Startup turns to patent troll for help in lawsuit

Kate Endress claims that she didn't have a choice in the matter. As mentioned on this blog previously, her startup, Ditto, a website that allows users to virtually try on glasses before buying them, was about to raise its first round of venture capital when it became the target of a lawsuit.

So why did she seek help from a notorious patent troll? It all came down to dollars and cents.

Wellpoint, the owner of 1-800-Contacts and Glasses.com, accused Ditto of patent infringement and threatened an injunction. According to an article in Wired, 1-800 Contacts claimed to have purchased the patent for this activity in 2012.

"Ditto could have licensed or purchased the same patent, but chose to ignore it and launched their website with an infringing virtual try-on feature anyway," the company told the news source.

Endress, however, said that Wellpoint only sought the patent after seeing Ditto's technology, intending to use it solely for the purpose of filing a lawsuit.

In response, she sought help from Erich Spangenberg, founder of IPNav, which does "full service patent monetization." In other words, it buys patents for the explicit purpose of suing other companies.

Wired reported that Spangenberg will handle the case and pay all legal expenses in return for equity in the company.

To some, it may sound a bit like a deal with the Devil. But Julie Samuels, a staff attorney at the Electronic Frontier Foundation, is more sympathetic.

"To ask someone who's facing a patent troll to do what's best for the world, which is to fight back or make a lot of noise, is often asking them to do something that's against their short-term interest," she said. "The systemic problem is different than the problem that any one company finds itself facing."

The fact is that while startups are often threatened by patent trolls, they too can occasionally benefit from the system that allows trolls to operate in the first place. As Wired points out, any startup that does manage to acquire a patent can turn around and work with third parties to sell it and make money off the intellectual property.

The result is often a series of increasingly complicated lawsuits that require different parties to work with entities that they would normally staunchly oppose.

Not many attorneys have the knowledge and background to sift through these complicated cases. But a Phoenix business attorney has the business experience to help reach an acceptable solution.

Categorised in: Intellectual Property Law

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