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PanIP Drops E-commerce Patent Lawsuits
Darlok writes "Back in October 2002, PanIP sued 50 small businesses, claiming patents over basic E-commerce functions. One of the defendents set up a group defense fund, and in the last week, contributors to that fund have been notified by e-mail and this notice on the fund's homepage that PanIP has agreed to drop its lawsuits without any licenses being issued. The U.S. Patent Office is currently reviewing the patents in question. Hopefully this will set some sort of precedent ..."
I posted my take on this story four days ago on my journal.
Here's what it says about it:
The message board and all the pages within the site are now gone, and there's only one single page that briefly outlines what happened.
But big fat question marks are all over the place. What happens now? The fifteen or so defendants who banded together to fight are off the hook, at least as far as PanIP is concerned, but what about the dozens of others? Has PanIP dropped all of its suits, or just the ones against the members of that group?
At the bottom of the page is a sort of cryptic quote: "Don't let the things you can't do stop you from doing all that you can," which I take to mean that among the things that couldn't be done was to utterly defeat PanIP and prevent its founder from continuing his campaign of lawsuits against e-commerce companies.
Back in January, the founder of the PanIP Group Defense Fund had placed a warning on the site that PanIP was sending threatening letters out to businesses who had previously been left alone. Were those letters a last-ditch effort by PanIP to generate the capital necessary to continue the fight over its patents? Or was PanIP anticipating settling its way out of paying the $19,000 in legal fees awarded to the defense group following a determination by at least one judge that PanIP's defamation lawsuit against the group was an illegal SLAPP under California law?
Should e-commerce businesses breathe a sigh of relief that PanIP has backed off, or should they be more worried than ever? If PanIP starts up its campaign of lawsuits anew, will the next round of targeted companies similarly band together to fight off the suit?
The former website of the defense group states that both of PanIP's e-commerce patents are facing re-examination by the USPTO. The "automated sales" patent has been under review since August, according to the old version of the site, which never mentioned that the other patent was actually under review. If they are indeed both under review, can PanIP even file any new lawsuits?
I do not mean to denegrate the defense group in any way... standing up to PanIP was, in my opinion, the correct and brave thing to do. And, at the same time, carrying on the fight when an olive branch is offered with few, if any, strings attached would have been foolish. I don't blame the defense group for opting out of a longer, uglier fight, and I salute them for standing tough as long as they did. Just getting the patent office to re-examine both the patents was quite a feat, one that very well might get both patents invalidated and send PanIP packing in the end, after all.
But if the patents are re-affirmed, you can bet that a whole lot of businesses who'd never heard of PanIP or its patents will be hearing all about them real soon.
You are in error. No-one is screaming. Thank you for your cooperation.
As an aside, I like the choice of "www.youmaybenext.com" for the fund's homepage. I wonder what the next ridiculous patent lawsuit will be for? I smell a new poll.
Auto-reply to ACs: "Truly, you have a dizzying intellect."
The PanIP Group Defense Fund is saying that it's going to dissolve because the all lawsuits against group members are being discontinued, in exchange for the group willing to give up the already on the books order that PanIP pay PGDF's legal fees. Uhm...
To me, this is not a result the outside world should be cheering. It's a settlement that protects the asse(t)s of the group members, but it's not a knockout blow to PanIP. PanIP is giving up nothing but the right to pursue an appeal that they weren't likely to lose and create an even stronger precedent. The PGDF is giving up the chance to extract real money from PanIP.
Boo! Hiss! Bad move!
The PGDF shuuld not be folding. Just because their orginal case has been settled does not mean they have become pointless. They should be seeing through that the patents be invalidated, and keeping the group in existance so that anybody sued by PanIP in the future could get quick and easy access to the resources that worked before.
As their website domain has always said, you could be next to be sued by PanIP if you're doing basic e-commerce on the Web. And nothing in this settlement prevents that happening. PanIP's plan may be to just let this group fade away, and then sue another group of defendants hoping that they don't join together into a large enough group to squash them like a bug again. It's a little too early to be putting the fly swatter away.
I had a friend who was being sued by PanIP. His online discount perfume store was nearly forced out of business over these dubious patents. What kills me is that the prior art for selling on the web was out there. Hot Hot Hot launched in 1994 doing most everything covered by that group of patents. Good Riddance.
Thalasar
Well, it doesn't set any sort of legal precedent and since businesses are, except in the extremely rare case, demonstrably amoral I wouldn't expect any sort of karmic-rub off on other companies, either.
Businesses are beholden to their shareholders. If shareholder valuation can be increased via protection of patents then the company has a fiduciary duty to pursue that course of action. To not do so would be neglicent and could open the company up to a shareholder lawsuit.
Hopefully this will set some sort of precedent... Oh, rest assured, it will. I just hope it's a good precedent.
-DB-
E-mail is like a prison: a prison with no walls... and no toilet. -Strong Bad
Hopefully this will set some sort of precedent ...
What kind of precedent? Patent defense consortia have been routine practices in defending against agressive plaintiffs seeking to take fundamental control of key industry elements. When this was first raised, I pointed out the various routes to shut down an overactive plaintiff: reexamination regarding prior art, joint defense agreements and joining forces to share costs of a legal defense. All of those happened and it worked.
This isn't new, it's routine.
The lawyers.
PanIP e-commerce patent suits withdrawn
20:52 Thursday 25 March 2004 Rejected
Yeah, I know, go ahead mod me down for bitchin about it and after all, stories like "Pokemon Game Boy Advance Update," that appeared that day really were more "stuff that matters."
In a legal sense, a precedent would be something new and groundbreaking. If the courts find PanIP's patents to be invalid due to prior art and such a decision has never been rendered before, then we may call it a precedent. Otherwise, its just another case.
