Let’s Revisit Lodsys v. TMSoft One Moore Time, Shall We?

I know, I know.  Recycling content, thou art the bane of summer.  And those of you with no sense of humor or grammatical puns will write to tell me I’ve misspelled a word in the title.  Nevertheless, it’s very much worth another recap because this story is important.  I wrote about it here and here, and now I’m writing about it again here.

The salient lessons we can learn, and by “we” I mean anyone anywhere who’s been sued by a troll, in no particular order:

1.  Refusing the Gag Order Is A Great Move:  I’m not sure how practical this is because I’m not a lawyer and maybe you can’t always not sign a confidentiality agreement?  But this right here was key in this case.  What trolls thrive on is being hidden under the bridge.  When you talk about them and what they’re doing, you shine a light in their  face and just like the cockroaches they emulate, they’ll run scampering back into the dark depths from which they came.  Hopefully.

2.  There Are Ways To Fund Defense Against The Dark Arts:  As Todd Moore says on his blog, there’s no one else out there right now like the Public Patent Foundation providing small businesses with pro bono legal services.  That tide of options is turning, however.  Already, we’ve seen Defense Mob come onto the scene with the ability to crowdfund patent defense.  Even if the troll doesn’t start out with litigation, this type of site could be used to respond to demand letters, fund prior art searches, etc.  And by tracking demand letters at That Patent Tool, we can build a core of knowledge surrounding these guys and what they’re doing, predict where they will hit next, build a list of the most egregious offenders and who their counsel is, etc.  Exciting times!

3.  Loser Pays Is Not An Effective Solution To This Problem:  As Todd says (emphasis mine):

And even if you could win and get awarded your attorneys fees and costs, which are very rare, you probably won’t see a dime of that money.

This is because patent trolls are set up as shell companies without much in assets.  Any money that the patent troll receives from all the licensing agreements is immediately distributed to other companies—this includes the law firm representing the patent troll on contingency and the company that originally held the patent.  Any money you might be awarded will be long gone by the time it comes to collect.

I’m glad he made this point because I made it too and I really like it when people back me up.  High five, Todd!  It’s not bad to make the loser pay, it’s just that patent trolls are losers with a capital “L” and they’re going to hide their money from you so you’ll never see it if you win.  That’s just the cold, hard, truth.  And so is this:


4.  History Is Important, Kids:  This is the best thing of all right here, the back story.  As the Apple Insider article on the story points out,

Lodsys first began filing lawsuits against iOS developers using Apple’s in-app purchase feature in 2011. The suits prompted Apple to attempt to intervene on behalf of its development community.

But the legal action spurred a number of developers to settle out of court by agreeing to licensing dealswith Lodsys, ending the lawsuits and allowing them to continue to offer in-app purchases. Though Lodsys started with smaller developers, it moved on to bigger companies like Electronics Arts and Disney.

This is a great lesson in the troll MO…go after the little guys first and see what kind of reaction you get.  Low and behold, if the little guys pay up, they start trolling for bigger fish.  Which, incidentally, might be where your friend enemy and mine Peter Detkin was going with his term “patent troll” to begin with.  Maybe he didn’t mean the guy under the bridge after all, but it was a reference to fishing troll lines, where you drag a net behind your boat and see what you can catch?  Anyway, by putting the full story together, we can see that these guys were successful at the little game so they stepped it up and went after deep pockets.

Some trolls use a different campaign, they go straight for the deep pockets first and bypass the little guy altogether.  Others go after only the little guys, figuring if they blanket the country with demand letters (MPHJ, I’m looking at you), they’ll get enough hits to fund their next souped-up Ford Mustang.  (Because, you know, small town Texas lawyers probably haven’t heard of the Bugattis that the play-uhs drive.)


Mac Rust, “nice guy” lawyer for MPHJ.
Via Joe Mullin and Ars Technica.


It looks like Lodsys got a lot moore than they bargained for when they went after TMSoft.  Like Rackspace, Fark, Neiman Marcus, and NewEgg before him, Todd Moore has discovered that backing down or rolling over is exactly what fuels these guys to keep playing their game.

Congratulations, Todd!  As we say in Texas, “You done a good thang.”



{loser image found here: http://fliplinestudios.wikia.com/wiki/File:Loser.jpg


2 thoughts on “Let’s Revisit Lodsys v. TMSoft One Moore Time, Shall We?

  1. Pingback: Obama Administration Offers Weak or Detrimental Intervention in the Patent System | Techrights

  2. Pingback: OMG Lodsys, You Don’t Want To Go There With Martha | IP Troll Tracker

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