gagging
15 November 2013Patents

Suspected troll has gag request thrown out

A US patent holder, which attempted to ban a company from discussing an impending lawsuit with the media, has had its request for a gagging order rejected.

The patent owner, Delaware-based Lumen View Technology, had accused FindTheBest (FTB) of patent infringement.

It said California-based FTB, which offers online comparisons of different products, had infringed US patent number 806,90,73 covering "multilateral decision making."

It demanded a $50,000 pay-out as an alternative to a lawsuit but faced a backlash from FTB which, suspecting troll-type activity, filed a lawsuit of its own under the Racketeer Influenced Corrupt Organizations (RICO) act.

RICO is a US law which provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organisation.

Danny Seigle, director of operations at FTB told WIPR it had spoken to around 20 companies who were all hit with similar demands in previous months.

“Everyone had the same story that it was a business decision to accept the payment. They did not believe they were infringing but did not want to proceed with litigation,” Seigle said.

“If we were making a business decision we would have settled but we decided to do what was right from a moral point of view and finance the litigation ourselves. It’s important for society to know what’s going on; these companies stifle innovation,” Seigle said.

“We are adamant we didn’t infringe, but furthermore, the patent’s claim is for multi-lateral decision making and we only provide single.”

In response, Lumen’s lawyer sought a gagging order at the US District Court for the Southern District of New York, which would have prevented FTB from discussing any further details of the case with the media.

However, on November 13, District Judge Denise Cote rejected the arguments.

“The plaintiff does not come close to carrying the burden of justifying imposition of a … order,” Cote wrote.

Lumen View had claimed it had reached an oral agreement with FTB not to discuss the demand for damages, and that FTB had breached that agreement.

However, making reference to a previous telephone call between the companies’ lawyers, Cote threw out the claims and said there was insufficient evidence.

“The defendant contends that plaintiff’s counsel never asked defendant’s counsel during the June 25 telephone call that their discussions remain confidential and that defendant’s counsel consequently never made any such agreement,” Cote wrote.

“The defendant has also asserted, and the plaintiff does not deny, that in the more than 100 emails that plaintiff’s counsel sent in the weeks that followed the June 25 telephone call, plaintiff’s counsel made no reference to such a verbal agreement until the time at which this motion was filed.”

Michael Oblon, partner at Perkins Coie in Washington, DC said typically, in cases such as this, the plaintiff would have “little downside risk” and can “wield the patent as a sword” without fear of the defendant striking back.

“By declaring that they will not cave-in and demonstrating that they will be a nuisance, FTB might be successful in convincing this plaintiff to drop the lawsuit and more generally, warding off other encounters,” Oblon added.

WIPR contacted Lumen’s representatives who did not provide comment.

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