All language subtitles for The.Patent.Scam.2017.1080p.WEBRip.x264.AAC-[YTS.MX]

Downloaded from
YTS.MX

[MAN]
THE U.S. PATENT SYSTEM
LETS YOU PATENT A THING

AND THEN SUE ANYONE
THAT DOES THAT THING.

Official YIFY movies site:
YTS.MX

BUT WHAT IF YOU COULD
PATENT ANYTHING.

[FILM PROJECTOR CLICKING,
SILENT MOVIE MUSIC]

I LITERALLY COULD
NOT DEFEND MYSELF.

I DIDN'T HAVE THE MONEY.

SO I HEARD NUMBERS BETWEEN
4 TO 500,000,

ALL THE WAY TO A
MILLION DOLLARS
FOR A DEFENSE,

WHICH MAY OR
MAY NOT SUCCEED.

THIS IS A GAME
THAT BIG COMPANIES PLAY

BECAUSE THEY KNOW
THEY CAN OUTSPEND YOU.

I THINK THAT THEY
MISUNDERSTOOD THE LANGUAGE
OF THEIR OWN PATENT.

SO IT DOESN'T MATTER
IF YOU'RE RIGHT,

IT MATTERS IF YOU HAVE
ENOUGH MONEY TO
DEFEND YOURSELF.

I RAN OUT OF MONEY,
I COULDN'T FIGHT THIS
CASE ANYMORE.

AND THE PROBLEM IS,
IF YOU WALK AWAY,

UH, THEY WIN BY WHAT'S
CALLED DEFAULT JUDGMENT.

ALL-- IT'S ALL CONSUMING,
IT'S ALL YOU CAN THINK ABOUT,

THERE IS UNKNOWN
DOWNSIDED PLAY.

YOU COULD LOSE
EVERYTHING.

THEIR LAWYERS ACTUALLY
THREW A FIT

AND TOLD US THEY WERE
GOING TO DESTROY OUR BUSINESS

AND DESTROY EVERYTHING
WE HAD WORKED SO
HARD TO BUILD.

IT'S LIKE BEING ACCUSED OF
A CRIME YOU DIDN'T COMMIT,

AND NOT HAVING ANY WAY TO--
TO ARGUE THAT.

SO THEY ACTUALLY,
UH, WILL WIN AND CAN
TAKE YOUR CODE

AND CAN TAKE WHATEVER ASSETS
YOUR COMPANY HAS

IF YOU DECIDE
TO NOT FIGHT ANYMORE.

I ASSUMED THEY MADE
A MISTAKE

BECAUSE NOBODY CAN OWN THE
PATENT ON A HYPERLINK,

THAT'S JUST COMMON
TECHNOLOGY USED
ON THE WEB.

THE PLAINTIFF ADDED
MY NAME PERSONALLY TO THE SUIT.

SO BY CONTINUING TO
DISTRIBUTE MY APP,

I CAN ULTIMATELY GO
TO JAIL. THAT'S WHAT
I WAS AFRAID OF.

YOU'RE BASICALLY ARE
GUILTY UNTIL YOU'RE
PROVEN INNOCENT.

IT-- IT CONSUMED ME,
100%.

LITERALLY, ZERO IDEAS CAME
OUT OF THESE PATENTS

-THAT WERE OF ANY--
-IT WAS THE DEMISE
OF MY COMPANY.

IT COULD BE MONEY FLUSHED DOWN
THE DRAIN BECAUSE YOU'RE GOING
TO LOSE--

YOU ARE STUCK IN A LAWSUIT,
NOT OF YOUR OWN MAKING,

-YOU DID NOT DO ANYTHING WRONG.
-I LOST MY HOUSE AS WELL.

I HAVE NO IDEA WHO'S
FINANCING THE LAWSUIT

THAT I GOT DRAGGED INTO.

THE DEMAND LETTER THAT SAYS
YOU HAVE THREE DAYS TO PAY
OR SHUT DOWN YOUR BUSINESS.

THAT WAS A VERY SCARY
MOMENT, I FELT--

I REALIZED REALLY QUICKLY,
TALKING TO OTHER BUSINESS OWNERS

THAT THIS WASN'T
AN ISOLATED CASE.

PEOPLE TRY TO EXTORT US,
AGAIN AND--

IT WAS MY BEST OPTION.

I DIDN'T HAVE AN OPTION.

YOU CAN'T GET OUT,

YOU HAVE TO PAY
THIS GUY TO GO AWAY.

IF YOU-- IF YOU DON'T
HAVE THE RESOURCES,

TO DEFEND YOURSELF,

THE FACTS FROM YOUR
SIDE COULD POTENTIALLY
NEVER BE HEARD

AND YOU COULD
LOSE EVERYTHING.

AND THAT'S THE
WAY IT IS.

TECHNICALLY WHAT WE DO--
THAT WAS SO BAD THAT
I WOULD SAY,

"WE BOUGHT A $200 SCANNER
FROM OFFICE DEPOT,

AND PUT IT ON OUR NETWORK
AND PLUGGED IT IN."

[EXPLOSION]

MY NAME IS AUSTIN MEYER

AND I'M A COMPUTER PROGRAMMER,
AEROSPACE ENGINEER,
AND PILOT.

AS WELL, I WROTE A COMPUTER
PROGRAM CALLED X-PLANE.

X-PLANE IS A FLIGHT SIMULATOR

THAT LETS PILOTS PRACTICE
FLYING ON THEIR PERSONAL
COMPUTERS AT HOME

SO THEY CAN THEN FLY
THEIR REAL AIRPLANE
MORE SAFELY.

AS WELL, PEOPLE THAT
AREN'T PILOTS AT ALL
ENJOY FLYING X-PLANE

BECAUSE THEY GET TO ENJOY
ALL THE THRILL OF FLYING

WITHOUT ALL THE COST
AND THE RISK.

ABOUT FIVE OR SIX YEARS AGO,

I MADE A SPECIAL VERSION
OF X-PLANE

FOR THE GOOGLE ANDROID
OPERATING SYSTEM.

JUST LIKE ANY
APP DEVELOPER WOULD,

I UPLOADED MY APP
TO THE GOOGLE STORE

SO ANYBODY THAT WANTED TO
COULD DOWNLOAD IT
AND FLY IT.

THEY DID.

SOME TIME WENT BY

AND THEN IT HAPPENED:

I WORKING AT A TRADE
SHOW IN WISCONSIN

WHEN I GOT A CALL
FROM A LAWYER.

HE TOLD ME
THAT I WAS BEING SUED
FOR PATENT INFRINGEMENT

FOR PUTTING AN APP
ON THE GOOGLE PLAY STORE.

WHO WAS SUING ME?

GOOGLE?

WELL,
[CHUCKLES]

ACTUALLY NOT.

I WAS BEING SUED
BY A COMPANY CALLED UNILOC.

THIS IS A COMPANY
I HAD NEVER EVEN HEARD OF
BEFORE.

UNILOC CLAIMED TO OWN
A PATENT THAT DESCRIBED
THE IDEA OF,

LOOKING UP A NAME ON A LIST
ON A COMPUTER.

AND SINCE THE GOOGLE STORE
APPARENTLY LOOKS UP YOUR NAME
ON A LIST ON A COMPUTER,

TO SEE IF YOU PAID FOR THE
APP THAT YOU'RE LAUNCHING,

UNILOC CLAIMED
TO OWN THE IDEA

OF HOW THE GOOGLE
STORE WORKS.

AND BECAUSE OF THIS,

THEY WERE SUING MYSELF,
AND A LOT OF OTHER
PEOPLE TOO,

SIMPLY FOR USING
THE GOOGLE STORE

TO DISTRIBUTE OUR APPS.

NOW, UNILOC HAD NOTHING
TO DO WITH THE CREATION
OF THE GOOGLE STORE.

UNILOC HAD NOTHING
TO DO WITH THE CREATION
OF X-PLANE.

I NEVER EVEN HEARD
OF THEM BEFORE.

BUT NONE OF THAT MATTERED.

THEY WERE SUING ME

AND MANY OTHER PEOPLE,

SIMPLY FOR USING
THE GOOGLE PLAY STORE

TO DISTRIBUTE OUR APPS.

NOW, AT THIS POINT,

THE QUESTION
YOU SHOULD BE ASKING IS,

WHAT'S IN THE PATENT?

DOES THE PATENT REALLY GIVE
UNILOC THE RIGHT
TO SUE PEOPLE

FOR USING AN ONLINE STORE?

WELL, HERE IT IS:

THIS, EXACTLY,
IS THE CLAIM IN THE PATENT

THAT UNILOC SAID
WE INFRINGED ON.

"COMPUTER CODE EXECUTABLE
ON AN ELECTRONIC DEVICE

TO PREVENT UNAUTHORIZED
ACCESS TO ELECTRONIC DATA

STORED ON THE
ELECTRONIC DEVICE."

THAT'S IT.

THAT'S IT.

THESE WORDS DO NOT INCLUDE
ANY SOURCE CODE,

THAT COULD BE OF ANY
USE TO ANY COMPUTER
PROGRAMMER AT ALL.

THESE WORDS DO NOT HELP ME,
OR GOOGLE,

OR ANYONE ELSE, DESIGN,
OR EVEN USE THE GOOGLE STORE.

THESE WORDS JUST SAY,

THAT IF SOMEONE ELSE
GOES THROUGH THE TROUBLE

TO ACTUALLY WRITE
A COMPUTER PROGRAM

THAT PREVENTS UNAUTHORIZED
ACCESS TO DATA,

THAT WHOEVER
HAS THIS PATENT

CAN SUE THEM.

THIS ISN'T AN INVENTION,

THIS ISN'T A NEW IDEA,

THIS DOESN'T CONTRIBUTE
ONE BIT OF KNOWLEDGE

TO THE COMPUTER INDUSTRY.

IT CERTAINLY DIDN'T
CONTRIBUTE ANYTHING TO ME.

IT JUST SAYS THAT WHOEVER
WROTE DOWN THESE WORDS,

CAN SUE ANYONE

THAT ACTUALLY MAKES,

OR IN MY CASE USES,

AN APP STORE.

NEXT,
I LOOKED AT THE LAWSUIT.

"UNILOC HAS BEEN
DAMAGED AS A RESULT

OF DEFENDANTS INFRINGING
CONDUCT DESCRIBED
IN THIS COUNT."

SEE, UNILOC CLAIMS
THEY'VE BEEN "DAMAGED"

BY MY PUTTING AN APP
ON THE GOOGLE STORE.

UNILOC ONLY FILES
LAWSUITS FOR A LIVING,

HOW CAN THEY BE
DAMAGED BY SOME GUY
LIKE ME

PUTTING A FLIGHT SIMULATOR
ON AN ONLINE STORE.

I TRIED TO FIGURE OUT HOW
UNILOC WAS DAMAGED BY LOOKING
AT THEIR LAWSUIT,

BUT, THEY NEVER REALLY
SEEMED TO SPECIFY EXACTLY
HOW THEY'VE BEEN HURT.

I CALLED A LAWYER.

I TOLD HIM TO HAVE
THE CASE JUST TOSSED OUT

BECAUSE OF
IT'S OBVIOUS ABSURDITY.

WHAT THE LAWYER TOLD ME NEXT,
SOBERED ME.

HE SAID THAT I WOULD
TAKE ABOUT THREE YEARS
OF MY LIFE,

AND $3,000,000

TO DEFEND MYSELF,

AND AT THE END
OF IT ALL,

I'D BE PUT ON TRIAL,

IN FRONT OF A JURY
IN THE OUTSKIRTS OF TEXAS

THAT WOULD DECIDE
MY PUNISHMENT

FOR PUTTING AN APP
ON THE APP STORE.

I LIVE IN SOUTH CAROLINA.

HOW COULD I BE PUT
ON TRIAL IN FRONT OF A JURY
IN THE OUTSKIRTS OF TEXAS,

FOR COMMITTING THE SIN
OF USING THE GOOGLE STORE
TO DISTRIBUTE MY APP?

IT WAS AT THIS MOMENT
THAT I REALIZED

THAT I'D ENTERED
THE MOST TERRIFYING MESS
OF MY LIFE.

WHAT I'M ABOUT TO TELL YOU
IS SHOCKING.

AND I'M INVITING YOU
TO COME WITH ME

ON MY JOURNEY TO UNCOVER

THE PATENT SCAM.

FIRST THING I WANT TO KNOW:

WHO'S BEHIND ALL THIS?

I HIT THE 'NET TO FIND OUT.

CONTROVERSIAL PATENT
LAWSUITS?

WHAT DOES THIS COMPANY DO?

A DOZEN LAWSUITS FILED
JUST LAST WEEK?

LET'S CHECK OUT
THEIR WEBSITE.

HMM.

MEMBERS ONLY.

MAYBE THERE'S SOMETHING
IN THEIR SOURCE CODE.

AH, THERE IT IS:

PATENT COMMERCIALIZING?

REAP THE REWARDS.

WHO OWNS THIS COMPANY?

THE MARATHON PATENT GROUP?

HMM?

THEY'RE NOT INVENTORS?

THEY JUST OWN PATENTS?

AND THEY'RE TRADED ON THE
NASDAQ STOCK EXCHANGE?

WHAT'S A PATENT TROLL?

SO WHAT IS A
PATENT TROLL ANYWAY?

MY FIRST TRIPS WERE TO GO
TALK TO THE EXPERTS

AND FIND OUT
FOR MYSELF.

PATENT TROLLING IS
THE PRACTICE OF
TAKING PATENTS

AND USING THEM TO SUE

OR THREATEN TO SUE OTHERS.

IT'S NOT THEN TAKING
THOSE PROCEEDS

AND USING IT TO CREATE
THE NEXT GREATEST TECHNOLOGY,

BUT IT IS BASICALLY
BUILDING A BUSINESS

OUT OF SUING OR
THREATENING TO SUE.

UNFORTUNATELY,
PATENT TROLLING HAS BECOME
A LOT MORE COMMON

IN THE LAST TEN YEARS.

UH, LAST YEAR,
PATENT TROLLS SUED
ABOUT 3,600 COMPANIES

AND, UH,
THERE WERE HUNDREDS
OF PATENT TROLLS ACTIVE

IN THE FEDERAL COURT SYSTEM.

THE ESTIMATES VARY

BUT THEY GENERALLY COME
OVER $10 BILLION A YEAR.

THE VAST VAST MAJORITY
OF PLAINTIFFS ARE
NOT INVENTORS,

THEY'RE PEOPLE WHO HAVE
PURCHASED PATENTS FOR NOTHING,

FROM BANKRUPTCY ESTATES
OF FAILED COMPANIES,

OR-- OR THEY'VE JUST
PURCHASED PATENTS FOR
VERY, VERY LITTLE

AND THEIR SOLE GOAL
IS TO MAKE MONEY
BY SUING PEOPLE.

IT DOESN'T EVEN MATTER

IF THE PATENT ACTUALLY
SHOULD HAVE NEVER
HAVE BEEN GRANTED,

THE COST OF INVALIDATING
A PATENT IS SO HIGH

THAT DEFENDING YOURSELF
IN A PATENT LITIGATION
IS SO HIGH,

THAT EVERYONE--
ALMOST EVERYONE

ENDS UP HAVING TO
WRITE A CHECK.

"ALMOST EVERYONE ENDS UP
HAVING TO WRITE A CHECK."

WHAT KIND OF CHECK ARE
WE TALKING ABOUT HERE?

WELL, AS IT TURNS OUT,

THE AVERAGE SETTLEMENT

THAT A PERSON HAS TO PAY
TO A PATENT TROLL

TO MAKE THE LAWSUIT
AGAINST THEM STOP,

IS $340,000.

THAT'S RIGHT,
THE AVERAGE PERSON
IS FORCED TO PAY

THE PATENT TROLL
$340,000 JUST TO END
THE LAWSUIT

BECAUSE THEY DON'T HAVE
THE $3 MILLION

TO DEFEND THEMSELVES.

WHEN I TELL PEOPLE
ABOUT MY LAWSUIT,

THEY ALWAYS SAY
THE SAME THING:

THEY SAY, "HEY, AUSTIN,
IF UNILOC SAYS THAT
THE GOOGLE STORE

INFRINGES ON THEIR PATENT,

WHY DON'T THEY JUST
SUE GOOGLE?"

