The New York Times has published some damning exposes about patent trolls — shell companies that make a business of using old patents to demand money from real businesses — and now it’s getting an opportunity to endure a troll attack first hand.
This month, Delaware-registered Preservation Technologies LLC accused the New York Times of infringing patents dating from 1998 that cover a “Digital Library System” and a “Method and Apparatus for Management of Multimedia Assets.”
The company doesn’t explain how exactly the Times is violating the patents, but simply refers to the paper’s “Internet service for streaming movies” and methods for “cataloguing, organizing, searching, rating, and provisioning of digital multimedia data.”
The complaint is typical of tactics used by patent trolls: invoking old patents to make sweeping claims, while demanding an injunction, damages and a jury trial. The tactics pose a dilemma for companies like the New York Times because opposing the claims requires legal expenses that can run into the millions; most typically just pay the troll to go away.
In this case, the patents in question were granted to the Shoah Foundation, a non-profit launched with the help of Steven Spielberg that is dedicated to recording testimony of Holocaust survivors.
A Shoah spokesman said by phone that the University of Southern California, where the Foundation is located, now controls the patents. As TechDirt reported last year, USC auctioned a license to the patents in 2010 to a private equity firm which created a series of subsidiaries — including Preservation Technologies LLC — to demand payouts from companies ranging from Google to Facebook. This month, it expanded the campaign to target the Times, Fox, CBS and video service Vimeo.
Patent troll litigation is a drain on a wide variety of industries, and raises ethical questions for universities like USC, which espouse a belief in research and innovation while simultaneously facilitating broad-based patent trolling. Boston University recently commenced a similar lawsuit campaign directly, filing suits against Apple and dozens of other companies over a 1997 patent.
I’ve asked for comment from USC, which still owns the patents, and from Rob Kramer, the managing partner of Altitude Capital, the investing firm behind the Times lawsuit, about whether they plan to file more such lawsuits; I will update if I hear back. Meanwhile, there’s growing pressure in Washington for Congress and President Obama to fix a patent system that many believe is broken.
Here’s the complaint against the Times: