TLDR;
Patent Troll: Give me US$60 000
Kaspersky: Here’s a cheque for US$ 0.00!
Patent Troll: US$ 40,000?
Kaspersky: F your patent.
Patent Troll: US$ 10, 000 pretty pleeeeaase?
Kaspersky: Die today. Infact, pay me US$10, 000. NOW!
Patent Troll: Aye man. Was just a bluff. I only got 5000.
Kaspersky: [snatches money away]
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In October, Kaspersky Labs found itself in a situation familiar to many tech companies: it was sued (PDF) by a do-nothing patent holder in East Texas who demanded a cash settlement before it would go away.
The patent-licensing company, Wetro Lan LLC, owned US Patent No. 6,795,918
, which essentially claimed an Internet firewall. The patent was filed in 2000 despite the fact that computer network firewalls date to the 1980s. The '918 patent was used in what the Electronic Frontier Foundation called
an “outrageous trolling campaign,” in which dozens of companies were sued out of Wetro Lan’s “headquarters,” a Plano office suite that it shared with several other firms that engage in what is pejoratively called “patent-trolling.” Wetro Lan’s complaints argued that a vast array of Internet routers and switches infringed its patent.
Most companies sued by Wetro Lan apparently reached settlements within a short time, a likely indicator of low-value settlement demands. Not a single one of the cases even reached the claim construction phase. But Kaspersky wouldn’t pay up.
As claim construction approached, Kaspersky’s lead lawyer Casey Kniser served discovery requests for Wetro Lan’s other license agreements. He suspected the amounts were low.
“Their patent was for a firewall that’s not user-configurable,” Kniser said in an interview with Ars. "They knew ours was
configurable. So they started taking weird positions, basically saying, ‘Well, you can only configure it a little bit.’ I think that would have gotten them in trouble as far as [patent] validity goes."
Wetro Lan’s settlement demands kept dropping, down from its initial “amicable” demand of $60,000. Eventually, the demands reached $10,000—an amount that’s extremely low in the world of patent litigation. Kniser tried to explain that it didn’t matter how far the company dropped the demand. “Kaspersky won’t pay these people even if it’s a nickel,” he said.
Then Kniser took a new tack.
“We said, actually, $10,000 is fine,” said Kniser. “Why don’t you pay us $10,000?”
Eugene Kaspersky published the bank receipt in which patent assertion entity Wetro Lan paid his company $5,000.
Enlarge /
Eugene Kaspersky published the bank receipt in which patent assertion entity Wetro Lan paid his company $5,000.
After some back-and-forth, Wetro Lan’s lawyer agreed to pay Kaspersky $5,000 to end the litigation. Papers were filed Monday, and both sides have dropped their claims.
“From our point of view, we had a winning case,” Kniser said. “We had invalidity contentions that were good. For that effort, we didn’t want to pay them money. It didn’t seem fair that they should be able to just walk away.”
On a post to his personal blog detailing the victory against Wetro Lan, founder and CEO Eugene Kaspersky says his company has now defeated five claims from patent assertion entities, including the infamous claims from Lodsys, a much-maligned patent holder that sent demand letters to small app developers. Lodsys dropped its case against Kaspersky right before a trial.
While the company has spent plenty in legal fees, its total payout to so-called “trolls” has been $0. Firms that engage in “trolling” know that companies often simply settle instead of dealing with the costs and pain of a court litigation.
“Companies just pay the relatively small sum to the troll to shut it up so they can get back to work on something worthwhile,” Kaspersky wrote in his blog post. “However, in the long run, they’re on to a loser: once the troll gets a taste of the easy money—it comes back for more again and again.”
Wetro Lan attorney Peter Corcoran didn’t respond to a request for comment on the case.