OH, OH, LET'S THINK
ABOUT THAT FOR A MOMENT.

IF THEY SUED GOOGLE,

I THINK GOOGLE HAS
$3 MILLION DOLLARS.

GOOGLE CAN DEFEND ITSELF

AND PROBABLY, OVER YEARS,
WIN.

BUT, IF UNILOC SUES
AS MANY PEOPLE AS POSSIBLE

THAT USE GOOGLE,

THEN THINK OF HOW MANY
PEOPLE THEY CAN SUE

THAT DON'T HAVE THE
$3 MILLION TO DEFEND
THEMSELVES.

THOSE COMPANIES
WILL BE FORCED TO SETTLE.

EVEN IF THEY'VE DONE
NOTHING WRONG.

AND, ONCE IT BECAME HOW
OBVIOUS IT IS TO MAKE
EASY MONEY

BY FILING THESE PATENT
INFRINGEMENT LAWSUITS

PEOPLE CAN'T DEFEND
THEMSELVES AGAINST,

YOU CAN PRETTY MUCH
FIGURE OUT WHAT
HAPPENED NEXT.

COMPANIES LIKE
UNILOC WERE FORMED.

COMPANIES THAT EXIST
ONLY TO FILE LAWSUITS.

NOW, HERE'S JUST HOW
FAR IT CAN GO:

UNILOC,
THE COMPANY SUING ME,

IS OWNED BY
A MUCH LARGER COMPANY CALLED

THE MARATHON PATENT GROUP.

THE MARATHON PATENT GROUP
DOES NOT MAKE ANYTHING.

THEY DON'T INVENT ANYTHING.

THEY JUST SUE
THE COMPANIES THAT DO.

AND THE MARATHON PATENT GROUP

IS TRADED ON THE NASDAQ
STOCK EXCHANGE.

[CHUCKLE]
THAT'S RIGHT,

THE NASDAQ STOCK EXCHANGE
WAS DESIGNED TO FOSTER
INNOVATION,

AND NOW, THE NASDAQ HOSTS
THE MARATHON PATENT GROUP,

A COMPANY WHO'S
ONLY FUNCTION,

IS TO SUE.

AND IT'S ALL BASED ON
HOLDING A PATENT.

SO, ARE THESE
PATENTS BRILLIANT?

WELL, LET'S TAKE
A LOOK AT SOME.

THESE ARE REAL PATENTS.

[MAN]
METHOD OF VIDEO GAMING
OVER THE INTERNET.

[WHISTLING MUSIC]
METHOD FOR VOICE COMMUNICATION
WITH AN ENTITY,

SUCH AS A PLANT.

SNOWBOARD TRAINING
APPARATUS.

ANIMAL EAR PROTECTORS.

FOREHEAD SUPPORT
FOR A URINAL.

A HOSE TO BREATHE
FROM A TOILET BOWL.

A REALITY ALTERNATE
METHOD.

A DOMESTIC ANIMAL
TELEPHONE.

METHOD TO SEARCH FOR
EVENT PHOTOS ON THE
INTERNET.

SELF HAIR CUTTING APPARATUS.

AN ANTI-EATING FACE MASK.

METHOD OF SWINGING SIDEWAYS
ON A SWING.

EXERCISING A CAT
WITH A LASER POINTER.

SELF-DEFENSE WEAPON
KEY HOLDER.

APPARATUS TO SIMULATE
A HIGH-FIVE.

DOG KNOWS ART
APPARATUS.

A BIB FOR USE WHILE
OPERATING A MOTOR VEHICLE.

A BUTTOCKS KICKING
APPARATUS.

A STICK THAT A
DOG CAN FETCH.

THIS ALL SEEMED JUST
TOO CRAZY FOR ME TO
ACTUALLY BELIEVE.

I HAD TO TALK TO SOMEONE
WHO WAS EXPERIENCED IN THIS.

I FOUND A GUY BY THE
NAME OF KEVIN O'CONNOR.

KEVIN'S SOLD AND DEVELOPED
COMPANIES WORTH BILLIONS
OF DOLLARS.

AND HE WAS ALSO BEING
SUED BY A PATENT TROLL.

SO HE KNEW HIS WAY
AROUND THE BLOCK.

KEVIN WAS SUED SIMPLY
FOR MAKING A WEBSITE

THAT SCANS LARGE NUMBERS
OF PRODUCT

AND THEN SHOWS YOU THE ONE
THAT'S BEST FOR YOUR NEEDS.

SO, KEVIN,
I'M BEING SUED
FOR PATENT INFRINGEMENT.

THAT'S TOO BAD.

IT IS NOT FUN.

LET'S HEAR YOUR STORY.

SO DECEMBER, 2013,
WE GET THIS LETTER
FROM LAW FIRM

AND SAYS WE'RE
VIOLATING THEIR PATENT

AND THEY CLAIM TO
HAVE THE PATENT THAT
FACILITATES BILATERAL

AND MULTILATERAL
DECISION-MAKING.

THAT'S BEEN AROUND
SINCE CAVEMAN DAYS,

IT'S BAFFLING HOW ANYONE
CAN HAVE A PATENT ON THAT.

I MEAN, IT'S BASICALLY
DECISION-MAKING,

UH, DATING ALL THE
WAY BACK TO PROBABLY
NEANDERTHAL DAYS,

UH, PEOPLE DECIDING WHETHER
TO TRADE CHICKENS FOR COWS.

I MEAN, IT'S-- IT'S
BASICALLY HOW
HUMANS INTERACT,

OR COMMUNITIES INTERACT
WITH EACH OTHER.

THEY HAD A PATENT ON IT.

OKAY, SO YOU GOT
THE LETTER.

WHAT DID THE LETTER SAY?

UH, THE LETTER
BASICALLY SAID, UH,

THEY GOT THIS,
IT'S CALLED A DEMAND LETTER,

THEY SAID THAT,
THEY'VE GOT THIS PATENT,

UH, THEY BELIEVE WE'RE
INFRINGING ON IT.

UH, WE CAN SETTLE NOW,

OR WE CAN THROUGH
PROLONGED DISCOVERY.

UH, WE'RE GOING TO HAVE
MOTIONS IN THE COURT,

YOU'RE GOING TO HAVE TO
INCUR LAWYER FEES.

YOU KNOW,
THE MORE THIS GOES ON,

THE MORE EXPENSIVE
IT'S GONNA BECOME FOR YOU.

ONCE YOU GOT THIS LAWSUIT,
WHAT'D YOU DO?

I MEAN, THE FIRST THING
YOU DO IS YOU--

YOU RESEARCH
THE HELL OUT OF IT.

YOU'RE TRYING TO
FIGURE OUT, YOU KNOW,

ONE,
IS THIS A VALID PATENT?

WHO'S BEHIND IT?

WHO ELSE HAVE THEY SUED?

UH, WE DID A
LOT OF RESEARCH,

THEY KIND OF PICKED ON
THE WRONG COMPANY, YOU KNOW,

WE HAVE ONE OF THE LARGEST
KNOWLEDGE GRAPHS IN THE WORLD,

SO-- SO WE DID A LOT
OF RESEARCH.

AND WHO IS BEHIND THIS?
WHO ARE THESE LAWYERS?

WHO ARE THESE, UM,
INVENTORS?

"INVENTORS" OF THIS PATENT.

UH, AND WE FOUND
A PATTERN.

WE FOUND A VERY
DISTURBING PATTERN.

UM, IT WAS BASICALLY,

THERE WAS THESE TWO--
TWO PEOPLE,

UM, WHO WE BELIEVE MET
IN HARVARD BUSINESS SCHOOL,

UH, EILEEN SHAPIRO AND
STEVEN-- STEVEN METZ,

UM, THAT HAD--
UH, THEY WERE NOT
TECHNOLOGISTS

BUT SOMEHOW, MYSTERIOUSLY,
THEY HAD SOME-- I THINK
IT WAS MAYBE TEN--

UH, TECHNOLOGY PATENTS.

YOU NEVER KNOW WHO
IS BEHIND THESE
SHELL COMPANIES,

AND IN OUR CASE,
IT WAS LUMEN VIEW
TECHNOLOGY,

AND SHE WAS BEHIND IT,
BUT THERE WAS A SERIES
OF THESE SHELL COMPANIES

THAT WERE PROSECUTING
THESE PORTFOLIO PATENTS.

UH, AND THEY WERE VERY,
VERY AGGRESSIVE.

ONCE WE LEARNED ALL THAT,

I WAS PISSED.
I WAS SO PISSED.

UH, I KNEW WE
DIDN'T INFRINGE,

I KNEW WE COULD WIN,

UH, IT REALLY JUST
CAME DOWN TO MONEY.

HOW MANY DOLLARS
HAVE YOU PUT INTO THIS
SO FAR?

WE GOT $350 TO $400,000
INVESTED IN THIS.

IN TWO AND A HALF YEARS?

YEAH.

[AUSTIN] AND IT'S STILL
NOT OVER.

NO.

NO, IT WON'T BE OVER
FOR-- I DON'T KNOW,

ANOTHER YEAR,
YEAR AND A HALF.

HOW MUCH MORE MONEY
ARE YOU GONNA SPEND?

WELL,
I COMMITTED A MILLION,

SO, I'LL KEEP--
I'LL KEEP FIGHTING IT.

[AUSTIN] ALL RIGHT,
SO I'M BEING SUED
BY A PATENT TROLL RIGHT NOW

FOR USING THE
GOOGLE PLAY STORE,

I'VE BEEN IN THIS NOW
FOR ABOUT FOUR YEARS,

AND THERE IS NO END
IN SIGHT,

WHAT DO I DO?

[EXHALES SHARPLY]
I GET ASKED THIS
QUESTION A LOT.

ARE YOU RICH?

SO, I GUESS THE BIG
QUESTION IS,

CAN YOU-- CAN YOU
AFFORD THE PAIN?

SO, YOU'RE LAWSUIT IS
A PARTICULARLY ABSURD CASE,
WHICH IS,

YOU'RE BEING
PROSECUTED NOT FOR DEVELOPING
TECHNOLOGY IN VIOLATION,

YOU'RE SIMPLY USING
SOMEONE ELSE'S TECHNOLOGY.

AS CONSUMERS OR BUSINESSES,

WE USE THOUSANDS OF
TECHNOLOGY PRODUCTS,

THAT COULD, AT ANY MOMENT,
BE A VIOLATION

OF THOUSANDS
OF DIFFERENT PATENTS.

I MEAN,
ANYONE IS AT RISK.

WHAT KIND OF
LEGAL SYSTEM IS

WHEN ANYONE CAN BE GUILTY
OF PATENT INFRINGEMENT

AT ANY GIVEN TIME
AND THEIR LIVES DESTROYED?

I MEAN, REALLY?

IS THIS-- IS THIS THE KIND
OF SOCIETY THAT WE WANNA--

WE WANNA LIVE IN?

THIS IS-- THIS IS TERRIBLE,
THIS IS A TRAVESTY.

SO WHAT DO I DO?

I TELL MOST PEOPLE,

YOU'RE A LITTLE
DEEP INTO IT.

I TELL MOST PEOPLE TO SETTLE,
IT'S NOT WORTH IT.

WHY SHOULD I SETTLE
WHEN I KNOW IT'S
THE WRONG THING TO DO?

YOU KNOW, ASK THE GUY
THAT OWNS THE LIQUOR STORE

UH, WHY HE PAYS $100
FOR PROTECTION,

AND NOT TAKE A BULLET
IN THE HEAD, RIGHT?

I MEAN, THE RIGHT MOVE
IS TO TAKE A BULLET
IN THE HEAD,

STAND UP TO
THE EXTORTER.

SMART MOVE IS
TO PAY $100 BUCKS,

GET THE PROTECTION.

I'VE THOUGHT A LOT
ABOUT THIS PROBLEM,

JUST TRYING TO FIGURE
OUT, LIKE,

HOW DO YOU PULL PEOPLE TOGETHER
TO GO AFTER HIM, YOU KNOW?

HOW DO YOU BUILD SOME KIND
OF DETERRENT SYSTEM?

IT'S COMPLICATED.

FIGHTING ONE OFF,

I'M NOT SURE
THAT'S THE SOLUTION.

IF FIGHTING ONE OFF
ISN'T THE SOLUTION,

AND SETTLING INVOLVES
ENCOURAGING THEM
TO DO IT AGAIN,

WHAT'S LEFT?

I'VE-- I'VE GOTTEN TO LEARN
THE WAY THEY LEGALLY OPERATE

AND SET UP MONEY,
AND GO AFTER PEOPLE.

IT'S A VERY
ASYMMETRICAL FIGHT,

UH, IT'S KIND OF
LIKE TERRORISM,

UH, WHERE THEY
CAN COME IN

AND COST THEM $400
TO FILE A LAWSUIT
AGAINST ME.

IT COSTS ME $2 MILLION
TO GO CALL THEIR BLUFF.
NO ONE CALLS THEIR BLUFF.

VERY FEW PEOPLE
EVER CALL THEIR BLUFF.

SO IT'S A BRILLIANT,
BRILLIANT, UH, STRATEGY,
AND FOR THEM,

NO DOWNSIDE WHATSOEVER.

FOR YOU?

FOR ME, IT'S NOTHING
BUT DOWNSIDE.

I THINK A LOT
OF THESE PATENT TROLLS
ARE SOCIOPATHS.

THEY KNOW THE DAMAGE
AND THE CARNAGE THEY--
THEY CREATE IN SOCIETY,

THEY JUST DON'T
GIVE A SHIT.

THEY DON'T CARE.

IT'S THE ALMIGHTY DOLLAR.

THEY GIVE GREED
A BAD NAME.

[AUSTIN LAUGHING]

AN IDEA IS NOT
PRIVATE PROPERTY,

YOU CAN'T OWN
AN IDEA,

IT'S NOT POSSIBLE.

YOU CAN'T OWN A CONCEPT.

LOOK, I'VE BEEN DOING--

I'VE BEEN INVENTING
FOR 40 YEARS.

MY BELIEF:
IDEAS ARE CHEAP.

TURNING A GOOD IDEA INTO
A SUCCESSFUL PRODUCT
AND COMPANY?

THAT'S REALLY, REALLY HARD.

WHAT THE PATENT OFFICE HAS
DONE IS COMPLETELY PUT
EVERYTHING ON IT'S HEAD.

THEY'RE-- THEY'RE PUTTING
ALL THE VALUE IN THE IDEA

AND THEY'LL MAKE IT
EXTREMELY EXPENSIVE

FOR PEOPLE LIKE US
THAT ARE TRYING
TO IMPROVE THE WORLD

BY ACTUALLY CREATING
PRODUCTS AND SERVICES
THAT BENEFIT OTHERS.

SO THAT'S KEVIN'S STORY

AND I'M STARTING TO SEE
THE TIP OF THE ICEBERG

IN THIS ONGOING
NATIONAL DISASTER.

THE LAWSUIT AGAINST ME
HAS BEEN DRAGGING ON FOR
ABOUT FOUR YEARS NOW,

AND THERE'S NO END
TO IT IN SIGHT.

I'VE WATCHED MY DAUGHTER,

GROW UP FROM AGE ONE
TO AGE FIVE,

ALWAYS UNDER THE THREAT

THAT I'D HAVE TO TURN
OVER MY SAVINGS FOR
HER FUTURE

TO A LAWYER
THAT'S SUING ME

FOR USING THE GOOGLE STORE.

THIS HAS COST ME TIME

THAT I'LL NEVER GET BACK.

BUT, AM I
THE ONLY ONE IN
THIS WRETCHED SITUATION?

COMING OUT OF COLLEGE,

I KNEW THAT I WANTED
TO BE A PROGRAMMER.

I KNEW THAT I WANTED
TO CREATE APPLICATIONS

THAT PEOPLE ENJOYED,

PEOPLE WANTED TO
USE EVERY SINGLE DAY.

SO, THE IDEA FOR DITTO
REALLY CAME FROM WATCHING

THOUSANDS OF PEOPLE
TRY TO BUY GLASSES
IN THE REAL WORLD.

AND WE REALIZED
THEY WERE REALLY STRUGGLING.

YOU KNOW, THAT'S REALLY WHAT
KIND OF MADE THIS EXCITING,

LIKE, IT FELT LIKE
WE WERE REALLY SOLVING
A CONSUMER PROBLEM.

WELL, I STARTED IT
IN MY BASEMENT,

IN 1997, WITH, UH,
TWO OTHER PEOPLE.

IT WAS BASICALLY JUST, UH,

I WANTED TO STOP ANNOYING
MY FRIENDS SENDING THEM
EMAILS ALL THE TIME

SO I THOUGHT, YOU KNOW,
I'LL JUST PUT ALL THIS
ON A WEBSITE

AND THEY CAN COME
CHECK IT OUT WHEN
THEY WANT TO.

OKAY, TIME OUT.
JUST WAIT ONE SECOND HERE.

THIS GUY IS
DREW CURTISS,

AND HE RUNS A
WEBSITE CALLED FARK.COM.

HE WAS SUED FOR POSTING NEWS
AT HIS WEBSITE.

[CHUCKLES]
OKAY, NOW I'M GONNA
REACH THE PATENT.

"WRITING THREE
KEY MESSAGES,

PURPOSE:
ANSWER THE QUESTION,

WHY SHOULD I BE
INTERESTED IN THIS?

GUIDELINES:
TWO TO THREE STATEMENTS
THAT SUPPORT THE HEADLINE

AND ENTICE THE READER.

FOR EXAMPLE,
ANSWER THE QUESTION:
WHY IS THIS NEWS?

PRESENT FACTS OR STATISTICS
OR OTHER EVIDENCE

TO SHOW WHY YOUR STORY
IS IMPORTANT OR INTERESTING.

THE STATEMENTS DON'T
NECESSARILY HAVE TO
RELATE TO EACH OTHER,

BUT MUST SUPPORT
THE HEADLINE.

30 TO 40 WORDS IN
TOTAL PER HIGHLIGHT."

THAT'S IT.

THAT'S THE PATENT.

THAT'S THE PATENT
THAT THE PATENT TROLL USED

TO SUE DREW CURTISS

FOR POSTING NEWS
AT A WEBSITE.

[LAUGHING]

ALL RIGHT, SORRY FOR
THE INTERRUPTION.

BACK TO THE MOVIE.

SO I KIND OF FLIPPED
OVER A NAPKIN

AND STARTED
DRAWING IT OUT,

IT WAS JUST AN EXCHANGE
OF ECONOMICS FOR POWER.

THE DAY MY BROTHER
GOT BACK FROM AFGHANISTAN

WAS THE DAY
THAT WE ACTUALLY WENT LIVE.

AND WE SOLD OUT.
WE SOLD OUT.

WE-- WE DID THIS IN
A NIGHTCLUB HERE IN CHICAGO.

AND, UH, IT SOLD OUT
IN ABOUT 17 MINUTES.

WE HAD A LOT OF FUN.

MY WIFE AND I WORKED
HAND IN HAND.

AND UH, WE WERE THE
FIRST PHOTOGRAPHERS
IN THE EVENT.

SO WE'VE GONE TO LOTS
OF GREAT PLACES,

WE'VE PHOTOGRAPHED LOTS
OF GREAT PEOPLE,

CAPTURED MEMORIES
FOR THEM.

RUNNING MY OWN BUSINESS
DEFINITELY MADE ME HAPPY.

IT WAS SOMETHING THAT,
YOU KNOW, I ALWAYS
WANTED TO DO

AND, UH, YOU KNOW,
JUST HAVING THE ABILITY
TO BE CREATIVE

AND SHARE YOUR CREATIVITY
WITH THE WORLD

WAS SOMETHING THAT
I THINK EVERYBODY
WANTS TO DO.

EVENTUALLY, ONE OF MY APPS,
WHITE NOISE,

UH, BECAME
EXTREMELY POPULAR,

EVEN BECAME THE NUMBER ONE APP
ON ITUNES

AND THAT'S WHEN I
WAS ABLE TO FOCUS ON
MY STARTUP FULL TIME.

I WAS ABLE TO WATCH
FOLKS WHO CAME IN

AS INTERNS FROM
COLLEGE GROW INTO
SENIOR MANAGERS

IN THE ORGANIZATION.

AND IT WAS ALMOST
LIKE GETTING TO, UH,
YOU KNOW,

BE A PARENT
OR AT LEAST AN UNCLE.

UH, IT'S BEEN THE
BEST THING EVER.

WHEN YOU'RE
BUILDING SOMETHING

AND THE FIRST
CUSTOMERS SAY, LIKE,

"WOW, THAT REALLY
HELPED US."

UH, THERE'S NO
GREATER FEELING.

IT WAS, UH,
DECEMBER 31ST, 2013,

AND I WAS MY FAMILY
RINGING IN THE NEW YEAR,

NOT KNOWING WHAT
LIED AHEAD OF US.

AND, UH, WE HAD
CHAMPAGNE GLASSES
IN OUR HAND

AND AT 12:04 A.M.
MY EMAIL LIT UP
ON MY PHONE

FROM A PATENT ATTORNEY.

SAYING,
"I SEE YOU'VE BEEN SUED
FOR PATENT INFRINGEMENT.

MAYBE I COULD
REPRESENT YOU."

ALL OF A SUDDEN,
ON 9/11, IN 2013,

I RECEIVED A
DEMAND LETTER.

THE DEMAND LETTER
BASICALLY STATED THAT
I INFRINGED UPON A PATENT

AND IT DIDN'T TELL ME HOW,
OR IT DIDN'T TELL ME WHY,

IT JUST SAYS,
"WE BELIEVE THAT YOU INFRINGED
UPON THIS PATENT

AND IF YOU DO NOT
CEASE AND DESIST,

WE'RE GOING TO
SUE YOU."

IN FEBRUARY OF 2012...

AND, UH, I REMEMBER
IT VERY CLEARLY.

A LETTER CAME
IN THE MAIL, SAYING,

"DEAR DOCTOR VICINANZA,"

UM, "WE UNDERSTAND THAT, UH,
YOU HAVE CERTAIN TECHNOLOGIES,

UH, IN PARTICULAR,
NETWORK-BASED SCANNERS

THAT," UH,
"WE FEEL," UH,

"INFRINGE ON OUR
PROPRIETARY PATENT

AND THEREFORE WE
SUGGEST THAT YOU
CALL US

SO YOU CAN ARRANGE
TO GET A LICENSE TO USE
YOUR EQUIPMENT."

YEAH, WE'D BEEN IN
BUSINESS FOR ABOUT
10 YEARS

WHEN I GOT HIT
BY A PATENT TROLL LAWSUIT

IN 2011,
OUT OF NOWHERE.

SO, IT WAS SOMEBODY
WHO WAS CLAIMING

THAT FARK, AND REDDIT,
AND AOL,

AND SIX OTHER COMPANIES
WERE INFRINGING ON
A PATENT OF THEIRS.

ESSENTIALLY, IT
INVOLVED EMAILING PRESS
RELEASES TO PEOPLE.

GOT A CURIOUS PHONE
CALL FROM AN ATTORNEY

THAT CLAIMED
THAT I WAS INFRINGING
ON THEIR PATENT.

IT WAS A LOT
OF JARGON AND NONSENSE

AND THEN
A BUNCH OF CLAIMS

AND ONE
OF THE CLAIMS WAS

UH, IF YOU, UH,
SCAN A DOCUMENT
TO AN EMAIL,

THAT'S PROTECTED
UNDER THIS PATENT.

WHAT THE PATENT SAID
WE WERE DOING WRONG WAS,

TAKING A DOCUMENT,
PUTTING IT ON A SCANNER,

AND PRESSING A BUTTON,

AND HAVING THAT
SCANNED TO AN EMAIL.

THE DEMAND LETTER
SAID NOTHING ABOUT WHAT
WE WERE INFRINGING ON,

NOTHING ABOUT
WHAT WE WERE DOING WRONG

OR WHAT THEY WERE
EVEN TRYING TO CLAIM
AGAINST US.

SO, THIS IS
USUALLY WHAT YOU GET.

THIS IS, UH,
A DEMAND LETTER.

AND IT USUALLY
COMES WITH A LOT
OF PAPERWORK.

THESE ARE, YOU KNOW,
FOUR PATENTS HERE,

AND THEY BASICALLY SAY,

"YOU'RE VIOLATING
SOMETHING HERE,

ONE OR MORE OF OUR PATENTS
YOU'RE VIOLATING."

UM, A LOT OF TIMES
THEY DON'T EVEN TELL YOU.

IN MY CASE,
THEY ACTUALLY ILLUSTRATED

WHERE THEY THINK
I'M INFRINGING
ON THEIR PATENT,

AND IT'S RIGHT HERE.

WHEN YOU CLICK
THIS BUTTON,

IT OPENS APPLE'S
APP STORE.

AND THAT'S IT.

THAT'S ALL IT IS.

A BUTTON,
THAT GOES OUT
TO THE INTERNET

AND OPENS UP
ITUNES,

AND THAT'S--
THAT'S A MILLION
DOLLAR LAWSUIT?

REALLY?

AND IT SAYS
RIGHT THERE,

"STORING RESULTS OF
A TWO-WAY INTERACTION

TO A CENTRAL LOCATION."

THAT SOUNDS LIKE
USING THE INTERNET.

LATER, I DISCOVERED
I WAS NOT ALONE

AND THAT MANY
OTHER SMALL BUSINESSES

HAD BEEN TARGETED
AND SENT THESE
DEMAND LETTERS,

AND THEY ALL SAY
PRETTY MUCH THE SAME THING,

THEY REFERENCE
A FEW PATENTS,

UH, AND THEN THEY
CLAIM THEY WANNA GET
A LICENSING FEE FROM YOU.

UH, IF YOU
DON'T PAY THEM
A LICENSING FEE,

THEY'RE GONNA TAKE
YOU TO COURT.

OKAY, SO YOU'VE
SEEN SOME PRETTY
ABSURD LAWSUITS HERE,

BUT NOW, IT'S TIME
FOR THE MOTHER OF THEM ALL.

UNILOC, THE COMPANY
THAT'S CURRENTLY SUING ME,

WAS ALSO SUING A COMPANY
CALLED RACKSPACE

FOR SELLING
LINUX COMPUTERS.

UNILOC'S EXCUSE
FOR THE LAWSUIT?

THAT UNILOC
HELD A PATENT

THAT DESCRIBED ROUNDING
NUMBERS WHEN DOING MATH.

THIS, BECAUSE RACKSPACE'S
LINUX COMPUTERS

ROUNDED NUMBERS
WHEN DOING MATH.

WHEN SOMEONE IS SUED
FOR DOING MATH,

I PRETTY MUCH WANNA
TALK TO THEM.

I'VE BEEN ACCUSED
OF RUNNING LINUX.

BECAUSE THE LINUX
KERNEL DOES MATH.

IT ROUNDS, IT ROUNDS UP
OR ROUNDS DOWN,

THEY SAID WE VIOLATED
THEIR PATENT.

YOU KNOW WHAT HAPPENS
WHEN YOU HAVE A PHONE

AND IT ROTATES
LIKE THAT.

WE'VE BEEN ACCUSED
OF HAVING A FREE MOBILE
APP THAT ROTATES

ON YOUR PHONE.

WE HAVE,
AN ACCUSATION RIGHT NOW

THAT WE SEND EMAIL.

UH, WE HAVE BEEN
ACCUSED OF...

SELLING CLOUD
COMPUTING SERVICES.

THEY SAID,
"IF YOU CHARGE
SOMEBODY MONEY

FOR PROVIDING
A COMPUTING SERVICE,

THAT VIOLATES OUR PATENT."

SO YOU MAY NOTICE
THAT UNILOC'S LAWSUIT
AGAINST RACKSPACE

WAS FOR SELLING
LINUX COMPUTERS.

[SCOFFS]
WHY LINUX?

THINK ABOUT IT,
AND THE ANSWER
BECOMES CLEAR.

IF THEY WERE
TO SUE RACKSPACE

FOR RENTING OUT
TIME ON APPLE

OR MICROSOFT
OPERATING SYSTEMS

FOR ROUNDING NUMBERS,

ANY JURY WOULD JUST
LAUGH IT RIGHT
OUT OF COURT.

BUT WHEN THEY
CHOOSE LINUX,

THAT'S AN OPERATING SYSTEM

THAT MOST JURORS JUST DON'T
KNOW MUCH ABOUT.

TURNS OUT,
LINUX ROUNDS NUMBERS
JUST LIKE APPLE

AND JUST LIKE
MICROSOFT.

ALL THE OPERATING
SYSTEMS WORK ON
THE SAME COMPUTERS.

BUT BY CHOOSING LINUX,

UNILOC INTRODUCES
JUST ENOUGH DOUBT

TO STAND A CHANCE
OF SUCCEEDING.

AND IT'S THAT
TINY LITTLE SEED OF DOUBT

THAT DRIVES
THE ENTIRE LAWSUIT.

THEY DON'T REALLY CARE

THAT THEIR INTERPRETATION
IS RIDICULOUS ON
THE FACE OF IT.

AND THE TROLLS
DON'T EVEN CARE HOW
NONSENSICAL

OR IRRELEVANT
THEIR PATENT IS.

THE THING ABOUT
THESE USERS SUITS

IS THAT WE'RE ALL
NOW USERS OF TECHNOLOGY.

SO THAT'S WHY YOU
SEE FOLKS WHO ARE ANGRY
ABOUT PATENT TROLLS

NOT ONLY INCLUDING
TECH COMPANIES,

BUT RETAILERS,

YOUR MOM AND POP
STORE DOWN THE STREET.

IF YOU HAVE A SCANNER
IN YOUR HOUSE-- DO YOU?

-DO YOU HAVE WI-FI
IN YOUR HOUSE?
-ABSOLUTELY.

-DO YOU HAVE A SMARTPHONE
IN YOUR POCKET?
-OF COURSE.

OKAY, SO THOSE THINGS
MAKE YOU A TARGET FOR
A PATENT LAWSUIT,

BECAUSE YOU ARE USING
THE TECHNOLOGIES
WHICH ARE AT STAKE.

-MAN.
-BUT HISTORICALLY,
PATENT HOLDERS

WON'T GO AFTER USERS
BECAUSE THEY DON'T WANT
TO SUE THEIR CUSTOMERS.

THE THING ABOUT PATENT
TROLLS IS THEY DON'T
HAVE CUSTOMERS,

SO THEY CAN GO
AFTER FOLKS

WITHOUT WORRYING
ABOUT THEIR REPUTATION
IN THE MARKETPLACE.

WHEN I RECEIVED
THE DEMAND LETTER,

MOST OF THE SCREENSHOTS
WERE OF APPLE'S APP STORE,

WELL I'M AN END USER
OF THAT TECHNOLOGY.

I DIDN'T INVENT
THAT TECHNOLOGY,

I'M JUST USING
THAT TECHNOLOGY.

BUT THEY'RE CLAIMING
THAT END USERS

ARE VIOLATING
THEIR PATENTS,

EVEN THOUGH APPLE
HAS A LICENSE PATENT,

EVEN THOUGH
APPLE SAYS,

THEIR DEVELOPERS ARE
NOT INFRINGING.

IT DOESN'T MATTER
TO THE PATENT TROLL.

IT DOESN'T MATTER.

IF THEY COULD PIN
THAT-- THAT INTERPRETATION

IN ANY SUCH WAY,

THEN THEY FORCE YOU
TO RESPOND.

BECAUSE, THEIR POINT IS
NOT TO WIN.

THEIR POINT IS TO MAKE
YOU SPEND MONEY.

IF THEY CAN MAKE IT
MORE EXPENSIVE
FOR YOU TO PROVE

THAT YOU'RE RIGHT
THAN IT IS FOR YOU
TO PAY THEM OFF,

THEN 99 OUT OF 100
PEOPLE WILL JUST
PAY THEM OFF

AND GO ABOUT
THEIR BUSINESS.

