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Summary:

Hipmunk’s quest to “take the agony out of travel planning” has won plaudits from users and the media and earned the start-up a new $15 million investment. Now, a patent troll wants Hipmunk to give it a piece of the action.

hipmunk 2

Hipmunk’s quest to “take the agony out of travel planning” has won plaudits from users and the media and earned the start-up a new $15 million investment. Now, a patent troll wants Hipmunk to give it a piece of the action.

Just days after Hipmunk’s June funding announcement, a company called i2z Technology LLC told the travel start-up that it has to buy a license for a 1994 patent that covers a method for displaying data in multiple computer windows.

Despite its high-tech sounding name, i2z is simply a Texas shell company run by a California lawyer that is targeting internet and travel companies including Kayak, Google, Yelp and Microsoft. Under i2z’s business model, known as patent trolling, firms that don’t make anything collect patents in order to extract licensing settlements from companies that do.

In a new twist, trolls have begun laying in wait for start-ups to receive funding before pouncing. That is what happened to hand-crafted goods marketplace Etsy earlier this year.

In an attempt to fight the troll, Hipmunk has taken pre-emptive action by filing a lawsuit asking a federal judge in San Francisco to declare that it’s not infringing the patent and that the patent should be invalidated because it’s obvious.

Hipmunk’s complaint notes that this is the second time it has been threatened by a patent troll this year and that the patent has nothing to do with Hipmunk’s technology. It adds:

Though its funding is intended for innovation, Hipmunk elects to defend its technology rather than spend its hard-earned venture capital paying for a license it does not need.

The patent in question is US Patent 5,345,551, “method and system for synchronizing the presentation of data from different, but related, sources in different windows of a computer display”. Like many patents related to software, it covers seemingly common-place internet functions.

More details can be found in Hipmunk’s complaint here:

Hipmunk v Patent Troll

  1. The only problem is that this stuff is “obvious” now, but back in 1994, when Hipmunk’s creators were probably still in Pampers, it probably wasn’t “obvious” to them… This patent is almost 20 years old.

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    1. Displaying information in multiple windows wasn’t new 20 years ago. I guess you weren’t even in pampers back then.

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    2. Benjamin Ragheb Thursday, July 5, 2012

      Follow the link and read the patent. This would cover any pretty much any Windows 3.1 app that opened multiple windows. So it was hardly any less obvious then than it is now. The trouble with these patents is that they sound inventive by using lots of words to describe what the system accomplishes, but they don’t really explain how it works. So they are useless as publications (nobody can learn anything useful from them) and they make it really easy to sue anybody (because they are so vague, they seem to apply to anything).

      Trust me, if you read a software patent and can’t understand it, it’s not because the invention is brilliant, it’s because it is, in fact, incomprehensible.

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  2. These stories make me sick. This stifles innovation. Is there any legislation in the works to create a more effective patent system that protects real innovators from predatory, ambiguous, sweeping patents?

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    1. katie anderson Tuesday, July 10, 2012

      I doubt it. The IP trolls appear to have captured the legislative bodies.

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  3. This Rakesh Ramde seems to be a donor to the republican party ($5000 in 2005):

    http://images.nictusa.com/cgi-bin/fecimg/?25970404010

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  4. Gad Heilweil Thursday, July 5, 2012

    apples anyone?
    #boycottapple

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    1. @Gad – not at all the same thing. Apple, like them or hate them, innovates and creates. They make something and sell that something to satisfied customers. Patent trolls, like the one described above, don’t create anything. They are leeches plain and simply. I don’t think anyone would call Apple leeches in any sense of the word.

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      1. Yeah, the proper word to describe Apple would be “anticompetitive”.

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      2. @Boo – Apple is doing the exact same thing. Read this article.

        http://www.readwriteweb.com/mobile/2012/06/apples-647-patent-what-it-is-and-why-its-bad-for-the-mobile-ecosystem.php

        Look closely and you’ll find the same kind of vaguely worded patent from decades ago.

        Yes, Apple does create great things but if their best ammunition is an obscure patent filed in 1996 then I don’t think it’s a stretch to call them patent trolls and leeches in every sense of the word.

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      3. @Boo – Apple is doing the exact same thing. Read this article.

