Lodsys Socked With Another Declaratory Judgment Suit

Jul 5, 2011 3:00 PM PST

PHOENIX — While Lodsys has filed four suits relative to alleged patent infringement over U.S. Patent No. 7,222,078, the holding company has been socked with six declaratory judgment suits that seek to invalidate its patent claims.

On Monday, Lodsys again was sued over its authority over the patent --?? ?this time by an automotive website called DriveTime.com that says that it isn't infringing on web chat functionality in relation to U.S. Patent No. 7,222,078 and wants it legally declared as such.

Scores of online adult companies have received letters from Lodsys over infringement of the same patent, which is described as using "methods and systems for gathering information from units of a commodity across a network."

The letters, online adult execs say, are delivered by FedEx and read, "[W]e are interested in reaching a negotiated nonlitigation licensing arrangement with you for all of your uses of the Lodsys patents under your brand names and would like to discuss this matter with you within 21 days of your receipt of this letter."

So far, Lodsys has been slapped with six declaratory suits seeking to invalidate U.S. Patent No. 7,222,078 from The New York Times Co., market research firms OpinionLab and Foresee Results Inc., antivirus software maker ESET, real-time intelligent engagement platform LivePerson and now DriveTime.

DriveTime lawyers said in the suit filed at U.S. District Court in Phoenix that Lodsys has a well-known reputation as a “patent troll.”

"These companies never actually manufacture anything covered by the patents they acquire – they generate revenue from litigation and the threat of litigation alone. This practice is becoming more and more common, much to the concern of the technological and legal communities. Lodsys is one of the latest to attempt to profit from this disturbing trend.

"Lodsys has targeted numerous companies throughout the U.S. with demands that the companies either pay a license or settlement fee in exchange for a covenant not to sue, or in the alternative, face the exorbitant cost of defending a patent infringement lawsuit."

Lodsys CEO Mark Small has declined to speak with XBIZ on the letters and the suits, saying that he would let court filings do the talking for the company. "We made a decision not to do press and apply our resources to licensing discussions, and we want to be consistent/fair in our policy," he said.

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UPDATE (3:10 P.M.): Lodsys on Tuesday filed suit against DriveTime, ESET, Foresee Results, LivePerson, OpinionLab and The New York Times Co.

In its suit, Lodsys alleges that all of the companies are infringing on one or more of its held patents. The suit was filed at the U.S. District Court in Marshall, Texas.

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