AND EVERY ONE
OF THESE PEOPLE ARE--

ARE COMING IN AND
RUNNING AROUND

AND SAYING,
"WELL, NEWEGG COULD
NOT HAVE SUCCEEDED

BUT FOR MY PATENT,"

WHICH IS UTTER BULLSHIT.

RIGHT?
NONE OF OUR DEVELOPERS

OR SOFTWARE DEVELOPERS

HAD, YOU KNOW,
EVER REFERENCED ANY
OF THESE PATENTS.

FOR EXAMPLE,
ON THE ONLINE SHOPPING CART,

WHAT THEY CODED
FOR THAT-- FOR THAT
FUNCTIONALITY,

EVERY WEBSITE
IN AMERICA THAT'S
AN E-COMMERCE WEBSITE,

UM, HAS A SHOPPING CART.

YOU KNOW WHAT I
SAY AT OUR COMPANY?

IDEAS ARE CHEAP.

I HAVE AN IDEA
EVERY DAY, YOU KNOW?

WHAT, AM I GONNA
GO PATENT EVERY
ONE OF THEM?

THIS LAW FIRM
THAT SUED ME

HAD ABSOLUTELY
NO VALUE TO ADD
TO MY BUSINESS.

THEY WERE ONLY
TRYING TO EXTRACT MONEY

IN EXCHANGE
FOR AGREEING NOT TO SUE ME,

WHICH I CALL EXTORTION.

PAY MONEY TO NOT BE SUED?

WELL, SO WHAT
IF WE DO GET SUED?

THIS'LL NEVER
STAND UP IN COURT.

OF COURSE,

WE DO HAVE TO HAVE
TO PAY OUR DEFENSE FEES.

THEY ARE HARD COSTS,

THAT ARE ALREADY
TREMENDOUS AND TRAGIC

AND RIDICULOUS.

THEY COUNT
ON THE FACT THAT MOST
COMPANIES CAN'T MANAGE, UM,

THEIR LEGAL DEFENSE
AND THEY HAVE TO

BASICALLY END UP PAYING
FAR, FAR MORE

THAN, UM--
THAN WHAT THE PLAINTIFFS
ARE ASKING FOR.

AND SO THOSE PLAINTIFFS
WILL VERY CLEVERLY--

THEY'LL PRICE BELOW
THE COST OF DEFENSE.

A PATENT SUIT GENERALLY
COSTS $1 TO $2 MILLION

TO DEFEND THROUGH
TO JUDGMENT.

SO IN 2011,
WHEN I GAVE MY TED TALK,

THEY WERE ESTIMATING
THAT THE COST OF DEFENDING
A PATENT TROLL LAWSUIT

WAS ABOUT
A MILLION AND A HALF.

THE LEGAL EXPENSE
OF DEFENDING YOURSELF

AGAINST THE PATENT, UM,

TROLLING LAWSUIT

CAN BE
IN THE MILLIONS OF DOLLARS.

AND A LOT OF TIMES
THE PATENT TROLLS ARE
PICKING ON SMALL COMPANIES

THAT THEY KNOW
CANNOT AFFORD

TO GO THROUGH
THE WHOLE LEGAL PROCESS.

YOU PROBABLY SPEND
ABOUT $3 TO $4 MILLION.

SO FAR, I WOULD ESTIMATE
THAT THE LEGAL FEES

HAVE BEEN
IN THE MILLIONS.

AND I THINK WE'RE
TALKING ABOUT SEVERAL
MILLION MORE

BEFORE IT'S ALL
SAID AND DONE.

MY SMALL COMPANY
COULDN'T AFFORD THAT,

AND THEY KNEW THAT.

IT WOULD BE
HALF A MILLION DOLLARS OR UP,

TO DEFEND AGAINST
A PATENT INFRINGEMENT
LAWSUIT.

[AUSTIN]
AND HOW MUCH MONEY
DID YOU MAKE

IN THE YEAR LEADING UP

TO THE PATENT
INFRINGEMENT LAWSUIT?

WE MADE ABOUT
$30,000 PROFIT IN 2013.

EVERY CASE HAS BEEN
BROUGHT AGAINST IT SO FAR

HAS BEEN BY MPEs

WHERE THERE WAS NO
PRODUCT FOR US TO BUY

OR NO SERVICE OUT THERE
IN THE MARKET THAT WE
COULD HAVE BOUGHT.

WE SHOULD FIGHT AND WE DO,

UM, WITH WHAT WE HAVE

BUT WE DON'T
HAVE THAT MUCH.

FOR ME,
HUNDREDS OF THOUSANDS
OF DOLLARS

IS A LOT OF MONEY.

IT WAS MORE MONEY
THAN WE SPENT ON
THE ENTIRE APP.

[AUSTIN]
SO WHAT'D YOU DO?

UM, WE SCRAPED
TOGETHER A LITTLE BIT
OF MONEY

THAT WE COULD, UH,
COULD GET A HOLD OF.

WE EMPTIED OUR 401K,

WE PAID OUR ATTORNEY
ENOUGH TO GET
THE JOB STARTED.

THE LAWYERS,
THE FIRST QUESTION
THEY ASK YOU IS:

"HOW MUCH MONEY
DO YOU HAVE?"

AND SINCE I DIDN'T
HAVE ANYWHERE NEAR
A MILLION

TO $3 MILLION
IN THE BANK,

I WAS LAUGHED
OFF THE PHONE.

SOME OF THEM WERE
EXTREMELY RUDE.

WHEN WE GOT THE LAWSUIT,

WE KNEW WE IMMEDIATELY
HAD TO MAKE SOME VERY
HARD DECISIONS.

SO WE ACTUALLY
HELD A MEETING AND I TOLD
ALL OF MY EMPLOYEES,

I SAID,
"EVERYBODY IS
GETTING LAID OFF.

I'M GONNA MOVE
THE OFFICE BACK
TO MY BASEMENT,

AND I'M GONNA TRY TO DO
EVERYTHING MYSELF."

AND I FIGURED WITHIN--

BY THE END OF THE YEAR
WE MIGHT BE OUT OF
BUSINESS.

I HAD PLANNED
TO HIRE ANOTHER COUPLE
OF EMPLOYEES THAT YEAR

AND I WASN'T ABLE
TO DO IT.

YOU KNOW,
I LAID OFF SEVEN PEOPLE,

UM, MOST OF
WHOM WERE ENGINEERS.

UM, I LOST EMPLOYEES.

I HAD TO-- I HAD
TO GET RID OF THEM

SO I COULD FINANCE
THE LITIGATION.

YOU HAVE
TO LEARN A LOT
ABOUT THE LEGAL SYSTEM

SO I CAN'T TELL
YOU HOW MUCH TIME I'VE
WASTED ON THIS,

TIME I COULD
HAVE BEEN FOCUSED
ON MY OWN PRODUCTS.

LAST MONTH I PROBABLY
COULD HAVE HIRED
20 PEOPLE,

EXCEPT FOR WHAT
WE'RE SPENDING ON
PATENT LITIGATION AND...

INSTEAD OF SPENDING
18 HOURS A DAY RUNNING
MY BUSINESS

LIKE I NORMALLY DO,

I HAD TO INSTEAD
SPEND THAT TRYING
TO FIGURE OUT

HOW TO FIGHT
THIS LAWSUIT.

IT TOOK UP 100%
OF MY TIME

FOR THE BETTER
PART A THE YEAR.

I PROBABLY SPENT
60 OR 70 HOURS A WEEK

DOING LITIGATION
ACTIVITIES,

UM, IN THOSE FIRST
COUPLE MONTHS.

UM, WHAT I SHOULD
HAVE BEEN DOING

WAS FINDING
NEW CUSTOMERS

AND GROWING OUR BUSINESS,

AND SIGNING UP NEW
EYEWEAR MANUFACTURERS
TO OUR SITE.

THE BUSINESS GROUND
TO A HALT.

EVERY RESOURCE,

FINANCIALLY
AS WELL AS MY-- YOU KNOW,
MENTAL RESOURCES

AND MY TIME
WERE FOCUSED ON

WHAT WERE WE
GOING TO DO NEXT?

HOW WERE WE
GONNA SURVIVE?

WE HAD TO STOP
GROWING BASICALLY

IN ORDER
TO DEAL WITH THIS.

EVERYTHING
ON THE BUSINESS SIDE
WAS DERAILED.

NOT ONLY AM I TRYING
TO RUN A BUSINESS,

I'M TRYING TO RUN
A BUSINESS,

PLUS,
DEAL WITH LAWYERS,

AND YOU KNOW, UM,

LOOKING UP DOING
RESEARCH ON THE PATENT

AND THE PATENT TROLL

AND COMING UP
WITH RESPONSES,

SO YEAH,
IT DID TAKE A TOLL.

IT WAS A--
IT WAS A-- TOUGH TIME
FOR US ALL.

THEY WANT YOU
TO MAKE IT SO PAINFUL
TO FIGHT THEM,

THAT YOU JUST GIVE UP

AND YOU PAY THEM OFF.

AND EVEN MY BOYS,

THEY-- THEY KNEW
THAT, YOU KNOW,

THEIR DAD WAS
TIED UP WITH THIS,

THAT MY MIND
WAS ELSEWHERE.

AND WE CONSIDER 2014
A WHOLE YEAR LOST.

OVER ALL, YEAH,
I WOULD SAY IT HAD
AN EFFECT ON MY KIDS.

THEY-- THEY-- MISSED
THEIR DAD FOR ABOUT
THREE MONTHS.

MY OLDEST SON WHO
WAS EIGHT AT THE TIME,

UH, WAS LISTENING IN
ON ALL OUR CONVERSATIONS
ABOUT STRATEGY,

AND AT ONE POINT HE,
UH-- HE TRIED TO HELP,

AND HE SAYS,
"DADDY, I KNOW WHAT YOU
NEED TO DO WITH THIS GUY."

AND I GO, "WHAT?"

HE GOES,
"YOU SHOULD KILL HIM."

THESE TROLLS DON'T
JUST RUIN PEOPLE'S
BUSINESSES,

THEY RUIN THEIR LIVES
AND THEIR FAMILIES.

AND IF YOU SETTLE
WITH THE PATENT TROLLS

YOU'RE JUST ENCOURAGING
THEM TO DO IT TO
YOU AGAIN.

OR,

TO DO IT
TO SOMEONE ELSE.

WHICH LAWSUIT?

[AUSTIN]
THE FIRST ONE.

IT'S STILL NOT RESOLVED.

[AUSTIN]
HOW LONG IS IT
GONNA GO ON?

IT COULD GO ON
SEVERAL MORE YEARS.

IT CAN GO ON FOREVER.

IT CAN GO ON...

FOR THE--
FOR YOUR ENTIRE LIFE.

THE PATENT TROLL NEEDS

TO MAKE IT
AS DIFFICULT FOR YOU

AS HE POSSIBLY CAN,

SO YOU'LL FINALLY
JUST GIVE UP IN EXHAUSTION
AND SETTLE.

ONE OF THE WAYS
HE DOES THIS

IS A PROCESS CALLED
DISCOVERY.

THEY WILL BLEED YOU DRY

IN THE DISCOVERY PROCESS.

THEY WILL ASK
FOR FOUNTAINS OF INFORMATION,

AND IT'S A VERY
INTRUSIVE PROCESS.

WE'RE TALKING
EMAIL RECORDS,

FINANCIAL RECORDS,

BANK STATEMENTS.

THE LIST GOES ON AND ON,

AND THEY DON'T
REALLY NEED THIS
FOR THEIR CASE.

THEY JUST WANT YOU
TO PAY A LOT OF MONEY

AND A LOT OF TIME.

THAT'S HOW THEY
BLEED YA'.

THEY BLEED YA',
BLEED YA',
BLEED YA'.

SHOW US
THE HUNDREDS OF THOUSANDS
OF EMAILS

THAT HAVE BEEN SENT
BACK AND FORTH

BETWEEN YOU AND INVESTORS,

AND-- AND ANYTHING
THAT HAS TO DO WITH

HOW YOU CREATED
THIS IDEA,

AND THEN WE'LL
TAKE A LOOK LATER

AND DETERMINE
WHETHER OR NOT

YOU'RE INFRINGING.

THAT'S JUST--
THAT'S CHEAP.

IT'S-- IT'S CHEAPER
FOR THEM.

IF IT WAS MADE MORE
EXPENSIVE FOR THEM,

PERHAPS THEY
WOULDN'T DO IT.

BUT THEY KNOW
IT'S EXPENSIVE FOR ME.

UH, IT'S-- IT'S VERY
SIMILAR TO,

WHAT IF SOMEBODY
BROKE INTO YOUR HOUSE

IN THE MIDDLE
OF THE NIGHT

AND YOU HAVE
TO SIT THERE ON THE COUCH

WHILE THEY ARGUE
WITH THE COPS

OVER HOW MUCH OF YOUR STUFF
THEY CAN TAKE

WHEN THEY LEAVE.

SO THE PERSON BEING
SUED HAS TO REVEAL
EVERYTHING

ABOUT HIS OWN BUSINESS.
[SCOFFS]

WHAT DOES
THE PATENT TROLL HAVE
TO REVEAL ABOUT HIS?

IT BASICALLY CREATED AGAIN

A HUGE IMBALANCED
BURDEN ON DEFENDANTS.

PLAINTIFFS HAVE
NO DOCUMENTS

OR RECORDS
TO TURN OVER, RIGHT?

[AUSTIN]
WHY DON'T THE PLAINTIFFS
HAVE ANY DOCUMENTS

OR RECORDS TO TURN OVER?

BECAUSE THEY'RE SHELL
COMPANIES.

PATENT TROLLS ARE JUST
SHELL COMPANIES.

THEY DON'T MAKE ANYTHING,
THEY DON'T PRODUCE ANYTHING.

THEY DON'T HAVE EMPLOYEES.

IT'S SMOKE AND MIRRORS.

YOU DON'T EVEN
KNOW WHO'S SUING YOU.

YOU HAVE NO IDEA.

YOU DON'T KNOW ANYTHING.

THEY'VE THOUGHT
OF EVERY SINGLE ANGLE

AND YOU CAN'T WIN.

THE COMPANY
THAT SUED US

WAS NOTHING MORE
THAN A COUPLE LAWYERS

THAT WERE IN A ROOM
IN EAST TEXAS

THAT THOUGHT THEY COULD
MAKE SOME MONEY.

IN ONE CASE
OF A FRIEND OF MINE NOW,

UH, THEY WON.

THE JUDGE ACTUALLY SAID,

UM, "THIS IS
ACTUALLY INSANE,

AND YOU'RE OWED
ALL THESE PUNITIVE DAMAGES."

BUT IT WAS
A NON-PRACTICING ENTITY.

THEY HAVE NO ASSETS,

SO THEN THEY JUST
THROW UP THEIR HANDS

AND SAY,
"SORRY, WE DON'T HAVE
ANY MONEY."

YOU GET
A MILLION DOLLAR JUDGMENT
AGAINST THE SHELL COMPANY,

THEY GO,
"OKAY, POOF,
WE'RE OUTTA BUSINESS."

SO THAT'S WHAT
A SHELL COMPANY IS.

IT'S AN EMPTY SHELL

PUT TOGETHER JUST
TO HOLD A PATENT

AND NO OTHER ASSETS.

AS THE MONEY COMES INTO
THE SHELL COMPANY,

THE PATENT TROLLS
FUNNEL IT DOWN INTO
THEIR OWN POCKETS

SO THE SHELL
COMPANY ITSELF

NEVER ACHIEVES ANY VALUE.
[SCOFFS]

FOR THE PATENT TROLL,

THERE'S NO RISK.

BECAUSE HE HAS
NO BUSINESS,

HE HAS NOTHING
TO LOSE.

LET'S EXAMINE ONE
OF THESE SHELL COMPANIES.

YOU REMEMBER OUR FRIEND,
STEVE VICINANZA?

IN ORDER TO USE
MY $200 SCANNER
ON THE NETWORK,

I WOULD HAVE TO PAY THEM
$120 THOUSAND.

BUT WHO ARE WE PAYING
THIS $120 THOUSAND TO?

UH, THE PATENT TROLL
WAS AN ENTITY CALLED
PROJECT PAPERLESS--

[AUSTIN]
PROJECT PAPERLESS?

