How To Beat a Patent Troll in East Texas

Below I will share the the contact information for the outstanding attorney who helped me, the letter I wrote to the patent troll, and my general recommendations on how you also can beat a patent troll if sued in EDTX.

A patent troll brought a lawsuit against my company, CoalitionTechnologies.com, in the Eastern District Court of Texas. My attorney and I were able to get them to voluntarily dismiss the lawsuit shortly afterwards.  I won’t be naming the patent troll here as they voluntarily dismissed the lawsuit.

Coalition has a policy of never settling frivolous lawsuits and fighting all the way to the bloody end. We recently won a judgement with attorneys fees in another lawsuit.

When I first received the notice that I was being sued, I freaked out a little bit. I didn’t sleep well for the next couple of nights, but began working on this right away. I contacted a couple of dozen Texas patent attorneys, most of whom quoted outrageous prices ranging from $200 to $600 per hour and some asking for a $25k retainer upfront! I soon realized that all of these Texas patent attorneys are in the same game with the patent trolls… these attorneys make money the longer the legal process gets drawn out. I was contacted by Amit Agarwal (310-351-6596 – based in LA but he can operate anywhere) and at first I was turned off by his aggressive approach. However, I spoke with my other attorney and he said it won’t hurt to give him a shot. I signed up with Amit and it was the best decision I could have made. Amit brought a very aggressive approach and quickly got the patent troll to back down and dismiss the lawsuit.

The lawsuit was mostly dismissed after Amit really went after the troll and their attorneys with some great research and motions he spent Christmas writing. I do think the letter I sent to them also played a part in getting the dismissal. The letter shows that I understand their business model and am committed to fighting them and making their lives miserable and will never give them money:

To whom it may concern,

I am sure you receive many letters from angry business owners or the attorneys representing them who have just received your patent lawsuits. I have a very good understanding of your business and already have committed to a course of action to handle this type of “patent troll” lawsuit, so I think you will find this letter to be a bit different than what you usually receive.
I have been closely following the non-practicing entity lawsuit industry and determined years ago that I would take the same approach as Lee Cheng at Newegg. I have also been a strong supporter of the Electronic Freedom Foundation and have been in contact with Daniel Nazer there.
Your business model: The business model you are using is to acquire cheap patents and then partner with patent attorneys to work on a commission only basis of any win or settlement. You then file lawsuits against 10-15 companies at a time with the goal of getting companies to settle under an NDA with minimum fuss for a reasonable dollar figure. Since you are filing so many of these identical lawsuits, you have all the paperwork that you can just do a find and replace in each to move forward. You are willing to go all the way up to trial, since you expect a minimum of work and a high likelihood that the business will find it cost prohibitive and frustrating and just settle. You file these lawsuits in the Eastern District of Texas as this is a court notoriously friendly to plaintiffs and patent holders, while also very inconvenient for defendants. You anticipate that the businesses targeted will have to hire your friends at other law firms and pay them high legal fees. Ultimately, you expect that businesses will say “This will cost us $100k-1m to litigate, we will settle for 5-10% of that”. Do you agree that I have a fair understanding of your business?
Your patent: Patent No X,XXX,XXX is clearly one of the patents that the USPTO office rubberstamped on it’s way through. It is way too broad and covers 99% of all websites on the internet. There is lots of easily accessible prior art. You wouldn’t find any infringement anyways. Your goal clearly is to not actually fight this patent in court, but to rely on the high legal expenses on the way to win to force defendants to settle.
My defense: The way to fight a patent troll is to gather all potential plaintiffs together and to organize a unified defense: we can share court documents (find and replace like you use), defense strategies, ideas, and even the attorneys. We know we won’t get a fair hearing in Eastern Texas, so we are committed from the start to go up through the appeals courts. We will fight this as far as we can and we will win. I will reach out to the other victims of your scheme: XYZ, ABC, DEF,  etc as well as try organize all companies that you would try to apply this to in the future. I have a strong relationship with XYZ and several other companies you are going against and they will undoubtedly join me. I will make a strong case that no one should settle and that we should all fight it all of the way through the courts. I will show that it will be far cheaper to do this with me then to pay you off to go away. 
You rely upon easy settlements and those will completely dry up. I will watch for every lawsuit you file and contact the defendant immediately to join me. You will go years with zero settlement money while we fight this out and get your patent tossed. We will aggressively try to get your attorneys disbarred if warranted, as in our opinion we believe it will be, and if warranted will find reasons to sue the patent owner personally. We will fight everything you do and make an enormous amount of work for everyone involved on the patent troll side.
Publicity: You targeted an industry that specializes in public relations, so along the way to our victory, we will aggressively get the message out about how honest companies and hard-working entrepreneurs are getting scammed by patent trolls. We will share details of this lawsuit and others with reporters and everyone else.. How would you like everyone you know – your family and friends – to realize you have no ethics and do nothing to innovate but simply extort money from those who do, which in our opinion is the case? We will make this as painfully public as possible. We will never sign an NDA to have settlement talks, so please don’t even mention the idea. If necessary, we will blog the entire process of the lawsuit, get articles written in major publications, and make sure that anyone searching for the patent owner and the CEO of the patent firm (who has already been arrested previously for tax evasion), and anyone searching for the attorneys involved finds information about this situation.
My character: I have built my company from scratch and have never had an investor – it is entirely self funded with my blood, sweat, and tears. That means I have complete decision making authority to fight you all the way. I will never support your business model by paying you a single dime. I will fight this case to the bitter end. I know I will not get a fair hearing in Eastern Texas and so I have already committed that even if I lose, I will appeal and appeal and appeal. I will fight this to the absolute limit and liquidate my company if I have to. I have studied the patent troll business model for a long time. I believe you and your industry are a gigantic suck on the American economy, that patent trolls destroy innovation and hurt good people and businesses. You are evil and the reason people hate lawyers. I believe there are very few things in this world worse than a patent troll. I am going to make it my personal, principled mission to destroy everyone involved on your side of this case if it moves forward.
My previous lawsuit: I just completed a lawsuit that was far more difficult to win than this one. It took two years, a lot of money and effort, however, we did win the case and also were awarded six figures in attorneys fees. Both attorneys and the judges said that 97% of people settle in similar situations, but I fought it all the way through. If you’d like to talk to my attorney in that case to find out what a bulldog I am, I will be happy to provide his contact information. We are also currently pursuing discipline against the attorney that represented the opposing party. I anticipate a much easier win in this case and a much higher likelihood of successfully getting the attorneys in this case disciplined for bringing cases that are an abuse of the court system.
Insurance: I checked my policy and it appears to specifically exclude patent infringement, meaning that I have full control over this lawsuit and can fight it all the way to the end. We are fully self funded and have very little to pay even if we ended up losing after appeals and everything else.
Your one and only settlement offer: Once I begin organizing all of the other defendants and potential defendants, I will have to commit to each one that I won’t be settling and that I will fight this all the way through and make it as public as possible. You are probably hoping that the rest of this email is just hot air and in a few months I’d simmer down enough to settle. However, I will be making commitments to a lot of other people to fight this all the way through and will be fully committed to fighting this the full distance. So my true one and only settlement agreement is this: I will pay nothing and you will give me a written agreement that you will not bring any cases against me in the future. If this happens, I will not start organizing other defendants and potential defendants, and I will not start the aggressive publicity campaign. You will have no more easy settlements from any defendants for years as we fight up through the appeals courts if necessary. You have five business days (end of day December 27th 2016) to reply to this settlement offer, then I will begin organizing and contacting all other plaintiffs and fighting this.
I look forward to hearing your reply soon.
My general recommendations on how to fight a patent troll (keep in mind I am not an attorney, so take my advice with a grain of salt):

 

