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Under Attack by PanIP's Patent Lawyers?

Posted by Cliff on from the sponsored-by-the-major-blunders-of-the-USPTO dept.

Matthew Catalano, of the Dickson Supply Company, asks: "I work for a small plumbing, heating, irrigation, and BBQ supply house. Over the past four we have built up quite a website that houses tons of information and offers many products for sale via an online store. Recently a company known as PanIP has decided to sue us on 2 counts of patent infringement. To the best of my understanding, as you can see from their website, they claim that they invented the use of text and images as a method of business on the Internet. They also claim that they invented the use of a form to enter customer information. Obviously this is ridiculous and most likely won't hold up in court! However, this is not the problem. PanIP has also sued 10 other small companies. PanIP chose small companies because they hope that none of them can afford the legal fees that would ultimately remove their patents. Most defendants, including us, want to opt to bail out for a smaller licensing fee of $30,000. PanIP will continue this vicious cycle on small companies of which many of you may become victim of. Eventually they will have so many cases under their belt that they will be able to attack larger companies." Yet again, the USPTO is used as a weapon in the free market. When will someone get a clue and put a stop to this type of digital extortion?

"I am hoping to release this story to the press so that the US Patent office finally wakes up, but the media is unpredictable and unreliable in terms of which stories they encapsulate. If there is anyone out there who has any ideas about stopping PanIP or can help us out in any way it would be appreciated. Otherwise, just pass this along to everyone you know and hopefully something will come of it.

There is also a page we have constructed that reveals some more details."

19 of 543 comments (clear)

  1. Prior Art by powerlinekid · · Score: 5, Interesting

    While don't your company and the other smaller pool together to fight back? That way since you're all being attacked on the same basis it'll save each of you money and maybe get a better lawyer. Obviously in the courts you guys will win just due to prior art, like the case recently where that company claimed that hyperlinking was their invention and it took an 80+ year old to say "umm, no we've been doing this for 30+ years". Also, licensing is not a good way to go because you will certainly be tied to them. Hell, maybe you guys can contact IBM's ebusiness department to see if they could lend any help in this case due to the fact that it would be in their best interest to not let this get out of hand. Just my 2 cents...

    --

    can't sleep slashdot will eat me
  2. consolidate your legal challenges by MattW · · Score: 5, Interesting

    If it were me, I'd contact the other defendants, and see if everyone were willing to pitch in to front one company challenging the validity of the patents. I'd look for some blatant prior art, which should be trivially easy to find. IANAL, but I'd be looking to get a summary judgement based on a mountain of prior art, and I'd want to ask a lawyer if it would be possible to countersue for malicious prosecution or fraud. You might also want to contact your senators or representatives -- you might be able to get the USPTO to "independantly" re-review their patents (and obviously, subsequently revoke them)

  3. Safety in Numbers by twfry · · Score: 3, Interesting
    It was stated that there are at least 10 other small companies being sued by this "company" and in the same situation. Do you know who they are? If so I'd suggest contacting them and seeing if they are interested in a group class action lawsuit for extortion.

    It seems that your case is very strong and at least some of the other organizations will recognize this as well. Banding together with the other companies will 1) Reduce your legal fees 2) Strengthen your case 3) Give all of you more negotiating power with PanID.

    IANAL

  4. Time to make this illegal... by gweihir · · Score: 5, Interesting

    It is high time to make filing of patents that do not cover any real invention illegal. And it is high time that the USPTO is made legally responsible for damages caused by patents that are succesfully revoked.

    Futhermore I think that patents on IT need to be granted or refused within a very short time or alternatively be automatically voided if the "invention" is in broad use when the patent is finally granted.

    Interesstingly German patent law had the requirement that only inventions that are significantly more inventive than what an average expert can come up with could be patented at all. Sadly it seems that with the EU this is not valid for software patents anymore.

    --
    Most ACs are not even worth the keystrokes to insult them. Be generically insulted and ignored otherwise.
    1. Re:Time to make this illegal... by cookd · · Score: 2, Interesting

      Perhaps not the USPTO office, per se. From what I can tell, they are doing the best they can, and their problems are being exploited by greedy businesses. However, the govnerment that has a constitutional mandate to provide a reasonable PTO should be responsible when it doesn't provide it and when citizens suffer as a consequence.