[SCOFFS]
YEAH, THAT'S A SHELL COMPANY.

BUT WHO
ARE THEY SUING?

WELL, IT TURNS OUT
THERE'S A DIRECTORY CALLED

"THE BEST BUSINESSES
TO WORK AT IN ATLANTA."

THE BUSINESSES
ON THAT LIST

WERE THE ONES
THAT WERE SUED
FOR USING SCANNERS.

THE BEST BUSINESSES
TO WORK AT IN ATLANTA,

CLEARLY, BUSINESSES
WITH GOOD MORALE,
HAPPY EMPLOYEES,

A DECENT STREAM
OF MONEY.

THEY'RE THE PERFECT
FRUIT TO PICK,

RIPE FOR THE TAKING
BY PATENT TROLLS.

WHAT LAW FIRM
WOULD GO AND RUIN

THESE PEOPLE'S
LIVES LIKE THIS?

TURNS OUT,
IT'S A LAW FIRM CALLED

HILL, KERTSCHER, AND WHARTON.

HILL, KERTSCHER, AND WHARTON

DEMANDED THAT EACH BUSINESS

THAT USED A SCANNER
TO SCAN A DOCUMENT
TO AN EMAIL

PAY THEM
A THOUSAND DOLLARS

FOR EACH EMPLOYEE
IN THE COMPANY

THAT USED A SCANNER.

IF THE COMPANIES DIDN'T PAY,

THEN HILL, KERTSCHER,
AND WHARTON WOULD SUE THEM,

AND THE VICTIMS WOULD BE
LOOKING AT $3 MILLION
IN LEGAL FEES.

HILL, KERTSCHER, AND WHARTON'S
EXCUSE FOR THIS NONSENSE?

THAT THEY WERE
REPRESENTING A CLIENT

CALLED PROJECT PAPERLESS.

SO WHO IS
THIS PROJECT PAPERLESS
ANYWAY?

A LITTLE
MORE RESEARCH FOUND
THAT PROJECT PAPERLESS

WAS JUST A SHELL COMPANY,

WHICH IN TURN
WAS OWNED BY THREE
MORE SHELL COMPANIES.

AND THE PEOPLE WHO SET UP
THOSE SHELL COMPANIES?

THREE GUYS,
BY THE NAMES OF

STEVEN HILL,

DOUGLASS KERTSCHER,

AND SCOTT WHARTON.

[SCOFFS]
SOUND FAMILIAR?

THE VERY LAWYERS
THAT WERE FILING
THE LAWSUITS.

THE SUPPOSED
VICTIMS THAT THE LAWYERS
WERE REPRESENTING

WERE JUST SHELL COMPANIES

CREATED BY THE LAWYERS
THEMSELVES.

IMAGINE GOING
TO A LAWYER AND SAYING

THAT YOU WANT TO SUE
PEOPLE FOR USING SCANNERS

BUT YOU DON'T WANT
ANYONE TO FIND OUT
WHO YOU ARE

WHILE YOU'RE DOING IT.

AND THE LAWYER
THEN SAYING, "OH, OKAY,
THAT'S NO PROBLEM.

WE'LL JUST SET UP
DUMMY CORPORATIONS FOR YOU
TO HIDE YOUR IDENTITY

WHILE WE SUE EVERYONE
IN THE BEST WORK PLACE
DIRECTORY

IN YOUR OWN HOMETOWN."

WELL, THAT'S EXACTLY
WHAT STEVEN HILL,

OF HILL, KERTSCHER,
AND WHARTON,

OF ATLANTA, GEORGIA DID.

THE ADDRESS OF ONE
OF THE SHELL COMPANIES,
BY THE WAY,

WAS A CONDO IN FLORIDA,

OWNED BY A FRIEND

OF ONE OF THE LAWYERS.

ONE OF THE BUSINESSES
THEY DEMANDED MONEY FROM,
BY THE WAY,

WAS A COMPANY CALLED
COBB PEDIATRIC THERAPY.

COBB PEDIATRIC THERAPY
IS A BUSINESS

THAT HELPS DISABLED CHILDREN.

WHEN THEY GOT
THEIR LAWSUIT THREAT FROM
HILL, KERTSCHER, AND WHARTON

THEY HAD TO PROMISE
STEVEN HILL

THAT THEY WOULD NEVER
AGAIN USE A SCANNER

TO SCAN A DOCUMENT
INTO AN EMAIL.
[SCOFFS]

THAT'S WHAT
COBB PEDIATRIC THERAPY
HAD TO DO

TO MAKE THE LAWSUIT
THREAT AGAINST THEM STOP.

SO NOW,
WHENEVER DISABLED CHILDREN

COME INTO
COBB PEDIATRIC THERAPY
TO GET HELP,

COBB PEDIATRIC THERAPY
CANNOT HELP THE CHILDREN
AS EFFECTIVELY

AS THEY OTHERWISE WOULD,

BECAUSE THEY ARE
NOT ALLOWED TO SCAN
THEIR DOCUMENTS INTO EMAILS.

SO THIS,
TO SATISFY THE LAWYERS.

SO NOW,
WE HAVE THE LATEST
COMMANDMENTS FROM THE LAWYERS.

THOU SHALT NOT SCAN!

ALL THE LAWYER HAS
TO DO IS MANUFACTURE
A VICTIM

THAT HOLDS A PATENT

THAT DESCRIBES
WHAT WE ALL DO EVERY DAY.

ONCE HE'S DONE THAT,

HE JUST STARTS SENDING
OUT THE LAWSUITS,

TO THE BEST BUSINESS PLACES
TO WORK AT IN ATLANTA,
FOR EXAMPLE.

IN THE DEMAND LETTER

THEY ACTUALLY SHOWED
A SCREEN SHOT OF MY APP.

AND THEY REFERENCED
THE HYPERLINK

AND THEY SAID,

"THAT IS IN VIOLATION
OF ONE OR MORE OTHER PATENTS."

A HYPERLINK.
YOU KNOW, THE THING
YOU CLICK ON

ON THE INTERNET,

THAT IS BASICALLY

UH, THE BACKBONE
OF THE WORLD WIDE WEB.

THAT IS NOT PATENTABLE

AND YOU SHOULD
NOT BE ABLE TO ABUSE
THE COURT SYSTEMS

AND DRAG SMALL COMPANIES
LIKE MINE

ON SUCH A SIMPLE CONCEPT.

AND...

HERE'S THE PROBLEM,

IS WHAT DO YOU DO
AT THAT POINT?

SO WHAT DO YOU DO?

I'M BEING SUED
FOR SOMETHING EQUALLY OBVIOUS.

WHAT ARE MY OPTIONS?

IT'S VERY DIFFICULT TO SAY
WHAT A COMPANY SHOULD DO

WHEN-- WHEN THEY'RE SUED--
WHEN THEY'RE SUED BY--

PARTICULARLY,
SAY, A PATENT TROLL,

BECAUSE THE CHOICES
ARE ALL-- ARE ALL BAD.

AND SO THEN HE TOLD ME
WE HAD A COUPLE OF OPTIONS,

AND ONE OF THOSE
OPTIONS WAS TO KIND OF
SETTLE OUT OF COURT,

IN WHICH CASE,
I WOULD HAVE TO GIVE UP
SOME TYPE OF ROYALTY FEE.

OR SOME TYPE OF PAYMENT.

MOST COMPANIES
HAVE TO SETTLE

BECAUSE THEY CAN'T
AFFORD EXPENSIVE LITIGATION

AND THOSE COMPANIES
THAT DO SETTLE,

IT'S LIKE
BLOOD IN THE WATER.

OTHER PATENT TROLLS SEE THAT,

THEY SEE THAT
YOU'RE WILLING TO PAY

TO GET OUT OF
THE LAWSUIT

AND THEY'RE GONNA
COME KNOCKING.

BUT WHEN I GOT
INTO THE WEEDS

AND STARTED TALKING
TO MORE LAWYERS,

I UNDERSTAND THAT, UM,

THIS IS JUST WHAT
TROLLING IS,

AND THEY SUE A BUNCH
OF PLAYERS IN THE SAME DAY

AND, YOU KNOW,
MOST OF THEM ADVISED ME,

"HEY, THIS ONE YOU
CAN SETTLE,

AND MOST LIKELY
YOU CAN SETTLE IT

FOR SLIGHTLY
LESS THAT IT WOULD TAKE
YOU TO WIN IN COURT."

THE WAY THIS PLAYS OUT
FOR US IS THAT,

YOU KNOW,
WE'RE NOT ONE OF
THE COMPANIES SO BIG

THAT THEY LEAVE
US ALONE 'CAUSE THEY'RE AFRAID
OF OUR-- OUR LEGAL BUDGET,

BUT WE'RE NOT SO SMALL
THAT THEY IGNORE US

BECAUSE THEY THINK
WE CAN'T WRITE A CHECK.

WE'RE RIGHT
IN THE MIDDLE WHERE,

YOU KNOW, THEY KNOW
THAT WE CAN'T AFFORD

TO KEEP FIGHTING FOREVER,

AND I FEEL LIKE
THEY LEVERAGE THAT

TO TRY TO GET
SETTLEMENTS OUT OF US

BUT IN THE NEXT YEAR
WE'RE STILL GOING TO BE
A MIDDLE SIZED COMPANY

AND WE'RE VENTURE-BACKED
SO WE'RE GONNA CONTINUE
TO GET HIT

AND IT'S GONNA CONTINUE
TO BE DRAINING FOR US.

AND WE WENT FROM
NEVER HAVING HAD
A PATENT LAWSUIT AT ALL

TO HAVING ONE COME UP
EVERY COUPLE MONTHS,

WHAT WE CALL
REPEAT BUSINESS.

WE STARTED TO GET
PEOPLE WHO WOULD COME
AFTER US

AGAIN AND AGAIN

AND WHEN WE SAW THAT,

WE REALIZED,

THIS IS JUST PAYING OFF
THE BULLY.

THIS IS NOT SOMETHING
THAT WILL CHANGE.

UM, SO --
I ACTUALLY WENT TO MEDIATION.

FOR THE FIRST
TIME I MET, UH,

FOR THE FIRST TIME,
THE PLAINTIFF.

I SAW HIS FACE,
AND I MET THIS PERSON

IN FRONT OF KIND OF
A FEDERAL MEDIATOR.

UM, THE MEDIATION
WASN'T A MEDIATION AT ALL.

UH, I GOT INTO
A ROOM WITH MY ATTORNEY

AND THESE GUYS
MADE SOME MORE DEMANDS

AND THE DEMAND WAS,

"LOOK, WE MAY OR
MAY NOT WIN THIS CASE,

WE MAY OR MAY NOT
WIN THIS APPEAL,

BUT WHAT WE ARE
GOING TO DO,

AS SOON AS THIS
APPEAL IS OVER,

IS WE'RE GOING TO SUE YOU
WITH A DIFFERENT PATENT

IN OUR PATENT PORTFOLIO

AND WE'RE GONNA START
THIS ALL OVER AGAIN.

AND YOU'RE NOT GONNA
BE ABLE TO-- TO FIGHT,

'CAUSE WE KNOW YOU'RE
RUNNING OUT OF MONEY."

[TAPE REWINDING]

WE'RE GOING TO SUE
YOU WITH A DIFFERENT PATENT

IN OUR PATENT PORTFOLIO

AND WE'RE GONNA START
THIS ALL OVER AGAIN.

THAT SCENARIO--

I TEND TO MITIGATE RISK,

AS AN EX-BANKER,
AN EX-PILOT.

THAT-- THAT SCENARIO
I DIDN'T EVEN SEE COMING.

WHY ISN'T THE NATIONAL
MEDIA ALL OVER THIS?

WELL, NOW IT'S TIME
FOR OUR NEXT STEP

DOWN THE RABBIT HOLE.

[AUSTIN]
SO, WHEN THESE PEOPLE SETTLE,

CAN I GO ASK THEM
ALL ABOUT THE SETTLEMENT

TO FIND OUT
WHAT HAPPENED TO THEM?

YOU CAN ASK
WHAT PEOPLE SETTLED FOR,

BUT YOU GENERALLY
WON'T GET AN ANSWER.

SO IT TURNS OUT THAT, UH,

WHEN YOU SETTLE
AS OPPOSED TO COME
TO A TRIAL JUDGMENT,

UH, THE SETTLEMENTS
HAVE OTHER TERMS IN THEM,

AND ONE OF THE TERMS
IS ALWAYS NON-DISCLOSURE,

WHICH MEANS THAT, UH,

IF I PAY YOU
TO GO AWAY AS A PATENT TROLL,

I'M NOT JUST PAYING YOU,
I'M ALSO GIVING YOU MY SILENCE.

THEY ALWAYS ASK FOR THAT.

NINE OUT OF TEN TIMES,

THE FIRST THING
THAT THE PATENT TROLL
ASKS YOU TO DO

IS TO SIGN
A NON-DISCLOSURE AGREEMENT.

IN MY CASE,

THEY WOULD NOT EVEN
TELL ME

WHICH SPECIFIC CLAIMS
WE WERE INFRINGING ON

UNLESS I SIGNED
A NON-DISCLOSURE AGREEMENT.

SO WE HAVE BEEN
APPROACHED BY NUMEROUS
PATENT TROLLS IN THE PAST,

AND UNFORTUNATELY BECAUSE
I'M UNDER A NON-DISCLOSURE
AGREEMENT,

I'M NOT ALLOWED
TO REALLY TALK ABOUT
THE SPECIFICS OR WHAT HAPPENED.

THE SPECIFICS
OF THE LAWSUIT ARE--

ARE COVERED
IN A NON-DISCLOSURE AGREEMENT

AS PART
OF THE SETTLEMENT
AGREEMENT,

SO I REALLY
SHOULDN'T TALK ABOUT
ANYTHING SPECIFIC

LIKE WHO'S SUED ME,
HOW I WAS SUED,

OR, THE SPECIFICS
OF HOW I INFRINGED
UPON A PATENT

THAT I REALLY CAN'T
EVEN TALK ABOUT.

IT WAS-- I JUST DON'T
WANT TO TALK ABOUT
CURRENT THINGS.

BUT I CAN TALK
ABOUT WHAT GENERALLY
I'VE BEEN ACCUSED ABOUT.

YEAH, I-- I--
CAN MENTION THAT I AM
IN ONGOING CASES,

BUT WE'RE NOT GONNA
MENTION NAMES

OR WE'RE NOT GONNA
MENTION-- YEAH.

[AUSTIN]
WHAT LAW FIRM WAS IT
THAT SUED YOU?

UH, I REALLY CAN'T SAY.

[AUSTIN]
WHAT WAS THE NAME
OF THIS COMPANY?

I AM NOT GOING
TO TALK ABOUT THAT.

[AUSTIN]
WHO WERE THE LAWYERS
THAT WERE DOING THIS?

I CAN'T DISCLOSE THAT.

UH, WHAT-- WHAT TRULY
MAKES ME SAD, UH,

IS TO THINK
ABOUT THE PEOPLE
WHO ARE SILENCED.

SILENCE IS A PART
OF THE AGREEMENT.

[AUSTIN]
DID THIS TROLL EVER OFFER
TO SETTLE WITH YOU?

UM, WE DID END UP
SETTLING THIS CASE.

[AUSTIN]
FOR HOW MUCH.

WE HAVE NOT DISCLOSED THAT.

[AUSTIN]
ARE YOU ALLOWED
TO DISCLOSE IT?

-NO.
-[AUSTIN] WHY NOT?

I DON'T WANT
TO GET INTO THAT.

CAN WE TURN THIS
OFF FOR A SECOND?

[AUSTIN]
TURN IT OFF.

[AUSTIN] TELL ME
ABOUT THE SUCCESS
THAT YOU'VE ENJOYED

FROM THE PRODUCTS
YOU'VE BROUGHT TO MARKET.

I'M NOT ABLE
TO DISCUSS THAT.

[AUSTIN]
WHY?

UM...

BECAUSE SOMETIMES...

[SIGH]

HOLD IT A SEC.

[AUSTIN]
ON, OKAY...

