I'm a one person company and have no idea what to do.
There are definitely low-cost and pro bono (free) options out there for very small businesses. The EFF attorney referral list is a good place to start.
I'm also happy to talk it through with you if you'd like more specific information - my contact information is here: https://shawkeller.com/attorneys/andrew-e-russell/
Write to each of your competitors, explain the situation and ask for a referral to their lawyers. You'd be surprised how many are more than willing to make a referral against a troll Also search around for any other attorneys who have filed against this troll and contact them as well. They should all be willing to do an initial call for free.
You are trying to find an attorney who has a successful blueprint for dealing with this particular troll, ideally this particular claim. If the attorney is able to leverage their prior work or knowledge, your costs are greatly reduced. Also, if the troll has unsuccessful experience with a particular attorney they may just give up. Good luck!
Also you should add "[ask HN]" to the beginning of your post.
edit: A good way to find a lawyer is to talk to good lawyers you have worked with in the past. They will not be able to help you themself if they practice in a different area, but will likely have referrals for someone who does.
Some years ago, worked for a US based startup that went public. When they got to a valuation of around 1 billion, they got hit by a patent troll. Completely bogus claim, but at the time the CEO just decided to settle and avoid the risks and financial stress of prolonged litigation.
As you stated you are a small business I would start by doing the following four things :
1) Read the Wikipedia pages about these morons. It is a good overview of what you are up against:
https://en.wikipedia.org/wiki/Patent_troll
https://lotnet.com/
"How to Fight--and Win--Against Patent Trolls"
https://www.inc.com/magazine/202004/minda-zetlin/patent-trol...
4) Respond only through an attorney.
Also as stated in the article above, only agree to talk
to lawyers where the initial consultation is
free of charge. I have no affiliation with this
company but you might want to start your search here:
https://www.priorilegal.com/intellectual-property/patent/patent-trolls
Good luck and remember ... IANAL
Have they actually served you with any notice, potential licensing terms, legal documents of any kind? For clarification, are they a NPE (non-practicing entity)?
Anyway, I've worked on pretty much every side of the patent system in the United States (assuming you're there). While I (fortunately) haven't been presented with your exact scenario I suggest:
- You need to hire a patent attorney immediately (it doesn't sound like you have one).
- Get them up to speed on the situation.
- They can advise you on what to do.
The advice I've been given in the past essentially boils down to:
1) Have your attorney immediately respond with a letter containing any/all of the following: likely prior art, issues with their patent, why it doesn't apply to you, any circumvention measures you've taken, etc, etc.
2) Meet their terms. It sounds like this probably isn't a viable option for you.
#1 serves several purposes:
1) Letting the other party know you have a patent attorney.
2) You (and they) understand the landscape and have a prepared response.
3) You aren't just some naive rube that will be (that) easily intimidated.
4) If they're looking for a quick rollover, settlement, licensing terms, etc that won't happen here.
For you it sounds like most of this will be a bluff.
Ideally they'll move on to a different target. However based on what you've described they sound very aggressive and well funded so that's probably not what will happen here if it comes to that.
As you probably know these kinds of things often come down to who has the last dollar and it sounds like that will be you.
The worst case scenario is you end up with a judgement against you and the cops show up and seize company assets. Don't mess around with this and let it get to that.
Good luck.
You likely can either do something more advanced or something less advanced -- if you have the choice do the more advanced solution as you are then likely pushing your product even further.
Fighting patents is for rich, established companies. You do not have the luxury.
You should change your product immediately to avoid infringement, or even close to infringing. If you do this you can avoid damages/claims against you.
Because you didn't know you were possibly infringing, you can avoid all claims/damages by immediately changing your product.
When you respond to them, you should say you didn't realize you were possibly infringing as you were not aware of the patent, you should say that you do not believe you were infringing, but anyhow you have modified your product to clear up any possibility of claims of infringement going forward.
You do not want to admit any guilt in anyway (actually the rule is NEVER admit guilt, always claim you believe you are not infringing), and you want to get away from these people because they are not worth your time.
But if you do need to use this tech, you should try to license it, but while claiming you are not infringing and there are alternative methods you can adapt. This gives you the most powerful stance. Make sure they understand you are very small and thus not worth dragging this out. Offer them something for a one time fee if possible and get than done and move on.
But avoiding the perception of infringing going forward is best.
