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Suing Open Source Startups - A New Scam? 104

Posted by Cliff from the despicable-behavoir-in-business dept.
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."
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Suing Open Source Startups - A New Scam? More

Suing Open Source Startups - A New Scam?

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  • you don't really lose anything.. (Score:3, Informative)

    by gl4ss ( 559668 ) on Friday October 01, 2004 @04:35PM (#10409000) Homepage Journal
    ..by calling their bluff.

    if their claims have any merit they'll cough up.

    • Re:you don't really lose anything... (Score:4, Insightful)

      by swillden ( 191260 ) * <shawn-ds@willden.org> on Friday October 01, 2004 @04:54PM (#10409187) Journal

      ..by calling their bluff. if their claims have any merit they'll cough up.

      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.

    • And possibly even if they don't. Is it Diebold?

    • Re:you don't really lose anything.. (Score:2, Interesting)

      by Anonymous Coward
      Actually, that's not what we are scared of -- we're scared of two things:

      1. Investors pulling out, for fear of the lawsuit
      2. Customers and clients being scared of the credibility of our software

      Besides, we're only a startup -- we do not have an established cred, nor we have the resources. If this proves to be a bad call on our part, it might just prove disastrous, although I hope not.

      Anonymous Crowhead

  • If it's just a threat.... (Score:3, Interesting)

    by FooAtWFU ( 699187 ) on Friday October 01, 2004 @04:36PM (#10409009) Homepage
    ... then please, don't just give in without at least some idea of what it is you're supposedly violating. Surely they can understand the rationale behind this if they're at all vaguely legit.

    • Re:If it's just a threat.... (Score:5, Interesting)

      by ambrosen ( 176977 ) on Friday October 01, 2004 @04:45PM (#10409095) Homepage
      Truly. It's not as if patents are secret. They should give you the Patent number and then if there's any case at all, you can answer it.
      • And once you have the number (at least in the UK) you can ask the Patent Office (the "Comptroller") to say whether the patent is valid or not. So if it's trivially anticipated you may be able to sort it out without making a court appearance.

        I think there is a similar routine in the USPTO, basically recognition of the fact that bad patents slip through.
    • And you could add a little thing at the end that says "And you know, I was surfing the web and I was shocked to learn that barratry is illegal and can get an attorney disbarred. I just love what I can learn on this here World Wide Intarweb."

      • Re:If it's just a threat.... (Score:5, Insightful)

        by fatmonkeyboy ( 257833 ) on Friday October 01, 2004 @05:06PM (#10409315) Homepage
        No, there's no point in making veiled (and probably idle) threats.

        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.
        • And if you're not willing to retain a lawyer, then what are you going to do? Call them names?

          No, call the law society and file a complaint.
        • No, there's no point in making veiled (and probably idle) threats. It's in your best interests to remain polite.

          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 posi
        • 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.

          I'd disagree a little with this. Most lawyers I've dealt with are good at helping you reduce the risk of a course of action, but aren't so good at suggesting them. Instead, come up

    • Re:If it's just a threat.... (Score:4, Interesting)

      by yog ( 19073 ) on Friday October 01, 2004 @10:34PM (#10411070) Homepage Journal
      Maybe while they're at it they should fire their legal counsel and get someone with a little more backbone.

      It's common for lawyers to present a cost benefit analysis of this type of situation and quite often they will encourage a settlement, similar to the way a family pays off kidnappers to free a hostage or a retail business pays protection money to some street gang.

      One wonders whether there is in fact a conspiracy in the legal world to encourage settlements, because if people challenged every questionable lawsuit that came down the pike, perhaps there would ultimately be fewer such suits, just as if all businesses refused to pay protection money there would be no protection racket (albeit, after some bouts of violence) and there would be no incentive to kidnap hostages either.

      • I spoke to my lawyer a few weeks ago about this, and he said that getting named in a frivolous lawsuit is gonna cost you about $1000-$5000 just to file a motion to dismiss (the higher end is if there is some back and forth before dismissal). If there is any merit to the suit at all, you're looking at $5000 - $20,000 in attorney's fees alone for a simple matter. It just goes up from there depending on complexity. He's had cases in litigation for 10 years!

