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Patent Troll Values Its Entire Portfolio At $2, Goes Bankrupt (arstechnica.com)

Posted by BeauHD on from the don't-let-the-door-hit-you-on-the-way-out dept.

mspohr shares a report from Ars Technica: In September 2018, Shipping & Transit LLC (formerly known as ArrivalStar) filed for Chapter 7 bankruptcy -- voluntary liquidation -- but no one seems to have noticed until the Electronic Frontier Foundation pointed it out on October 31. The company claimed that it held the patent on vehicle tracking and related alerts. But about 15 months ago, judges began to rule against Shipping & Transit for the first time. That seems to have put a damper on its entire business model.

Now, according to Shipping & Transit LLC's federal bankruptcy filings, its global patent holdings (34 in the United States and 29 elsewhere) are worth a whopping $2. Meanwhile, it owes more than $423,000 to numerous creditors, including banks, law firms, and something called the "West African Investment Trust," based in Geneva, Switzerland.

20 of 117 comments (clear)

  1. in order by guygo · · Score: 5, Funny

    I believe and "Womp Womp" is in order?

  2. This isn't over by Opportunist · · Score: 4, Insightful

    One patent troll gone. Good riddance. How many more to go?

    The problem with patent trolls is that you cannot win against them. If you lose, you pay a fortune. If you win, they have no assets, go poof and tomorrow you have the next patent troll come into existence, with the same shysters, the same office and a new "creative" name.

    And as long as this is legal, it will continue.

    --
    We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    1. Re:This isn't over by sheramil · · Score: 2, Funny

      One patent troll gone. Good riddance. How many more to go?

      The problem with patent trolls is that you cannot win against them.

      As for assets, how many people work for this company, and (Zim voice) do they have all of their organs?

    2. Re:This isn't over by DewDude · · Score: 2

      I think part of the solution is that patents shouldn't be transferable...at all...ever. The problem is these guys just buy up "useless" patents...usually cheap...and just sue like crazy. They never actually contributed *anything* to the development of the technology...not to mention the original guys who came up with it probably never got compensated as they were probably employees and the patent went to the company.

      If you prohibit patents from changing hands to entities that have nothing to do with them...then stuff like this for the most part will stop. You won't have guys buying a bankrupt company's IP at auction and then just suing everyone because "they own the patent".

      If the company goes under...then the patent should expire. Letting assholes buy it for a couple bucks at a liquidation and then start suing everyone isn't what the patent system was designed for.

  3. make em public by dicobalt · · Score: 4, Interesting

    Sometimes patents should just be made available for everyone. This is one of those times.

    1. Re:make em public by Immerman · · Score: 5, Insightful

      Why would they do that though?

      I suspect valuing the patents at $2 is prelude to the CEO starting a new LLC to buy them and keep doing the same thing without all those old debts hanging over their head. Standard corporate shell game - our company imploded, so we're going to buy all the assets at fire-sale prices and start a new company doing the exact same thing but with a different sign over the door. Have fun trying to squeeze that money we owed you out of our old corporate charter!

      --
      --- Most topics have many sides worth arguing, allow me to take one opposite you.
    2. Re:make em public by Cytotoxic · · Score: 2

      Exactly my first reaction.

  4. Portfolio is worth $2? by darthsilun · · Score: 2

    Great. I'm a buyer at that price, and I'll happily put them into one of the patent trusts.
    Where do I have to talk to?

    1. Re:Portfolio is worth $2? by misnohmer · · Score: 2

      I'm outbidding you by 50%, offering $3...;-)

    2. Re: Portfolio is worth $2? by Anonymous Coward · · Score: 4, Interesting

      They probably transfered them to another company for $2 and will start again

  5. Four. Four big trolls by raymorris · · Score: 4, Interesting

    > How many more to go?

    Four.

    Three or four companies file half of *all* patent suits. The total number of patent suits includes all of the legitimate business disputes, so probably 90% of the trolling is those few companies.

    To pretty much solve trolling, one only needs to study the business model of those few companies and figure out how to disrupt it, how to make it not profitable.

