Anatomy of a patent troll who wants $1000 from every scanner user in America: patents are totally, utterly broken

Joe Mullin's Ars Technica piece, "Patent trolls want $1,000—for using scanners," is an excellent, blood-boiling piece detailing the ease with which the US patent system can be used for pure extortion. A company -- its identity is shrouded in mystery and hidden behind several layers of obfuscation -- has a series of junk-patents allegedly covering any time anyone scans a document over a network and attaches the scan to an email. That may not, in fact, be what the patents say, but they're written in such absolutely tortured fashion that it's impossible to say.

The company -- and its many alphnumerical subsidiaries -- send invoices to small and medium business, threatening to sue them if they don't pay a per-employee license fee. Any company that fights risks having to pay triple damages for "willful infringement," though the companies that do fight win -- the patents are garbage, there's tons of invalidating prior art. But they still have to pay thousands in legal fees for the privilege of fending off these creeps.

When patent-troll apologists tell you that the patent system is necessary to protect "invention," ask them why the acceptable cost for this protection is allowing any unscrupulous scumbag to use the court system to extract windfalls from productive companies on the basis of having claimed to invented commonplace, existing, obvious technologies.

Vicinanza was able to get in touch with several other Project Paperless targets, suggesting that Project Paperless lawyers were indeed targeting companies based on the list.

Reactions to the letters varied. “Without question, some people were livid,” said Vicinanza. “Some of the smaller ones were scared out of their wits, in addition to being livid.”

Some were ready to fight back, while others had no intention of doing so. One mid-sized Atlanta business in the process of being acquired by a major Silicon Valley tech company paid the Project Paperless demand, no questions asked. Some companies just ignored the letters; others talked to an attorney. It isn’t clear the companies that did speak to their lawyers about the situation actually fared better.

“The patent attorneys typically have a whole different set of objectives,” said Vicinanza. “Now they’re in settlement mode. If the company does end up getting sued and the lawyer said ‘ignore them,’ a company could find themselves paying treble damages. Even my attorneys told me, settle it, you’re crazy to fight.”

Patent trolls want $1,000—for using scanners [Joe Mullin/Ars Technica]


  1. As a software developer, THANK GOD people are talking about this. I had a buddy who was threatened for having a button on his app that said upgrade. 

    1. Thank God it wasn’t an ‘enhance’ button; he’d have the men in black at his door.

  2. Can someone explain to me why the users of the technology (in this case, scanners) can’t just point the patent troll at the vendors of the technology and say “we didn’t manufacture or sell the technology, we are just users, and are shielded by a warranty for fitness of purpose [or whatever] for the devices as sold by the vendor.” -?

      1. Aye; I think there ought to be some manner of affirmative defense (“We bought the tech from vendor XYZ who, by vending the technology, implicitly represented to us that they had the legal right(s) to sell the technology to us in this legal venue for use in this legal venue, therefore we are dealing in good faith, aren’t patent experts, arm’s length, not infringing use …”, and so forth) that anyone could — with or without an attorney — posit to a judge, who would then throw the [expletive] case out on its ear, thereby shifting the cost of these [expletive] lawsuits to the patent trolls and the burden to the trolls to be able to demonstrate merit AND willful infringement by an actual implementor rather than a third-party who dealt in good faith and doesn’t have a burden of researching the validity of the royalty payments and licensing of someone they buy tech from.

        1. I’d like to see a boilerplate resource website where people can mark a sample letter as successful, similar to what bugmenot does with logins. Has Nolo reached into IP at all yet?

    1. From the article it seemed like these were “use” or utility patents rather than design patents.
      Since the vendor is not “using” the technology in the way described they are not liable for the infringing ways their customers are using their devices. Normally we would think of this as a good thing, but here, yeah it is pretty messed up.
      The simplest answer is that these patents should never have been awarded in the first place. Since they were, we can all see the major issues with fighting bad patents once they are awarded.

      1. It’s not quite as simple as that (as I understand things — IANAL). The vendors and manufacturers could be taken to court for “inducement”, especially if the process (allegedly) described in the patent is in the instruction manual of the scanner.

  3. It seems to me that companies like this would be a good target for Anonymous or similar crews.   If someone could find all their employees names and personal info and post it on the web, nature would take it’s course.   Even after the lulz kids got tired of it, having the first Google hit for your name permanently be the fact that you worked for a company like this might not be great for your future career prospects.

    1. You might stop short of ruining the lives of the secretaries and janitors.  Lawyers are fair game; unfortunately many law firms would see this trolling as aggressive and enterprising.

    2. This calls for the most extreme, cat-bin-lady level of personal destruction. Frame them all for kiddie porn…destroy their reputations so completely that they can’t even be prostitutes.