        If you were looking at $20k in legal fees plus what

        • Agree with OP, settling is never the right decision. Thus far IBM has spent enough on legal fees to have acquired SCO, Paying off a blackmailer is always foolish. Because you will either be hit up again... OR hit up again by someone else. If you intend to stay in business more than 10 years, its worth taking it before the judge. paying 10k per year or 2 years vs paying 30k once is the right call.
  • It is irrelevant to the patent infringement issue whether your code is open or closed. If you negotiated a license for a patent, and that license did not specifically preclude it, there would be nothing to prevent you from releasing it as open source code.

    • It is irrelevant to the patent infringement issue whether your code is open or closed.

      Yes and no. Open source code makes it much easier for a company to verify that their patent is being infringed upon, because they can look and see how things are done.

      Now, with closed source, you can often tell that a patent is being violated just by how it works, but often you can't, or not easily anyways.

      Suppose you had a patent on the quicksort algorithm (sorry, not algorithm -- you cannot patent algorithms

    • "and that license did not specifically preclude it"

      They are trying to license for a fee if closed source or get stake in the company (probably much more money) if open source. If open source, at least GPL, they would have to give everyone a free license to use their patented technology, so it would devalue their patent.

      If you're talking about why the "scam" might only pertain to one, that is presumably how they discvoered that it infringed their patent. If it was a closed source product, they probably

      • I don't know the terms of the GPL well enough to comment, but in general there is nothing about open source that implies a license to patents which it implements.
        • Of course you can't imply a license to the patents and assume you have the rights to use any patents, but you can't distribute a GPL program unless there's a royalty-free license to any patents in it. In the GPL [fsf.org] there is a summary:

          Finally, any free program is threatened constantly by software patents. We wish to avoid the danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, we have made it clear that any patent m

          • I still don't see anything that, singly, or in combination, precludes distributing unlicensed patent implementations under the terms of the GPL.
            In fact, I'm sure it happens all the time.

            • I still don't see anything that, singly, or in combination, precludes distributing unlicensed patent implementations under the terms of the GPL. In fact, I'm sure it happens all the time.

              Well, maybe it does happen, but it isn't legal. The post you responded to lays it out explicitly: in order to distribute a program that contains a patented bit of code, you must have a free license for that code that allows redistribution.

              From the license: For example, if a patent license would not permit royalty-free r

              • > The post you responded to lays it out explicitly:
                > in order to distribute a program that contains a
                > patented bit of code, you must have a free
                > license for that code that allows redistribution.

                Oh certainly. I don't doubt that. But it's not pertinent whether the code is distributed in source
                form or in binary form.

  • They didn't tell what patents you're violating? (Score:4, Insightful)

    by ion_ ( 176174 ) on Friday October 01, 2004 @04:39PM (#10409047) Homepage

    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.

    we are not aware of any patents that we may be violating.

    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.

    • Re:They didn't tell what patents you're violating? (Score:1, Informative)

      by Anonymous Coward
      Nope, they did not tell us the code we were violating. We had sent them a polite mail asking them to indicate the portions we may be infringing, as well as a list of the patents from their end.

      In response, we just got another cease & desist notice, which was kinda funny.

      Our legal counsel (well, which honestly, is just one lawyer) felt that it might be wise to settle, since he was afraid that if they did sue us, we would be hit real bad - plus, it would affect our existing (and potential) customers, to
      • If they won't even identify their patent numbers then they are obviously full of crap and just trying to hold you up for money. However, you can look up patents yourself online at http://www.uspto.gov [uspto.gov] and search by things like the name and city/state of the inventor or assignee. You could then see if the company even has any patents, and if they do if there is any merit at all to their claims your software infringes on them. That information should be very useful to your lawyer in advising you on whether

  • Probably do Infringe (Score:2, Insightful)

    by mrblah ( 229865 ) *
    Realistically, probably almost all software these days infringes on some kind of patent. The patent office seems willing to hand out anything, letting the courts sort it all out. That's fine for big companies, but it means smaller companies (who can't defend themselves) get the short end of the stick.

    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.
    • True, but, on the other hand, any not-currently-patented algorythms used in open-source will be patent-free in the future. Remember, as long as the source code is present, it can be used as prior art in any patent dispute.

      So, it sucks to be you, but is good for everybody else.

