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Patent trolls are legal. Can one be nailed for extortion? One man is betting yes.

 

Most business owners sued by patent trolls don’t talk about it to anyone other than their lawyer; a typical response is to cross one’s fingers and hope the problem goes away. It won’t, of course. Often they do the next best thing—hope it will go away for as little money as possible.

FindTheBest CEO Kevin O’Connor, who also cofounded online ad giant DoubleClick, decided several weeks ago he would talk about it—publicly, and often. O’Connor wrote to tech sites like PandoDaily telling them of his determination to “slaughter” the troll, the “scum of the earth.” And in August, he pledged $1 million of his own money to fight the troll that went after his company.

Now, we’re getting a vision of how FindTheBest is putting that money to use. The company has made a novel legal claim, saying that the troll that came after it is so reckless, it has engaged in outright extortion, violating racketeering laws.

The claim follows an investigation of the troll that sued the startup, Lumen View Technology. The investigation started when O’Connor and FindTheBest Director of Operations Danny Seigle simply started making phone calls. “The first thing you think is, who the hell are these guys?” O’Connor ultimately called the lead inventor listed on the patent, which describes a system for “multilateral decision-making.”

That set in motion a bizarre series of events. Lumen View’s lawyer accused O’Connor of committing a “hate crime” by calling the inventor, Eileen Shapiro of Hillcrest Group. (“I didn’t know patent trolls were a protected class,” quips O’Connor.) Then the lawyer threatened criminal charges (again, for calling an inventor). From there, it got personal.

Instead of kowtowing to the troll’s demand for $50,000, O’Connor decided to pledge to spend $1 million fighting. He knows it’s not the rational business decision… and he doesn’t care.

“From a business perspective, it makes 100 percent sense to settle,” he said. “I decided to take it out of the business realm, and into the personal. There’s one thing I love and that’s technology, and there’s one thing I hate, and that’s injustice—people abusing the system.”

Instead of kowtowing to the troll’s demand for $50,000, O’Connor decided to pledge to spend $1 million fighting. He knows it’s not the rational business decision… and he doesn’t care.

Spending that kind of cash to fight a patent suit would be devastating to a young startup like FindTheBest, which has received $17 million in venture capital over its short life, according to a recent VentureBeat profile. O’Connor, who sold DoubleClick to Google in 2008, felt like he’s in a position to use some of his personal wealth to push back.

 

The suit makes technological demands that would be almost impossible to meet without shutting down one’s business. In the Lumen View letter, it instructs the target company to immediately preserve “the complete contents of each user’s network share and e-mail accounts,” writes Lumen. That’s in addition to “system sequestration,” meaning that any accused “systems, media, and devices” should be “remove[d]… from service to properly sequester and protect them.”

In other words, to comply with the demands of litigation, Wasserbauer actually suggested that FindTheBest had to immediately stop using its computers.

It’s a long shot any way you look at it. But O’Connor’s tangle with Shapiro, her co-inventor, their lawyers, and any other shadowy investors that may exist, is now set to be a knock-down, drag-out fight. It’s the kind of battle rarely seen in patent troll litigation, where trolls often want to settle for “nuisance” settlements that can be in the high five-figures.

 

O’Connor hopes he’ll encourage other entrepreneurs to speak out.

 

Read more at:    http://arstechnica.com/tech-policy/2013/09/angry-entrepreneur-replies-to-patent-troll-with-racketeering-lawsuit/

 

 

 

 

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