Attack, Defeat, Desist – How Kaspersky Handles Patent Trolls
Back in October of 2016, Kaspersky, the world-renowned online security solution provider was hit by a patent troll called Wetro Lan who alleged that Kaspersky had, ‘infringed upon a patent related to firewalls,’ and offered a, kind settlement of the matter out of court for a large sum of American dollars. According to a report by Ars Technica, the Wetro Lan LLC, owned the US Patent No. 6,795, 918 which claimed an internet firewall. The patent was filed in 2000 and was used as an excuse to sue dozens of companies that had anything to do with the development or production of internet routers and switches.
In order to avoid dealing with a legal case, most of these companies chose to settle with Wetro Lan instead of fighting them head-on. With a short time, the cases reached low-value settlement demands and none of it actually reached the claim construction phase. But with Kaspersky it was different. Wetro Lan could have no chance with Kaspersky and it would soon learn its lesson.
What is Patent Trolling?
You’ve heard plenty of patent suits (Apple vs Samsung) but you’ve probably not heard of patent trolling. So what is it exactly? According to the Internet dictionary, ‘patent trolling is the practice of obtaining and using patents for licensing or litigation purposes rather than in the production of one’s own goods or services.’
According to the Electronic Frontier Education, the case against Kaspersky is the perfect example of patent trolling where they allege that the U.S patent System designed to protect innovation is now falling apart and seems to harm innovation rather than foster it. The rise of the patent troll is worrisome and has grown considerably since 2011.
A similar example could be of Lodsys LLC, a company with no products of its own, targeted app developers with litigation threats claiming an infringement of in-app purchasing technologies. This was a widely popular case that had both Google and Apple intervene to resolve the patent claim and had many developers choosing to settle instead to fight.
The Lodsys LLC went on to sue General Motors. Crocs, Somerset Investments, and dozens of other companies for various patents. It even sued Kaspersky Lab but lost the case as Kaspersky was able to win the lawsuit citing, ‘dismissed with prejudice.’ Eventually, by 2015, the Lodsys site domain expired and the company was shut down.
How Do Patent Trolls Work?
To understand how patent trolling works, we need to know what is a patent. According to the United States Patent and Trademark Office, a patent is defined as a ‘license granted by a government for an intervention, be it a new process, manufactured article, or a useful and new improvement, original ornamental design, or a new and distinct variety of a plant. It is often used for 20 years from the date of filing, which gives the patent holder a good chunk of time to exclusively produce the patented product, and also to pursue claims against other that infringe on their patent.’
Patent trolls make money by patent-infringement lawsuits. They keep a look out for existing technologies and try to decipher if any new applications or innovations relate to a patent that could be identical. Once the potential infringement is identified, the troll goes ahead and develops an attack plan by targeting weak companies or those that have a repute for easy settlements. The trolls play on the weakness of the companies to avoid the costs of a legal battle because it would be more expensive to hire a lawyer, fight the lawsuit and risk facing a defeat than to give in to settlement demands.
In a report released by RPX Corps, NPE Litigation, ‘nearly 4,500 patent cases were filed in 2014, out of which 2,791 cases were by patent trolls.’
Defeating Patent Trolls the Kaspersky Way
If a company has the strength to go through with a lawsuit and believes the infringement is shady, they can easily attack and defeat trolls the way Kaspersky did with Wetro Lan and Lodysys. Kaspersky recently won the battle with Wetro Lan by refusing to pay even a single nickel. The troll lowered the settlement sum to $10,000 from $60,000 but in a rare twist of events, Kaspersky demanded Wetro Lan to pay the $10,000 for Kaspersky to drop the lawsuit. If the company didn’t agree, Kaspersky would continue to drag them into court and have the risk of them paying for court expenses. The CEO Eugene Kaspersky firmly believes that companies which prefer to settle with trolls:
”…keep feeding the parasites which, only leads to stronger, hungrier, nastier patent trolling to slow down the development of the IT industry.”
He urges companies to:
”…stop their short-sightedness, see what’s really afoot and finally help put an end to this scandalously costly plague of patent bloodsuckers.”
What if You Are a Small Startup
If you are a small startup and do not have the legal capacity like Kaspersky, then you need to take the precautionary route instead of the attack route with trolls. Mitigate risks with patent-trolls by hiring patent-tracking companies on an annual-fee basis to stay informed of potential problems with patents and rights in the market. The only way you can get ahead of trolls and avoid being their victim is by staying alert, believing in the authenticity of your product, and doing your homework well. Trolls can be defeated. Feeding them, however, is not the solution.