These Killers Are Out There!!

[Marcus Paul]

Fellow Warriors,

About a year ago I received a cease and desist letter from an attorney representing a company who felt my website and it's business process infringed on a patent they held.

I was not infringing on any technology they patented.
I was violating a copyright.
I did not copy a thing.

My website constituted a form that let users provide information that other users could respond to. Apparently, in 1996 they were awarded a very broad patent for this very thing. The only difference is that they called it an "application" and likened it to a bidding process. It was not a bidding process. The argument was going to be over the definition of the word "application."

Unfortunately this patent holder had already been awarded $5 million in a suit against LendingTree.com. So they had precedent for stretching the boundary of their patent. And this is apparently how they made their living.

So how did I get myself in trouble? By sending out a press release with the wrong terminology in it, and not doing enough research that my website did not violate someone's patented business process. My press release used the word "application" and the word "bid" in it, and this sealed my fate. They only found me because patent trolls go through press releases all day long to see who they can sue next. My attorney said this is becoming more common everyday.

They wanted me to pay a license for each user I had using my system. While I was not dead set against it, it made the operation unprofitable. So I decided to shut down my website and throw away more than $5,000/mo in revenue. I couldn't afford to go through the court system, lose, then stay in business paying them what they wanted. They killed that business. Just. Like. That.

Today I received a letter from them saying they were dropping the complaint since I complied with their cease and desist. Big of 'em.

And I'm not saying not to do press releases. Just be cautious of what you throw out there.

All is not lost. I will re-do this site, using a different design, different terminology, and a slightly different process and see what happens.

[ryanthetrafficguy]

That's so unfortunate. It's horrible that people do this. To get better, you should simply get better, not bring others down to your level.

[Marcus Paul]

If they could make the point that my form was an application by their definition of the word "application" and they could make the point that the user responses constituted as "bids", then they could say my business process violated their patented business process.

Yes, I live in the USA.

[Marcus Paul]

In the US that would not matter because the owner is a US business (a corporate entity called an LLC). Wouldn't matter what server it was on. My business was being sued, the website was just an asset. The press release was the evidence.

[Mark Dulisse]

Just counter sue and give your evidence.

Filing suit means squat. Anyone can do that. And in the US people do frivilous law suits all the time.

What matters is the perception of the Judge....not the companies perception.

[Allegro]

didnt you read his post? if he reacts in any legal way he loses more money than if he stops his website for a few months to redesign it.

[Mark Dulisse]

Well, I guess he felt that he was in the wrong then if he ceased shut down his website. For me, if I felt I was in the right, I would have told them to blow it out their ears and have a judge decide.

[TeamGlobal]

Hi Marcus,

I know that was a tough call, but the truth of the matter is that sometimes it is best to assess the pros and cons and cut your losses short...which is exactly what you did.

It's easy to be on the outside looking in and say, "I'm going to dig in and fight because it's the principal that matters". Those have been the famous last words of many a would be successful business person.

I'm glad to see that you have learned from this experience and reinvent your product/service and prepare yourself to profit with a fresh approach.


All The Best,


Tony

[Jeff Henshaw]

I think that you did the right thing Marcus.

In my opinion, it is often dangerous to go up against a big opponent, with the risk of losing a lot of money, not to mention the sleepless nights and the stress and pressure both on you and your family.

Most of the time, they would not have approached you unless they felt that you were doing something that infringed there sphere of operation.

For those who say fight on - remember - a large corporation is faceless, they have lawyers to whom litigation is an everyday task (a day job). That's not the same for us small operators where defending against a potential law suit is time consuming, expensive, personal, worrying and stressful.

That is not to say "roll over" and be walked over, but to take everything into account and make your own informed judgement as to the best course of action to take.

You made your decision and appear fortunate in that you can go back out there and re-establish your business. I applaud that decision and thank you for reminding Warriors of the potential pitfalls that can await any of us.

Good luck in re-establishing your business.

Regards,
Jeff Henshaw.

[ObsidianKnight]

This is why there are states that have "no-info" holding llc or company legislation, New Mexico for instance does not require owner details. You could also revamp your business structure to be in such a manner that your company holds no assets hence making it less worthwhile to sue you.

But aside from that, it does suck that people can sue you for the stupidest things. I think nearly 1 in 3 people will be sued in their lifetime. Just because people have little else to do but argue over the definition of "application".

I am sure bidding practices have been around for longer then their patent. Just stupid.