By Bob Gourley
I know you have heard of patent trolls, those sham companies that are created to assert patent-infringement claims to shake down firms for money or other assets. They have been around for a long long time, stifling innovation and removing more value from our economy than the Chinese steal in all their hacking (no kidding, costing the US economy over $29 billion in 2011) .
That is reason enough for you to know of these trolls and oppose them, but as an executive or technologist you need to know more. You should think through the impact that these trolls have on the vendors that supply technology to you. Trolls cost these legitimate vendors money and time and slow their innovation because they have to be fighting off Trolls. And since Trolls cost money it causes the vendors to have to charge you more. And when a Troll wins it can change the support landscape and cause you to have to make decisions over whether you want to partner with a crooked company or find another solution.
Why the introduction to this topic now?
I just read an awesome statement by Rackspace on this topic titled:Why Rackspace Is Suing The Most Notorious Patent Troll In America.
It discusses their response to an action by “Parallel Iron”, which is a troll (Parallel Iron sued several good companies including Qualcomm, Twitter, Rackspace, Groupon, Paypal, Cloudera and Ebay, read their complaint here)
I want to share Rackspace’s response with you. I would also appreciate it if you help get this into the hands of others who need this info. This is important to all of us. Here are some excerpts from the Rackspace post:
Today we drove a stake into the ground in our dogged fight against patent trolls – we sued one of the most notorious patent trolls in America.
Last week, a patent assertion entity (PAE) called Parallel Iron sued Rackspace and 11 other defendants in Delaware for allegedly infringing on a trio of patents that Parallel Iron says cover the use of the open source Hadoop Distributed File System (HDFS). This is the newest in a series of 23 similar suits Parallel Iron has filed in Delaware since last June, which is when Parallel Iron was forced to dismiss an earlier set of lawsuits on another patent it could not enforce. Parallel Iron is the latest in a string of shell companies created to do nothing more than assert patent-infringement claims as part of a typical patent troll scheme of pressuring companies to pay up or else face crippling litigation costs . At least that is what it looks like on the surface.
In actuality, it is a bit more complicated. Our dealings with this particular troll reach back to December 2010 when IP Navigation Group (IP Nav), as agent for a supposedly secret patent owner, now known as Parallel Iron, accused Rackspace of patent infringement. IP Nav told us that they could not divulge the details of their infringement claims – not even the patent numbers or the patent owner – unless we entered into a “forbearance agreement” – basically, an agreement that we would not sue them. IP Nav was worried that as soon as we found out what their patents and claims actually were, Rackspace would sue to invalidate their patents or for a declaration that Rackspace does not infringe. We were unwilling to enter into such a one-sided agreement, so we negotiated a mutual forbearance agreement that required either party to give 30 days’ notice before bringing suit.
IP Nav has used this trick before. Sending a letter like the one IP Nav sent Rackspace – and trying to pressure the target into a forbearance agreement – got IP Nav into hot water with a Wisconsin federal court in late 2011. The court decision, as reported by Techdirt, describes the tactics that IP Nav deploys, and uses literary references to Shakespeare and Chekov to excoriate IP Nav. It even cited the “Duck Test” – if it quacks like a troll, it probably is a troll. Search online for “IP Navigation Group.” You will find that this group’s only business is acquiring patents and suing companies.
Once again, the Duck Test holds true: walking, swimming, quacking, everything. True to form, Parallel Iron sued Rackspace in Delaware without providing any notice, breaking the agreement they insisted upon.
We aren’t going to take it. We have sued IP Nav and Parallel Iron in federal court in San Antonio, Texas, where our headquarters is located (see the complaint here). We are asking the court to award Rackspace damages for breach of contract, and to enter a declaratory judgment that Rackspace does not infringe Parallel Iron’s patents.
As a consumer I have always loved Rackspace. You guys always did right by me. I wish you well in this and I feel like you are fighting for all of us. Keep up the good work!