  1. Contact Amit Agarwal – http://www.agarwalpernas.com/. Four days after I began working with him the troll voluntarily dismissed the lawsuit.
  2. Understand the patent troll business model. They live on your fear of high legal costs and are hoping you agree to a big settlement where they did very little work. If you break their business model by fighting them all the way through, they (and future patent trolls like them) will leave you alone.
  3. Do not hire the regular EDTX patent attorneys – these guys make big money in legal fees from you, then just settle anyways. The patent troll wins by taking home a big settlement, your attorneys win by making lots of money in legal fees from you, and you lose by paying everyone who takes part in this scam.
  4. Be willing to bring massive publicity in. Many companies are embarrassed that they are being sued and try to keep it quiet. You want to do the opposite – try to get articles in every major publication possible and show the world how the patent troll scam works. The group who sued me was very publicity-averse and I think this may have played a part in the early dismissal.
  5. Do your research. See what date the patent troll created their business in Texas and where it is registered. See who else the patent troll has sued. See who the executive officers are at the patent troll and research their attorneys thoroughly.
  6. Look into other people who have fought off patent trolls in the past, especially looking at NewEgg for inspiration.
  7. Support the Electronic Freedom Foundation – a group dedicated to helping get patent reform through to prevent this sort of lawsuit in the future.
  8. If you don’t have the money to hire an attorney, represent yourself. Just never give in to feeding these patent trolls more cash or they will only swell in size and power and be back to harass you and others in the future. Fight to the bloody end! Apparently you are not legally allowed to represent your own LLC. Thanks lawyers.
  9. I will not be taking any clients or employees on in the future in the Eastern District of Texas until they get their kangaroo court fixed. I posted a notice stating this in the footer of my company’s contact page as well. My attorney tells me that should keep me out of their jurisdiction.

 

 

Make Managers, Directors & Shareholders Liable

For many years, cigarette companies fraudulently hid evidence that smoking causes a myriad of health issues. Cigarette company managers directly hid the evidence their research teams found, cigarette company boards of directors knew and hid the same information. Enormous human suffering and pain has been knowingly caused by these people. Why did they do it? The managers and directors received huge salaries and bonuses for many years and retired fat and happy.

Is this an isolated incident?

No. The exact same pattern has played out over and over again. Before the 2007 financial crisis, real estate agents, mortgage managers, and bank directors knowingly got people into homes they could not afford then took enormous multi-million dollar bonuses each year.  When the house of cards collapsed, these people kept their ill-gotten gains.

The same thing continues to happen all the time in many businesses ranging from Wells Fargo’s fake accounts, Exxon’s half century of hiding climate change information, Comcast & TWC’s payments to landlords and cities for exclusive monopolies, Volkswagen’s falsifying of environmental data from their diesel cars, and many other areas.

This is a systemic problem that needs a systemic solution.

The reason that these issues have been happening and will continue is that corporate managers, boards of directors, and shareholders can collect enormous financial wins while taking risks with other peoples lives that they will not be held accountable for.

How do we stop systemic abuses like those perpetrated by cigarette company managers, bankers scamming the system for big bonuses, and oil companies hiding climate change research?

Make managers, directors, and shareholders PERSONALLY liable for their actions when in their positions for twenty years. If they commit unethical or illegal acts today, then when they are discovered in ten years we can sue them and take their salary and bonuses back that they had illegitimately earned. Do not allow companies to buy insurance companies to cover this risk. If people are afraid personally, they will not make the business decisions that put someone else’s life below their own personal gains.

Some people have argued that shareholders should not be liable for decisions of boards of directors or managers they can’t directly control. My suggestion is that they can and should be liable so that they seize this control and enforce strict standards on their boards of director and managers.

Others have argued that managers and employees should not be responsible for decisions made higher up. The same argument was made at the Nuremberg trials that the concentration camp guards were just following orders or didn’t really know what was going on. Those people put their own financial / career well being over the very lives of others. If you are asked to do something unethical or if your company is doing something harmful to the world, then you should be obligated to quit and find a better place to work. You should not be able to keep financial gains that you obtained at the expense of other people.

To summarize, make these changes to our law and you will see a lot of the extremely harmful abuses by businesses disappear overnight:

  1. Make company managers, boards of directors, and shareholders directly and personally liable for unethical decisions and actions of their company.
  2. Do not allow companies to buy insurance policies that protect individual managers or directors or shareholders from the effects of unethical behavior.

