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Customized Ordering Gets Customized Patent Suits

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Hyundai, Reebok, Puma, Polo Ralph Lauren, and Michelin are all being sued by the same company for patent infringement. The patent involves technology that allows customers to customize products on the companies’ websites. But it’s not just the scale of the suit that will get attention, but also the timing, and who’s bringing it.

The suit is brought by Taurus IP LLC.

Who?

Right.

Taurus is the Wisconsin affiliate of Texas-based Plutus IP LLC.

Who?

Right again, because they don’t make anything but lawsuits.

CNNMoney sums them up beautifully:

The group’s very name — Plutus is the mythical Greek god of wealth — evokes the riches that are stake in a business that wrings revenue from patent portfolios via licensing deals and settlements, usually achieved by threatening or filing lawsuits.

Here’s the way it works: A law firm buys up unused patents on the cheap, sits on them until somebody makes something similar, sues them, settles for a million or so, goes on to the next litigation. Nice little racket, huh?

Often these patents are arguably "low-quality" or "obvious" and as such, won’t hold up in court, but large companies, such as the four mentioned above are willing to settle for a small amount to save on legal costs.

The suit comes at an interesting time as the House of Representatives is expected to vote soon on the Patent Reform Act, proposed to address overly-litigious patent farmers.

Interestingly, most of the lawsuits are filed in patent-suit friendly, Marshall, Texas, says the Coalition for Patent Fairness, which counts Google, eBay, and Microsoft among its members.

According to the website:

The number of companies caught up in patent litigation is large and growing: for example, the 218 infringement actions filed in Marshall, Texas, during the 28 months from January 2004 through April 2006 named 856 defendants, including more than 600 separate companies (some companies were named in more than one action).

Earlier this week, Google expressed why patent reform was important on its Public Policy blog:

Low-quality patents and escalating legal costs are currently hurting the ability of U.S. companies to compete globally, and that in turn hurts U.S. workers and consumers. Without a modernized patent system, U.S. companies are at a competitive disadvantage, spending resources on unnecessary litigation and unwarranted licensing instead of on innovation.

Customized Ordering Gets Customized Patent Suits
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