LAW-TED Talks-Drew Curtis: How I beat a patent troll

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Transcript:
Last January, my company, Fark.com, was suedalong with Yahoo, MSN, Reddit,AOL, TechCrunch and othersby a company called Gooseberry Natural Resources.Gooseberry owned a patentfor the creation and distributionof news releases via email.(Laughter)Now it may seem kind of strange that such a thing can actually be patented,but it does happen all the time.

Take something already being doneand patent it for an emerging technology --like phone calls on the internetor video listings for TV showsor radio but for cellphones,and so on.The problem with these patentsis that the mechanisms are obscureand the patent system is dysfunctional,and as a result, most of these lawsuits end in settlements.And because these settlements are under a non-disclosure agreement,no one knows what the terms were.And as a result, the patent troll can claimthat they won the case.

In the case of Gooseberry Natural Resources,this patent on emailing news releaseshad sort of a fatal flawas it pertained to myself,and that was that in the mainstream media worldthere is only one definition for news release,and it turns out that is press release --as in P.R.Now my company, Fark,deals with news, ostensibly,and as a resultwe were not in violation of this patent.So case closed, right?Wrong.

One of the major problems with patent law is that,in the case that when you are sued by a patent troll,the burden of proof that you did not infringe on the patentis actually on the defendant,which means you have to provethat you do not infringe on the patent they're suing you on.And this can take quite a while.You need to know that the average patent troll defensecosts two million dollarsand takes 18 months when you win.That is your best case outcomewhen you get sued by a patent troll.

Now I had hoped to team up with some of these larger companiesin order to defend against this lawsuit,but one-by-one they settled out of the case,even though -- and this is important --none of these companiesinfringed on this patent -- not a one of them.And they started settling out.The reason they settled outis because it's cheaper to settle than to fight the lawsuit --clearly, two million dollars cheaper in some cases,and much worse if you actually lose.It would also constitute a massive distraction for management of a company,especially a small eight-man shop like my company.

Six months into the lawsuit,we finally reached the discovery phase.And in discovery phase,we asked the patent troll to please providescreenshots of Farkwhere the infringement of their patentwas actually occurring.Now perhaps it's because no such screenshots actually existed,but suddenly Gooseberry wanted to settle.Their attorney:"Ah, yes. My company's having a reorganization on our end."Never mind the factthat the address led to a strip mall somewhere in Northern L.A.with no employees."And we'd like to go ahead and close this out.So would you mind giving us your best and final offer?"My response:"How about nothing?!"(Applause)We didn't have high hopes for that outcome.(Laughter)But they settled.No counter offer.

Now, as mentioned before,one of the reasons I can talk to you about thisis because there's no non-disclosure agreement on this case.Now how did that happen?Well during the settlement process, when we received our copy, I struck it.My attorney said, "Nah, no chance of that working."It came back signed.Now why? You can call them.They're not under NDA either.

Now what did I learn from this case? Well, three things.First of all, if you can,don't fight the patent, fight the infringement.Patents are very difficult to overturn.Infringement is a lot easier to disprove.Secondly, make it clear from the beginningthat either you have no money at allor that you would rather spend money with your attorney fighting the trollthan actually giving them the money.Now the reason this worksis because patent trollsare paid a percentage of what they're able to recover in settlements.If it becomes clear to them that they cannot recover any money,they become less interested in pursuing the case.

Finally, make sure that you can tell themthat you will make this processas annoying and as painfuland as difficult as possible for them.Now this is a tactic that patent trolls are supposed to use on peopleto get their way.It turns out, because they're paid on contingency,it works really, really well in reverse.Don't forget that.

So what does all this mean?Well to sum up,it boils down to one thing:Don't negotiate with terrorists.(Applause)Patent trolls have done more damage to the United States economythan any domestic or foreignterrorist organization in historyevery year.And what do they do with that money?They plow it right back into filing more troll lawsuits.

Now this is the point in the Talkwhere I'm supposed to come up with some kind of a solution for the patent system.And the problem with thatis that there are two very large industry groupsthat have different outcomes in mindfor the patent system.The health care industrywould like stronger protections for inventors.The hi-tech industrywould like stronger protections for producers.And these goals aren't necessarily diametrically opposed, but they are at odds.And as a result, patent trolls can kind of live in the space in between.

So unfortunately I'm not smart enoughto have a solution for the patent troll problem.However, I did have this idea,and it was kind of good.And I thought, "I should patent this."(Laughter)Behold, patent infringement via mobile device --defined as a computer which is not stationary.My solution: award me this patentand I will troll them out of existence.

Thank you.

(Applause)