If You're Selling Gift Cards Over The Internet, There's A Patent Troll Coming For You

from the let's-just-forget-about-all-that-'music'-stuff-that's-so-integra dept

An integral aspect of the dark art of patent trolling is knowing an exploitable patent inside and out. Patent 6,233,682 (the '682 patent, as it's referred to in lawsuits [which is pretty much the only place it's being referred to]) is titled "Distribution of musical products by a web site vendor over the internet." It was originally granted to its creator, New York businessman Bernard Fritsch, in 2001 and was actually used in the creation and delivery of a music service.

At the time of the patent's issuance, its listed inventor Fritsch worked for a subsidiary of MCY.com Inc., a company founded in 1995 that tried to sell music online.

The patents were intended to help MCY market a proprietary system for the digital delivery of music and other media products, according to MCY.

Though MCY made an effort to sell music for some time, it no longer exists, at least online — its site is occupied by a domain-name placeholder and has been since January 2005.

In March of 2010, the '682 patent was acquired by a patent troll d/b/a Sharing Sound, LLC. Naturally, Sharing Sound was located in Longview, Texas, from where it could avail itself of the friendly east Texas court system. It used this patent (along with another, very similar patent originally obtained by Fritsch -- patent 6,247,130, also titled "Distribution of musical products by a web site vendor over the internet") to extract settlements from Wal-Mart, Amazon, Gamestop, Netflix and several others before exhausting the patents' apparent "usefulness."

Another patent troll, also "located" in the east Texas region, acquired both patents in July of this year. The timeline looks like this:

06/25/2015 - Batarga, LLC files as domestic limited liability corporation in Texas.
07/20/2015 - Batarga acquires both of Sharing Sound's patents.
08/21/2015 - Batarga files first patent infringement suit.

Seeing as the previous troll had already wrung the market dry of settlements and licensing fees by targeting big players in the media distribution, these two "music distribution, but on the internet" patents would seemingly be of little use.

But hope springs eternal when the barrier to entry is just a nominal filing fee. Batarga, LLC has found an exploitable claim in the '682 patent (a claim that's not included in the nearly-identical '130 patent).

12. A method for distributing products over the Internet, comprising:

displaying a login screen on a video monitor that allows a user to enter an unique identifier for accessing database information;

confirming the validity of the entered unique identifier; and

displaying a shopping list that lists items for purchase as selected by said user, the listed items being in digital format suitable for downloading to a user's computer connected to the Internet and being in other media format suitable for shipping to said user.

By cherry-picking this claim from the numerous music-related claims surrounding it, Batarga feels it has a legal basis for extracting licensing fees/settlements from a number of entities who don't offer music for sale via their websites.

Batarga is filing lawsuit after lawsuit in the East Texas district -- 20 of them as of August 24th. And all of them targeting... clothing retailers?


So, if music is no longer the lynchpin of trolling with this nominally music-related patent, what's the angle? GIFT CARDS. But on the internet.

Defendant has directly infringed, and continues to directly infringe, at least Claim 12 of the ’682 Patent in violation of 35 U.S.C. § 271(a), either literally and/or under the doctrine of equivalents, by offering for sale on its website (shopjustice.com) gift cards in both digital and physical forms, thereby illegally using the patented method of distributing products over the Internet encompassed by the ’682 Patent.

The "doctrine of equivalents" allows patent trolls to indulge in more speculation when speculatively invoicing. In this case, Batarga can't really claim these non-music-selling entities are infringing on its "internet music distribution" patent, but it can claim that things they do are somewhat similar to a single claim within the entirety of a music sales-related patent.

And it's not as though the original patents weren't of questionable validity to begin with. By the time Fritsch had applied for his patents, online music sales already existed and there were plenty of previous patents that covered the same ground his did. At least Fritsch used his to start an online music distribution platform. These two companies have done nothing more than secure mailboxes and empty offices in the dusty East Texas towns, and their sole interaction with the parties affected are filings delivered by local lawyers.

And as long as we're checking villains for hearts of pyrite, at least Sharing Sound's abuse of the lousy, unoriginal patents was limited to the "music" aspects integral to the bulk of the claims. Batarga is stripping down the entire patent to a single paragraph -- one that would seemingly make anyone selling anything over the internet a target for infringement allegations.

Filed Under: downloadable music, gift cards, music streaming, patent troll, prior art
Companies: batarga, sharing sound

Why Have So Many Companies Settled Over Ridiculous Patent For 'Online Music Distribution'?

from the cheaper-to-settle dept

A company going by the name Sharing Sound LLC, which of course does not appear to do anything, got hold of some exceptionally broad and absolutely ridiculous patents on "distributing musical products by a website over the internet" (6,247,130 and 6,233,682). Go ahead and read the claims on both of those, and realize they were filed in 2000, well after online sales of digital goods was available (I should know, I worked for a company focused on selling software online through nearly identical means described in the patents -- in 1998).

Earlier this year, however, Sharing Sound sued a whole bunch of companies over these patents. Included was Apple, Microsoft, Napster, Rhapsody, BDE (Kazaa), Sony, Sony/Ericsson, Amazon, Netflix, Wal-Mart, Barnes & Noble and Gamestop. Late last week, the news came out that Apple had settled and paid up. Along with that, people noted that most of the other companies had already settled.

I defy anyone to explain how this patent is a valid patent. The folks at M-CAM broke down a whole bunch of prior art when the lawsuits were first filed. Anyone who was anywhere near the online web store world for digital content would look through the (very, very, very simple) claims in the patent and just laugh. There's no "invention" there at all. It's a joke.

So why did so many companies settle? The easy guess is that the settlement terms were simply less than going through with the lawsuit. Lawsuits are expensive, even over totally bogus patents. So it's often just easier and cheaper to pay up. Of course, now that gives Sharing Sound more ammo to say "look at all these big companies who settled" when they continue to go after lots of other companies. This is a perfect example of how bad patents still "win" lawsuits.

Filed Under: music distribution, patents
Companies: amazon, apple, barnes & noble, gamespot, microsoft, napster, netflix, rhapsody, sharing sound, sony, wal-mart