‘Patent troll’ files suit against small business
WARREN — A “patent troll” has filed suit against U.S. Safety Gear, a small business with 95 employees in 13 locations, including one in Leavittsburg, demanding action from a federal judge because the company, like many others, use technology that enables people to purchase things online.
A patent troll is a company that buys up patents — often patents that never should have been granted in the first place because they protect ideas that are too general, according to the Electronic Frontier Foundation.
“A patent troll uses patents as legal weapons, instead of actually creating any new products or coming up with new ideas. Instead, trolls are in the business of litigation (or even just threatening litigation). They often buy up patents cheaply from companies down on their luck who are looking to monetize what resources they have left, such as patents,” according to the EFF. “Unfortunately, the Patent Office has a habit of issuing patents for ideas that are neither new nor revolutionary, and these patents can be very broad, covering everyday or commonsense types of computing — things that should never have been patented in the first place.”
The companies usually target businesses that are large enough to pay a “ransom” in a settlement, but small enough that spending money on attorneys to fight the legislation is too expensive.
John Conley, Chief Financial Officer and minority owner of U.S. Safety Gear on West Market Street, said the saga for his company began with a letter from Landmark Technology. That was before the company even had the rights to the patent, according to the lawsuit filed in U.S. District Court in the Northern District of Ohio. The patent was owned by Landmark LLC before that, the suit states.
“It has been horrible, this company is a patent troll. This is not going to be easy,” Conley said.
News reports indicate Landmark Technology sued other small businesses across the country. Numerous organizations label the company as a patent troll.
Conley said he learned he should expect to pay $40,000 to $60,000 to defend against the suit.
The patent protects a concept for how information should travel when a transaction is processed in many online payment systems that have a user interface and are capable of complex interactions.
“Pretty much any system that accepts payments online does this. It is too common and is a general concept, the patent never should have been issued in the first place,” Conley said.
Conley’s employees didn’t design his payment system, Hitachi did, he said.
“They wrote this lawsuit as if I my IT guy wrote the software. We didn’t create it, we licensed it,” Conley said.
Howard Wernow, a Canton attorney with Sand, Sebolt and Wernow, filed the suit with Menlo Park, Calif., firm Banie and Ishimoto, a lawfirm “specializing in legal services for high-tech clients.”
Wernow responded to a request for comment via email, but did not answer questions inquiring about the “patent troll” nature of the suit or provide a comment.
“I think it is a sad thing, that this Ohio law firm would agree to work on a case like this,” Conley said.
An email to California attorney John Lee was not returned.
Landmark Technology was listed as a “frequent filer” in a 2018 Retail Patent Litigation report. The report states the company filed against Kanan Enterprises, a Solon-based company that has been selling nuts since 1927 and has three locations and has an online shopping feature on its website.
Attempts to reform the country’s patent laws to prevent patent trolls failed in 2014, shortly after a political action committee was formed by several known patent trolls.
The U.S. Supreme Court in the last few years issued rulings that dampen the patent troll efforts, which also stifle the ability of business and innovators, according to the Harvard Business Review.
“In the last few decades, courts have both broadened the kinds of inventions for which patents can be granted and relaxed their oversight of what constitutes genuinely novel innovation. As a result, companies of all sizes are increasingly hindered in efforts to bring new products and services to market by patent holders claiming infringement of even trivial features,” states a 2017 article written for the review.
Though the court set precedents that should make it harder for generic functions to be patented, real reform is needed, according to the EFF. The patent system is biased in favor of granting patents, at the expense of small business owners, according to the EFF.
The business review article calls for Congress to act, something Conley said is needed, too.
“I wrote President (Donald) Trump a letter. I didn’t hear back,” Conley said.
The case is assigned to Judge Benita Y. Pearson in Youngstown.