This stupid patent was going to be used to sue hundreds of small businesses

A patent litigation factory was stopped from suing hundreds of small printers.

Joe Mullin – Nov 1, 2017 3:39 pm | 32

The Electronic Frontier Foundation’s most recent “Stupid Patent of the Month” highlights the importance of IPRs—patent reviews that can knock out bad patents quickly and relatively cheaply.

US Patent No. 6,738,155 was originally filed in 1999 and assigned to the Banta Corporation, a provider of printing and supply chain management services. Banta was acquired by R.R. Donnelly in 2006, and R.R. Donnelly handed off the ‘155 patent to a patent-holding company called CTP Innovations in 2013. More correctly, Donnelly tried to hand off the patent—more on that in a bit.

The patent claims to cover a “printing and publishing system” that uses “a communication network.” Amazing, right? But in 1999, it was very easy to get software patents.

Starting in 2013, CTP Innovations filed dozens of lawsuits saying its patents were infringed. It also sent out demand letters to printing companies offering a “fully paid up, one-time license” for the bargain price of $75,000—if the printer paid up within two weeks. If they didn’t, the price went up to $95,000.

Not everyone paid, and CTP filed more than 75 lawsuits alleging infringement of the ‘155 patent and a related patent.

Because CTP started its litigation campaign after Congress had created the “inter partes review” process, or IPR, more of those companies were able to fight back. EFF’s Vera Ranieri describes how several defendants were able to petition for an IPR, arguing that the patent represented nothing new in the art and claimed things that were either known or obvious at the time of filing—like sending PDF files to a remote printer.

After a certain amount of back and forth, the Patent Office ultimately ruled that the relevant claims should be canceled. CTP didn’t appeal that decision, and it didn’t go on to sue the more than 200 additional companies it had threatened to sue as infringers.

CTP had a second major legal problem in addition to losing its IPR. A few months before the IPR was complete, a Maryland federal judge held (PDF) that even though Donnelly bought Banta back in 2006, it didn’t complete the formalities necessary to acquire Banta’s patents. That means the company’s later decision to hand those patents off to patent-licensing companies wasn’t done right, so CTP didn’t have standing to sue.

Before CTP got hit by the one-two punch of the Maryland order and the IPR ruling, though, it was able to litigate against dozens of companies and presumably acquired settlements from many of them.

It’s no coincidence that this month’s Stupid Patent featured the successful use of an IPR. IPRs are under threat right now, with increased lobbying against them and a pending Supreme Court case arguing that they are unconstitutional. The Supreme Court will hear oral arguments in that case later this month.

“As this short story shows, the Patent Office sometimes misses things in the prior art, and unsurprisingly then, often allows patents that it shouldn’t,” writes Ranieri. “The public should be able to point out those mistakes to the Patent Office and not have to pay patent owners for things that rightfully belong to the public.”

An attorney for CTP Innovations, a Delaware LLC, didn’t respond to an e-mailed request for comment.