-[AUSTIN] CAN YOU TELL ME--
-THEY-- THEY CAN ACTUALLY,
ANYWAY--

[AUSTIN]
CAN YOU TELL ME...

IF ANYONE ELSE HAS
TAKEN CREDIT FOR YOUR WORK?

IT'S PROBABLY BETTER
THAT I NOT DISCUSS THAT.

THEY'RE NOT EVEN
ALLOWED TO TELL ANYONE

WHAT HAPPENED TO THEM.

AND AS A RESULT,
THE PROBLEM CAN NEVER
BE MADE PUBLIC

AND SOLVED.

WHAT COURT WOULD EVEN
ALLOW THIS?

IT'S MOSTLY IN TEXAS,
UNFORTUNATELY.

THERE'S ONE PARTICULAR
DISTRICT,

THE EASTERN DISTRICT
OF TEXAS,

THAT IS PERCEIVED
AS BEING VERY FAVORABLE

TO PATENT OWNERS,

AND, UH, OVER A THOUSAND
PATENT TROLL LAWSUITS

ARE FILED THERE EVERY YEAR.

[AUSTIN]
WHY DO THEY PICK TEXAS?

IT'S A NUMBER OF REASONS.

THE PATENT TROLLS
PICK TEXAS BECAUSE THEY BELIEVE

THAT THE JURIES THERE
ARE FRIENDLY TO PATENT OWNERS.

THEY PICK TEXAS BECAUSE

THEY BELIEVE
THAT THE LOCAL RULES
OF PRACTICE

ARE FAVORABLE
TO PATENT OWNERS

AND MAKE DEFENDING
A CASE VERY EXPENSIVE.

AND THEY PICK TEXAS
JUST BECAUSE IT'S FAR AWAY

FROM A LOT OF THE PEOPLE
GETTING SUED

AND THAT ALONE CREATES
FINANCIAL PRESSURE,

BECAUSE THAT'S A DISTANT
AND INCONVENIENT FORUM.

[AUSTIN]
SO THE PLACE IN TEXAS,

IS IT LIKE SOMEPLACE
RIGHT INSIDE OF DALLAS

WHERE YOU COME INTO DFW
AND GET RIGHT TO WORK
DEFENDING OURSELVES?

THE EASTERN DISTRICT
OF TEXAS

IS TO THE EAST OF DALLAS

AND THE COURTHOUSES
WHERE MOST OF THE PATENT
LITIGATION

ARE TAKING PLACE

ARE IN MARSHALL AND TYLER
WHICH ARE SMALLER CITIES

UH, GETTING CLOSER
TO THE LOUISIANA BORDER.

[AUSTIN]
SO TELL ME ABOUT
THE COMPUTER INDUSTRY

THAT HAPPENS IN TYLER, TEXAS
AND MARSHALL, TEXAS

THAT MADE THEM
SUCH A GOOD VENUE
FOR THESE LAWSUITS

WHERE WE KNOW WE CAN
GET KNOWLEDGEABLE JURIES.

THE TYLER AND MARSHALL,
TEXAS ARE NOT, UH, CENTERS

OF THE UNITED STATES
TECHNOLOGY DEVELOPMENT.

THEY'RE--
THEY'RE MORE KNOWN
FOR THE LITIGATION ITSELF

AND, UH, THEY'VE
ACTUALLY CREATED A LARGE
INDUSTRY OF LITIGATION SUPPORT

AND A LOT OF WORK
FOR THE LAWYERS THERE.

BUT, UH, I DON'T
KNOW IF ANY LARGE
TECHNOLOGY COMPANIES

THAT ARE ACTUALLY
CREATING PRODUCTS
OUT OF THESE CITIES.

MOST OF THE TIME,
PARTICULARLY WHEN

YOU'RE DEALING
WITH THESE PATENT TROLLS,

YOU'RE NOT DEALING
WITH A REAL BUSINESS.

YOU'RE DEALING
WITH SOMETHING

THAT IS A POST OFFICE BOX

SOMEWHERE
IN TYLER, TEXAS.

WE ACTUALLY
GOT SUED AGAIN,

THIS TIME FROM
A NON-PRACTICING ENTITY

OUT OF EAST TEXAS,
WHERE THEY ALL COME FROM.

THE MOST SHOCKING THING
WAS-- WAS FINDING OUT

THAT THERE'S A--
THE EAST DISTRICT

UH, EAST TEXAS,

UH, DISTRICT COURT

WHERE A LOT OF PATENT
CASES ARE FILED.

NO BUSINESSES ARE
LOCATED IN EAST TEXAS,

EXCEPT PATENT TROLLS.
RIGHT?

WHY? BECAUSE
THAT JURISDICTION
IS MOST SYMPATHETIC

UM, FOR PATENT TROLLS

AND IS VERY EXPENSIVE
FOR BUSINESSES

TO GO AND, UH,
LITIGATE THERE.

THE-- IT'S
A COTTAGE INDUSTRY
FOR THE ENTIRE CITY,

SO, ALL THE JURORS
ARE CORRUPT.

YOU KNOW, ALL THE--
ALL THE PEOPLE WHO WORK

FOR THE COURTS
ARE CORRUPTED
BY THIS-- THIS--

THIS PATENT TROLL
INDUSTRY.

[AUSTIN]
COULD THIS EVEN BE TRUE?

I QUICKLY FOUND
A WEBSITE THAT LAID
ALL THE FIGURES OUT,

AND THE STATISTICS
WERE STAGGERING.

44% OF ALL THE PATENT
INFRINGEMENT LAWSUITS

IN THE ENTIRE COUNTRY

ARE BEING FILED
IN ONE TINY,

ISOLATED DISTRICT
OF TEXAS.

AND 95% OF THOSE CASES

ARE FILED
BY NON-PRACTICING ENTITIES.

COMPANIES
THAT INVENT NOTHING.

THEY JUST FILE
PATENT LAWSUITS.

NOW I WAS
ON TO SOMETHING,

I SIGNED UP
FOR AN INSIDER ANALYTIC SITE

CALLED LEX MACHINA

AND DID A SEARCH
OF ALL THE PATENT LAWSUITS

BEING FILED IN THE U.S.,

AND I STARTED TO SEE
SOMETHING VERY PECULIAR.

THE SAME NAME
KEPT APPEARING

ON A HUGE PERCENTAGE
OF THESE LAWSUITS:

WILLIAM ELSWORTH
DAVIS III.

HIS NAME IS LISTED
AS A LAWYER

IN 419 PATENT
INFRINGEMENT LAWSUITS.

ANOTHER NAME KEPT COMING UP:

THOMAS JOHN WARD, JUNIOR.

HIS NAME IS LISTED
AS A LAWYER

IN 725
PATENT INFRINGEMENT
LAWSUITS.

SO, WELL OVER
A THOUSAND CASES

WERE HANDLED
BY TWO VERY BUSY LAWYERS,

ALL IN THE EASTERN
DISTRICT OF TEXAS.

IT JUST DOESN'T
SEEM POSSIBLE SOMEHOW.

THEN, I STARTED
LOOKING TO SEE

WHAT JUDGES
WERE HANDLING THESE CASES.

AND THAT'S
WHEN I SAW IT:

JUDGE LEONARD DAVIS,

AND JUDGE JOHN WARD?

BEAU DAVIS IS
JUDGE LEONARD DAVIS' SON,

JOHNNY WARD IS
JUDGE JOHN WARD'S SON.

THE LAWYERS ARE
THE SONS OF THE JUDGES.

SO, IF JUDGE LEONARD DAVIS
AND JOHN WARD

CAN ENCOURAGE
MORE PATENT TROLLS

TO FILE MORE
LAWSUITS IN THE EASTERN
DISTRICT OF TEXAS,

THEN THEIR SONS ARE
THE ONES WHO WILL RACK
UP THE BILLABLE HOURS,

OR PERHAPS,
A PERCENTAGE OF THE TAKE.
[CHUCKLE]

NOW,
BOTH JUDGE LEONARD DAVIS
AND JOHN WARD

HAVE JUST RECENTLY
RETIRED,

AND THEY'VE GONE
TO WORK FOR THE VERY
LAW FIRMS

THAT REPRESENT
THE PATENT TROLLS
AND THEIR VICTIMS.

NOW THAT THE EASTERN
DISTRICT OF TEXAS

HAS BEEN ESTABLISHED
AS A PATENT TROLLING HAVEN,

THE JUDGES ARE WORKING
AT THE LAW FIRMS

THAT HANDLE THE CASES.

THE ODDS OF GETTING
A CASE DISMISSED

UH, EARLY,
ON A RULE 11 MOTION

OR ON SUMMARY JUDGMENT,

ALMOST IMPOSSIBLE,
TO THE POINT WHERE

I THINK MANY DEFENDANTS
WERE COUNSELED

BY THEIR OTHER OUTSIDE
COUNSEL TO NOT EVEN BOTHER
FILING THOSE.

YOU KNOW,
SUMMARY JUDGMENT MOTIONS
BECAUSE--

AND THE OUTSIDE COUNSEL
AGAIN WOULD--

WOULD SAY THINGS LIKE,
"YOU DON'T WANNA PISS
OFF THE JUDGE.

[LAUGHING] BECAUSE HE'S
GONNA GET UPSET WITH YOU
FOR FILING THIS."

YOU KNOW,
WHY THEY DO IT,
ONLY THEY KNOW.

IT'S BETWEEN THEM
AND IT'S BETWEEN GOD, RIGHT?

BUT, THERE ARE JUDGES
IN EAST TEXAS THAT, UM,

YOU KNOW, HAVE--

THEY-- THEY USE
DISCRETION IN CERTAIN
CIRCUMSTANCES

THAT WE'VE BECOME AWARE OF.

FOR EXAMPLE,
WHERE SOMEONE FILES
A VENUE TRANSFER MOTION.

IF THE JUDGE
DENIES THE VENUE
TRANSFER MOTION,

THERE'S A PRETTY
DARN GOOD CASE
THAT ON APPEAL,

UM, THAT-- THAT JUDGE
WILL BE OVERTURNED

BY THE FIFTH CIRCUIT
OR THE FEDERAL CIRCUIT.

AND SO THE WAY
THAT THE JUDGE GETS
AROUND, UM,

BEING OVERTURNED IS--
HE JUST DOESN'T RULE ON IT.

HE JUST WILL NOT
RULE ON THE VENUE
TRANSFER MOTION

UNTIL RIGHT BEFORE TRIAL.

AND JUDGES CAN TAKE--

THERE ARE SOME JUDGES,
LIKE--

LIKE EAST--
IN EAST TEXAS,

THEY CONTINUE TO
REFUSE TO FEE SHIFT.

THEY ESSENTIALLY
ARE, YOU KNOW,

A POST-- IN THE
POST-OCTANE WORLD,

HALF OF ALL
FEE SHIFTING CASES
HAVE BEEN GRANTED.

FEE SHIFTS HAVE
BEEN GRANTED.

IN EAST TEXAS,
SINCE OCTANE WAS--
WAS, AH,

WAS ISSUED
BY THE SUPREME COURT,

THERE HAVE BEEN ZERO
FEE SHIFTS,

UNTIL FINALLY
IT JUST GOT SO DAMNED
EGREGIOUS, RIGHT?

IT FINALLY GOT SO EGREGIOUS

THAT PEOPLE STARTED
FILING WHAT ARE CALLED
WRITS OF MANDAMUS

UP TO THE FIFTH CIRCUIT
AND UP TO THE
FEDERAL CIRCUIT.

BUT THERE ARE COMPANIES,
RIGHT, THAT AT THE END
OF THE DAY,

EITHER BECAUSE THEY'VE
BEEN VICTIMIZED
SO MANY TIMES

OR BECAUSE THE COMPANIES
HAVE PRINCIPLES,

THEY REALIZE
SOMEBODY'S GOTTA DO IT.

SOMEONE'S GOTTA DO IT,
AND IF WE DON'T DO IT,

IF PEOPLE DON'T COMPLAIN
AND START BUILDING
UP A RECORD,

OF ABUSE--
OF JUST WRONG-DOING,

OR ABUSE.
YEAH, IT'S NOT WRONG.
IT'S TECHNICALLY NOT WRONG,

BUT CERTAINLY ABUSE--

THIS'LL JUST
CONTINUE FOREVER.

[AUSTIN]
SO THE JUDGES NEVER TOSS OUT

PATENT TROLLING LAWSUITS,

NO MATTER HOW
RIDICULOUS THE CLAIMS.

THE JUDGES NEVER
GRANT YOUR MOTION
FOR A CHANGE OF VENUE,

NO MATTER WHAT STATE
YOU LIVE IN.

THE JUDGES NEVER
MAKE THE PATENT TROLLS
PAY YOUR LEGAL FEES,

NO MATTER HOW ASININE
THE LAWSUIT.

THE LAWYER ADVISES
YOU TO NOT EVEN ASK
FOR THESE THINGS

BECAUSE IT MIGHT
ANGER THE JUDGE.

AND THIS IS A VENUE
WHERE I'M BEING SUED?

SHAKESPEARE SAID,
"THERE'S SOMETHING ROTTEN
IN DENMARK,"

I SAY,
WHAT THE HECK IS
GOING ON IN TEXAS?

[MUSIC PLAYING]

[AUSTIN]
ARMED WITH THE FIRST

55 PATENT INFRINGEMENT
LAWSUITS I COULD FIND

IN MARSHALL, TYLER,
AND LONGVIEW,

ALL IN THE EASTERN
DISTRICT OF TEXAS,

OFF I WENT TO THE ADDRESS

OF EVERY COMPANY
ON THAT LIST.

FIRST STOP,
MARSHALL, TEXAS.

OF COURSE,
I IMAGINED MARSHALL TO BE

A THRIVING
BUSINESS COMMUNITY.

I MEAN,
WITH ALL THESE BIG
TECH COMPANIES,

LAWYERS, AND COURTS,

THEIR AIRPORT WAS SURE
TO BE BUSY

AND BUSTLING WITH LOTS
OF AIR TRAFFIC,

RIGHT?

[WESTERN MOVIE MUSIC PLAYS]

[UPBEAT MUSIC PLAYS]

HERE'S THE WI-LAN OFFICE,

UH, AS FAR AS
I CAN TELL.

SO WE CAN COME
AND SEE-- WHY DON'T WE
BRING THE CAMERA AROUND,

AND SEE WHAT'S--
SEE WHAT'S, UH,

GOING ON
IN THIS OFFICE HERE.

THIS IS, UH,
JUST A FEW DAYS AFTER

THEY RECEIVED
$33 MILLION FOR PATENTS,

AND, UH, THIS IS
IN THE MIDDLE OF THE DAY
ON A THURSDAY.

LET'S KEEP GOING.

HERE WE HAVE PERDIEMCO,

UH, PERDIEMCO FILED
A PATENT INFRINGEMENT
LAWSUIT.

[KNOCKS]

HELLO?

HELLO?

WE'LL KEEP WALKING.
[SIGH] IF THEY COME OUT,

WE'LL...
GO TALK TO THEM.

THIS IS THE OFFICE,

UH, LISTED FOR A COMPANY
CALLED LODSYS,

UH, AND IF ANYBODY
WANTS TO TRAVEL
TO MARSHALL, TEXAS

AND SEE IT
FOR THEMSELVES,

WE'RE AT
505 EAST TRAVIS STREET.

LODSYS IS WELL KNOWN
AS BEING ONE OF THE BIGGEST

PATENT DESERTION
ENTITIES IN THE WORLD,

UH, THEY SUE
A LOT PEOPLE FOR
PATENT INFRINGEMENT.

THIS IS THEIR ADDRESS.

[KNOCKS]

HELLO?

AND THEY CLAIM TO BE
FROM, UM, MARSHALL, TEXAS,

WHERE WE ARE NOW.

LET'S KEEP WALKING.

HERE, WE HAVE, UH,

A COMPANY CALLED
PACKET INTELLIGENCE,

THEY HAVE FILED, UH,
TWO LAWSUITS

FOR PATENT INFRINGEMENT.

[KNOCKS]

HELLO?

WE'VE BEEN WALKING
UP AND DOWN THESE HALLS
FOR ABOUT 25 MINUTES NOW

LOOKING FOR, UH,
FOR ANYONE.

