Oracle sues to smash patent troll Lodsys

sleddgehammer, smash

Oracle, it seems, is not one for irony. Right after an epic court fight with Google in which it was accused of abusing its intellectual property, the software maker is now trying to dissolve another company’s patents.

This time, though, Larry Ellison’s company gets to be the good guy. In a lawsuit filed in Wisconsin federal court, Oracle is asking the court to invalidate four patents belonging to a patent troll that has been terrorizing corporations and small software developers across the country.

The troll in question, Lodsys, is a Texas-based shell company that gained infamy last year by suing app makers who included a common “in-app” purchase feature in their Apple products. The company’s business model is based  in part on using threatening letters to force app makers to hand over part of their revenues —  money which then fuels new legal campaigns.

Oracle has decided to weigh in because Lodsys “has repeatedly threatened numerous Oracle customers” such as Walgreens over the use of a web-chat feature Lodsys claims to own. Oracle is asking the court to declare that the four patents Lodsys is using to bully its customers are not new inventions. The patents, including US Patent  5,999,908 (“customer based design module”), came to prominence last year when Lodsys used them to sue Best Buy, Adidas and others.

Oracle’s lawsuit also takes a swipe at Lodsys’s status as a patent troll — a shell firm that doesn’t make anything but instead collects patents to sue companies that do:

Lodsys did not invent the technology claimed in the Patents-in-Suit. Instead, Lodsys claims to have acquired the Patents-in-Suit from a non-practicing entity, Webvention, LLC, and now seeks to extract royalties by demanding that Oracle’s customers, or Oracle, take a license under the Patents-in-Suit.

Lodsys is a patent holding company that does not practice any of the Patents-in-Suit but attempts to obtain licensing revenues in connection with its assertions of those patents.

Oracle is not the only heavyweight to challenge Lodsys. A court recently gave Apple permission to intervene on behalf of its developers in a Texas case.

The patents themselves were obtained by Dan Abelow, a self-styled inventor who attended several business schools but appears to have no training in science or engineering. The front man for Lodsys is a Chicago man named Mark Small but the real owners of the shell company have yet to reveal themselves. Lodsys is believed to be tied to Intellectual Ventures, a Seattle firm that aspires to make patent trolling a multi-billion dollar industry.

Here’s the Oracle suit:

Oracle v Lodsys
(Image by Tereshchenko Dmitry via Shutterstock)

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