      Reason tells me that the only way to solve this is by correcting the economic imbalances that exist: the cost of a thorough examination of a patent vs. the cost of applying for a patent; the cost of bringing a patent lawsuit/defending against a patent lawsuit vs. the benefits of doing so.

      I would like to say that the price for patents should be jacked up to cover the actual cost of examining the patent. Then, the PTO could hire enough examiners to actually do the job. However, this might make it more difficult for Mr. Inventor to submit a perfectly valid patent, again giving the advantage to the big guy.

      More than anything, the whole IP issue needs to be revised carefully. The problem is that I'm not sure that I trust the government to do the revising -- let them get involved, and the DMCA might happen all over again!

      --
      Time flies like an arrow. Fruit flies like a banana.
    2. Re:Time to make this illegal... by gotan · · Score: 3, Interesting

      If the folks of the USPTO were in the least responsible for patents they do grant they would be more careful about it, and, when in doubt not grant the patent. This is not about throwing them all in jail, but about motivating them to do their job. At the moment the USPTO profits by granting as many patents as possible and let the courts deal with it (shifting the job of examining the validity of patents to the courts, and the costs to the folks being sued). Since it should be the job of the parent office to examine the validity of patents they should have some motivation to do so. Also they should have some power to make their job possible. This could easily be done if it were possible that they refuse to grant patents on the grounds that the language is too complicated.

      It should be obvious, that the current practice of US patent law hurts small businesses and startups most and generally slows down innovation. The only people who win by this are lawyers and scum like PanIP.

      --
      "By the way if anyone here is in advertising or marketing... kill yourself." -- Bill Hicks
  5. Loser pays by meta-monkey · · Score: 3, Interesting

    Definately, this illustrates the need for patent law and patent office reform. However, I think it also identifies another fundamental weakness of the US civil courts: anybody can sue anybody else without real penalties, and make it so expensive to fight back that the victim better off settling. The court system is being used as an extortion racket.

    Seems to me it would be worthwhile to adopt a "loser pays" system. PanIP would be free to sue this guy's company all they want, but when PanIP loses in court, they has to pay the other side's legal bills. Think of all the worthless lawsuits people file with lawyers who know they don't have a case, but are just throwing them out there to see who'll settle (*cough*JesseJackson*cough*). They're probably think twice about it, and make sure they actually have legal leg to stand on if they knew they'd have to foot the bill if they lose.

    --
    We don't have a state-run media we have a media-run state.
  6. Call the folks at Amazon! by aitala · · Score: 4, Interesting

    There is a simple solution - call the folks at Amazon and tell them about the patents. This affects they way they do business. Let them fight it out with PanIP.

    --
    Eric Aitala
    www.f1m.com
  7. Re:Sue em back! by Flower · · Score: 3, Interesting
    (IANAL) Or get together and pay the fee to have the patent re-reviewed. iirc, this is between $15-50K but from what I've read if a patent survives re-review it is much stronger in court. A group of major players, including IBM, did that for the Y2K windowing patent.

    btw, anybody know what happened with that issue? I haven't anything about the windowing patent for quite some time.

    --
    I don't want knowledge. I want certainty. - Law, David Bowie
  8. Loser Pays would go a long way towards fixing this by gtwreck · · Score: 2, Interesting

    It's about time for some Tort Reform in the USA. Unfortunately, all the politicians are lawyers...

  9. Sue the USPTO? by bill_mcgonigle · · Score: 3, Interesting

    I'm so not a lawyer, so I ask: Can these guys sue the USPTO for issuing the bogus patent? It only seems fair to be able to recover court costs, at least.

    --
    My God, it's Full of Source!
    OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
  10. Wierd... by AcidDan · · Score: 4, Interesting

    Google search for 'PanIP' and 'Patents'

    http://www.google.com/search?hl=en&q=PanIP+paten ts

    results in zero returned results...

    Their website looks very crummy too - are you *sure* they are a legitimate business? I mean it's *very* hard to escape google's search with *zero results*.

    You might just scare them off if you go "see you in court".

    -- Dan "who is off to look up USPTO on PanIPs patents now..." =)

  11. HTTPS! QUick before they take it down! by Anarchofascist · · Score: 4, Interesting

    https://www.panip.com/index.htm

    Check it out! Quick, before they take it down.
    Very weird, very confusing...