Blah, blah, blah. I guess you're probably trolling, but in case someone falls for it: the McDonald's lawsuit in question is a piss-poor example of a "frivolous" lawsuit. Two quick links explaining why:
Clicky
Clicky
Auto-reply to ACs: "Truly, you have a dizzying intellect."
I used to think the same thing until someone pointed out the actual details of this lawsuit. It is defintely interesting. McDonald's was told repeatedly before this incident that they served coffee way too hot, something like 10-20F above the average. This lady just wanted a very small amount for medical bills, McDonald's bascially told her to go screw herself. In the end McDonalds was slapped with such a big fine because they were so far out of line with how they served the coffee in general and not because of the injuries to the old lady.
-- Slashdot, making the Left look conservative since 1997.
Yeah. It sets the precedent that small businesses should work together to establish a "technology, business process and other silly patents defense fund" to deter such behavior in the future.
GreyPoopon
--
Why is it I can write insightful comments but can't come up with a clever signature?
My apologies if this seems offtopic, but I just need to point out that not all cases that appear frivolous are truly frivolous. Found via Snopes, from the Association of Trial Lawyers of America, here are the actual facts of the McDonald's coffee spill case:
Facts Sheet: McDonald's Scalding Coffee Case
FOR IMMEDIATE RELEASE Contact: William G. Wilhelm 858-454-7095 Raymond Mercado rmercado@panip.com
PanIP Settles All Litigation With The "You May Be Next" Defendants
San Diego, CA March 24, 2004. PanIP, LLC is pleased to announce that as of March 19, 2004, it has settled all outstanding litigation with the members of the "PanIP Group Defense Fund, Inc.," the originators of the You May Be Next website. PanIP released those defendants from liability by issuing them covenants not to sue under a confidential settlement agreement. Currently, PanIP has no outstanding litigation in relation to its United States Patent Portfolio.
In the fall of 2002, PanIP filed suit against 40 individual defendants in the United States District Court for the Southern District of California in San Diego, California, alleging that those defendants were infringing claims in U.S. Patents Nos. 6,289,319 B1 and 5,576,951. Shortly after PanIP initiated suit, a group of sixteen defendants formed the "PanIP Group Defense Fund" in an effort to defeat the patents. Their efforts, like those of another group defense fund formed in 2002, were fruitless. Since 2002, when PanIP began enforcing its intellectual property rights, all parties that have been sued for patent infringement have settled with PanIP and the cases have been dismissed.
PanIP, LLC is a technology development company that holds a number of United States and Canadian high-impact patents. Several additional patent applications are pending.
For more information about PanIP, LLC, please visit www.panip.com
Some interesting stuff, Currently, PanIP has no outstanding litigation in relation to its United States Patent Portfolio. This makes me think the other 24 suits have been dropped. Their efforts, like those of another group defense fund formed in 2002, were fruitless. Seems like they where fruitful in getting you to drop your suits. Perhaps more judges theatening to force companies to pay the legal bills of defendents in questionable patent lawsuits may prevent these things in the future.
"I used to think the same thing until someone pointed out the actual details of this lawsuit"
You do not know the actual details.
"McDonald's was told repeatedly before this incident that they served coffee way too hot, something like 10-20F above the average"
Actually, that is the recommended serving temperature. McDonald's was selling coffee at the recommended serving temperature, which was how the customers wanted it. A detail you did not know.
"This lady just wanted a very small amount for medical bills"
But it was entirely her fault, since she dumped it. Another detail you overlook.
McDonald's bascially told her to go screw herself
As it should to anyone who begs for money with no reason.
the end McDonalds was slapped with such a big fine because they were so far out of line with how they served the coffee in general
Except they were entirely in line! A detail you forget. If you look at the miniscule number of burns per # of cups sold, it is something like a staggering 1 in 25,000,000.
After McDonald's was forced to serve the coffee too cold, the complaints greatly increased. Only after the frivolous lawsuit were they forced to be "out of line".
Perhaps the head of PanIP found a dead fish in his bed :)
A law that gives patents to obvious processes.
A legal system that discourages the use of ideas (remember the eolas v microsoft patent)
The white settlers of a large part of North America thought that patents of nobility were a tyranny.
Now you can get a patent for a file layout that is based on a standard.
Whose to blame?
Those taking advantage of the system?
Those who enforce the system?
Those who created the system?
Those who elected the creators of the system?
The only thing that sets legal precedent is published appellate court case results. Since this didn't go to an appellate court (it sounds like it didn't go to any court), this isn't going to set any kind of legal precedent.
Perhaps you mean, "Hopefully, this will enlighten stupid fucking multinational corporations, whose board of directors thinks they are entitled to eternal perpetually increasing profits at the expense of others, that they can't fuck with this community."
The problem with that is a man is innocent until proven guilty, which is for the court to determine, not the lawyer. That's a consequence of due process.
EvilCON - Made Famous by
Anything less will still leave a door open for legal thugs to try and mug small businesses on the grounds of ridiculous claims on abusively granted patents (on obvious business methods and such).
The business world would be a safer place with those jailbirds slammed to where they belong.
In Soviet Russia, our new overlords are belong to all your base.
A co-worker and I went to check this PAN-IP company out... after all I'm just a lowly reporter for a small e-zine! Guess what, 329 Laurel Street in San Diego is a spot to park your car... not your butt. There's no office there. I tracked down the PAN-IP owner's house... and it's in tatters within a location called South Park San Diego. Really, the place is a shit-hole and in disarray. My guess is they needed money to pay the mortgage on the tired old house. PAN-IP was a scam folks. Challenge them completely and countersue. Watch this bottom feeder move into Barrio Logan.