A shell company in Texas is invoking a 1996 patent to claim a monopoly over remote location services like Apple’s(s aapl) “Find my Friends” and Google’s(s goog) defunct “Latitude,” filing lawsuits against the two tech companies and against major phone carries like Verizon(s vz).
The lawsuits, which also refer to Apple’s “Find my iPhone” service, could spell trouble not just for the corporate giants but for the many small players in the burgeoning industry for location-based smartphone apps.
The invention itself is US Patent 5548637, which covers a method for “locating personnel and objects in response to telephone inquiries,” and describes a system for using infrared transmitters to route calls to individuals or objects in large buildings like a hospital. Here’s more and a diagram:
In response to a telephone caller’s inquiry, a computer-based locating system determines the whereabouts of a person (or object) of interest and generates a message for the caller which describes that location. Then, if prompted by the caller, the locating system automatically places the call to the telephone extension nearest that location. [..] An important technical advantage of the invention is that no telephone operator or PBX switchboard attendant is needed to place a call directly to an individual, which decreases the connect time and overall expense of the system.
In seven lawsuits filed this week in Texas, the shell company, known as Remote Locator Services LLC, asks the court to bar Google, Apple and the phone companies from using their location services and to award money damages as well.
It’s unclear who really owns the patent, which has passed through a series of shell companies in recent years, or who is paying for what is likely to be a multimillion dollar litigation campaign. Reached by phone, an attorney for the shell company declined to comment on who its investors are. State of Texas company records show that the LCC, which does not appear to be conducting any business activity besides this litigation, was formed in August.
Overall, the lawsuits bear all the earmarks of so-called “patent-trolling,” a controversial business model in which investors and lawyers team up to acquire old patents, and then demand licenses or file lawsuits against a broad array of targets. Unlike ordinary patent holders, the trolls are not vulnerable to counter-suits because they have no assets. The result is extra costs for companies and developers, which are ultimately passed on to consumers.
In this case, the troll may also be using the litigation against Google, Apple and AT&T to pressure small app developers into paying licensing fees.
The patent trolling phenomenon has led to public outrage and some states to pass laws to drive trolls away. Congress and the White House are also planning action but, so far, the trolls continue to thrive. Giant patent-holding company Intellectual Ventures, for instance, is reportedly seeking to raise $3 billion for more lawsuits while also expanding its lobbying efforts in Washington.