In a 2012 Intellectual Property Magazine article, DeAnna Allen, partner at Cooley, brought up an important question about content providers and patents:

“What degree of financial responsibility should a content provider reasonably expect to bear for patent infringement when it has little or no hand in designing, developing or even providing the technology at the heart of the dispute?”

This is a particularly salient point when that technology is something “every cell phone user expects to have an unencumbered right to do.” In a ruling on August 14^th, 2013, U.S. District Judge John Darrah, a federal judge in the Northern District of Illinois sided with the defendants including The New York Times, ruling that sending news alerts with hyperlinks via text message did not infringe upon any patents.

In 1997, Richard Helferich patented methods for sending a unique identifier of content (i.e. a hyperlink) through SMS. Helferich’s company, Helferich Patent Licensing LLC (HPL) filed a suit against The New York Times Company for infringing upon this technology in 2010. By this time, HPL had already secured many licensing deals with scores of cell phone manufacturers and other corporations such as Apple Inc., The Walt Disney Company, and McDonalds Corporation. The Associated Press reported that HPL offers a settlement fee to the tune of $750,000. This all changed when the non-practicing entity (NPE) sued The New York Times and other content providers.

The USPTO granted the NYT’s request for an ex parte re-examination of the patents which successfully allowed the newspaper to seek a stay.  “The Times’ general counsel, Kenneth Richieri, says he wants to prevent Helferich’s patents from becoming a burden on activities that are commonplace in the digital age.” Through 2012, HPL continued to change the original patent claims by adding new claims thus resulting in a re-examination and a drawn out period until HPL was able to get the district court to lift the stay.

Last Wednesday, Judge Darrah ruled in favor of the defendants. His opinion referenced Quanta, 553 U.S. at 265 and stated that, “Defendants rely on the Supreme Court’s ruling in Quanta to support their motion for summary judgment, arguing that when a patented invention is sold, all of the patent’s claims are exhausted, regardless of any narrowly tailored license agreements.”

Darrah ended the opinion with this statement, “To permit HPL to recover multiple times on the same patent…is contradictory to these policies supporting the doctrine of patent exhaustion. Therefore, HPL’s patents are exhausted.” While the court ruled against the NPE in this case, there is no law against being a “patent troll” as long as the USPTO does not require that patent holders actually execute on their inventions.

DeAnna Allen of Cooley reiterates in her 2012 article that this case is a reminder that patent wars are now moving beyond the tech realm. Marc Maron, comedian and host of the WTF with Marc Maron podcast, is another content provider who has been attacked by NPE Personal Audio. Maron and other podcasters have far fewer resources than large corporations such as The New York Times Company, which begs the question ‘why go for the little guys who can’t even afford to pay settlement fees?’ In an interview with Brian Glaser, web editor of CorpCounsel.com, Maron says, “None of us can afford to litigate this thing. That’s why we reached out to the EFF (Electronic Frontier Foundation), we figured out some talking points, got press attention on This American Life, on Planet Money.”

In an era of free and abundant content, the targeting of smaller entities by patent trolls is essentially a direct threat to American lifestyle in the information-centric 21^st century. We have more empathy for the little guys and the writers versus big tech companies and we don’t want our content interrupted. After all, our democracy is built upon the idea of free speech. “In some ways, [the suit against The New York Times] it’s a tax for being on the Internet,” says Kenneth Richieri, GC for The New York Times, and the Internet is so tightly integrated into our way of life. Now that the American public is becoming increasingly aware and vested in the threats of NPEs, will the system be pushed even harder to make a change?

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