    --
    Once more unto the breach, dear friends, once more, Or close the wall up with our American dead!
    1. Re:HTTPS! QUick before they take it down! by niola · · Score: 3, Interesting

      Looks like some kind of scam organization to me...

  12. Get EFF to help sue the USPTO! by MadCow42 · · Score: 3, Interesting

    Isn't the USPTO liable for the damages it causes by recklessly granting frivolous patents such as those you mention?

    Sure, they're a government agency, but they ARE doing harm by granting these patents. They ARE costing businesses money, and probably end up making some go bankrupt trying to fight these crap patents (or through paying silly license fees).

    Can't they be sued for gross negligence or something similar... A good suit like that would go a LONG way towards stopping the endless stream of crap that they've granted.

    Just my non-lawyerly $0.02.

    MadCow.

    --
    I used to have a sig, but I set it free and it never came back.
  13. Re:Clever buggers by Captain+Large+Face · · Score: 3, Interesting

    I have to agree -- this page is the largest on their web site, and it's only 54830 bytes. Still it is the largest, and would therefore be the best way to slashdot the site, wouldn't it?

  14. Re:Software patents are not the root of all evil. by Kindaian · · Score: 2, Interesting

    Software patents aren't the only evil... all patents are evil per si...

    Some decades ago... the legislators, in an atempt to put order in the fast and furious times of invention... invented a low level playground called "patent". It was granted to intenvors to protect them from others thieving their ideas and marketing the fruits of them without any compensation the the original inventor.

    Even in it's starting points... the rush to patent existed. The first to place the papers in the patent office would win (and that happened with patents related with telephones at least - if i recall correctly).

    Patents today don't protect anything. The only thing that they allow is for restrictive access of common knowledge.

    Today the great majority of all patents are pushed by companies, funded by companies and mayhappen used by companies.

    The inventors at large don't profit anymore from the inventions apart from the "renown" (which they would receive anyway).

    Another problem with patents is the time of "monopoly" for exploring the patent. It doesn't even protect companies anymore (see the typewriters patents and all those *inventive* tecniks to hammer the letters in the paper - and specially see where all that has gone today [and the companies also]).

    Of course... the time is still the end of the 19 century... yup... where to build anything you still needed one or two years... NOT!

    20 or 25 years in a software patent is just madning! In the industrial world, a patent normally don't outlast it's usefullness. But, in software, that means 5 to 6 full generations of software and arround 2 completelly diferent breads software engeneering! That is just too much...

    And yes... the root of all evil is in the USPTO office. When the patent examiners are rewarded by the number of patents approved! You can add 2+2 i presume...

    Enought of rantings...

  15. Re:This is why we need "loser pays" by hyphz · · Score: 5, Interesting

    Don't think that the "loser pays" system helps too much.

    All that happens in the UK is that the big firms pump up the cost of the lawsuit as far as they can (hiring the most expensive lawyers, transporting them around, etc). If they are suing a small firm, or especially a private individual, they know that if they have to pay his costs it's barely a blip on a balance sheet, but if he has to pay theirs it could gut his business or bankrupt his family in a single fell swoop. The result is the same: they settle to avoid the risk.

    The proposed system is interested, but I'd make a change: you have to pay, to BOTH lawyers, whatever you paid yours. So if yours cost $3000 and the other guy's cost $500000 and you lose, you pay only $6000... but if you WIN, the other guy has to pay $1000000, and your lawyer gets an extra $497000! (Hey, he deserves it for beating a higher-paid lawyer, right?) This ensures that the big firms still have to worry about paying costs if they lose, as opposed to being able to say '$3000? Pah.' It also, of course, means that small guys won't have much of a problem finding a lawyer in these cases...

  16. Hoax?? by robstercraws · · Score: 2, Interesting

    I'm sincerely wondering if this is a hoax. As of 8:44 am EST 05/14/2002, the PanIP webpage has a ton of bad links. The Legal Disclaimer is 404, and so is the Company Background, Company Information, Patents Granted, one of the patent links, Choosing a Stock Portfolio, and A Case for Patent Citation Analysis in Litigation (huh??).

    Furthermore, the site looks like it was done by an elementary school student.

    If it is a hoax, maybe it was done in the spirit of the "humouse" we heard about on slashdot earlier this week.