You need a lawyer, but a lot of lawyers do this sort of thing pro bono for small companies. The EFF has a list of attorneys who can help. Interview at least 5 of them - ask for references, ask about past successes in this space, and ask about your case at a high level (give the one-minute overview of the case and ask about their plan).
The good news is that most software patents are invalid (thanks to the Alice decision* in 2014), and will be struck down in a process called inter partes review, which is a cheap way to challenge the validity of a patent through the USPTO. When you interview attorneys, you might want to ask prospective candidates about the validity of this patent and if they see this as a viable strategy.
Another dynamic at play here is that in many patent proceedings, the loser pays attorneys fees. You may not end up paying a dime, even without a pro-bono lawyer. Trolls like threatening lawsuits to pressure you into a settlement, but there's a lot at risk for them if they actually sue you for infringement.
*The full opinion on the Alice case is here, and is very interesting: https://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf
EDIT: Also, if your lawyer suggests that you might be able to invalidate this patent, you may be able to band together with some of your competitors to share the cost of invalidating it.
https://www.eff.org/pages/legal-assistance
Probably a long shot, but you might get somewhere.
1) Willful infringement is worse than infringing.
2) Patent trolls are trying to earn money - some money is better than no money.
3) In most legal scenarios, you want to get out of the conflict as cheaply as possible - vindication is very expensive.
Does anyone have experience with the LOT network [0]?
If so, is this useful, recommended or advisable for small startups?
As for the OP. I wonder if joining LOT at this point might have any value for you.
Political: The patent troll industry is yet another example of how much our politicians have failed us. I see them as scam artists who would be bad car sales people and ambulance chasers had they not gone into politics. All they care about is votes. Everything else does not affect their fitness function, therefore, they tend to ignore things that are actually important to real people.
By the way, I strongly believe that software patents should not exist.
There are also some law firms in the US which will help against these types of suits without requiring you to fork over a large retainer. You'll have to research these but they are out there.
I found a good patent attorney and explained the situation. After learning that we were a small company with less that $500K revenue that year, bootstrapped and only had couple hundred thousand dollars in the bank, he suggested that I talked to the patent trolls lawyers by myself without a lawyer first. His rational was that they were not really after us as we were small, and once they learned that, they would either drop it or ask for a small amount to settle.
I followed his advice and had a call with them and it went exactly as he predicted. Upon learning that our US revenue was only few hundred thousand dollars, they asked $30K to settle and sent me an agreement. He reviewed the agreement for us, and recommended that we settle. We did. It was a ridiculous patent yet all of the companies that were sued settled as well. The experience was traumatic and was one the main reasons I decided to raise money from investors later. I slept better knowing that we had the funds to fight lawsuits if need be. Patent lawyer was happy to take the case if we needed to, but warned us about how expensive it would be.
Given that you're a single person company, you're likely small fish for patent troll. The best option for you may be to let them know that and see what they do. Best of luck!
Having said and tried all that personally, I've usually got my lawyer to negotiate it down to a smaller sum of a few thousand dollars and paid it. It simply wasn't worth paying orders of magnitude more than that for a legal process in which the outcome was unsure and that would take years.
Did I like it? Hell no but it was the best possible outcome at the time.
The secret to a good negotiation is getting your lawyers to call them and basically plead poverty. If you don't have substantial revenue or assets in your corporation, the NPE isn't dumb enough to keep spending time chasing you. In my case they were suing massive multinational corporations and also tiny startups with the same sized lawsuit.
The NPE are usually some random inventor who sold their 90's era patent to some shitty lawyers, with an equally random person trying to 'negotiate' the settlements. It's better to let your lawyers deal with them than getting your hands dirty yourself.
Or cutting wood with a knife to then use it to build a chair.
I.e. while you need the result of the first part to do the second part, how you do the first part and how you do the second part are completely unrelated.
Honestly given the large degree of economical damage such patent trolling does it's sad to see that laws hasn't been updated to involve serve penalties for anyone trying to abuse the patent system (if it's clear that it's an abuse like in this case).
Like if it's such a obvious case like this:
1) Hold the suing person responsible for all financial costs of the defender, and a penalty and personal consequences for lawyer suing.
2) Make it a crime a create "deceptive" patents. Which are not clear in what they patent or clearly (for a person with knowledge of the topic) patent trivial or obvious things which should never bee palatable.
3) Make the patent office earn more money from catching clearly bad patents then from passing them through.
