First-Ever 'Patent Troll' Lawsuit Filed In Washington

OLYMPIA, WA — Washington Attorney General Bob Ferguson has filed the state's first-ever lawsuit against a "patent troll", which he says had been illegally targeting small businesses across the country.

Ferguson's lawsuit, filed in King County Superior Court, alleges that Landmark Technology is a predatory "patent troll", a company that files bad faith patent claims, harassing small businesses into paying them exorbitant licensing fees.

As the Attorney General's Office (AGO) explained in a news release announcing the suit:

"Landmark does not make products. Its entire business model consists of demanding licensing fees from other companies. From January 2019 to July 2020, Landmark sent identical form demand letters to 1,176 small businesses nationwide, claiming the business infringed on Landmark’s alleged patent rights. In those letters, Landmark threatened to sue if the business did not pay $65,000 to license the patent."

Among those 1,176 businesses targeted by Landmark were five small businesses in Washington. All five refused to pay Landmark's fees, so Landmark sued them. The businesses ended up settling to avoid the cost of a lawsuit. The AGO says, that's Landmark's modus operandi: find a small business that can't afford a lengthy lawsuit, and try to squeeze a settlement out of them.

Four of those Washington businesses ended up paying Landmark between $15,000 and $20,000 to settle their lawsuits:

• A bottle maker in Seattle.
• A Seattle bakery
• An electrical supplies company from Spokane.
• A Seattle bookstore

“Landmark extorts small businesses, demanding payment for webpages that are essential for running a business,” Ferguson said. “It backs them into a corner — pay up now, or get buried in legal fees. I’m putting patent trolls on notice: Bully businesses with unreasonable patent assertions, and you’ll see us in court.”

The attorney general's lawsuit is the first of its kind in Washington, and follows the passage of anti-patent troll legislation back in 2015. That legislation bans businesses from sending patent demand letters that:

• Contain false or deceptive information.
• Are sent by companies that do not actually have the right to license or enforce a patent.
• Baselessly threaten a lawsuit if a fee is not paid.
• Fail to identify who is asserting the patent or explain the patent infringement.

That third bullet is likely to be the biggest sticking point for Ferguson's suit: according to the AGO, Landmark operates by sending identical form letters to businesses threatening to sue if companies do not cough up a $65,000 licensing fee.

Ferguson's office says Landmark's patent, known as the ‘508 patent, is a "vaguely worded" patent that likely wouldn't hold up in court. The company claims it is a “automated multimedia data processing network for processing business and financial transactions between entities from remote sites,” but basically they are claiming to have a patent on any website that uses a customer login feature, which as the AGO notes is a feature "virtually every business uses".

The attorney general's lawsuit asks the count to bar Landmark from enforcing their '508 patent going forward, as well has pay back civil penalties, attorney's costs and restitution to businesses — including all the money they've made from their patent scheme.