New York Times Tangles with Patent Trolls

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Patent trolls — shell firms that don’t produce anything but instead amass patents in order to sue real companies — have long been tormenting the technology sector. Now, they are coming for media companies and one famous newspaper is fighting back.

The New York Times Co. is engaged in a pitched legal battle with two such “trolls.” One is Helferich Patent Licensing LCC, a Chicago shell firm that claims to own the process for sending links to mobile phones — basically where a company sends a customer a text message. According to the Associated Press, the firm typically demands $750,000 to go away, a fee that it has already collected from dozens of firms like Apple and Disney.

Such demands place companies like the New York Times in a difficult position. The patents in these type of cases are often spurious but it can cost millions to prove that they are, meaning it’s cheaper to  simply pay up. If a company pays, the troll can then use the money to target other companies.

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“In some ways, it’s a tax for being on the Internet. Millions and millions of dollars collectively is going out of the pockets of people who earned it to people who, in my opinion, didn’t do anything,” the Times general counsel Kenneth Richieri told the AP.

Right now, the  Times is paying to have the patents at issue re-examined by the US Patent Office. A Times court filing says the office has already succeeded in knocking down two of the patents, including US Patent 7,499,716 (“systems and method for delivering information to a transmitting and receiving device”). The company is asking a federal court in Chicago to suspend the litigation while the rest of the patents are re-examined.

The Times’ second major troll battle is over “autocomplete,” the function that suggests a word when a user types a few letters. A troll, called Boadin Technologies LLC, is stalking the Times, Bloomberg, USA Today and others for using the autocomplete function to propose stock ticker symbols. Court records show the Times is digging in to contest that suit too.

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In the larger picture, the troll cases raise questions about the state of America’s innovation policies. While patents are regarded as a spur to invention, they are increasingly also being used simply as fodder for lawsuits by companies that don’t make anything. The problem has been exacerbated by a US patent office that has issued patents for everything from methods of exercising a cat with a laser to swinging on a swing.

In a highly-publicized editorial in the Atlantic last month, the famous judge Richard Posner called for the system to be reformed.

Republished with permission from paidContent, which writes about the transformation of the media-and-entertainment industries in the digital era, with a focus on emerging-business models and technologies.

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3 comments
Jalexanderphd
Jalexanderphd

This the reason I'm relocating my company overseas because of troll companies and too many federal regulations. They make it impossible to do business here in the states anymore. Outsource I go. 

1hopelessoptimist1
1hopelessoptimist1

The patent system is used and abused shamelessly. First, the Patent Office funding should be dramatically increased and more qualified examiners hired. Second, a patent not actively used should be voided. Third, trollers should be punished with punitive damages if their claim against an alleged violator is dismissed. These are some observations from one who was hounded by a troller.

Jerry Pearl
Jerry Pearl

Be careful what you wish for because Intellectual Property is America's number one export. Outlaw the American Inventor and do what - Give it to the Chinese? Everyone seems to be hung-up on the idea that Helferich didn't build anything.  A simple domain and trademark search indicate otherwise.  Web sites mobile2web.com, emailremote.com, teleporter.com and many others seem to indicate he operated several patented service businesses. 

Nonetheless, you want to ban patents if the inventor doesn't make the invention. That's interesting, because many notable companies have thousands of patents they never use and so they sell  or license them --- Where were you then? Then there are many other companies like Apple who don't really build anything. Sure, Apple owns the patents but then license the Chinese to build your iPad, iPhone, iPod and Mac. 

You say Helferich claims he Patented the hyperlink. Which of his patents are you talking about because I  think that is a false statement. Please provide that 1997 patent claim so we can all read it.

You say the US Patent office screwed up but a simple search indicates Helferich has the same patents in Japan, Korea and through Europe. Are they screwed up too? You want us to believe that one guy tricked the entire world of patent offices?!!!! I don't think so.

You want us to believe the New York Times along with a number of other billion dollar companies are being picked on by Helferich the Goliath for something he didn't invent yet he has patents all over the world! 

It looks to me like he's kicking your butt and via the power of the press you're crying like a baby.