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Patent Trolls vs. Modern Day Billy Goats Gruff

Most people have never heard of a patent troll. I hadn’t until a year or so ago. They involve patents, which most of us know little or nothing about. But the “troll” part is easily understood.

Remember the kids’ story of “Three Billy Goats Gruff”?

The goats wanted to cross a bridge. But a troll stood in their way and threatened to gobble them up.

The first two goats persuaded the troll to wait for the third and larger goat to come by in order to get a bigger meal. But when the last and largest of the goats showed up, he kicked the troll off the bridge and everyone lived happily ever after.

Well, the modern-day “patent” troll operates pretty much the same way. It preys on smaller companies and threatens to sue them if they don’t pay a “licensing fee” for the privilege of crossing the bridge.

Patent trolls are often trial lawyers (or are represented by trial lawyers) trying to shake down unsuspecting and vulnerable business owners over alleged “patent violations” – business owners who aren’t large enough to kick the troll off the bridge.

Let’s look at some examples…

There’s a very aggressive, obnoxious patent troll named “Eclipse IP.” And according to the Electronic Frontier Foundation’s (EFF) “Stupid Patent of the Month” blog, last January the Eclipse IP troll “sent a letter claiming that Tiger Fitness infringes one of their patents by sending emails to customers updating them about the status of orders.”

The shakedown demand: $45,000. Or get sued.

For sending a customer an order status email?

It gets worse…

“Beginning in 2011,” writes Daniel Nazer, “a patent troll named Innovatio IP Ventures, LLP, began a massive shakedown campaign. Armed with some patents purchased from Broadcom, Innovatio sent thousands of letters targeting hotels and cafes that provide Wi-Fi for customers. The troll demanded as much as $2,500 per location.”

For simply providing a wi-fi signal it’s already paid for to its customers?

Ever vote in on an online poll? Probably almost everyone who’s ever opened a browser on the Internet has at one time or another.

Well, there was a photographer who had readers submit photos which he posted on his website. He then let visitors vote in a competition to see which photos they liked best. This harmless, fun online competition – in which no money was involved whatsoever – got the photographer sued by a patent troll.

Ever scan a document and email it to somebody. Lots of businesses do it every day.

Well, as exposed by Joe Mullin or ARS Technica, a patent troll named “MPHJ Technology” claimed to hold a patent on that. As such…

“MPHJ Technology Investments quickly became one of the best-known ‘patent trolls’ of all time by sending out thousands of letters to small businesses – 16,465 of them, we now know – saying that if the business did not pay a licensing fee of $1,000 or more per worker, it would be sued for patent infringement.”

Greedy ol’ troll!

Then there’s the patent troll named “Personal Audio” that was shaking down podcasters claiming it “invented” podcasting.

But an awfully big podcasting goat named Adam Carolla, along with an army of smaller goats, fought back and kicked the Personal Audio troll off the bridge last year.

Up until now, businesses have had to defend themselves from these predatory shakedown trolls, but they shouldn’t have to. It is a legitimate role of government to stop such abuses. Alas, it’s a responsibility that Congress shamefully continues to kick down the road.

Until Congress gets serious, businesses beware. Trolls ahead!