Interesting, patent trolls have reached the level of public relations foil. I think its great that Rackspace is suing these guys but I found the press release made me feel like I do when somebody is trying to impress me with all of the charities they've donated money to. Mutual forbearance agreement? Seriously? Why not sue them right then and there when they foisted that bit of "strategy" on you and charged them with criminal extortion?
My reasoning is like this, either you infringe or you don't. So the patent holder can say "We believe you infringe claims x, y, and z on patents q, r, and s." Or they can't. So if someone tells you infringe but they won't tell you the patent or the claims, and they are threatening to sue anyway, that is a protection racket and actionable under the RICO statutes as far as I can tell.
We couldn't sue because we didn't know what we would sue on. They wouldn't even tell us the patent numbers - so we didn't have the knowledge necessary to even file a complaint.
As for suing because of the forbearance agreement, they try to write these things so they are just on the side of the line, and it is really hard to make a RICO suit stick (see Cisco and Innovatio).
We, of course, think that it is just BS. Now we are on record saying so.
Excellent reference, thanks Van. This comment from the judge in the WSJ coverage[1] of Cisco ""It is enough for now to determine that Innovatio at least has a plausible argument that its infringement claims are still viable," wrote Judge Holderman. The "licensing campaign is therefore not a sham," he said." So did Innovatio include the patent numbers? I have read in other cases that legal test for extortion was "credible but not actionable" threat of exposure. (Crosby vs Upshaw as an example, she wouldn't provide paternity data)
FWIW I've added you to the list of technology companies being harmed by patent extortion (I try to keep my congressional representatives informed in order to disallow them the excuse that they had no idea how bad the problem is)
IANAL, but, doesn't this at one point border on extortion? There's an implied threat to cause harm by force unless you do x. Again, not a lawyer. Maybe there are much finer points to consider before it becomes extortion.
Shortsighted assumption. Rackspace is bit bigger than one guy answering phone calls, replying to tickets, administering racks, configuring new ones, procuring bills and mopping the floor.
If I read it correctly Rackspace probably wanted to see if they could be legitimately (in the eyes of the law) at fault.
The way I read that mind bogglingly stupid forbearance dance was as if a bill collector calls me up and says I have a bill to pay, but they won't tell me what it's for unless I promise not to dispute it. I'm not going sue then and there because maybe I really do have a bill outstanding, so I play their stupid game and agree neither side will do anything for 30 days, now show me the damn bill.
Well it speaks to the 'trollness' of patent trolling. In the Prenda Law case (and other copyright cases) the judiciary has decided in many cases that the 'threaten with action' strategy used is an issue. Had this been a "real" patent case the patent holder would approach Rackspace, say we think you infringe on patent X and you need to license that from us or stop infringing. Then license negotiations begin, and then either they license it or they break of negotiations and it becomes a lawsuit.
The steps here of attempting to intimidate them into a favorable position without any way of knowing if they are in fact liable, is what pushes it into the extortion space for me.
No, the course of action I would try to take in this situation is that as soon as I was presented with this demand I would respond, "Either sue us and open up to discovery, or go away, and if you go away and try to sue us later we'll use that as evidence that you didn't really believe we infringed in the first place."
I don't know if you have ever been in a bar fight but I can tell you from experience that once the trouble maker has asked you if you just called them a liar (or some other affront) there really isn't any negotiation that is going to work, their is going to be a fight whether you want it or not so your best bet is to just start planning to win it.
When presented with the "possible infringement" demand Rackspace was already in the fight. Appeasement doesn't work, it can push off the start of hostilities (and that can be strategic) but the safe bet is to assume they are coming after you. (which I have to believe RS knew because they did the whole mutual forbearance thing).
Unlike a bar fight, getting the jump on someone with your pint glass doesn't really count for much in court.
Don't get me wrong, if someone came to me with a mystery case and that dumbass agreement, I'd be sorely tempted to officially respond via certified letter with a single piece of paper stating "LOL."
But as is, it looks like they get a little mileage out of the idiots forgetting about the 30 day agreement. So their approach did help a bit.
From what I read, it seems like the suit may be mostly predicated on the agreement that required IP Nav to wait 30 days. I don't believe they could have just sued for "patent extortion" originally.
It is nice that they are asking for a declaratory saying they are not infringing, but I believe they only could have done this on the defensive originally whereas now they can be on the offensive.
My reasoning is like this, either you infringe or you don't. So the patent holder can say "We believe you infringe claims x, y, and z on patents q, r, and s." Or they can't. So if someone tells you infringe but they won't tell you the patent or the claims, and they are threatening to sue anyway, that is a protection racket and actionable under the RICO statutes as far as I can tell.