AND, UH,
NO ONE'S BEEN HERE.

BUT A LARGE NUMBER
OF PATENT INFRINGEMENT
LAWSUITS

COME OUT
OF THIS HALLWAY.

WELL, I GUESS WE'LL GO
TO THE NEXT ADDRESS.

[KNOCKS]

IT'S BEEN EMPTY FOR--

WE LOOKED AT THAT SPACE,
'CAUSE WHEN WE MOVED
IN HERE,

- [AUSTIN] MM-HMM.
- IT'S BEEN EMPTY.

NO ONE'S
IN THEIR OFFICE TODAY.

NO ONE'S
IN THERE TODAY?

-NOPE.
-OH.

HM, MAYBE KNOCK
ON THE DOOR?

NO ONE'S DOWN THERE.

[HORROR MOVIE MUSIC]

[KNOCKS]

[KNOCKS]

THIS IS THE ADDRESS, UH,

USED FOR A LAWSUIT
FOR PATENT INFRINGEMENT

THAT FOLLYCODE FILED.

[KNOCKS]

HOW ABOUT
LAKE CHEROKEE HARD DRIVE,
CAN WE SEE THEM?

UH, NO, THIS IS JUST
THE ACCOUNTING FIRM,
WE DO THE--

OH I SEE--
WHAT ABOUT BLUE BONNET
TELECOMMUNICATIONS?

-SAME THING.
-WHAT ABOUT STAR CODE
L.E.D. TECHNOLOGIES?

THEY'RE ALL THE SAME.

OH, THEY'RE NOT
ACTUALLY HERE.

THE ONLY ENTITY HERE
IS A&G LLP.

ARE THESE COMPANIES
HERE?

UM, I SERVE AS
A REGISTERED AGENT FOR THEM.

I SEE.

THEY ARE LOCATED
IN EAST TEXAS.

CAN YOU SAY WHERE?

UH...

[HORROR MUSIC PLAYS]

[AUSTIN]
WHEN I WENT UP TO SUITE 1504,

I SAW A COMPANY CALLED
COLLINS INVESTIGATIONS.

YOU SEE,
THESE COMPANIES ARE
FILLING LAWSUITS

THAT COST $3 MILLION
TO DEFEND AGAINST,

AND THEY'RE ALL BASED
RIGHT HERE IN YOUR OFFICE

THAT'S ABOUT 15 FEET WIDE.

WHAT'S GOING ON?

AND HE SAID,
"WELL, PATENTS ARE PROPERTY

JUST LIKE ANYTHING ELSE

AND I HAVE NO FURTHER
COMMENT."

AND THAT'S WHEN THEY,
UH, SHOWED ME THE DOOR,

UH, AND CLOSED THE DOOR
IN MY FACE, AND THIS IS
THE NEXT THING I SAW.

"BAXTER BUILDING,
LAW OFFICES,"
ON THE DOOR.

THE ADDRESS
FOR MANYN MANY COMPANIES

THAT FILE PATENT
INFRINGEMENT LAWSUITS.

THE BAXTER BUILDING
LAW OFFICES,

104 EAST HOUSTON STREET.

MCKOOL SMITH,
SOUNDS LIKE A LAW FIRM.

MCKOOL SMITH.

EMPTY,
NOTHING THERE.

LEGGAT HAGAN,
WHATEVER THAT IS.

EAST TEXAS BOOT COMPANY,

GOTTA SEE WHO THEY ARE.

[COUNTRY MUSIC PLAYS]

[BIRDS CAWING]

SO, [SIGHS]
WE'RE HERE AT 211 WEST TYLER,

-[KNOCKS]
-ON-- IT'S A--

AN ADDRESS
THAT A LOT OF LAWSUITS
COME FROM.

THERE DOESN'T SEEM
TO BE ANYBODY HERE.

SO, UH, THIS COMPANY'S
BEEN SUING,

UH, INTEL, DELL, HP.

YET, AS FAR
AS WHAT THEY PRODUCE,

WELL, THEIR OFFICE IS
KIND OF THIS--

KIND OF RUN-DOWN PLACE
WITH BLACKOUT SHADES

AND CURTAIN BEHIND IT.

WHEN I LOOK UP ALOFT MEDIA,

"ALOFT MEDIA SUES 10 COS.
OVER WEATHER PATENT."

"ALOFT MEDIA SUES S.A.P.
OVER MESSAGING PATENT."

"ALOFT MEDIA LLC
VERSUS YAHOO."

"ADOBE, MICROSOFT,

ACCUSED OF INFRINGING
ON BROWSER-RELATED PATENTS."

IF YOU'RE WONDERING
WHERE THESE PATENT
INFRINGEMENT LAWSUITS

ARE COMING FROM,
IF IT'S FROM ALOFT,
OR STRAGENT, OR AZURE,

THIS IS IT.

SO, UH--
I GUESS THIS IS, UH,

I GUESS THIS IS, UH,

INNOVATION,

AMERICAN INNOVATION,
YEAH.

[AUSTIN]
55 ADDRESSES,

EACH ONE
A SO-CALLED BUSINESS

THAT WAS SPEWING OUT
NOTHING BUT PATENT
INFRINGEMENT LAWSUITS.

ALMOST EVERY OFFICE
WAS DESERTED

OR REGISTERED AGENT,

OR IN ONE CASE,
A MAILBOX AT A UPS STORE.

BUT THE BUSINESSES
CLAIMED IN THE LAWSUITS

DID NOT EVEN EXIST.

AND THE LAWSUITS
JUST KEEP ON COMING.

THE PEOPLE BEHIND
THE CURTAIN

DO NOT WANT
TO BE DISCOVERED.

YOU KNOW
WHO THEY ARE?

NO.

BUT THERE HAS TO BE
[SIGH]

SOME WAY WE CAN FIND
SOMEONE ON THE INSIDE.

SOMEONE THAT'S A REAL...

PATENT TROLL.

THERE WAS
THE FAMOUS CASE
OF THE SCANNER TROLL,

WHO SENT THOUSANDS
OF LETTERS

TO SMALL BUSINESSES
DEMANDING PAYMENT

FOR COMPANIES
THAT USED SCAN TO EMAIL.

[AUSTIN] NO, NO,
WE ALL READY KNOW WHO
THAT GUY IS.

THAT'S STEVEN HILL.
NEXT.

THERE WAS
A PATENT TROLL THAT SENT

THOUSANDS OF LETTERS
TO CAFES AND HOTELS,

AND A BAKERY,
AND A FUNERAL PARLOR,

DEMANDING PAYMENT
JUST FOR PROVIDING WI-FI.

[AUSTIN]
AH. I DON'T KNOW
ABOUT THAT ONE.

LET'S SEE,
PATENT TROLL SAYS

ANYONE USING WI-FI
INFRINGES ON HIS PATENT.

HE WON'T SUE INDIVIDUALS
AT THIS STAGE. [SCOFFS]

THE GUY BEHIND THIS?

A LAWYER,

NAMED RAYMOND NIRO.

A REAL LIFE
PATENT TROLL IN CHICAGO.

I GOTTA SEE
THIS FOR MYSELF.

[AIRPLANE JETS ROARING]

I AM THE PERSON

THAT WAS INVOLVED

IN THE WHOLE BUSINESS
OF WHAT A PATENT TROLL IS.

PATENTS ARE PROPERTY.

THEY'RE ISSUED
BY THE GOVERNMENT,

AFTER AN EXAMINATION.

AND THEN A COURT LOOKS
AT THEM AND SAYS

THEY'RE GOOD OR BAD.

IF I HAVE A PATENT
FOR WI-FI,

THAT'S SPECIFIC,

AND IS USEFUL AND NOVEL,

THEN YEAH,
IT'S MY PROPERTY.

AND IF YOU INFRINGE IT,

YOU HAVE TO PAY ME
A LICENSE FEE.

BUT I WOULD WANNA LOOK
MORE CAREFULLY

AT WHAT SOMEBODY'S
TELLING YOU,

THAT THEY WERE ABUSED
BY SOMEBODY THAT SENT
THEM A LETTER

AND THEY WENT OUT
OF BUSINESS BECAUSE OF IT,

BECAUSE I'M NOT BUYING THAT.

YOU COME TO ME AND SAY,
"MISTER NIRO,

THERE ARE A BUNCH OF PEOPLE
THAT ARE USING MY IDEA.

CAN YOU HELP ME?"

I SAY, "SURE,
I'LL TRY TO HELP YOU

LICENSE YOUR PATENT."
I GO TALK TO THEM.

I SAY,
"LISTEN, YOU'RE USING
THIS GUY'S INVENTION.

YOU GOTTA PAY
THEM A ROYALTY."

"NO, I'M NOT GONNA PAY HIM."

WHAT DO WE DO?

I GO TO YOU AND I SAY,

"WHAT DO YOU WANT TO DO?"

YOU SAY, YOU KNOW,
"I WANNA STOP THEM.

I WANT THEM TO PAY ME.

THEY'RE STEALING
MY PROPERTY.

THEY CAME TO MY HOUSE
AND TOOK MY GOODS.

THEY WENT ON MY FARM
AND TOOK MY ANIMALS.

THEY INFRINGED MY PATENT.

THEY TOOK MY PROPERTY."

I SAY,
"OKAY, I'LL HELP YOU."

IF IT'S MERITORIOUS,
I'LL HELP YOU.

IS THERE SOMETHING
WRONG WITH THAT?

IS THAT UN-AMERICAN?

IS THAT WRONG?
I DON'T GET IT.

YOU KNOW,
I TELL JURIES
IN CLOSING ARGUMENT,

I SAY,
A PATENT IS SORTA LIKE
HAVING A PROPERTY,

AND YOU BUILD
A FLOWER PATCH.

MY WIFE LOVES FLOWERS.
I BUILD A FLOWER PATCH
IN MY FRONT YARD.

BEAUTIFUL FLOWERS.

MAYBE EVEN
I COMMERCIALIZE IT,

BUT I DON'T HAVE
TO COMMERCIALIZE IT,

I DON'T HAVE
TO HAVE A NURSERY,
AND SELL THEM.

AND BEAUTIFUL--
IT'S MY PROPERTY,

I PAID FOR IT.
I GROW THE FLOWERS.

AND SOME GUY COMES ALONG

AND WALKS RIGHT THROUGH IT.

CRUSHES THE FLOWERS.

PUTS A PATH RIGHT
DOWN THE MIDDLE.

WHAT AM I SUPPOSED TO SAY?

"OH, THAT'S GREAT?
IT'S OKAY.

YOU CAN TRESPASS
ON MY PROPERTY?"

NO, YOU SAY,
"I DON'T WANT YOU
TO DO THAT."

THAT'S A PATENT LAWSUIT.
THAT'S PATENT INFRINGEMENT.

YOU HAVE TRESPASSED
ON MY PROPERTY,

AND ALL I'M ASKING YOU,
TO DO TWO THINGS.

STOP DOING IT,

AND PAY ME
FOR THE COMPENSATION,

FOR REPLANTING
THE FLOWERS THAT YOU
JUST DESTROYED.

IS THAT BAD?
IS THAT EVIL?

IS THAT WRONG?
I DON'T THINK SO.

I'D LIKE TO HAVE
SOMEBODY SHOW ME
THE STATISTICS

ON HOW OFTEN
THIS DOOMSDAY SCENARIO

THAT YOU GUYS SEEM TO BE
PORTRAYING REALLY HAPPENS.

HOW FREQUENTLY IS A COMPANY
RUN OUT OF BUSINESS

'CAUSE OF A PATENT
INFRINGEMENT LAWSUIT?

YOU KNOW WHAT,
I'LL BET YOU CAN'T FIND

A HUNDRED CASES LIKE THAT.

AND IF YOU CAN FIND
A HUNDRED CASES LIKE THAT,

THEN LET CONGRESS
TAKE CARE OF IT.

BUT 1,000? 2,000?
NEVER HAPPENS.

SHOW ME THE STATISTICS

THAT THIS TYPE OF ABUSE
OF PROCESS,

HAS DRIVEN A THOUSAND
COMPANIES OUT OF BUSINESS.

SHOW ME THAT.
IF YOU CAN SHOW ME THAT,

GET THE THOUSAND PEOPLE,
LINE 'EM UP,

AND HAVE THEM SIGN
AN AFFIDAVIT.

"I WAS DRIVEN
OUT OF BUSINESS 'CAUSE
OF A PATENT INFRINGEMENT SUIT

THAT COST ME $3 MILLION."

YOU KNOW WHAT?
I DON'T THINK YOU CAN
GET A THOUSAND.

I DON'T THINK YOU
CAN GET 500.

I DON'T EVEN THINK
YOU CAN GET 100.

BUT I CHALLENGE YOU
TO DO IT.

[AUSTIN]
YOU CAN'T DO IT BECAUSE
PEOPLE THAT ARE SUED

ARE LOCKED UP IN THEIR
NON-DISCLOSURE AGREEMENTS.

THEY'RE NOT ALLOWED
TO TALK ABOUT WHAT
HAPPENED TO THEM.

THAT'S WHY YOU CAN'T
GET A THOUSAND PEOPLE.

NONSENSE.
THEY CAN TALK ABOUT IT.

[AUSTIN]
... BECAUSE THEY ARE FORCED
TO SETTLE

BECAUSE THE ALTERNATIVE
WAS TO--

WHO? WHO WAS FORCED
TO SETTLE? WHO?

[AUSTIN]
THE PEOPLE THAT SIGNED
THE NON-DISCLOSURE AGREEMENT.

WHO ARE THE PEOPLE?
WHO ARE THE PEOPLE?

IDENTIFY THE PEOPLE.

GIVE ME THE LIST.
GIVE ME THEIR NAMES.

GIVE ME THEIR ADDRESSES.
GIVE ME THE LAWSUIT.

YOU KNOW WHAT?
YOU CAN'T DO IT.

YOU KNOW WHY
YOU CAN'T DO IT?

YOU BOUGHT
INTO THE PROPAGANDA.

YOU KNOW WHAT?
YOU CAN'T DO IT.

YOU KNOW WHY
YOU CAN'T DO IT?

YOU BOUGHT
INTO THE PROPAGANDA.

IF MCKOOL SMITH AND OTHER
FIRMS OF SIGNIFICANCE

STOPPED TAKING PATENT CASES,

WHERE ARE THE PEOPLE
THAT HAVE MERITORIOUS
INVENTIONS,

WHERE-- WHERE ARE
THEY GONNA GO?

[AUSTIN]
WHOA! STOP, STOP, STOP.

[CHUCKLE] TIME OUT.
MCKOOL SMITH,
MCKOOL SMITH--

I KNOW THAT NAME.

WHERE HAVE I HEARD
THAT NAME?

THAT'S RIGHT.

THERE WERE MCKOOL SMITH
SIGNS ALL OVER

THAT PATENT TROLL HIVE
IN TEXAS

THAT SPAT OUT
ALL THOSE LAWSUITS

FROM THOSE ABANDONED
OFFICE BUILDINGS.

OF COURSE RAYMOND NIRO
KNOWS WHO MCKOOL SMITH IS.

THE DEEPER I DUG,
THE MORE I REALIZED

THAT THIS NETWORK OF GREED
WAS INTERCONNECTED.

AND THERE'S SOMETHING
INTERESTING ABOUT THIS
ADDRESS TOO, BY THE WAY.

MCKOOL SMITH'S OWN OFFICE,

WHICH WE HAVE NOW
CONFIRMED IS ACTUALLY JUST
A PATENT TROLL HIVE,

IS ACROSS THE STREET
FROM THE COURTHOUSE

WHERE THE PATENT TROLL
CASES ARE TRIED.

WHERE WE FIND JELLYFISH
TECHNOLOGY OF TEXAS,

IN MOTION LLC,
ARKSAR LLC,

MARSHALL FEATURE
RECOGNITION LLC,

HOPEWELL CULTURE,
$ DESIGN,

WEILAND TECHNOLOGIES,
SPECIALIZED MONITORING
SOLUTIONS LLC,

THEY'RE ALL
AT 104 EAST HOUSTON STREET.

