January’s Patent Lawsuits, Explained
Patented: Sharing credit info, tracking shipping containers, "digital media reproduction," and "storing broadcast content"
Last week, I published my litigation spreadsheet for Week One of 2021, and explained how I find and identify patent trolls. This week, I’m going to briefly run through some details of the non-practicing entity (NPE) cases from that week.
In the coming weeks, I’m planning to briefly look at all NPE cases for the month of January. Today’s newsletter is part one of that process, covering the first week of the month. Case numbers on all of these litigations are in the linked spreadsheet, along with districts & the filing dates.
I’ll be publishing three types of posts in my Tuesday newsletters. Posts like this one that round up many NPE cases; in-depth posts that focus on a single case; and more wide-angle looks at how U.S. patent disputes operate.
From Jan. 1 to Jan. 8, there were 37 cases filed, of which 19 were NPE cases (51%). Of the 19 NPE cases, 11 of them were filed in the Western District of Texas.
Caselas, LLC v. UBS Bank USA [Complaint]
Caselas, LLC v. Volusion LLC [Complaint]
Caselas, LLC v. Prosperity Bancshares, Inc. et al [Complaint]
Caselas, LLC v. Farm Bureau Bank, FSB [Complaint]
Caselas, LLC v. BBVA USA Bancshares, Inc. [Complaint]
I briefly discussed Caselas’ claims last week. Lawyer-turned-inventor Raymond Joao claims these five patents cover financial systems that warn about credit card chargebacks. Those claims have allowed him to sue just about any credit card-issuing bank, along with e-commerce companies like Austin-based Volusion. The earliest two patents are 7,529,698 and 7,661,585, which date to applications from 2001.
Let’s consider for a minute whether it’s even possible for someone to have “invented” a warning system about chargebacks in that time frame. Consumers’ right to dispute credit card charges (which cause a refund called a “chargeback”) has been guaranteed by law since the Fair Credit Billing Act passed in 1974. So we’re talking about a process that has been mandated by law for decades. Is writing down and communicating about a particular consumer’s use of that law really an “invention?” I would argue it’s not, at least not in the sense that the great majority of people in this country understand the term. If you add in language about computers and processors and data—nope, it’s still not an invention.
There are also many earlier patents about using computers to analyze consumers’ credit history, and then making decisions based on that history. Here’s one that dates to 1985. This earlier patent came up in Joao’s patent application process, but he was allowed to modify the claims to work around it, despite its description of extremely similar concepts.
How can USPTO issue such obvious patents? To my mind, there’s still no better explanation than Charles Duan’s essay on how Amazon got a patent on white-background photography.
Proven Networks LLC v. Broadcom Inc. [Complaint]
Proven Networks, which has filed more than 20 lawsuits in the past year, is in many ways a pretty typical NPE. But its ownership structure is special. Proven Networks is owned by attorneys at the same law firm that is litigating its patents, Los Angeles-based, Russ August & Kabat.
In the January case against Broadcom, Proven Networks is using two patents on managing data traffic. The patents originated at Alcatel-Lucent. Proven Networks says that the Virtual Traffic Manager and load-balancing controllers sold by Brocade, a Broadcom subsidiary, infringe.
Proven Networks, a California LLC, was originally called RAK Investments III. The company changed its name in 2020, just before it started its big litigation campaign. Documents filed at the California Secretary of State’s office show that Larry C. Russ and seven other partners at the law firm are invested in the NPE.
Most of Proven Networks’ lawsuits have been filed in Western District of Texas or the Eastern District of Texas. This case was filed in West Texas, despite the fact that it involves a California law firm-owned NPE suing a California tech company.
Transcend Shipping Systems, LLC v. CMA CGM (America) LLC et al. [Complaint]
Transcend Shipping Systems LLC owns more patents created by Raymond Anthony Joao. He has owned a lot of NPEs over the years, including Joao Bock Transaction Systems LLC, which was active from 2011 until 2016, when the company was hit with a $1 million sanction. I’m not sure how many litigations Joao has filed, but it could well be in the hundreds. He has been in the game for years. With Transcend, Joao is suing shipping companies.