    You hear about lots of different companies being victims of trolling, and different patents being trolled, so it seems like a large issue. It's the same plaintiffs over and over though.

  6. Re:Four. Four big trolls by dAzED1 · · Score: 2, Funny

    "how to make it not profitable" - we could yell at them in restaurants, I hear that is terrifying and is as bad as being sent a bomb.

  7. They should check previous claims by gerald.edward.butler · · Score: 3, Insightful

    Someone should check previous claims they made to investors and the courts prior regarding the value of their portfolio and charge them with fraud if they don't line up.

  8. West African Investment Trust by r1348 · · Score: 4, Funny

    Because it takes a patent troll to scam a Nigerian prince.

  9. Also Judge Gilstrap heard 39% of troll cases by raymorris · · Score: 5, Informative

    On a similar note, 39% of of cases by high volume plaintiffs were heard by Judge Gilstrap in the Eastern District of Texas. He had 24% of all patent cases in the country. In other words, Judge Gilstrap was 39% of the problem.

    Last year, the Supreme Court held in TC Heartland that patent plaintiffs can't venue shop like they used to. Now,
      Gilstrap is down to only 9% of all patent filings and 15% of HVP filings.

    That's a big improvement. Getting of Gilstrap would be a major win. He's one guy.

    1. Re:Also Judge Gilstrap heard 39% of troll cases by radarskiy · · Score: 2, Insightful

      That doesn't prove that he was part of the problem, just that he hears a lot of patent cases. What do his plaintiff vs. defendant rulings look like? Are the overturn rates different than for other judges.

      People love to claim how East Texas is friendly towards patent plaintiffs, except that district doesn't actually have the highest rate of finding for patent plaintiffs.

  10. Ps Judge Schroeder down to 3% from 19% by raymorris · · Score: 4, Informative

    Ps, while Gilsap previously had 39% of HVP filings, Judge Robert William Schroeder III, had 24%. That's 63% for just those two judges.

    After TC Heartland, only 3% of filings go to Schroeder.

    Some people think that to fix this we have to completely throw out the patent system. These two judges, two people, were 63% of the problem. Handle those two guys and you're most of the way there.

    1. Re: Ps Judge Schroeder down to 3% from 19% by Anonymous Coward · · Score: 2, Interesting

      So that rant suggests you're actually anti-patent rather than anti-patent-troll, a difference that matters to at least a few of us around here.

      EDTX drew all those filings because EVERY serious patent holder, trolls included, wants a judge that actually takes the subject matter seriously and knows enough about patent law not to screw it up. I'm not exaggerating to say that my boss has had to explain the difference between a patent and trademark to individual federal judges in more than one district.

      And that's completely beyond the fact that EDTX runs a seriously efficient docket- if/when one of *your* patents is infringed, you're going to wish to god you had a judge that was willing to keep defendants moving. Delay helps nobody but a determined or past infringer.

      Blaming EDTX judges for whatever it is you don't like about patent trolls is about the most asinine thing I've read here today. That's why I suspect it's really patents in general you have a problem with.

    2. Re: Ps Judge Schroeder down to 3% from 19% by HornWumpus · · Score: 2

      We've been watching _idiotic_decisions_ come out of east Texas patent courts for decades. Sell your bullshit elsewhere.

      These judges are selected by plaintiffs for their stupidity. That and the stupidity of the local jury pool. That's over, yeah!

      --
      John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
  11. Re:Portfolio value by bobbied · · Score: 2

    Which is why I think any patents held by a company in bankruptcy should be thrown into the public domain.

    So I propose that we make it so patents either revert back to the original patent filers, or are assigned to the public domain should the current holder be forced into bankruptcy.

    In addition, all patents must be "maintained" by paying a set of yearly fees to remain in force. The fees increase each year by adding 20% to last year's fees. Fees may be paid in advance at the current year's rate, but anytime the patent is re-assigned, any prepaid fees are forfeit and the new owner must pay fees at the current yearly rate.

    So if you want patent protection, you will pay fees to keep it. If you cannot make money on the patent, then it reverts to the public domain.

    --
    "File to fit, pound to insert, paint to match" - Aircraft Maintenance 101