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Suing Open Source Startups - A New Scam?

Posted by Cliff on from the despicable-behavoir-in-business dept.

Anonymous Crowhead asks: "I'm posting this anonymously for reasons that will soon be obvious. We're a fairly new startup company who specialize in products, and we have a policy of making all our software Open Source. A while ago, we received an notice from a company claiming that we were violating some of their patents, and that they had found this out by looking at our code. They gave us one of the two options - either make the product closed source and sign up for a percentage of the profits with them, or provide them with a stake in our company. Our legal advisors felt that it might be wise for us to settle, but we decided to press them further for details of the infringement and refused to yield. We haven't heard from them since - so either we called their bluff, or they've gone to come back with more legal firepower. No matter what, we feel that this is a scary precedent. Have any other entrepreneurs around here experienced anything similar? Is this one of the after-effects of the SCO episode - to go after unwitting small startups who cannot fight back? Personally, this was a nightmare for our company, and we are not aware of any patents that we may be violating."

6 of 104 comments (clear)

  1. They didn't tell what patents you're violating? by ion_ · · Score: 4, Insightful

    A while ago, we received an notice from a company claiming that we were violating some of their patents, and that they had found this out by looking at our code.

    we are not aware of any patents that we may be violating.

    Did i get this right - they didn't tell you what patents you are supposed to be violating?

    In that case their claims don't sound very credible IMHO.

  2. Re:If it's just a threat.... by ambrosen · · Score: 5, Interesting

    Truly. It's not as if patents are secret. They should give you the Patent number and then if there's any case at all, you can answer it.

  3. Say what? by max+born · · Score: 4, Insightful

    Our legal advisors felt that it might be wise for us to settle, but we decided to press them further for details of the infringement and refused to yield...

    So your legal advisors advised you to settle without further details? Something is not right about this story.

  4. This seems incredibly fishy by heychris · · Score: 5, Insightful
    If you're a new startup, how did they happen to come across *your* open source project so swiftly? Could you have a disgrutled ex-employee who decided to up the stakes for you?

    That said, if it's a patent, the patent is public information. They should have to provide the number of the patent that you have infringed, and proof of their ownership of said patent. It should then be easy enough to get the relevant info from the Patent Office. There's no incentive for you to settle until they do those 2 things. They *could* try to directly file a legal case, but it looks like they are out for a quick buck, and they are just hoping to scare you into a bad call.

    CC

  5. Re:If it's just a threat.... by fatmonkeyboy · · Score: 5, Insightful

    No, there's no point in making veiled (and probably idle) threats.

    It's in your best interests to remain polite. The company might come back with a legitimate patent infringement. Just because you're not aware that you've infringed on a patent doesn't mean you haven't done so. There are patented algorithms (the "marching cubes" algorithm for voxel rendering comes to mind). Even if you independently develop such an algorithm, you'd be infringing the patent by using it.

    Now, if you never hear from them again after challenging them and feel you have a moral obligation to strike back (on behalf of future victims or something)...and after you've done your research and you're sure that the company isn't legit...then you should contact a lawyer and see what he or she suggests as a course of action.

    And if you're not willing to retain a lawyer, then what are you going to do? Call them names? Idle threats won't stop them. Do something useful about it, or just forget it and move on.

  6. Lies... Lies... by Corpus_Callosum · · Score: 4, Insightful
    I'm posting this anonymously for reasons that will soon be obvious.

    And what is it that is obvious?

    New startup that specializes in products

    Our legal advisors felt that it might be wise for us to settle

    but we decided to press them further for details of the infringement and refused to yield

    we feel that this is a scary precedent

    Have any other entrepreneurs around here experienced anything similar?

    to go after unwitting small startups who cannot fight back?

    Personally, this was a nightmare for our company

    we are not aware of any patents that we may be violating.

    This reads like it was written by a psychologist to scare us out of starting an open-source company (note the use of language to make as many people identify with the text as possible combined with the implicit transfer of fear). That is what is obvious.

    --
    The reason that it can be true that 1+1 > 2 is that very peculiar nonzero value of the + operator