In this lawsuit, Transcend says that the GPS container tracking system used by CMA CGM, a French shipping company, infringes five of its patents.
Mod Stack LLC v. VirtualPBX.com, Inc. [Complaint]
Mod Stack has filed more than 40 lawsuits using U.S. Patent No. 7,460,520, a method for “using multiple call controllers of voice-band calls,” filed in 2003 and issued 2008. The patents originated at Paradyne Corp., which was sold in 2005. The target in this case, San Jose-based VirtualPBX, has less than 100 employees.
Mod Stack’s headquarters is a Texas virtual office. It’s said to be connected to IP Edge, which seems to be the parent company for a huge number of NPEs. Mod Stack started suing in 2015, solely in East Texas; since the TC Heartland decision came down in 2017, it’s filed suits in Delaware, Illinois, and California.
Grecia v. Cullen/Frost Bankers, Inc. [Complaint]
William Grecia is an individual inventor who claims to have invented… a lot of things. He’s filed over 60 lawsuits, although until this month, he was on a long break from he has taken almost two years off from his last new filing.
This lawsuit says San Antonio-based Frost Bank infringes U.S. Patent No. 8,402,555, which covers a “personalized digital media access system.” Grecia says that the Zelle payment system, used by many banks, infringes. He wants royalties and an injunction, i.e., to shut down Zelle until he gets paid.
A different Grecia patent was used to sue well over a dozen of the nation’s biggest companies, including JP Morgan Chase, Apple, Amazon, Sony, Spring, T-Mobile, MasterCard, and Visa, before it was demolished last April in a case against Samsung and big banks.
I don’t think losing a patent like that is much of an injustice, to say the least. Grecia feels differently, however. He wrote a letter to Senators Thom Tillis and Chris Coons complaining about losing some of his patents, stating: “The value of my patents have been gutted by billions of dollars of value due to the PTAB threat, my inability to stop infringers, and even worse, being a patent holder today places you as the villain.”
Media Chain, LLC v. Roku, Inc. [Complaint]
Media Chain LLC is Delaware-based, formed in 2018 “to own and commercialize the Patents” of Christopher Estes, a former music executive. This appears to be its first patent lawsuit. Media Chain sued Roku over six patents, including Patent No. 9,715,581, which basically describes loading authorized “media content items,” then collecting user data.
Dual Control Systems LLC v. Sure Grip Controls Inc. [Complaint]
Dual Control Systems LLC has a residential address in New Jersey. They’ve sued just one target so far, a Canadian firm that makes joysticks to drive construction equipment.
The founders of this company put up a website in 2017 soliciting donations for a new gaming controller, claiming that “our radical new design will allow people to play games like never before.” By late 2018, the website was discontinued, with its last iteration saying the joystick was “in development.” Later that year the founders were granted U.S. Patent No. 10,137,366 for a “dual joystick controller.”
Their lawsuit is based in West Texas, filed by a law firm that has filed dozens of cases for patent plaintiffs.
Scanning Technologies Innovations, LLC v. Ideabud LLC d/b/a Ticketbud [Complaint]
Scanning Technologies Innovations, LLC v. Yapsody Entertainment, Inc.
Scanning Technologies Innovations, LLC v. VBO Tickets, Inc.
Scanning Tech Innovations (STI), which has filed more than 40 patent lawsuits, is controlled by Leigh Rothschild, another longtime serial plaintiff. Rothschild has won EFF’s Stupid Patent of the Month award three different times. STI is a Texas LLC, based in a Miami virtual office.
The patent supposedly solves problems around “inventory management” and getting “information associated with articles of commerce.”
The complaints state: “The ‘101 Patent claims do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet.”
But STI is suing different companies that invariably have completely different code and are managing inventory in different industries. The defendants this week sell event management software. In October, STI sued an access control company, Alvarado Manufacturing; in December, STI sued an app called Goods Order Inventory.
