Weekly IP Buzz for the Week Ending November 8, 2019
In this week's post, we look at patent trolls as they continue to file lawsuits against a variety of defendants. Choosing to sue a popular non-profit open-source group could be a disastrous move for RPI because the case has drawn widespread media attention in the field as well as the defensive support of powerful allies. While patent trolls are unlikely to stop their practice of filing such patent infringement lawsuits, the current fight between GNOME and RPI may cause trolls to think twice before suing open-source non-profits.
Also, a look at the challenges presented with buying and selling a business. Knowledge-based businesses have additional nuances that must be addressed when transferring intangible assets.
GNOME Fights Back Against Patent Troll and Finds Allies
The GNOME Foundation (“GNOME”), a leading open-source and Linux non-profit group, has been sued by Rothschild Patent Imaging (“RPI”) for allegedly violating an RPI patent for “wireless image distribution system and method patent.” RPI claims that GNOME violated U.S. Patent No. 9,936,086 and is asking for the removal of the functionality from GNOME’s “Shotwell” application, or for a running royalty from the time of judgment going forward instead.
Critics of the lawsuit have called RPI a patent troll, noting that RPI is a non-practicing entity that has filed 714 patent-related lawsuits in the last six years, and that the patent creator, Leigh Rothchild, has filed the single largest number of lawsuits at 141. While, at first blush, many may dismiss the idea that the lawsuit could be successful due to the sheer number of photo applications that currently boast this functionality, experts in the field note that RPI’s patent claims in the patent have been so broadly written that courts could be swayed by RPI’s argument.
Though many experts have said that it is difficult to determine which way a court or jury would rule, the general consensus in the field has been to question whether RPI has simply made a colossal blunder by filing suit against a popular non-profit, which likely has little assets and potentially no insurance to cover any court judgment found against them. As such, many speculate that RPI could simply have been assuming that with little assets, GNOME would quickly settle and agree to pay money for a license, which RPI could later use as future leverage against other companies.
Instead, now that GNOME has decided to fight back, the suit could quickly become a public relations nightmare for RPI, especially as GNOME has found some powerful allies in its fight against RPI. Currently, GNOME has filed three legal defenses in answer to RPI's claims: 1) a motion to dismiss; 2) an answer to the claim; and 3) a counterclaim.
Announced at the Open Source Summit Europe, the Open Invention Network (“OIN”), a pro-Linux consortium that preaches patent non-aggression, announced that it would use its own legal resources to not only help GNOME in its legal dispute with RPI, but to also search for prior art that could be used to invalidate RPI’s patent altogether. OIN’s chief executive officer, Keith Bergelt, even used his keynote speech at the Open Source Summit Europe in France to call RPI a “bad company,” whose actions slowed innovation and used settlements to intimidate others into settling.
GNOME believes that OIN’s help of providing prior art evidence will help GNOME not only defend against the lawsuit but send a message to RPI that it cannot be bullied into settlements.
Read more here.
Transferring Intangible Assets: Knowledge-Based Enterprise
A knowledge-based enterprise (“KBE”) refers to a business that heavily leverages its creative, non-tangible assets, such as: information, data, goodwill, and know-how. Legally, these types of assets are called intellectual property and are characterized as either: trade secrets, trademarks, copyrights, or patents (collectively, “IP Assets”).
Despite the intangible nature of these IP Assets, the value to the companies that create, own and use them is very real. In fact, for KBEs, IP Assets comprise a significant portion of their overall enterprise value. Therefore, knowing the proper way of transferring intangible assets is key to successful business transactions.
Here's the latest article in an 8-part series on transferring intangible assets. Authored by Jim Chester.
Click to read the previous Weekly IP Buzz on Thriving Attorney.
For more posts, see our Intellectual Property Law Blog.
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Darin M. Klemchuk is founder of Klemchuk LLP, a litigation, intellectual property, and transactional law firm located in Dallas, Texas. He also co-founded Project K, a charitable movement devoted to changing the world one random act of kindness at a time, and publishes Thriving Attorney, a blog dedicated to exploring the business of the practice of law, productivity and performance for attorneys, and other topics such as law firm leadership and management, law firm culture, and business development for attorneys.
Click to learn more about Darin M. Klemchuk's law practice as an intellectual property lawyer.