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):
- Contact Amit Agarwal – http://www.agarwalpernas.com/. Four days after I began working with him the troll voluntarily dismissed the lawsuit.
- 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.
- 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.
- 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.
- 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.
- Look into other people who have fought off patent trolls in the past, especially looking at NewEgg for inspiration.
- Support the Electronic Freedom Foundation – a group dedicated to helping get patent reform through to prevent this sort of lawsuit in the future.
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.
- 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.
2 thoughts on “How To Beat a Patent Troll in East Texas”
Suggest you change advice item #8. A company, such as a c corp, or limited liability corporation (llc), cannot be represented by an executive unless the executive is an attorney. If one has formed such an entity and it is a named defendant in a lawsuit, then an attorney is required. Wanted to help you avoid dispensing advice that could lead one to make an imprudent decision.
Great point! I will fix this.
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