A shell company says its patent gives it the exclusive right to place certain ads in online videos, and is now suing the popular viral news site, Buzzfeed.
In a complaint filed this week in Delaware, Mobile Transformation LLC says a “Romney vs Boris” video on Buzzfeed violates its technology by showing a static ad at the same time the video is streaming.
The shell company is relying on US Patent 6,351,736 which was issued in 2002 and covers a “system and method for displaying advertisements with played data.” The “method” described in the patent refers to the idea of showing a visual ad while music is playing:
A method and a system for playing a first type of data, such as audio stream data, for the user while simultaneously displaying an advertisement in the form of a second type of data, such as video data. The system and method enable advertisements to be displayed while music is being played from an audio file by the computer of the user, thereby providing an alternative revenue source for the owner of the rights to the audio data. Furthermore, since the advertisement is in a data format, preferably video data, which is different from that of the audio music file, the display of such an advertisement does not interfere with the enjoyment of the music or other audio data being played.
The Buzzfeed video, which shows London mayor Boris Johnson slamming Presidential candidate Mitt Romney, is not an audio clip. Mobile Transformation LCC claims, however, that it violates the patent because it uses an “embedded flash player to present a first data type of a video file of “Boris v Romney” along with the presentation of advertising data of a second type that includes a static image advertisement.”
Records show the patent has been assigned to a chain of shell companies before it became the basis of the current troll suit.
Patent trolling involves shell companies that don’t make anything acquire patents in order to demand money from companies that do make things. Since they have no tangible assets, the shell companies are not vulnerable to countersuits, meaning their victims frequently pay them to go away rather than endure expensive trial. Mobile Transformation LLC has already sued 21 companies and settled with a dozen of them.
Buzzfeed said it can’t comment as it is still reviewing the lawsuit. The website, which makes highly-sharable content like “The 25 Happiest Animals in the World,” is unlikely to roll over for the patent troll, however. Last year, after it was sued by infamous copyright troll Righthaven, Buzzfeed countered with an abuse of process lawsuit. (It will be interesting to see if Buzzfeed tries to go viral with “10 pieces of prior art that invalidate an advertising patent.”)
The shell company’s lawyer did not immediately return a request for comment. The lawsuit is below: