Companies Join Forces To Fight Patent Trolls

WCCO TV in Minneapolis/St. Paul provides a report today on companies banding together to fight patent trolls.

It was May 2003 and Ubel, Valspar's chief intellectual property attorney, found himself reading a demand for $600,000 in licensing fees from a Chicago, Ill.-based company called Solaia Technology.

Pay up in 30 days or face an expensive court battle, the letter not so subtly warned, adding that Clorox, Kellogg, Kodak, Gillette, BMW, Eli Lilly and other firms had all paid Solaia's licensing fees. The letter noted that Solaia's attorneys were experienced patent enforcers, having won 22 verdicts in eight years worth more than $400 million.

"It really blows my hot buttons to hear all this troll nonsense. Those who talk about trolls are know-nothings. They have no background dealing or enforcing patents," said Ray Niro, the Solaia attorney at Niro, Scavone, Haller & Niro who sent the letter to Valspar. He said his style of patent litigation helps cash-poor inventors protect their intellectual property, adding that big companies are not the only ones entitled to patent protection.

Ubel thought that if he could find just three other companies that had received the same letter from Solaia, the four companies could collectively sue Solaia for deceptive trade practices and unfair competition. Together they could split several million dollars in legal costs and be no worse off than if they had individually forked over $600,000 to Solaia.

Initially, each of the nine companies hired an independent counsel, sought software specialists and met with plant managers to verify that the patent in question -- No. 5,038,318 -- was not employed in their automated manufacturing processes. The patent, which Solaia purchased in 2001, was related to a spreadsheet software device for communicating real-time data between automated machines.

The group picked three possible firms to represent the group and settled on Fish & Richardson, an experienced patent law firm with offices in Boston and Minneapolis.

After two years of court battles, a Chicago judge dealing with another Solaia lawsuit interpreted Solaia's definition of its interface spreadsheet technology in such a way as to make it difficult for the company to claim infringement in the Minnesota case.

Eleven days after the March 28, 2005, decision, Solaia and the nine Minnesota firms settled, with Solaia giving the Minnesota firms the right to use the patent and released them from any claims.

"Our total defense costs were divided by a factor of nine. So it was $67,500 for each of us," Sorensen said.

And the nine lawyers are sticking together. Look for a new association of in-house patent attorneys soon.

Read the full report here.