Interesting Day Yesterday

I had a fun day yesterday (Saturday):

  • Watched several Laracast training videos on PHP
  • Worked on fixing my importer from Time Doctor to Time Tracker
  • Came up with ideas for improving my SEO team’s tracking
  • Watched Oblivion, a fun sci fi movie starring Tom Cruise
  • Finished beating Inside, a highly rated xbox one game.
  • Watched parts of the Washington Huskies football game where they blew out the Ducks 70-21. Huskies are 6-0 this year and ranked #5 in the country!

Preventing Burn Out When Working 7 Days a Week

How do you prevent burn out when you work 7 days a week? I generally work every day including weekends, and many days I’ll put in very long hours. This can cause physical effects like blurry eyes, sore / stiff back, lack of flexibility. It can also cause mental burn out where you struggle to get anything done productive.

Pushing through the grind / being persistent is the most important trait to achieve success as an entrepreneur. How can you avoid burnout while still driving hard?

I try to mix things up for myself a little bit:

  • My most productive hours are the morning when I first get up, so I try to get in a few hours of hard charging work right away.
  • Naps are incredibly important for refreshing your brain to keep going
  • Working out is a necessary way to relieve stress and get out from in front of your computer screen.
  • Social interaction is huge. I try to call a family member or friend every time I am driving to or from work in my car. Most friends won’t pick up, but I usually can talk to a family member.
  • Intimacy with your significant other is also an important way to relax and release and do something not work related.
  • Occasional short vacations and longer trips can go a long ways. I usually work every day on vacation / trips, but still do find time to recharge since I am in a new environment. I typically do a weekend trip each month and a week or two every six months. Next weekend I am headed to Bishop to rock climb with friends.
  • Drink tons of water. This not only keeps you hydrated, but makes you get up frequently to go to the bathroom. You get a chance to stretch and move around every 45 minutes or so and look away from your computer screen.

Universities (Especially Online) Are a Waste

I attended the University of Washington and really enjoyed my experience there. I probably enjoyed it too much: I graduated in four years with a 3.5 GPA, but most of my time was spent partying or not really doing anything at all. Perhaps you could consider that learning about life, but I think I have learned far more about life out in the working world.

For people who are self motivated, the internet provides an enormous treasure of learning resources. You can get the course schedules, textbooks, lectures, quizzes, and everything else for major universities like MIT, Harvard, Stanford, and many other top tier schools online. For a tiny fraction of the cost of a university education, you can rapidly go through all of the course materials on your own and learn at your own pace and on your own schedule.

The main benefit of a university comes from those who are not self motivated. If you can’t study unless you have a regimented schedule forced on you from the outside, a university can help with that. However, spending $200,000 is idiotic. Go to a local community college and spend $10,000 for the whole thing.

The other reason people go to university is to get a piece of paper saying that they went there. I know a lot of employers look at this piece of paper, but I also know a lot of employers that couldn’t care less. All I care about is your work skills and previous experience.  Further, almost no employer cares about if you got a piece of paper from one of the for profit universities…  Full Sail University, University of Phoenix, Devry, Kaplan, ITT, etc. Don’t waste your money on any of these.

The Mighty Power of Google

I have worked “optimizing” search engines for my entire post college career. “Optimizing” is in quotes because I work to help companies that pay me show up higher in Google’s search rankings, perhaps occasionally against what Google would want ranking. I am probably more familiar with search algorithms used by Google than anyone outside of Google itself. I have discovered many little methods, as well as a few bigger secrets, of how to do my job of search engine optimization better than anyone else. Because I am successful at “optimizing” Google, I have built a company with sixty full time employees who also do what I do. I have many clients that receive far more leads and revenue than they otherwise would without my help.

I thought I was powerful and influential for awhile.

Then I realized that I am really just a barnacle on the surface of a worldwide leviathan. Google has tens of thousands times higher revenue than I do. I would not exist without Google, I am a small part of it’s ecosystem.

Everyone uses Google. Google controls the information we see on a day to day basis. Billions of searches and Google controls what gets clicked on and what doesn’t. Google controls which companies succeed, and which don’t. Each time I help a client reach higher rankings in Google’s search results, that client might see their overall revenues double or triple.