      Salt any land they have trod upon, and when they die, destroy their tombstones so no evidence of their existence remains.

      1. Sounds like the ravings of every not-very-smart LOIC user who is now in jail.

        I agree that they need to be stopped, but sloppy, ineffective, and unhinged isn’t the way to do it.

        1. My first suggestion would be: someone else do it. Frankly, I’m too busy eating cheetos to care enough that other people are getting sued to stick my neck out and organize an extensive campaign of personal destruction, as fun as that might be. 

          Next idea: croudsourced murder-for-hire. Betcha Special Victims Unit gets to the plot before RL. 

  4. It is not terribly useful to blame this behavior on the patent system, Cory.  This scam requires lawyers who are willing to indulge in extortion. They need to be found and punished. Seems like it might be a job for Anonymous.

    It is similar to the argument about guns: “guns don’t kill people, people kill people”. Fixing the patent system, which would no doubt be a great benefit to everybody, would be like outlawing one brand of gun. There are tons of scams where blood sucking lawyers sue completely innocent parties in the hopes that they will settle rather than spend the money to defend themselves. Even if the companies who own these worthless patents can’t be found, their lawyers surely can.

      1. Hey, I said “Seems like it might be a job” not “This is a job”. I was heavily hedging my recommendation. And I was really thinking more about the concealed owners of the companies behind this scam rather than the lawyers, because one thing Anonymous is really good at is uncovering that kind of stuff.

    1. The source of the problem is that the legal system assumes that anyone who initiates a lawsuit has a legitimate reason to do so, and is not engaging in fraud. Thus, it requires absolutely no checking on the validity of a claim before requiring the defendant to answer in court.

      It’s true that this problem is not limited to patents, but patents are the easiest legal tool with which to commit widespread, unchecked extortion.

    2. It is not terribly useful to blame this behavior on the patent system, Cory. This scam requires lawyers who are willing to indulge in extortion. They need to be found and punished.

      Not sure why litigation is a preferred remedy to cleaning up badly written law.

    3. If it wasn’t for how badly the patent system is broken the opportunity for these kinds of lawsuits wouldn’t exist. It is a root cause of these problems.

      1. In L.A. we had a bunch of lawyers that were going to restaurants and suing them all for employing undocumented laborers, even when they didn’t have any employees at all. The same threat was used: fighting the suit will cost the restaurant owners far more than the $2500 they were being shaken down for. What would fixing the patent system do to solve this problem? Nothing. The problem is the lawyers’ abuse of the legal system and legislation preventing it is the answer, because you sure as hell are not going to make honest men out of all the lawyers.

        1. I disagree that fixing the patent system would not cut down on the opportunities for this kind of abuse, just as if we legalized all undocumented workers would cut down on the scenario you postulated. 
          It may not be a panacea for the corrupt legal system, but that does not mean it is not worth doing as a part of the solution.

  5. @boingboing-a9f28957ce27d2618d934bb24b1546fd:disqus @google-31aa7b1faf8f75eafe973c1a76064de4:disqus 
    By arguing for vigilante justice, aren’t you agreeing that the law is broken? Where is the reasonable legal recourse for discouraging bad actors under the current system? 
    Why not change the system?

    1.  An excellent sentiment! Just, at the present moment, hoping that Anonymous does something is more practical and certainly more likely than the chances of patent reform given the current political climate.

    2. I absolutely think the system is broken and needs to be fixed.  I’d honestly rather see public shaming that will linger on the internet than vigilante justice as a stopgap measure, but wouldn’t begrudge anyone  vigilante justice that didn’t exceed the level of obnoxiousness of what they’re doing. (eg, pretty much anything short of violence or threats therof)

  6. Need anti-SLAPP-style approaches to patent trolling. There are legitimate uses of patents. It’s very sad that seemingly most patent lawsuits and threats are (or seem) illegitimate. But the cases for patents are primarily in protecting actual legitimate innovation that requires expense and that, when rewarded by a brief period of monopoly, does in fact have the right effect of encouraging investment in areas that otherwise wouldn’t be explored.

    Congress and courts could solve this, and the Supremes have done some work in recent years in limiting trolling and so forth. Companies that don’t make things shouldn’t be allowed to sue. I’m sure there are reasons for transferring patents to non-producing firms or licensees, but I suspect that is all to avoid tax and not for a productive purpose. If you have to make something to sue about it, then one expects most troll suits would go away.

    Would still leave software patents (Apple/Samsung) and so forth, but would get rid of a lot of wasted money.

    1. The patent system was invented a couple hundred years ago, long before our current technology had developed. It made sense to patent the design of a machine, but machines are no longer patented. Today, patents are obtained for mere ideas with no physical implementation.

  7. I read that article this morning. Turns out I violated this patent 20 years before it was issued.

    I thoroughly regret my violation of future intellectual property rights and throw myself on the mercy of the court.

