How Peter Braxton defeated a patent troll and still lost

Peter Braxton of Jump Rope, Inc explains how patent trolls attacked his small business as well as the benefits and consequences of fighting back.


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I was steaming when he said he went to mediation and the patent troll basically told him they may or may not win, but if he didn't settle, they would just hit him with another lawsuit on a different patent they owned. Three years of litigation, he is broke and his app is dead, but he 'won'.
newtboyjokingly says...

It sounds like the proper way to fight these trolls is to go to mediation, balk at mediating, then just kill them on the way out.
Killing a troll is beneficial to the kingdom, so is not a crime.
Why didn't he at least broadcast the name and location of the troll so some good knight could do what he couldn't?

Really, it seems his lawyer didn't do his job, because if they really brought the case knowing they probably wouldn't win, but were just looking for a settlement and would re-file new frivolous suits until they get one, that's compensable and should have them pay all costs AND massive punitive damages.

nanrodsays...

"Nice app you've got there. It would be a shame if something happened to it." Seriously, I'm certainly not a lawyer, but isn't there some kind of racketeering charge that can be brought against these guys?

articianjokingly says...

Thanks for summing up the thoughts from the angry-human perspective that I share so much.

In seriousness, the guy is probably being the more respectable individual by not drawing attention to the offending party's identity. What you propose could easily happen today. (Though I've mixed feelings about it, generally trending toward the more vengeful, sadly).

newtboysaid:

It sounds like the proper way to fight these trolls is to go to mediation, balk at mediating, then just kill them on the way out.
Killing a troll is beneficial to the kingdom, so is not a crime.
Why didn't he at least broadcast the name and location of the troll so some good knight could do what he couldn't?

gorillamansays...

These problems would evaporate if only juries could be relied upon to find not guilty in murder trials where the victim clearly deserved to die.

MilkmanDansaid:

Goddamn, that is infuriating.

You know that the system is broken when anarchy or flat-out nihilism seem like bright shiny options in comparison...

Babymechsays...

1 - His app sounds horrible and I would fucking hate if its use became widespread.
2 - Software and service patents are awful and shitty and shouldn't be a thing. His patent seems pretty shitty.
3 - The troll is obviously worse.

phymansays...

Thank goodness TechDirt and the NYT continued to follow this story and outed the troll: Smart Options (in context even the name is f'ed up). It's a good read and even has cringingly terrible troll on troll fighting: https://www.techdirt.com/articles/20150510/07083630948/patent-trolls-frivolous-attack-startup-forces-startup-to-sell-out-to-another-patent-troll.shtml

Stories like this simply crush my desire to strike out on my own in software development. We seriously need patent reform!

articiansaid:

Thanks for summing up the thoughts from the angry-human perspective that I share so much.

In seriousness, the guy is probably being the more respectable individual by not drawing attention to the offending party's identity. What you propose could easily happen today. (Though I've mixed feelings about it, generally trending toward the more vengeful, sadly).

kingmobsays...

There has to be some punishment for trolling and failing.
Like damages or something.

Like if you say infringement and the jury says nuh-uh...you should be fined.

Babymechsays...

Hmm. It’s an interesting story – it doesn’t seem that it’s 100% the typical patent troll mold, though it’s obviously still a shitty tale of bullshit patent litigation tactics. It looks like Pappas had his original idea and filed for a patent in 2000, basically trying to create a way to monetize the ad hoc markets that pop up whenever people are in line or reserving places for entertainment (probably based on his own restaurant experience). He filed a single, very broad, multiregion patent on this, and launched a company and online platform around it in 2008 (OptionIt) to provide an online service for trading ticket reservations / places in line. Braxton had a similar but more clearly defined idea in 2011, and filed his own patent.

Like I said – I don’t like this idea, I wish it hadn’t been granted patent protection, and I’m happy if it never reaches the market. However, for all that, I think Pappas original idea was a bit more inventive. Back in 2000 we didn’t have an app economy, and we hadn’t gotten used to these kinds of ad hoc, internet-facilitated temporary market places. When Braxton came up with it, it was pretty dull.

Either way, once Pappas started his business, I guess he instructed his law firm to handle litigation as aggressively as possible, which is fairly standard practice, and which is the unfortunate behavior described in the video. After losing the original suit and then losing the Rule 11 motion, they argued like aggressive assholes in mediation, and got Braxton to back down. I think their threat was fairly hollow – he says that they threatened him with their ‘patent portfolio,’ but this is the only patent family I can find for OptionIt / Smart Option.