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      4. katie anderson Tuesday, July 10, 2012

        I don’t believe it’s a coincidence that Apple sat on a ton of money then started paying a dividend and appears to engaging in IP trolling antics. In fact this is exactly what I’d expect to see if a company had run out of “next idea to grow the value of our current capital base through market derived profits”.

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    2. Richard Murray Thursday, July 5, 2012

      That is the droid you’re looking for.

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    3. GoodNewsEverone Thursday, July 5, 2012

      LOL out loud. You are silly.

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      1. Laugh out loud lout loud, erm what

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    4. Watts Martin Thursday, July 5, 2012

      Oh, I see! You’re trolling stupidly on an article about stupid trolls! Well played, sir.

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  5. Julian Gomez Thursday, July 5, 2012

    The ideas this patent covers were common practice in the ’80’s. It’s not even a case of “not obvious to a practitioner”. At the time they applied for the patent it was many years past being an invention.

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  6. OffBeatMammal Thursday, July 5, 2012

    Patents should expire unless the holder has developed and released a solution implementing the method, or licensed the patent to an unrelated 3rd party who has – in both cases within a reasonable time period (say 5 years). Use it, or lose it

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    1. ^ What he said.

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    2. That wont solve anything. Like in this case, the troll can easily create a useless web app which make use of his patented technique and some fake users signing up.

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  7. Patent system must be killed to save the world. The world has advanced so much but patent system still lives. That is a shame on mankind. Think when a company creates a new medicine to cure a disease, but sells the medicine for very high price. So, the medicine is there but we let many people die because they can’t afford to buy the medicine. Is not it cruelty? Think you create an online shop with single page checkout and then Amazon’s lawyer sends you a big letter threatening you to create a checkout process of multiple pages because Amazon has patented single page checkout. Is not it evil? You, as owner of the online shop, are forced to make checkout process of your shop difficult just because Amazon had patented it. Think you create an open source online teaching software to make the world better place and then Blackboard Inc’s lawyer send you a mail asking you to stop producing your software because they have patents. Patent system sucks. It is good only for lawyers because it makes money for them. Kill the Patent system to save the world.

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  8. Patent Trolls will stalk Travel’s rich seem. Why? Because Travel is packed with nativity and sadly both internal and external forces take advantage of that.

    It is time that the US Patent Office gets with the program and develops a form of either validation process or alternatively cancels these stupid and frivolous “patents” and Trade Marks. Ever since Microsoft was able to get a Trademark for Windows… life has been a giant pile of dog poop. This is where America just look not just stupid but ridiculous.

    However not everyone is prepared to just accept this form of anxiety.

    Look what the Taiwanese are doing. Puts the rest of us to shame.

    http://www.computerworlduk.com/news/it-business/3367954/taiwan-fears-apple-patent-could-target-ultrabooks-vendors-acer-asus/

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  9. Stephen Adolph Friday, July 6, 2012

    Patents exist; get used to it. Hipmunk and any/all startups need to understand the risks of the technology business.

    What surprises me is going after startups…not much moola there to try and grab.

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    1. As the article states,
      “In a new twist, trolls have begun laying in wait for start-ups to receive funding before pouncing. That is what happened to hand-crafted goods marketplace Etsy earlier this year.

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  10. Kevin Tyler Friday, July 6, 2012

    I’m happy Hipmunk is sticking up for themselves. There is a great TED talk on this topic too: http://www.ted.com/talks/drew_curtis_how_i_beat_a_patent_troll.html

    I believe the speaker quotes that, on average, it costs $2 million to litigate with a patent troll, so the vast majority end up settling for undisclosed terms. And since the burden of proof is on the alleged infringer, the patent troll risks nothing by making an allegation. The patent system is very outdated as it is, and it’s a shame resources are wasted on frivolous claims like this. I would love to see 2 new things: 1) a public listing of patent troll companies, whose running them, and any available details on the settlements (who payed up, over what patent). I think the legal professionals running these companies would not be pleased to see their “accomplishments” showcased to the tech community, and such a site would also help to garner the attention of politicians. 2) I do not believe there is a mechanism for patent trolls to be stuck with the legal bill at the end of the day, but I could be wrong. I think the risk of assuming the alleged infringers legal fees would help serve as a deterrent for frivolous claims, as this one against Hipmunk seems to be.

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