Google is a company with $75 billion in annual revenue for itself. But far more importantly, it controls many trillions of dollars of commerce going to other businesses. Google controls what information you see when you search for political questions. Google controls what answers come up when you look for the best programming language, best dating site, religious questions, and on and on.

Every day Google weaves itself tighter and tighter into our lives. As I drive to work each morning, every other driver is staring intently at their phones… mostly Android powered phones. Android controls 65% of the US market, 82% of the German market, 76% of the French market, 88% of the Spanish market.

Google is becoming harder and harder to influence. When I first started in search engine optimization, anyone who had read a few blog posts could figure out how to get their website to the top of Google. Now I see thousands of flailing worthless SEO firms not getting any real changes made for their clients. The old tricks mostly don’t work anymore. My team and I have had some success, but it takes far more work than it used to. And we are the #1 ranked “los angeles seo” services company… Most companies can’t move the needle at all.

I believe that Google is now more powerful than most governments worldwide. Google controls what information you receive, and because of that, in many ways how you think.

For me, I feel like I’ve become a cyborg. Much of what I think and remember is online. 90% of my communications happen through gmail. I can’t remember what I told I a client 6 months ago, but I can find that email in seconds. Much of what used to be stored in my brain is now stored online. Photos, emails, events, research, planning, and much else only resides online now. Google has literally become a part of my personality and who I am.

 

 

 

 

Hanlon’s Razor – Fundamental Attribution Error

Hanlon’s Razor states that you should never attribute to malice that which is adequately explained by carelessness.

Many times I have made this mistake and thought that someone in my life who had mistreated me had cunningly planned a way to hurt my interests. In reality, I think that most of the time those people had no ill will… they just didn’t care and therefore allowed something bad to happen.

Gamifying Workouts & Pokemon Go

I would really love if someone made a game where you could play an MMORPG while walking slowly on a treadmill. If you had combat against another character though, you would have to run on the treadmill and that would affect the damage you could do – whoever ran fastest would do the most damage. If you had a higher level character, you would do a higher level of damage as well. This way say a Level 10 character who could run 6 miles per hour would be equal to a Level 6 character who could run 9 miles per hour.

Pokemon Go is sort of like this -you wander around in the real world to collect Pokemon and level them up. It is highly addicting – Laurel and I played it for an hour or two last night walking around in the real world.  Augmented reality is pretty incredible stuff!

Doctors Should Be Paid On Outcomes, Not Procedures

I was just in the gym of the hotel we are staying at on Kauai for our honeymoon and overheard a couple of doctors talking. The entire conversation was about how they generate revenue and how to get more. Neither of them mentioned quality of care or patient outcomes once.

Our healthcare system incentivizes doctors to perform as many procedures as possible at a high of cost as possible without regard to patient outcomes.

The more MRIs and chemotherapy sessions and other treatments each doctor does, the more money they make. One of the doctors said his practice makes $110 million a year from all the services he charges for.

I think our whole medical system is backwards – doctors should be paid for achieving certain patient outcomes.

Imagine if you could go to a doctor and you knew he was paid based on getting you to the best possible outcome – wouldn’t you feel a lot better if he recommended a dangerous procedure? Right now when you are recommended a dangerous procedure you have to worry about whether the doctor just wants to make his next boat payment or pay for his vacation to Kauai.

Research shows that there is a massive amount of unnecessary treatments and procedures done in America each year. As a matter of fact, the 3rd leading cause of death in our country is medical error! Let’s stop paying trillions of dollars for treatments that don’t work and push through reforms for how healthcare is provided and how doctors are motivated.

Wouldn’t you rather overhear doctors conversing about the latest in medical science and how to get the best patient outcomes rather than how they are generating more revenue with a new machine?

 

Benjamin Graham’s “The Intelligent Investor”

Warren Buffet’s most highly recommended investment book is “The Intelligent Investor” by Benjamin Graham. Warren Buffet’s essays and philosophy on investing sound like the best way to invest to me, so I use his value based approach. Warren Buffet advocates that you keep in mind that underlying each stock is an actual business with a true actual valuation. However, the stock market gyrates wildly in reaction to if people are fearful or greedy and a good investor can take advantage of t his to buy low and sell high. I hope to learn more about how to do this from Mr. Graham’s book!