Graphiq staff photo.Graphiq
Lumen View Technology sued several small businesses in 2013 over a patent that described little more than online “matchmaking” before its demands for quick $50,000 payoffs ran into a Santa Barbara startup called Graphiq (formerly FindTheBest).
Graphiq CEO Kevin O’Connor, who had also co-founded online ad giant Doubleclick, pledged to spend his own money to defeat Lumen View—and defeat them he did. O’Connor’s battle with the patent-holding company has finally come to an end, with the still-unknown owners of Lumen View agreeing to pay him $100,000.
“We took their patent, and we got sanctions against their lawyer,” said O’Connor in an interview with Ars. “We probably spent $350,000 to get $100,000. It was worth every cent.
It definitely wasn’t the best investment, but goddamn, I feel good.
I don’t have a whole lot of sympathy for those bastards.”
Lumen View originally sued Graphiq in mid-2013. Finally faced with a determined and well-financed opponent, Lumen View was in for a serious courtroom pounding.
After reading early motions, US District Judge Denise Cote obliterated Lumen’s patent on “multilateral decision-making.”
“Matchmakers have been doing this for millennia,” wrote Cote. “Having two or more parties input preference data is not inventive.”
Lumen filed papers to appeal its loss but gave up before it even saw an appeal hearing.
Graphiq also pushed ahead with a RICO lawsuit, saying that the patent troll’s activity amounted to extortion.
The longshot RICO tactic didn’t succeed, but Graphiq became the first patent defendant to win an award of attorneys’ fees under a new law that came into effect with the Supreme Court’s Octane Fitness decision. Last month, the $300,000 fee award was upheld on appeal, although the amount was cut in half.
Principals still unknown
The settlement resolves both the RICO case, which was up on appeal, as well as the patent infringement fee motion, which had been kicked back to the district court.
Graphiq’s experience fighting Lumen View has a broader relevance for a few reasons.
First, it’s rare to see a final resolution of a patent-troll fight where the results are public at all.
Second, the case will be a powerful example for pro-patent-reform activists, because it demonstrates how the economics of patent litigation will continue to strongly favor patent trolls without legislative change. Graphiq won its fight about as thoroughly and as quickly as possible—and forced the other side to pay up.
Its total victory took advantage of both the Octane Fitness and Alice Corp. decisions, two Supreme Court decisions that tilted the playing field in favor of defendants. Yet even with those advantages, it still cost around a quarter-million dollars to win.
Finally, the win shows the incredible lack of transparency in the murky world of patents. Even while Graphiq was paid $100,000, no one knows who paid the money.
“I would have loved to penetrate the corporate shell, and take huge amounts of money, and win triple fees on the RICO case,” said O’Connor. “I would love to have exposed them, but I’ve got lots of other stuff to do in life.”
O’Connor says lawyers he spoke to told him it could cost as much as a half million dollars to pierce the corporate shell protecting the identities of whoever owns Lumen View Technology LLC, and there was no guarantee the effort would succeed.
In a brief interview with Ars, Lumen View lawyer Stam Stamoulis said none of the signatories on the settlement papers, including named inventors Eileen Shapiro and Steven Mintz, own or control Lumen View Technology. He wouldn’t say who his client is.
“They told me they don’t want to have any comment in regard to that,” he said.
Damian Wasserbauer, the lawyer who prosecuted Lumen View’s original patent cases, also wouldn’t say who owned Lumen View.
“You should report the fact that Kevin O’Connor went out of his way to create a great wrong against Eileen Shapiro, the inventor,” Wasserbauer said when reached by telephone yesterday. “She had nothing to do with this. You have to report this correctly, so do your job.” Wasserbauer then disconnected.
In the end, Lumen View’s owners will remain a mystery, even though they were able to extract payments from more than a dozen small businesses before being challenged by O’Connor and Graphiq.
It isn’t clear how Wasserbauer’s statement that “Shapiro had nothing to do with this” squares with earlier statements and documents from the case.
It was Shapiro and Mintz who sold their patent to Lumen View in the first place, and that transfer (though not the price) is recorded in patent office records. Wasserbauer himself complained in court papers that O’Connor had talked about “confidential information that should not have been revealed,” including Shapiro having an ownership stake in Lumen View.
That was part of his request for a “gag order” from the court, seeking to stop O’Connor from talking about the case. The motion seeking a gag order was roundly rejected by the judge.