US transport group halts ArrivalStar lawsuits

23-08-2013

US transport group halts ArrivalStar lawsuits

Non-practising entity (NPE) ArrivalStar has agreed to stop suing members of a US transport association after hitting several public agencies with patent infringement claims.

Trade group the American Public Transportation Association (APTA), whose members include public bus and rail authorities, sued ArrivalStar in June this year for making “frivolous infringement claims” against several agencies.

A settlement on Wednesday means ArrivalStar will not sue any of APTA’s members or any vendors providing goods and services to its members for patent infringement, according to APTA chief executive Michael Melaniphy.

APTA’s filing in June followed at least 11 lawsuits, dating to 2010, in which ArrivalStar sued public transport agencies based on patents covering the “arrival and status messaging systems and methods for the transportation industry” (providing transit information to customers).

All of the defendants, most of whom are APTA members, settled the cases within months.  In other cases, APTA claimed, ArrivalStar extracted settlements after threatening to file suit against transport agencies.

Non profit APTA asked the US District Court for the Southern District of New York to rule that its members cannot be sued for patent infringement by ArrivalStar.

The request was based on several legal arguments, primarily the 11th Amendment, which “prohibits APTA’s state and regional public transportation agency members from even being subject to such suits”.

APTA further alleged that ArrivalStar’s patents were invalid and non-infringed.

Now the parties have settled, Melaniphy, of APTA, said: “This is a good day for the public transportation industry and now public transportation agencies and businesses can move forward with innovative technology without threat of baseless litigation,” he said of the settlement.

APTA is likely to have paid ArrivalStar to settle the case but “the amount is not likely to be a significant sum”, said Michael Oblon, partner at law firm Perkins Coie. This is partly because ArrivalStar has already managed to extract settlement fees from a number of agencies in the past, he said.

Although ArrivalStar can no longer sue any remaining APTA members, “what is probably more important to ArrivalStar is that it still has its patents intact”, Oblon said, adding that ArrivalStar “will probably continue launching suits against other types of entities, such as logistics companies”, as it has done in the past.

“Given that this settlement only pertains to public transit agencies, I anticipate that we haven’t seen the last of ArrivalStar,” he said.

Oblon said ArrivalStar has over-stretched its patents in its lawsuits, considering that they are “really intended to cover a system whereby a parent receives an automated call to let the parent know that her child’s school bus is approaching the bus stop”.

It is very unusual for public agencies to wade into patent lawsuits. Oblon said APTA’s success at litigating on behalf of combined interests may be because its members are not competing with each other.

American Public Transportation Association, ArrivalStar, non practising entity, patent settlement

WIPR