Display Vectors LLC v. Shaghal Ltd [Complaint]
Display Vectors LLC v. BenQ America Corp.
An old Samsung patent was sold to Intellectual Ventures, and is now held by Display Vectors LLC. The patent, number 6,785,128, was filed in 2000 and covers a hinge and support mechanism for portable computers. It’s being used to sue over Ematic brand portable DVD players.
RPX says Display Vectors is linked to other NPEs including Digiframe Frame Technologies, LLC (target: digital photo frames); Script Transform LLC (target: baby monitoring products); and Symmetrix Video Systems LLC (target: video-conferencing platforms).
Lightside Technologies LLC v. Curtis International [Complaint]
Lightside Tech has sued Curtis International, a Canadian firm, over patents related to video frame-rate conversion. This appears to be the 11th company Lightside has sued with its patents, which were created by Kinya (Ken) Washino.
Washino’s patents have been involved in various NPE lawsuits going back at least 10 years. Some of his inventions were co-created with Barry Schwab, who invented amazing technologies like changing the channel (circa 2016).
Documents in another case state that Marc Shulman and Barry Schwab are co-owners of Lightside. A Chinese attorney, identified as Ms. Gu Ping, may also have a “pecuniary interest in the outcome of the case.”
Shulman is a Michigan attorney who has been involved in litigating other Schwab/Washino patents, including the massive campaign (200+ lawsuits) of an entity called Hawk Technology Systems.
The Lightside v. Curtis complaint goes on a bit about Washino’s biography, describing his education in Japan and how he acquired “a first class broadcast engineering license” in 1981. Later he moved to the U.S., formed a “video services company,” and started applying for patents in 1993.
Lenovo (United States) Inc. v. Liberty Patents [Complaint]
Liberty Patents started filing lawsuits in September 2020, and has sued 11 companies so far, including Lenovo, Texas Instruments, Broadcom, and Acer, among others.
Now Lenovo has filed a declaratory judgment action against Liberty Patents. This is a type of lawsuit in which the target of a patent holder goes to court first, seeking to invalidate the patents.
Liberty is using two patents that originated at Cypress Semiconductor. Those patents were acquired from patent-holding giant Intellectual Ventures in late 2019. Lenovo wants to move the dispute to North Carolina, where its U.S. office is based, and away from the two Texas districts, “venues that are perceived to favor plaintiffs.”
Lenovo says Jon Rowan, a Texas attorney, is the sole owner of Liberty Patents. The complaint says IV is getting a cut of the action from any of Liberty’s proceeds:
Liberty paid only a nominal fee upfront for the patents and has given Intellectual Ventures a security interest in the portfolio and/or in Liberty’s proceeds from litigation or otherwise… Intellectual Ventures is entitled to at least a portion of the proceeds from Liberty’s litigation, licensing, and other patent enforcement efforts.
The complaint notes that a different NPE owned by Jon Rowan, American Patents LLC, sued Lenovo in 2018, alleging infringement of four former IV patents. That case was dismissed (an apparent settlement) the following year. Rowan’s law firm office has been linked to NPE lawsuits since at least 2017.
Rothschild Broadcast Distribution Systems, LLC v. Verkada, Inc. [Complaint]
Leigh Rothschild again. This lawsuit involves U.S. Patent No. 8,856,221, a “system and method for storing broadcasting content in a cloud-based computing environment.” This patent was EFF’s Stupid Patent of the Month four years ago. By then Rothschild had already sued 25 companies, including a small startup; now he’s used it to sue more than 70 companies.
The patent is on, well, video content—but connected to a powerful computer network! Who’d have thunk it? Especially way back in 2011, before YouTube was even—oh, wait, actually YouTube had already been streaming for six years when Rothschild filed this patent. Pretty much anyone dealing in digital video is a potential target, and RBDS has sued big entertainment companies like Disney, as well as companies like Verkada that offer security products that use digital video.
That’s all for today! Thanks for reading, please share if you like it, and feedback is always welcome. I’m at email@example.com.
Photo by frankieleon