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Caveant Troglodytae (Trolls Beware)

- Bitmovin
(Image credit: EFF via Wikimedia, CCA 3.0)

Innovation and Patents

One of our core values at Bitmovin is technological innovation and pursuing the real, hard work of groundbreaking research and development. The visible part of this core value is in our published academic work – which includes dozens of papers and thousands of citations – and our portfolio of over 14 US pending patents and 7 PCT applications. Although we are huge fans of open technologies and an open internet, we are supportive of a balanced patent system.  The patent system, and intellectual property as a whole, helps to provide a return on investment, by offering the incentives necessary to innovate, extend the scope of human understanding beyond the horizon, and share that knowledge publicly. We continue to pursue patents on the inventions our employees make and encourage them to always be innovating. Clearly, we are proud of our innovation and the patents which protect them. I, myself, hold two US patents and I am just the company’s lawyer.

Abuse of the Patent System

But, like all good things, patents can be subject to abuse. So, we were quite dismayed when we found out that we were recently made the defendant in a patent lawsuit by a notorious patent troll. This was one of 7 lawsuits based on the same patent brought by the troll in different jurisdictions.  We felt strongly that the suit was not a threat to Bitmovin, but rather a chance for us to show our strength.
Patent trolls tend to be at the bottom of the IP food chain. If the patents they held were really valuable, the patents would have already wound up in the hands of someone who could make the invention. These trolls behave like bullies, threatening companies actually servicing customers, hoping to pick up some quick cash.  The troll knows about and takes advantage of the fact that it is cheaper for those companies to pay it off than to endure the cost of litigating the case. By contrast, patent holders who are making products for customers tend to be more rational. Sure, sometimes the likes of Apple, Google, Microsoft, and Samsung get one another involved in multi-year, multi-million dollar lawsuits, but for the most part these companies don’t extort one another. It’s a better use of their time to make products than to sue.

Dealing with Trolls

In dealing with a troll, the best strategy is to stand up. The difficulty in pursuing such a strategy is the fact that lawsuits with trolls are asymmetrical. In most cases, it would cost more to defend the suit than to simply pay the troll off. Moreover, the troll has nothing to lose. It can use the courts to bring your business to a halt.  There is no way to do the same to the troll — they don’t make any products. Thus, the key to this strategy is to change the nature of the asymmetry to a balance in your favor.
In our recent case, the patent on which the troll sued is at best a weak one, relating to multi-audio and multi-language streaming of multimedia content which has been around for decades. The patent itself is from 2010 and addresses a very specific issue of processing audio and video data from a data source (such as a DVD or Blu-ray disc) when handling a data stream having multiple language-specific content. The patent covers something akin to a digital 8-track player. It was very clear to us that Bitmovin’s technologies are far more advanced and do not infringe the patent. In fact, the infringement claims against Bitmovin were so baseless, we believed that the troll’s attorneys had not adequately fulfilled their obligation to conduct a minimal pre-filing investigation based on publicly available descriptions of Smooth Streaming, HLS, HDS, MPEG-DASH, and similar existing approaches, as required by the Federal Rules of Civil Procedure.

Our Approach and Outcome

We threatened to counter sue the troll, win the case on the merits, and then seek recovery of our fees and costs from the troll and its lawyers. Further, we pledged that Bitmovin would, as a public service, reinvest any recovery in invalidating all of the troll’s other patents. Through our initial investigation, we found the person behind the troll who had acquired some 15 patents originally held by a European technology company. This person then placed these patents in at least two other LLCs. In turn, those LLCs were asserting these patents in no fewer than 13 other lawsuits against defendants such as Sony, Microsoft, Cisco, Polycom, Blue Jeans Networks, and Motorola. Bitmovin pledged to use our recovery to assist those 13 companies and 6 other companies defending against the current patent in finding prior art and filing Inter partes Reviews at the US PTO’s Patent Trial and Appeal Board to invalidate all of those patents.
Without another word, the troll dismissed its lawsuit against us.
This follows closely the approach undertaken by Cloudflare last year against the patent troll, Blackbird Technologies (a case on which I worked). Cloudflare set out to crowdsource prior art, through its Project Jengo, to invalidate all of the patents (not only the asserted patent) held by Blackbird and to bring ethics complaints against their attorneys.
Trolls beware. Bitmovin will continue to stand for innovation and a nuanced, balanced approach to intellectual property.  We will stand up against intellectual property abuse and for our customers, our industry, and the Internet at large.

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Kenneth R. Carter is General Counsel at Bitmovin. He holds an Executive MBA from Columbia Business School, a JD from the Benjamin N. Cardozo School of Law, and a BA from Colgate University.

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