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A Nevada-based shell company has filed a lawsuit against Foursquare, claiming the popular app is violating two patents that cover familiar navigation features.
In a complaint filed Wednesday in Las Vegas, Silver State Intellectual Technologies Inc asked for an injunction and damages related to U.S .Patent 7475057 (“System and method for user navigation”) and U.S. Patent 7343165 (“GPS Publication Application Server”).
Both patents describe the process of pushing information from a remote server to a user based on the location of that user and show diagrams like this one:
Silver State’s short legal filing (embedded below) doesn’t describe how exactly Foursquare infringed on the patent. The popular app relies on location tracking technology to offer a service that lets users and their friends “check in” to restaurants, merchants and other physical locations.
The lawsuit comes at a time when so-called patent trolls like Silver State have become aggressive about suing promising young companies. Handcraft site Etsy and travel site Hipmunk, for instance, were “mugged on payday” when they were hit with patent suits earlier this summer.
Patent trolls like Silver State, more politely called “non-practicing entities,” don’t make anything but instead acquire patents in order to sue companies that do. The trolls’ targets often simply fold their cards and pay a licensing fee for the troll to go away rather than risk the expense of a prolonged lawsuit even though recent research (via The Verge) suggests doing so may be a mistake.
Applications for the two Silver State patents were filed in 2000 and 2001 and were granted in 2008 and 2009. The named inventor, Michael Obradovich, transfered them to a shell company shortly after.
The shell company structure is advantageous to the patent holders because it’s typically impossible to tell who is collecting on the patent payouts and because their lack of assets or a real business makes them impervious to countersuits.
This is the second time Foursquare has been hit by a patent suit. Last year, another shell company sued it for allegedly infringing on a method for mobile shopping.