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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: 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.