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It's been barely two months since Netflix added its long-awaited download feature, and the online streaming company has already been sued over it. The plaintiff is a company few have heard of: Blackbird Technologies, a company with no products or assets other than patents. Blackbird's business is to buy up patent rights and file lawsuits over them, a business known colloquially as "patent trolling."
Blackbird was founded by two former big-firm patent attorneys, Wendy Verlander and Chris Freeman. The organization owns US Patent No. 7,174,362, which it hopes will result in payouts from internet video companies with offline-viewing features. On Wednesday, Blackbird (who tells potential clients about being "able to litigate at reduced costs and achieve results") filed lawsuits against Netflix (PDF), Soundcloud (PDF), Vimeo, Starz, Mubi, and Studio 3 Partners, which owns the Epix TV channel. All of the companies have some type of app that allows for downloading content and watching it offline.
The patent-holding company, which filed the lawsuits in Delaware federal court, has good reason to hope for success. The '362 patent already has a track record of squeezing settlement cash out of big companies. The patent was originally issued in 2000 to Sungil Lee, a San Jose entrepreneur and business instructor. In 2011, Lee sold his patent to Innovative Automation LLC, a patent troll that filed dozens of lawsuits in East Texas and California. Innovative Automation said that the '362 patent covered various "methods and systems of digital data duplication" and used it to sue services like "Target Ticket" and "DirecTV Everywhere." Court records suggest most of those cases settled within months.
Source:
https://arstechnica.com/tech-policy/2017/02/patent-troll-sues-netflix-over-offline-downloads/
(Score: 4, Informative) by arcz on Tuesday February 07 2017, @02:49AM
The U.S. Supreme Court has repeatedly reiterated that no, taking something basic, and adding "with a computer" does not make a valid patent.
(accidentally posted AC)
(Score: 4, Insightful) by Nerdfest on Tuesday February 07 2017, @03:15AM
Unfortunately it's cheaper for people to settle. As a small business, being patent trolled by a bunch of lawyers is like having a gun pointed at your head.
(Score: 1, Insightful) by Anonymous Coward on Tuesday February 07 2017, @04:48AM
It's cheaper to settle once... What most big companies (who would be able to fight) forget is that it also puts a flashing neon signs of "EASY MARK" on them. Of course, fighting trolls would reduce profits for this quarter, so we can't have that...
(Score: 4, Insightful) by Nerdfest on Tuesday February 07 2017, @04:54AM
Oh, I know all too well. It's effectively the same as paying for the release of hostages; it does nothing to discourage it happening again, and generally encourages it. I like rewarding businesses that stand up to the weasels.
(Score: 1, Insightful) by Anonymous Coward on Tuesday February 07 2017, @09:08AM
Agreed. Its almost like watching a movie where the wronged one ends up annihilating the bully.
I have several patents to my name but assigned to a corporation; they did this to protect their own right to use my work. I know several other people are technically "in violation" of the patent, but neither me nor the company they are assigned to are much concerned.
We had to do this to downright guarantee that we could do what the patent covered, as this was original technology, and if someone else filed papers, we could easily spend a lot of money fighting someone who was into patents just for the power they provide to make a mess for someone else.
This system really needs some patches to eliminate the power to provide nothing but misery for those of us who are trying to make something.
The way things are going, one has to go outside our nation to get things done, then bring them in and try to sell them, keeping their manufacturing technology out of the control of those who would hold your production line hostage.
(Score: 1, Interesting) by Anonymous Coward on Tuesday February 07 2017, @10:59AM
Maybe there should be a law that if one of your patent suits is found to be fraudulent (that is, you knew that the patent suit would have had no change to succeed it it goes through to the end), then all your patents are passed over to the defendant. This would on one hand put a much higher risk on the patent troll, as by just having one defendant fighting to the end he risks losing his complete "business" (scare quotes because I consider extortion not to be a legitimate business, even if they manage to remain formally legal), and on the other hand put a big incentive to the defendant to fight it through, as he could end up winning a lot.
(Score: 2) by Nerdfest on Tuesday February 07 2017, @12:13PM
My thought was the patents to public domain. Make them useful for everyone.
(Score: 0) by Anonymous Coward on Tuesday February 07 2017, @03:39PM
But then the sued companies have no incentive to fight it through, and in effect everything remains as is.
(Score: 0) by Anonymous Coward on Tuesday February 07 2017, @06:19PM
My thought is that when a patent is infringed upon, and there is a settlement; the settlement is paid after 5 years and only when the patent holder has produced a profitable product using the patent.
If the patent holder can't show that the infringement is harming their product sales, then they aren't entitled to a settlement.
(Score: 2) by Geezer on Tuesday February 07 2017, @11:24AM
In this particular case, I'm pretty sure Netflix can afford to go all Warren Zevon on the trolls with lawyers, guns, and money.
(Score: 2, Insightful) by RandomFactor on Tuesday February 07 2017, @03:22AM
While this is the definition of obvious, invalid, and only applicable by mental gymnastics....
Settling will be priced much cheaper than litigating and winning.
I need to go buy something from NewEgg to make myself feel better.
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