  • its an easy way to get money. (Score:3, Interesting)

    by QuantumRiff ( 120817 ) on Friday October 01, 2004 @04:42PM (#10409070)
    Most small startups (and small businesses) cannot afford the cost of the litigation for something like this. So they settle. It might take $10k to fight in court, or $7k to settle (For example). And there is the chance that if you lose, its suddenly $17k total. That makes the settling cost look very attractive. This is really easy for the bad company, since if you want to fight them in court, they just run and hide, but a large portion of people just settle. So they get tons of money, and never have to take things to court. Long live the american legal system!. Its hard to tell what the other companies intentions are, based on the info in the story. Are they a big company? (if they have lots of salaried lawyers sitting around, they're probably going to have no problem sending them to work against you.) But your right to request further clarification.
    • There is a particular breed of scum-sucking parasite (I believe they are called small plaintiff attorneys) that look for clients that have a kind-of/might-be valid complaint in the $10,000 to $20,000 range. Unlike normal business-oriented attorneys, these a**holes will take the case on contingency. They know what it will cost for you to defend yourself, even if you win. And if you do win, they know there is little that can be done to counter-sue for fees and costs.

      I am speaking from direct personal exp

      • At least for now you can concentrate on growing your business. In the long term, assuming your business becomes successful enough, you can take them to court for wrongfully taking money from you.
      • ...you should never try to extort more from someone than it would cost to have you killed. Lawyers beware ;o)
        • This may be a tongue-in-cheek comment, but I'm seriously surprised at how little this actually happens. I would think that if someone who was a little unbalanced in the head got sued by some shyster, said shyster would end up on the bottom of a river with a pair of cement shoes.

          • This may be a tongue-in-cheek comment, but I'm seriously surprised at how little this actually happens.

            If things like this continue, we'll see more of it. When civil law breaks down (or just gets priced out of reach), vigilante justice naturally takes over. All manner of dirty deeds are cheaper than going to court these days. Although it would take a an unbalanced person to have the plaintif killed, there are all manner of unpleasant but non-fatal options.

            I must admit the thought of SCO recieving the

  • Get a bunch of plantiff's attorneys involved, and a chase for money will ensue. Though SCO may have opened the doors here, IT really isn't very special when it comes to this sort of thing. Business has been dealing with this for years. There's a scam right now concerning ADA [state.or.us] lawsuits, where law firms literally go out and hunt small and medium business that may have ADA infractions, even if they're relativly small and the owners tackle the problem right away. Settle up, or we sue [findlaw.com].

    If lawyers think they've go
    • What an irony! The linked article comes from a law firm specializing in defending against ADA Title III lawsuits.

      It doesn't reduce the validity of their advice but it's rather self serving to publish an article raising the alarm that ends with:

      For more information, please contact Jonathan W. Greenbaum at jgreenbaum@nixonpeabody.com, Robert Carrol at rcarrol@nixonpeabody.com, or Todd Shinaman at tshinaman@nixonpeabody.com.

      Rewritten it might sound like "Newsflash! Some unscrupulous law firms are suing

  • So, give me money! ;}

    That should sound silly...and it is. If they are claiming something, they have proof...asking for it is a normal thing to do. Rolling over without proof is a bad idea.

    Additionally, once you know what the patent is, you can research it (it may not be active anymore), dispute it, or re-write your code to avoid it (if possible). This last suggestion is the main thing that Linux kernel developers would be glad to do in the SCO case...but SCO also hasn't said what the code is or what

  • Say what? (Score:5, Insightful)

    by max born ( 739948 ) on Friday October 01, 2004 @04:54PM (#10409180)
    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...

    So your legal advisors advised you to settle without further details? Something is not right about this story.
    • This /. it's doubtful there's any truth behind the story.
      • This is probably true. How many attorneys would advise their clients to settle, possibly even giving up partial ownership of the company, without any evidence of wrongdoing?

        This other hypothetical company doesn't even have SCO's excuses for not revealing code. SCO supposedly doesn't want to give out what is their's because then it would be open. Patents are already open, available to anyone that wants to search [uspto.gov] for them.

    • Re:Say what? (Score:3, Informative)

      by Anonymous Coward
      Sorry, advisors is a wrong term that I should not have used. To be fair, we have just one lawyer who has been our counsel since inception - and a couple of his associates, but essentially he is the only one.

      We got a C&D notice, at which point we asked them to indicate the sections of our software in which we were violating the patents, and pointers to the said patents. That was met with another C&D letter, this time with strong worded and with a staunch warning. Our legal counsel felt that it would

      • Re:Say what? (Score:1, Insightful)

        by Anonymous Coward
        There are skeptics here, including me. If your story is true, you should post a copy of the C&D letters and give names, including the name of your incompetent attorney.

        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!

  • This seems incredibly fishy (Score:5, Insightful)

    by heychris ( 587825 ) on Friday October 01, 2004 @04:56PM (#10409205)
    If you're a new startup, how did they happen to come across *your* open source project so swiftly? Could you have a disgrutled ex-employee who decided to up the stakes for you?

    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

    • Lawyers! (Score:3, Interesting)

      by iendedi ( 687301 )
      Never call your lawyer unless you have paperwork that you need his help with.

      In this case, you can fight, argue and whatnot with this patent extortionist infinitely. If they are really serious you will get paperwork (e.g. start of a lawsuit). Let it go that far - showing them that you will not just *take it* will most likely make them run away. If they are serious then they will push forward to sue you and that is the right time to discuss details of the infringement and possible settlements.

      There
  • First and foremost, IANAL:


    1. Get a lawyer, preferably one who specializes in these things (patent attorney). Duh.


    2. Ask for proof, ie specific citations as to what code is infringing and what patent numbers it is infringing upon.


    While #1 is very important in this case, I can't stress #2 enough under any circumstances! People these days are far too gullible and don't question enough. I mean, can you believe that gullible isn't even in the dictionary?

  • 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.

    No, your only "option" would be to cease infringing on their patent. In order for you to do that, they'd have to tell you what patent you were infringing upon. Then they may have discussed your options for licensing the patent, but that would really be step number 2. Step 1 would be ceasing infringement.

    Otherwise, they have failed t

  • wow! (Score:3, Funny)

    by Scottarius ( 248487 ) * on Friday October 01, 2004 @05:16PM (#10409406)
    We're a fairly new startup company who specialize in products

    holy crap you have products? I've been looking everywhere for those!
    • It sounds silly, but I think it's as opposed to specialising in providing a service.
    • Sweet, I'll take five!

    • Re:wow! (Score:1, Informative)

      by Anonymous Coward
      Well, I merely used the notation that's popular in Europe and Asia -- Products refer to software products (say, Office suites, compilers -- stuff you can buy off the shelf) and services refer to things you would need a team to work on/off-site, customized to your needs (upgrading a mainframe database, writing software for a company specific to their needs).

      I was not aware that this is not a common term -- or maybe it's just because when you are in the business, you learn these. My apologies.

      Anonymous Cro
      • You must not be from the U.S. You see, during the tech bubble here, many startup companies formed. They would attract investors with promises of the profit they would produce. However, many of these companies either produced no products or services, or very flawed products and services.

        Basically, people were forming companies and had no idea how to make money from the internet, but promising they would.

        So, it's funny that you would claim to be a startup and actually have a product.
      • I was not aware that this is not a common term

        It is a common term, everywhere except the US.
        I understood what you meant.
  • ANybody could claim such a thing.

    If your lawyers do not demand to know what is that you are violating then they seem to be pretty incompetent to me.
  • We're a fairly new startup company who specialize in products, and...

    I'm opening up a restaurant that specializes in food.
  • I have been thinking about the problem of Open Source and patents lately and it occurred to me that there is a solution to the bigger problem. The bigger problem, btw, is that it is currently a possibility that Microsoft and/or other large patent portfolio wielding companies could go after individual developers and small companies that donate their work through the use of patent extortion techniques not unlike what this story is discussing.

    The possible solution? Something like "The Organization for O
  • This sounds like the company that used to call up small computer manufacturers and threaten to sue them because their machines were sold with blinking cursors -- Patents on which originally tricked down to private "owners" from companies such as Raytheon (XOR) or IBM (Much less efficient method). Yes, the patents exist, but if you think every single piece of software that uses a blinking cursor licensed them, you have to be smoking some crack. Gee I hope my cell phone manufacturer is all paid up on that cur
  • Means nothing, if they do haul you into court just say the code came from the net as part of what you based it on. But beyond that they need to have a chain of evidence linking your company with theirs or evidence of a break in. If you have employees in common that's one thing. But if you are working in the same space it's easy to spook you into being late to market as you search your site for non-existant data.

    FUD - Fear Uncertainty Doubt
  • Was the return address Redmond, WA?
  • We've been threatened several times, sometimes about ridiculous patents (one on the usage of the standard diff algorithm, which has been described in papers dating back to the early 1970's, yet their patent was from the late 80's...), sometimes about obviously undefendable trademarks they claim to own.

