Patent trolls start going after users

Patent trolls have moved their antics to a new level in the US by going after users.

Realising that taking on big companies with large legal teams is a risky prospect, it seems the trolls have started looking for softer targets. Ars Technica is reporting the case of Steven Vicinanza, who received a letter ordering him to pay $1,000 per employee for a licence for some “distributed computer architecture” patents.

The troll in question had a patent to scan documents to e-mail and was demanding money with legal menaces. If he paid, the troll would have collected $130,000.

He was not the only company to have been bitten by the troll, called “Project Paperless”.  Lots of other small and medium companies were being hit.

The company was represented by Steven Hill, a partner at Hill, Kertscher & Wharton, an Atlanta law firm.

He told Vicinanza that if you hook up a scanner and e-mail a PDF document the company had a patent that covers that as a process.

In other words, any company that used office equipment would have to pay up.

In this case Vicinanza decided to fight and routed the company in court. But the Project Paperless patents are continuing to appear. They have been passed to a network of at least eight different shell companies with six-letter names like AdzPro, GosNel, and FasLan.

These outfits are sending out hundreds of copies of the same demand letter to small businesses from New Hampshire to Minnesota.

Royalty demands range from $900 to $1,200 per employee.

The patents involved numbers 6,185,590, 6,771,381, 7,477,410 and 7,986,426. AdzPro also notes it has an additional patent application filed in July 2011 that hasn’t yet resulted in a patent.

The problem is that it often costs more in legal costs for small businesses to fight the trolls than it does to pay up and make them go away.

Vicinanza spent $5,000 on a prior art search and sent the results to the Project Paperless lawyers. He filed a third-party complaint against four of the companies that actually made the scanners, Xerox, Canon, Hewlett-Packard, and Brother. That could have compelled the manufacturers to get involved in the case.

In the end Hill dropped its lawsuit and went away and the case never came to court.

What is alarming is that if you want to make a lot of money from a dubious patent, it is better to sue users than the companies which make products that use it. If Apple wanted to kill off Samsung’s business all it would have to do is sue every Android user. Most of them would never go to court and pay whatever Apple demands. That particular scenario is unlikely, but it does show where the antics of patent trolls are headed.