Tuesday, July 5, 2011

Lodsys sues The New York Times Company and five other companies who previously sued Lodsys -- UPDATED

[Updated on July 6 to reflect Lodsys's motions to dismiss 5 of the 6 declaratory judgment complaints]

Lodsys filed a patent infringement lawsuit today in East Texas against the very six companies who previously filed declaratory judgment actions against Lodsys in other jurisdictions. I have uploaded the complaint to Docstoc. The six companies sued today are (in the order in which they are named in the complaint):

This is the fourth infringement lawsuit filed by Lodsys and takes the number of defendants up to 33. After suing 10 large companies, Lodsys sued 7 (mostly small) app developers, then another group of ten large companies including adidas and Best Buy, and filed today's suit.

Lodsys now claims that those six companies are all infringing on its patents. The reason Lodsys did this is that Lodsys wants to transfer all of those cases from Arizona, California and Illinois to East Texas. That's a matter of costs for Lodsys, and East Texas still has a reputation for being the most troll-friendly venue in the United States. (There are some who disagree with that based on more recent statistics, but most of the troll lawsuits that I see get filed there.)

Those six companies all have a first-to-file advantage: they can argue that their declaratory judgment actions preceded Lodsys's East Texas suit. But Lodsys can argue with judicial efficiency since there's already so much Lodsys-related litigation going on in East Texas. There will be a series of fights over Lodsys's foreseeable motions to transfer venue.

[Update] The venue war has already begun in earnest. Lodsys has filed motions to dismiss 5 of the 6 declaratory judgment lawsuits (all but the latest one, i.e., the one brought by DriveTime Automotive, but I have no doubt that it will happen there as well). Lodsys claims that those other courts lack jurisdiction. Mark Small, Lodsys's CEO, declares that he's a resident of Wisconsin, not Illinois. He says he has had a home there for 10 years, has a Wisconsin driver's license, and is registered to vote in Wisconsin. Apparently, the fact that he described his residence as "Greater Chicago Area" in a LinkedIn profile led some of those litigants to believe that he lives and works in the Northern District of Illinois. If that's how four companies were misled to believe that Mark Small lives in that district, they now have a high risk of losing the venue war and seeing their disputes transferred to East Texas. In that case, they didn't do enough research. A LinkedIn profile is not enough to have certainty as to where someone lives. The "Greater Chicago Area" is an unclear term, and can obviously include by some people's definition certain parts of the adjacent state of Wisconsin. [/Update]

I'm very concerned that Lodsys may soon sue more app developers. I encourage all app developers to give serious consideration to my previous post on Lodsys, which outlines a cost-efficient way for app developers to deal with the Lodsys situation. It's about getting legal counsel and using it efficiently to work toward a reliable solution rather than picking a fight with an apparently well-funded and relentless troll.

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