I’m not sure I would call this a textbook case of patent trolling – usually patent trolls file or acquire patents for the sole purpose of extorting legitimate businesses, but here it looks like Pappas was actually trying to make a go of this (shitty) app idea, but used intimidation to try to protect that idea. It’s one shitty business trying to intimidate another upstart shitty business, and the courts ruling against the first party. On the whole we all lose – OptionIt wins the mediation through shitty intimidation, and Braxton’s shitty patent gets added to Spangenberg’s portfolio of shitty troll assets to keep the cycle going.

phymansaid:

Thank goodness TechDirt and the NYT continued to follow this story and outed the troll: Smart Options (in context even the name is f'ed up). It's a good read and even has cringingly terrible troll on troll fighting: https://www.techdirt.com/articles/20150510/07083630948/patent-trolls-frivolous-attack-startup-forces-startup-to-sell-out-to-another-patent-troll.shtml

Stories like this simply crush my desire to strike out on my own in software development. We seriously need patent reform!

Bruti79says...

There's a law in Ontario (and I'm sure it's similar in the rest of Canada,) that says if someone takes you to court and attempts to sue you, if you win your case, the person who tried to sue you has to pay your legal defences. That's a light paraphrasing, I'm sure there's more nuance, but it dramatically reduces the civil cases. If you're going to sue someone, you better be damn sure you're in the right, or else you may end up paying their legal fees.

I think I already know the answer, but why doesn't America do that?

Babymechsays...

Like he says in the video - the US has plenty of rules like that, and he won. The rule did its job and the court did its job, for what that's worth.

Under rule 11, his team claimed that Smart Options brought their lawsuit without doing their due diligence - they sued Braxton before they even looked at the product he was offering. Under that rule, his reasonable legal costs would be covered by the plaintiff, and the court agreed with them.

The plaintiff had the right to appeal, both the original ruling and the rule 11 ruling, which they chose to do. Braxton didn't want to wait for the appeal to be resolved (because it's expensive to wait for the system) so he opted to go into mediation with Smart Options and they scared the shit out of him. That's how he lost (until he brought Spangenberger on board).

The problem (in this case) isn't the legal mechanism itself - it's the fact that it takes a lot of time for these issues to be finally resolved, and that time span can kill a small business. I would guess that holds true in Ontario as well.

Bruti79said:

There's a law in Ontario (and I'm sure it's similar in the rest of Canada,) that says if someone takes you to court and attempts to sue you, if you win your case, the person who tried to sue you has to pay your legal defences. That's a light paraphrasing, I'm sure there's more nuance, but it dramatically reduces the civil cases. If you're going to sue someone, you better be damn sure you're in the right, or else you may end up paying their legal fees.

I think I already know the answer, but why doesn't America do that?

Bruti79says...

Very interesting, thanks for the additional info. I believe that the plantiff paying isn't subject to appeal in Ontario, I could be wrong, but I have a few lawyer friends I'll ask.

It's a neat look at how the laws work for and against someone.

Babymechsaid:

Like he says in the video - the US has plenty of rules like that, and he won. The rule did its job and the court did its job, for what that's worth.

Under rule 11, his team claimed that Smart Options brought their lawsuit without doing their due diligence - they sued Braxton before they even looked at the product he was offering. Under that rule, his reasonable legal costs would be covered by the plaintiff, and the court agreed with them.

The plaintiff had the right to appeal, both the original ruling and the rule 11 ruling, which they chose to do. Braxton didn't want to wait for the appeal to be resolved (because it's expensive to wait for the system) so he opted to go into mediation with Smart Options and they scared the shit out of him. That's how he lost (until he brought Spangenberger on board).

The problem (in this case) isn't the legal mechanism itself - it's the fact that it takes a lot of time for these issues to be finally resolved, and that time span can kill a small business. I would guess that holds true in Ontario as well.

Babymechsays...

Even in the US it would depend on what the reason for making the plaintiff pay was. If the judgment to have the plaintiff cover legal fees was part and parcel of the original ruling, you could only appeal the decisions as a package, but if it was a separate ruling it could be separately appealed. Also, some decisions can't be appealed, though usually minor things.

In either case it makes sense to give citizens the right of appeal - the judge could very well have fucked up their decision. Remember, even though it seems that these mechanisms give trolls protection against their victims, they're actually there to protect citizens against abuse by the system. Regardless of whether the troll is a troll, they're supposed to get a fair hearing, and being able to appeal is one of the biggest parts of 'fair'.

Bruti79said:

Very interesting, thanks for the additional info. I believe that the plantiff paying isn't subject to appeal in Ontario, I could be wrong, but I have a few lawyer friends I'll ask.

It's a neat look at how the laws work for and against someone.

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