    So far, we haven't given them much credence, and they go away pretty quickly when they realize we're not going to fork your $$$ over so easily.

    The bluff is that they have the cash to take you to court to beg
  • Yes yes, the patent troll. Sending cease and desist orders like they are goatse links. Please tell us who is this entity so we can :moderate: them.

  • software patents (Score:3, Interesting)

    by j0nb0y ( 107699 ) <jonboy300 AT yahoo DOT com> on Friday October 01, 2004 @10:19PM (#10411003) Homepage
    You're a software company. You *are* violating software patents. You can't have software without violating software patents. There are too many of them, covering too many trivial and common software tasks. It's only a matter of time before someone sues you for infringement.

    There are only a few true defenses against this kind of attack. The first is to have a large patent portfolio of your own, to countersue any litigants. Unfortunately, this doesn't work against the recent trend of companies in the business of lititgation (eg. SCO). How can you sue a company for patent infringement if they have no product?

    The second defense is a large bankroll. Not very many people successfully sue IBM, since IBM has an army of lawyers at their disposal to delay the lawsuit until the litigants run out of money.

    My advice to any software developers is to go to law school and become lawyers. Litigation is the fastest growing industry in the US. Software companies will be put out of business by litigation companies, the only ones left will be behemoths like IBM and Microsoft, both of which will be using dev teams in places like India and China, where they can be paid a fraction of what US developers make. So quit your job, and go to law school. Try to make enough money so you can retire when the system collapses in on itself. Things won't be very pretty at that point.

    We can continue to press our government for patent reform to try to prevent all this, but they won't listen. They haven't listened in the past, and they won't listen in the future. I give my money to the EFF, I write letters and emails to my congressional representatives, yet nothing makes a difference. Instead of fighting for reform, we're fighting the INDUCE act so IP law doesn't become even *more* insanse. It's a losing battle. The lack of proportional representation in the US forces the election to be decided on just a few issues. The rest are auctioned off to the highest bidder for a few campaign contributions.

    Wow, I'm jaded. I remember when I used to have a shred of hope that things would improve...

  • Lies... Lies... (Score:5, Insightful)

    by Corpus_Callosum ( 617295 ) on Saturday October 02, 2004 @01:00AM (#10411521) Homepage
    I'm posting this anonymously for reasons that will soon be obvious.

    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:Lies... Lies... (Score:1, Informative)

      by Anonymous Coward

      Products -- I was not aware that a large section of the Slashdot crowd is unaware of this, but products and services how software is categorized into, in most parts of Asia and Europe. Products is stuff you can buy off the shelf, and sevices are those that are, well, services.

      Settling -- I've explained that elsewhere in the story, please look at that.

      Refusing to yield -- We had indeed asked them to point out the offensive part of the code, and what patents we were violating. At which point, we received

  • My views (Score:4, Insightful)

    by geeklawyer ( 85727 ) on Saturday October 02, 2004 @04:40PM (#10415812) Homepage Journal
    IAAL.

    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

  • Hypothetically, has anyone considered the possibility that this is someone who is anti-open-source trying to scare other people from pressing forward the open source movement by making companies that make their developments open source... I'm not saying this is definitely the case, but a little bit of caution may be in order...
  • Before the GPL was even a gleam in Stallman's eye, I'd heard of similar scams.

    It works like this: your small business gets an official looking letter from Company X claiming that you are violating their patent, but for a one-time fee of only $yyy (where $yyy is cheaper than a couple of hours of lawyer time) they will give you a license to use the patent.

    Of course, the letters are just flooded out to small companies and no one at Company X has bothered to check whether the patent is even applicable. (Rev
  • Move your company out of the United States.

    Hire local workers in that country.

    File assests and capital in the original company and setup a fake front company in the US to deal with distribution.

    First sign of trouble, fold, and reopen as a different company in countries that do software patents.

    Large organizations are doing it in droves, I suggest you do the same.

    -Hack
  • this in all likelihood is bogus, but keep in mind that many large corporations see patent infringements as a way to recover R&D expenses. I have a friend who is a senior counsel at one of the R&D departments of large wireless company. They troll all day to find patent infringements and use this to break even on costs they spent on developing new technologies. Even if this is a large company and you guys are the "small fish" you probably will not be a target unless there are large enough sums of m
  • You didn't mention whether their were right in their claim. :)

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