  8. A patent-trolls, by their very nature, are disreputable people.  Since no one is willing or able to contest the patent suit (due to the above mentioned financial reasons), how will you know whom truly represents the patent owner in such a case?
    So after a person or company pays $1k license, what is to keep a 2nd or 3rd patent-troll firm from approaching?

    Ooo, great idea for a patent-troll side-job: create and sell a list of people and companies that pay-up without a fight!!  -Patent Pending #230-233214

    1.  Sorry you’re already infringing on my patent. Now be a good lad, bend over, pay your money and I’ll send the MPAA, RIAA and BSA over for more.

  9. This is in no way an indication that the patent system is broken. Here’s the key piece of the puzzle: 

    “the companies that do fight win”

    Patents are (for all intents and purposes) a registration of an invention. When there is a dispute, or when someone is abusing their patent, it is for the courts to decide whether the patent is valid or not. Since people who fight are winning, then the system works as it was intended.

    Like it or not.

    I’m not a very big fan of patents, but TFA is simply wrong about this being a patent issue.

    1. By the same logic:  A schoolyard bully will occasionally find, to his surprise, that the kid he’s trying to beat up is going to fight back.  Rather than risk losing, he’s free to find a weaker kid and smash THAT kid’s face into the pavement.  Since the stronger victim “won”, this proves there’s no need to control the bully.  Q.E.D.

      1. This isn’t about the patent system; this is about crooked lawyer bullies. The patent system is just a convenient arena for their bullying; the cost vs benefit of lawsuit threats is their method.

        1. Well sure.  But the court is obligated to recognize when the court system is being abused, and put a stop to it.

          Otherwise people will lose all respect for that court, save the respect one gives a thug with a gun.  And they’ll ignore or disobey that court where-ever possible.

          1. That’s a legal issue, though. It’s got nothing to do with patents. In fact, people have been abusing the court system for literally decades, suing people frivolously. They certainly don’t need patents to do so. That’s just one convenient approach.

            Seems pretty obvious to me that if there’s a problem here, it is with the legal system.

          2. If patents give the scammers a unique and easy way to extort people – and they do – then it is indeed a patent issue.

    2. Roger puts it better, but I also strongly disagree with your argument. The costs of upholding one’s rights (money, time, stress etc) exceed the costs of sacrificing them. This so clearly true that there are firms which have a whole business model centred around exploiting this miserable situation.

      No one here has defined what a “broken legal system” actually is, but can you improve on this definition? “A legal system that makes it preferable to abandon one’s legal rights, instead of enforcing them.”

  10. I learned recently that patents have been interfering with innovation at least as far back as the *invention of the steam locomotive*, so anyone who says different should be forced to live in pre-industrial revolution conditions.

  11. We were doing this in 1994.  Windows for Workgroups 3.11 came with network fax software built in.  One machine on the network had a fax modem, and everyone else – including at least one machine with a cheap scanner – could fax documents through it.

    1. Too bad that fact isn’t usable to get the court to ignore the patent bullies. You’d still have to pay a lawyer many thousands of $$ to tell the judge that, and they still might ignore you.

  12. in a world were lawyers are needed to be politician and comedian work their way to political spheres while p(l)aying lawyer and wrestlers/steroid addicts, it is not a surprise that the nobel prize is a war mongerer, i wonder if all politicians are liars? and call them self journalists,poor world really,if it was not an invention lying will be a sin….OMG!!!! sunt tzu you should have name your work the art of lies

  13. They do a similar thing in Wi. to the Taverns that play live music. They say they are from BMI or something ask for money for playing copyrighted music at $200. a year. Some actually pay. Some won’t allow bands anymore and some tell them to F-off. They say that if a band comes in and plays a cover song they will be sued some stupid amount. 

    1. Actually, bars paying royalties for the music they play (live or recorded) is a pretty well established practice.  It is, after all, a public performance of a copyrighted work.  

      This scanner thing seems to me more like someone going around to bars and saying they hold a patent on the guitar, and demanding payment any time a guitar is played.

      As an aside, patent or no patent, $1000 per user seems like an outrageous licensing fee to me.

  14. There will never be patent reform in this country as long as the bulk of politicians are lawyers by trade

  15. There’s nothing particularly specific related to patent law in this kind of shakedown – it applies in any case where:

    1. a law exists that allows suing for damages
    2. amount demanded < (likely damages * chance of losing) + costs

    Which can easily be true where the chance of losing a case is in the single digit percentages.

    So you either repeal pretty much all civil law, from patents to environmental regulations. Or you change the equation such that truly frivolous suits are a los-making proposition, The usual way suggested for that is to allow the judge to award both sides costs as part of the settlement, as is done everywhere outside the US.

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