Suing Open Source Startups - A New Scam? 104
Anonymous Crowhead asks: "I'm posting this anonymously for reasons that will soon be obvious. We're a fairly new startup company who specialize in products, and we have a policy of making all our software Open Source. A while ago, we received an notice from a company claiming that we were violating some of their patents, and that they had found this out by looking at our code. They gave us one of the two options - either make the product closed source and sign up for a percentage of the profits with them, or provide them with a stake in our company. Our legal advisors felt that it might be wise for us to settle, but we decided to press them further for details of the infringement and refused to yield. We haven't heard from them since - so either we called their bluff, or they've gone to come back with more legal firepower. No matter what, we feel that this is a scary precedent. Have any other entrepreneurs around here experienced anything similar? Is this one of the after-effects of the SCO episode - to go after unwitting small startups who cannot fight back? Personally, this was a nightmare for our company, and we are not aware of any patents that we may be violating."
They didn't tell what patents you're violating? (Score:4, Insightful)
Did i get this right - they didn't tell you what patents you are supposed to be violating?
In that case their claims don't sound very credible IMHO.
Probably do Infringe (Score:2, Insightful)
From this perspective, open-source seems like a liability. It's harder for companies to snoop in closed-source applications looking for violations of their patents, but open-source is... well, wide open.
Say what? (Score:5, Insightful)
So your legal advisors advised you to settle without further details? Something is not right about this story.
Re:you don't really lose anything... (Score:4, Insightful)
Like The SCO Group did?
I'm sure IBM has sunk close to $10M into the SCO litigation by now, and after that, a year and a half in court and two court orders, SCO *still* hasn't said just what their beef is.
With any luck, Judge Kimball will grant IBM's motion for Partial Summary Judgement and put the whole copyright fiaSCO to rest once and for all (barring appeal). If not, IBM could spend another $10M before SCO's bluff is fully "called".
Granted, that's a much more complex situation, and there is still a faint glimmer of a flicker of a possibility that SCO, somewhere, somehow, will actually find something IBM did wrong (not on the copyright question, I don't think, but perhaps on the contracts), but the point is that you very well can spend a lot of cash calling their bluff.
Might as well at least make them file a formal complaint, I suppose.
This seems incredibly fishy (Score:5, Insightful)
That said, if it's a patent, the patent is public information. They should have to provide the number of the patent that you have infringed, and proof of their ownership of said patent. It should then be easy enough to get the relevant info from the Patent Office. There's no incentive for you to settle until they do those 2 things. They *could* try to directly file a legal case, but it looks like they are out for a quick buck, and they are just hoping to scare you into a bad call.
CC
Re:If it's just a threat.... (Score:5, Insightful)
It's in your best interests to remain polite. The company might come back with a legitimate patent infringement. Just because you're not aware that you've infringed on a patent doesn't mean you haven't done so. There are patented algorithms (the "marching cubes" algorithm for voxel rendering comes to mind). Even if you independently develop such an algorithm, you'd be infringing the patent by using it.
Now, if you never hear from them again after challenging them and feel you have a moral obligation to strike back (on behalf of future victims or something)...and after you've done your research and you're sure that the company isn't legit...then you should contact a lawyer and see what he or she suggests as a course of action.
And if you're not willing to retain a lawyer, then what are you going to do? Call them names? Idle threats won't stop them. Do something useful about it, or just forget it and move on.
Lies... Lies... (Score:5, Insightful)
And what is it that is obvious?
New startup that specializes in products
Our legal advisors felt that it might be wise for us to settle
but we decided to press them further for details of the infringement and refused to yield
we feel that this is a scary precedent
Have any other entrepreneurs around here experienced anything similar?
to go after unwitting small startups who cannot fight back?
Personally, this was a nightmare for our company
we are not aware of any patents that we may be violating.
This reads like it was written by a psychologist to scare us out of starting an open-source company (note the use of language to make as many people identify with the text as possible combined with the implicit transfer of fear). That is what is obvious.
Re:If it's just a threat.... (Score:3, Insightful)
I strongly agree.
I've never dealt with patent threats, but I used to work at a company that ran on-line communities. We regularly received legal threats from loons around the world. For non-credible threats, we'd just ignore them. Usually they'd just go away. For the plausible or persistent ones, we would be friendly but do nothing.
I found it was very helpful to ask questions about their position in a manner that was friendly, innocent, sincere, and slightly clueless. I also liked to be sympathetic and say pleasant, true things. E.g., agreeing that of course people's intellectual property should be protected. That conceeds nothing legally important, but helps to make people feel less scrappy. And mixing in moderate delays sapped their energy further.
Most people just wanted to vent or bully a little. When they got tired of getting nothing out of us, they just went away. But to maintain that, you must not seem like you're fighting them; many people love a good fight.
Even if your sharks are in it for the money, being polite, friendly, and eternally useless may be a good way to get them to move on to an easier mark.
Re:you don't really lose anything... (Score:3, Insightful)
And IBM's defense has significantly increased the confidence of the business community in using open source software. Imagine the impact that IBM settling with SCO would have on their multi-billion dollar Linux bet.
They would have gladly spent $100M for this kind of result.
My views (Score:4, Insightful)
Which country are you based in? if you are UK based, as some of your remarks suggest, I might give you a little consultation time for free. I do patents and IP, BTW.
Stop asking the IANAL /. crowd for legal advice: it's a serious waste of time as many of the reponses so far demonstrate.
The signature of this company suggests a scam: if I was representing someone with a strong patent I would be only too happy to give the patent number and relevant claims. But I certainly wouldn't refuse to divulge the patent and get snotty: that suggests lack of confidence on their part, and a tactically misjudged aggressive response.
On the other hand it may be just their litigative style and say nothing of the merits. Dunno, insufficient information.
You dont say whether your lawyer is an IP specialist: this matters, a generalist is fine for routine contracts, your building lease and employment law but you must know when to consult a specialist. your lawyer maybe out of his depth and not willing to admit it to you. He may worry about losing face and having you go elsewhere for legal services, whatever. Get someone with relevant experience if he hasn't got it: ask him to find you someone. I'm an IP lawyer but if a client asks me about tax law I wont bullshit: I'll refer them or find out myself from a specialist.
As one poster said: the temptation to push it all the way in outrage is understandable. this will cost you a fortune but the most pragmatic solution may be to enter some sort of agreement. But to do so without knowing the true strenght of their case is absurd. If their patent is weak and the prior art plentiful you may get them to agree to go away period, or with a very poor deal. I might be tempted just to say "bring it on".
You're playing poker: understand that and you are some of the way to understanding your predicament.
Your approach so far suggest diffidence and a lack of confidence, both you and your lawyer - while it's difficult to assess the dynamics of the parties from a /. posting you seem to be at risk of making bad decisions from a lack of proper guidance: get a specialist lawyer. Dont 'ask /.'. Really.
mail me offline for some advice: david atsign geeklawyer [dot] org
Re:Say what? (Score:1, Insightful)
IMHO bad legal advice that you trust, is more dangerous than an extortion attempt that you don't trust. Lawyers can seriously screw you up despite the best of intentions. A "successful" lawyer is nothing more than a very wealthy one. Remember that!