Through only if it's "clear" abuse, whatever that means.
It sucks, but when you’re small that’s how this works. Fighting these could be a multi year process that costs tons of money and may require you to personally show up in court. Do you want to bet the future of your company and spend hundreds of hours of your life fighting this? Or do you give them a few thousand to go away?
https://hn.algolia.com/?q=ip+lawyer
Might give you a starting point to see some people that have been suggested in the past
Such a shame for innovations in this area. I hope something can be done, but I am sceptical.
Can you work around the patent?
1) roll over and show your belly, and pay up
2) get a patent attorney and fight.
Depending on the size and resources of the patent troll, you may intimidate them out of pursuing the matter just by lawyering up. No one wants protracted litigation, not even vexatious litigants, for whom the fear of litigation is far more profitable than the actual court proceedings. It's money in your pocket if you can get your victims to spook and settle. Muggers work the same way: they don't want a fight, they want you to get scared and hand over your wallet.
I'm not saying that option two is best for you. That depends on your resources. But it's something to consider.
Could you share the patent # they are trying to use?
Maybe include data points like -
- the patent in question
- the troll behind the suit
- the defending IP litigator (so others can know where to turn when the troll goes after their next victim)
- the outcome of the suit - settled, won, lost, costs, penalties, etc
The more information that becomes available to combat these trolls, the better.
Perhaps a site like this could run completely off donations, by saving money in legal expenses. Or maybe monetize allowing IP litigators to list their services in a directory. Maybe allow users to review IP litigators and link them to successful/unsuccessful cases and outcomes?
Mouser, a large distributor in the Electronic industry is being sued by a Troll.
I hope that Mouser chooses to no longer carry the claimed infringing part.
How is there any logic to the troll suing the very company getting their product out to the world?
https://www.eenewseurope.com/news/micron-mouser-sued-germany...
or they sniff your app with some MITM proxy?
Like if you set up a limited liability company that owns the code that's allegedly infringing on the patent, that then licenses out the offending code to you. But you structure the actual company as something you're buying a infringing service for a nominal fee under an SLA.
If that shell company has no assets, and you publicise that to the troll, that would be a major disincentive to actually suing you.
Consensus seems to be to contact a lawyer, and even if the EFF can't help you directly maybe they can get you in contact with the right kind of lawyer. Hope you find someone who can help you out.
You can contact me at zoobab at gmail.com, we have has similar requests from small players in the US and in thr EU.
Or maybe start a patent troll insurance company with similar goals. Make yourselves an unappealing target.
"Thank you for your correspondence, I regret to inform you that you are mistaken in your understanding of my software. The methods of data transfer and QR code analysis are in no way covered by your patent. Even if my software was infringing on this patent, I think that your patent should be invalidated by prior art. Please see Patents, X,Y,Z as evidence of that." It doesn't matter what X,Y and Z are, you are just making them waste time on technical work.
Basically you are saying. Lets go to court and let a judge look at all these detailed technical things and let the Judge decide if I owe anything or if you should have this patent at all.
Lawsuits from Patent Assertion Entities (PAEs, sometimes called “patent trolls”) can be a drain on resources for any company. With software a primary PAE target, and software becoming an integral part of all industries — putting nearly all companies at risk of being sued.
That’s why leading companies have come together to form a collaborative, voluntary community to reduce this risk – one that grows in importance as the economic environment becomes increasingly uncertain.
Why is there no law that patents only hold when they are actively developed by their owner?
Patent troll is a evil move and against a one man double so
Consider contacting organizations like the EFF.
If they come back to you insisting that you're infringing or if you don't have the capacity to do this analysis, or if your analysis is that you indeed do what the patent describes in the same way, I would involve a lawyer. But I wouldn't do it right out of the gate for the first look at the claims as this is your easiest way out.
I suspect this will start to hurt US capitalism. who wants to start a company only to get sued at every turn.
Re-launch your company as a blockchain DAO then leave the country. What kind of retarded legal system facilitates this BS? Why would anyone want to live in such place?
Anyone who has any self-respect and has had to work hard for their money would never consider taking any of this crap.
Or if you really like your country (I.e. the land and its people), you can shut down your business and join the communist revolution. With the current anti-competitive climate, it's probably only a few years away. Just wait for Gen-Z to receive a decade or so of persistent crony-capitalist beatings and you'll be able to find enough disgruntled comrades to help you fix your situation.