Patent trolls face a new deterrent: The RICO Act

Suing patent trolls for extortion sounds like a great idea, but making the charges stick can be tricky

The arsenal of weapons against the scourge of technology, patent trolls, is slowly growing, with counterlitigation being one of the biggest. Now a California-based company, FindTheBest, is charging a patent troll that came after it with nothing short of extortion and racketeering.

A bold move -- but is it likely to work?

Ars Technica related the story of how online comparison-shopping service FindTheBest was sued by a shell company named Lumen View Technology, over a patent, US 8069073, that allegedly covered "[a] System and method for facilitating bilateral and multilateral decision-making."

Rather than keep silent and pay up the $50,000 demanded of him, FindTheBest CEO Kevin O'Connor (he previously co-founded DoubleClick) decided to fight back. He dug deep to find out more about the validity of the patent in question. When he attempted to contact the original inventor, Lumen View threatened him with criminal charges -- including, incredibly, the commission of a hate crime.

That convinced O'Conner all the more it wasn't worth rolling over. He put down $1 million of his own money (from his sale of DoubleClick to Google in 2008) to fight back, by using the RICO (Racketeer Influenced and Corrupt Organizations) Act. After all, "extortion" is a common word for the tactics used by many patent trolls.

Using RICO to battle patent trolls was suggested as a tactic in 2009, in the Yale Journal of Law and Technology. Blair Silver suggested RICO was likely to work as a deterrent in part "because of the scope of its remedies: treble damages, attorney's fees, and investigation costs," and because RICO explicitly covers intellectual property crimes as well as the ones normally associated with racketeering.

Silver did caution that RICO needed to be applied correctly to be effective, citing a history of how the courts have been reluctant to apply RICO to patent law because "most civil RICO allegations are thrown out for formalistic problems."

So far, the real-world track record for using RICO against patent trolls is sadly weak. Back in 2011, when patent trolls Innovatio tried to sue the owners of coffee shops and motels for using commonplace Wi-Fi technology, Cisco, Netgear, and Motorola all jointly countersued. Alas, no dice: The judge didn't buy into the RICO portion of the lawsuit and threw it out.

To complicate things further, the judge in that case later ruled that Innovatio's patent claims were in fact an essential part of the 802.11 standard. But it's hard to argue that gave them license to shake down end-users, rather than demand licensing fees from device makers.

The hardest part, then, is making sure the countersuit is actually applicable. Filing a properly drafted RICO claim takes a legal team with a good understanding of the statute -- and it may well be difficult to file RICO against a troll who's managed to stay on just this side of the law with its behavior.

Buying such legal expertise doesn't come cheap, either. An individual who doesn't have millions of dollars in his pockets to spare either has to seek pro bono aid, rely on the likes of the EFF's Patent Busting Project to save him, or pay up.

Until other legal remedies for patent abuse come online, like the SHIELD Act and the Patent Abuse Reduction Act, victims of patent trolls are stuck fending for themselves. The very legal system that gives patent trolls leeway to operate might be one of the best recourses for the time being.

For O'Conner, fighting fire with fire makes the most sense. "Patent trolls aren't interested in the technology covered by the patent or your business," he wrote in PandoDaily, "and they won't give you any specifics about the lawsuit they served you with: They just want your money. The second you signal that you are open to settling, they won't stop knocking on your door. They don't have any skin in the game, they are simply exploiting a faulty legal system."

This story, "Patent trolls face a new deterrent: The RICO Act," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.

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