting these patents in no fewer than 13 other lawsuits against defendants such as Sony, Microsoft, Cisco, Polycom, Blue Jeans Networks, and Motorola. Bitmovin pledged to use our recovery to assist those 13 companies and 6 other companies defending against the current patent in finding prior art and filing Inter partes Reviews at the US PTO’s Patent Trial and Appeal Board to invalidate all of those patents.
How did that work out? Pretty well:
Without another word, the troll dismissed its lawsuit against us.
And the company hopes that other trolls will take notice:
Trolls beware. Bitmovin will continue to stand for innovation and a nuanced, balanced approach to intellectual property. We will stand up against intellectual property abuse and for our customers, our industry, and the Internet at large.
Of course, in that post, Bitmovin declined to name the troll. Though, it's not that hard to figure it out. The case was filed by Hertl media, whose only existence online is for the various patent troll lawsuits it filed at the end of June. Within 3 days, Hertl Media sued not just Bitmovin, but also Amazon, Cox Communications, Netflix, Comcast, Longtail Ad Solutions, and Telestream. One hopes that others on that list take a similar approach to Bitmovin, and they too might see the following neat results. With minimal effort in court (just a standard request for extra time to file a response), Hertl just walked away and the case was closed:
Filed Under: defense, patent trolls, patents
Companies: bitmovin, cloudflare, hertl media, newegg
