Some in the private sector are also working on solutions with the patent office. In August, Google launched a free prior-art search tool, which scours many sources, including other patents, academic research, the Web, and books. "I've never met anyone who thought that the patent system as it exists today is a net benefit for the software industry," says Google software engineer Jon Orwant, who manages the project. In September, Stack Exchange, a question-and-answer site co-founded by Joel Spolsky and Jeff Atwood, teamed with the patent office to launch Ask Patents. The site uses crowdsourcing to find prior art and assess the claims of new patents.
Meanwhile, several tech companies, including Google, Facebook, Intuit, and Rackspace, filed a 30-page amicus brief to the U.S. Court of Appeals in December, asking the court to reject patents on abstract ideas that involve a computer or the Internet. "Such bare-bones claims grant exclusive rights over the abstract idea itself, with no limit on how the idea is implemented," reads the document. "Granting patent protection for such claims would impair, not promote, innovation by conferring exclusive rights on those who have not meaningfully innovated, and thereby penalizing those that do later innovate by blocking or taxing their applications of the abstract idea."
Entrepreneurs Fight Back
Unfortunately, none of these initiatives will make the kind of broad changes needed to curb the troll attacks against small and medium-size businesses. For now, the best recourse is to stand and fight.
Steve Vicinanza is one of those launching a counteroffensive. About a year ago, his company, BlueWave Computing, an Atlanta-based IT consulting firm, received an infringement claim from an NPE called Project Paperless. It owns a patent on scanning paper documents directly into an e-mail attachment. The patent was issued in the late 1990s and had gone through a series of owners before passing to Project Paperless in 2011. The troll demanded that BlueWave, which has more than 100 employees, pay a one-time license fee of $1,000 per employee. But BlueWave doesn't make office equipment--it just installs it. The claim struck Vicinanza as so crazy that he ignored it.
But then Project Paperless sued him--and named 100 of Vicinanza's clients as co-defendants. The troll claimed these customers were also infringing thanks to the printers and IT networks that BlueWave had set up for them. Vicinanza could either go to court or pay the license fee, which was now double--more than $200,000.
Though his attorney advised him to pay the fee, Vicinanza didn't like the idea. "I know a lot about this stuff," he says. "I pulled their patent. I said, 'This is crap!' I'm Italian, and we know how this stuff works. It's called extortion. When people try to extort money out of me, I fight back."
Vicinanza paid a Seattle firm $5,000 to conduct a prior-art search. When he had enough ammunition, Vicinanza warned the troll that he had evidence that invalidated the patent and was going to request a reexamination. Soon after, Project Paperless dropped the suit. All told, Vicinanza estimates he spent about $50,000 on the fight, but he considers that a victory. "People kept telling me that this would cost $1 million," he says. "I got off for a fraction of the fee I would have had to pay if I had settled. And if I had settled, I would've gotten agita when I wrote that check."
Drew Curtis, founder of Fark.com, a news aggregation site, is also encouraging other entrepreneurs to fight. Curtis's company was sued in 2011 by Gooseberry Natural Resources, an NPE with a patent on a Web form used to create and send out press releases online. Fark doesn't do anything like that, but trolls don't have to prove infringement in order to file a lawsuit. "These are just attorneys who have made the decision to ruin people's lives," says Curtis. "It's capitalism at its purest and worst."
Many other companies, including AOL, Yahoo, and Digg, also got hit with the suit. Curtis refused to pay up. "I was the only guy in the lawsuit that wasn't a conglomerate or venture-cap-backed company, guys who had war chests," says Curtis, who spoke about his experience at a TED Conference this year. "And I was the only guy that fought it." After Curtis made several discovery requests--asking Gooseberry to provide, for example, screenshots demonstrating Fark.com's violation of the patent--the troll offered to settle. Curtis refused to sign a nondisclosure agreement or pay a settlement fee. To his surprise, the troll backed down. (Curtis won't divulge how much it cost him to wage this war. He will say only that he got outstanding American Express points paying his legal fees with his credit card.)
Friedland, of Build.com, has also begun taking a stand. When he made it clear he was ready for a fight, the majority of the trolls backed down, he says. But a few sued. Friedland started calling other defendants, most of which were not direct competitors, and asking them to join with him and share resources. "I would tell them that we have mutual interest," says Friedland. "And that if we work together, we can get it resolved in the best way possible for all of us. As a group, we are stronger than as individuals." For one suit, Friedland managed to persuade all the co-defendants to fight, even though many initially wanted to settle. The case is still ongoing, and there are more battles ahead: Friedland is still involved in six other disputes and continues to get new infringement notices from other patent trolls. For him, the long-term answer is changing the patent law. (He would like to see the life of a software patent reduced from 20 years to two years and patent rights go only to the original inventor or company that commercializes the invention.) Until that happens, he encourages companies to reject the nondisclosure agreements that trolls routinely insist upon as a condition of settlement. Instead, he says, companies need to share their experiences with one another. "It's like being an abuse victim," he says. "If you don't talk, you perpetuate it."
-- Story updated on Feb. 14, 2013.