ON ALL THESE COMPANIES,

THEY'VE ALL FILED
PATENT INFRINGEMENT LAWSUITS,

AND THEY'RE ALL
AT THE EXACT SAME ADDRESS.

WHAT IS THAT ADDRESS?

WELL, HERE WE ARE
AT THE COURTHOUSE,

LOOK ACROSS THE STREET,

AND WE SEE
104 EAST HOUSTON STREET

IF THE JUDGES AND JURIES
HEARING THESE PATENT
INFRINGEMENT LAWSUITS

WANTED TO FIND OUT
WHAT "BUSINESS" WERE FILING
THESE LAWSUITS,

THEY WOULD HAVE
TO WALK ABOUT 50 YARDS.

THE JURIES WOULD HAVE
TO WALK ABOUT 50 YARDS

TO SEE THAT THE LAWSUITS
THAT THEY'RE HEARING

ARE COMING
FROM ABANDONED OFFICES
ACROSS THE STREET.

AND THE LAWYERS AND JUDGES
IN EAST TEXAS

ARE DRAGGING
THESE LAWSUITS OUT FOR YEARS.

SO KEVIN SAID
THESE PEOPLE ARE ALL CORRUPT.

THAT IS A HECK
OF A CHARGE.

BUT, WE'VE SEEN
THESE TRIALS BEING HELD
ACROSS THE STREET

FROM THE PATENT TROLL HIVES

THAT SPEW OUT
THE LAWSUITS.

WHERE THE JURIES WOULD
HAVE TO WALK ABOUT 50 YARDS

TO SEE THAT THE BUSINESSES
FILING THE LAWSUITS
DON'T EVEN EXIST.

WE'VE SEEN THE JUDGES
THAT NEVER TOSS OUT
THESE LAWSUITS,

NO MATTER HOW ASININE
THEY ARE,

WHILE THEIR SONS
ARE RACKING UP
THE BILLABLE HOURS

REPRESENTING THE TROLLS
AND THEIR VICTIMS.

WE'VE SEEN MANUFACTURED
VICTIMS,

CLEARLY EMPTY COMPANIES
THAT COULD NOT BE HURT
IN ANY WAY,

BY THE REST OF US
WORKING FOR A LIVING.
[SCOFFS]

BUT IS IT ALWAYS
THIS WAY?

COULD IT EVER BE
THAT A LAWYER MIGHT ACTUALLY
FIND SOMEONE

THAT BELIEVES
HE'S THE FIRST PERSON

TO THINK OF SOME
OBVIOUS IDEA?

WELL, YOU REMEMBER
OUR FRIEND, MIKE SKELPS?

HE MAKES A LIVING BY GOING
TO MARATHON RACES

AND PHOTOGRAPHING
ALL THE MARATHON RUNNERS.

WHEN HE'S DONE
PHOTOGRAPHING THE RACE,

HE UPLOADS EACH RUNNER'S
PICTURE TO HIS WEBSITE,

SO YOU CAN
LOOK UP THE PICTURES
BY THE BIB NUMBER.

YOU KNOW,
THE NUMBER ON
THE MARATHON RUNNER.

NEEDLESS TO SAY, MIKE WAS
SUED FOR PATENT INFRINGEMENT,

AND THE GUY THAT SUED HIM,

CLAIMED TO OWN THE IDEA
OF LOOKING UP

A MARATHON RUNNER'S PICTURE

BY THE NUMBER ON HIS CHEST.

WHO WOULD TAKE OUT
SUCH A RIDICULOUS PATENT?

MEET PETER WOLF.

THE ESSENCE OF THE PATENT

WAS TO ALLOW PEOPLE
TO SEARCH FOR THEIR PICTURES,

EVENT PICTURES,

OF-- OF MARATHON RUNNERS,

OR-- OR TRIATHLETES.

UH, TO ALLOW THEM
TO SEARCH BY BIB NUMBERS

USING A COMPUTER SYSTEM.

MARATHON PHOTOS
STARTED THEIR BUSINESS
IN THE MID '70s,

SO THAT HAD BEEN AROUND
FOR A LONG TIME.

UH, WHAT I CAME UP
WITH IN 1999

INVOLVED DOING IT
ON THE INTERNET.

IT'S A METHOD
OF DOING BUSINESS.

[AUSTIN]
AND WHAT IS THE METHOD?

THE METHOD IS
TO ALLOW PEOPLE TO ORDER
THE PICTURES ONLINE,

AS OPPOSED
TO THE OTHER METHOD

OF GOING
THROUGH THE POSTAL OFFICE

AND SENDING LETTERS
BACK AND FORTH.

THE DIFFERENCE IS--

I'M NOT SURE IF I CAN
EVEN EXPLAIN IT.

IT'S-- [SIGH]
MORE...

FOR ATTORNEYS
TO HOVER OVER AND
RECOGNIZE THE DIFFERENCE.

YOU KNOW, I'M FAIRLY
LAY AT THIS, BUT UH...

SO IN 2006,
WHEN THE PATENT ISSUED,

I THOUGHT I WAS HOME FREE.

I ENDED UP CONTACTING
SOME ATTORNEYS

AND ASKED THEM
WHAT WE COULD DO.

UH, THEY SAID, "WELL,

WE CAN SUE THEM."

WHEN WE FILED A CLAIM
AGAINST MISTER SKELPS,

IT FORCED HIM
TO HIRE ATTORNEYS HERE
IN CALIFORNIA,

AND I USED MY EXISTING
CALIFORNIA ATTORNEYS,

UH, TO, UH,
FIGHT THE BATTLE,

THE LEGAL BATTLE

OF PROVING THAT HE
WAS INDEED INFRINGING
ON THE PATENTS.

IF THE PATENT
IS PRESUMED VALID,

AND THEY DON'T
ADHERE BY IT,

THEY RUN THE RISK
OF BEING PUNISHED.

AND THEN MY ATTORNEY
WOULD HAVE TO RESPOND, UH,

AND THIS GETS VERY LEGAL.

AND, YOU KNOW,
I HAD NO QUALMS ABOUT IT.

I, UH, I FELT

SOMEWHAT SORRY
FOR MISTER SKELPS,

UH, UH,

[MUMBLING]
WHAT'S HIS NAME?

-[AUSTIN] MIKE SKELPS.
-MIKE SKELPS,
YEAH, MISTER SKELPS.

-UH...
-[AUSTIN] WHY DO YOU FEEL
SORRY FOR HIM?

BECAUSE I THINK HE SPENT
AN AWFUL LOT OF MONEY

UH, TRYING TO FIGHT, WHEN

WE COULD HAVE SAT DOWN
AND RESOLVED THESE ISSUES, UH,

-RATHER REASONABLY.
-[AUSTIN] HOW--
HOW REASONABLY?

WHAT DO YOU MEAN
BY "RATHER REASONABLY"?

UH, I MEAN,
I DON'T WANT TO GO
INTO THE MONETARY,

UH, SITUATION,
BUT I HAVE PROBABLY

ABOUT A DOZEN LICENSEES
OR HAD A DOZEN LICENSEES

THAT JUST CAME AND
WE REACHED A REASONABLE

AGREEMENT,

THAT DID NOT IMPOSE, UM,

HARDSHIP ON THEM
IN ANY WAY.

AND THEY SIMPLY PAID
ME A SMALL ROYALTY,

A REASONABLE ROYALTY.

[AUSTIN] GOSH, I JUST
CAN'T IMAGINE IMAGINE THE
$300,000 SETTLEMENT OFFER,

THE REQUIREMENT TO
MAKE THE LAWSUIT STOP,

REPRESENTS THEIR NOT
WANTING TO BE A BURDEN
ON SOMEBODY

THAT'S MAKING
$30,000 A YEAR.

QUITE FRANKLY,
I THINK THE LAWYERS

THAT NEGOTIATED FOR ME,

YOU KNOW,
THEY WERE SHOOTING HIGH,

WILLING TO SETTLE
FOR A LOT LESS.

UM, WHAT MR. SKELPS--

NOW THEY WERE PUTTING
HUNDREDS OF THOUSANDS
OF DOLLARS INTO THIS,

TO FILE
ALL THE NECESSARY PAPERWORK.

SO THOSE LAWYERS WANTED
TO GET SOMETHING OUT AGAIN.

AND THAT'S USUALLY
THE CONSEQUENCE ONCE
A LAWSUIT IS FILED.

IS-- IS HE A PATENT
ATTORNEY?

IS-- DOES HE REPRESENT
THE UNITED STATES
PATENT OFFICE?

ONCE THE PATENT OFFICE
ISSUES A PATENT,

THAT PATENT IS
PRESUMED VALID.

OKAY? UNLESS IT IS
PROVEN INVALID.

THE PATENT IS
PRESUMED VALID,

JUST LIKE A PERSON IS
PRESUMED INNOCENT,

A PATENT IS PRESUMED VALID

IF IT IS ISSUED
BY THE UNITED STATES
PATENT OFFICE.

WHO IS HE TO SAY
THAT IT IS NOT VALID?

[AUSTIN]
WHEN THE PATENTS
WERE OVERTURNED,

DID YOU RETURN ANY
OF THE MONEY TO THE PEOPLE

THAT, UH,
HAD TO PAY YOU?

NO, TYPICALLY
IN A LICENSE AGREEMENT,

YOU EXPLICITLY SAY
THAT ANY MONEY

THAT HAS BEEN PAID IS
NON-REFUNDABLE.

THE AGREEMENTS
THAT WE WROTE WERE--

INVOLVED NON-DISCLOSURE
AGREEMENTS

AND THEY-- THEY WERE
ALSO CONFIDENTIAL.

I HAVE A--
QUITE A FEW PATENTS.

I WANTED TO KNOW,

WHAT MAKES A GOOD EVENT
PHOTOGRAPH?

IS IT IMPORTANT TO PHOTOGRAPH
THE ENTIRE BODY,

OR JUST THE CHEST UP?

OR, GET THE FACE?

MOST PEOPLE LIKE
TO SEE THEIR FACE.

ONE OF THE ANSWERS
THAT I GOT

WAS THAT A GOOD EVENT
PHOTOGRAPH INCLUDES,

FOR RUNNERS
AT LEAST,

TO SHOW THE LEGS.

THAT'S THE MOST
IMPORTANT PART.
[CHUCKLES]

BECAUSE THEY RUN
WITH THE LEGS.

[CUCKOO CLOCK CHIMING]

WHEREAS BEFORE,

I WAS TAKING PICTURES
OF THE CHEST AND UP,

SO, NOW, IT BECAME
OBVIOUS TO ME THAT,

UH, GETTING THEIR LEGS
IN THE PICTURE

WOULD BE OF VALUE.

WE CAME UP WITH
THE IDEA OF PUTTING

AN ADVERTISEMENT
INTO THE PHOTOGRAPH,

BRANDING AND ADVERTISING
INTO THE PHOTOGRAPH,

AND GETTING PAID
BY THE ADVERTISER,

AND GIVING THE PICTURES
AWAY FOR FREE

TO THE, UH,
PARTICIPANTS.

[AUSTIN]
HUH.

THAT'S FASCINATING.

IF YOU LEAVE OUT GARBAGE,

YOU'RE GONNA GET
COCKROACHES.

IF YOU LEAVE OUT
GARBAGE PATENTS,

YOU'RE GONNA GET
PATENT TROLLS.

SO, THE QUESTION WE
SHOULD ALL BE ASKING IS,

WHO KEEPS APPROVING
THE GARBAGE PATENTS?

I'M ROBERT WILLIAMS,
I'M AN ATTORNEY,

FORMERLY A PATENT
EXAMINER.

[AUSTIN]
HOW MUCH TIME DOES
A PATENT EXAMINER GIVE

TO A PATENT?

OKAY, THE, UH,
QUOTA THAT EACH EXAMINER
HAS TO MEET UNDER

THE COUNT SYSTEM
IS A CERTAIN NUMBER OF
COUNTS PER WEEK.

UH-- UH, AN EXAMINER
AT A HIGH LEVEL

WILL ONLY HAVE
ABOUT FOUR HOURS TO--

PER EACH COUNT
THAT THEY HAVE TO GET

WITHIN THAT QUOTA SYSTEM.

[AUSTIN]
SO, OF COURSE
WHEN I HEAR THAT,

WHAT I HEAR IS,

AN EXAMINER HAS
FOUR HOURS TO DECIDE
IF A PATENT IS VALID.

-MM-HMM.
-[AUSTIN] I'VE CURRENTLY
BEEN IN LITIGATION

OVER SOMEONE THAT'S SUING
ME FOR PATENT INFRINGEMENT
NOW FOR THREE YEARS.

AND THIS THREE-YEAR
ABSURDITY OF A LAWSUIT

-WAS STARTED BY SOMEBODY
THAT HAD ONLY HAD FOUR HOURS.
-MM-HMM.

[AUSTIN]
TO POP THE PATENT
OUT OF-- OUT OF HIS OFFICE

WITH AN APPROVAL.

DOESN'T THAT SEEM CRAZY?

THAT SOMEONE IS
ONLY ALLOCATED FOUR HOURS

TO APPROVE A PATENT

THAT COULD THEN RESULT
IN YEARS AND YEARS AND YEARS
OF LITIGATION?

I DO THINK THAT TIME
IS ONE OF THE CHALLENGES

THAT THE USPTO IS FACING

IN TERMS OF ALLOWING
THE EXAMINERS ADEQUATE TIME

TO DO AN IN-DEPTH SEARCH

AND TO PREPARE
A DETAILED OFFICE ACTION

THAT PREVENTS--
THAT PRESENTS THE MOST
SALIENT ISSUES

INTO THE RECORD
AND, UM, YOU KNOW,

FIRST, TO JUST
IDENTIFY THAT BEST EVIDENCE,

BUT ALSO TO CONSIDER
AND APPLY

THE BEST AVAILABLE EVIDENCE
TO MAKE THAT, UM,

PROSECUTION AS--
AS SHORT AND EFFECTIVE
AS POSSIBLE.

THE EXAMINER IS PRIMARILY
GONNA LOOK AT PREVIOUS
PATENTS APPLICATIONS

OR PREVIOUSLY-ISSUED
PATENTS.

PRIMARY BODY OF KNOWLEDGE

THAT THE PATENT EXAMINERS
DRAW FROM

IS ACTUALLY WHAT'S
ALREADY BEEN PATENTED.

THE APPLICANT
IS ESSENTIALLY GIVEN
THE BENEFIT OF THE DOUBT

THAT THEY ARE
IN FACT THE INVENTOR

AND THAT THEIR INVENTION
IS NEW AND NOT OBVIOUSNESS.

THE WAY THE STATUTES
ARE WRITTEN,

SECTION 102, 103,
IS THAT IT DEFAULTS

TO A PATENT BEING ALLOWED.

IT SAYS THAT AN INVENTOR
SHALL BE ENTITLED TO A PATENT.

AGAIN, THE DEFAULT
POSITION IS THAT IT IS
PATENTABLE.

OF THE IPRs
THAT GO THROUGH
THE FULL PROCESS

AND REACH A FINAL
DECISION ON THE MERITS,

ROUGHLY 75% OR MORE,

UH, WERE COMPLETELY
INVALIDATED.

[AUSTIN]
SO WHY WERE THEY
APPROVED IN THE FIRST PLACE?

[CHUCKLES]
THE ONLY ANSWER I CAN GIVE

AS TO WHY
THOSE PATENTS WERE APPROVED
IN THE FIRST PLACE

IS BECAUSE
THE EXAMINER DECIDED,
BASED ON THE EVIDENCE

THAT WAS AVAILABLE TO
HIM OR HER AT THE TIME,

THAT THAT APPLICATION
MERITED BEING ALLOWED
AS A PATENT.

[AUSTIN]
YOU'RE GONNA HAVE TO FORGIVE ME
FOR ASKING HERE,

-UH, "METHOD OF
SWINGING ON A SWING."
-MM-HMM.

[AUSTIN]
THIS WAS APPROVED
NOVEMBER--

-PRIORITY DATE,
NOVEMBER 17, 2000.
-MM-HMM.

[AUSTIN]
HAVE YOU SEEN
THIS ONE BEFORE?

YOU KNOW,
I THINK THIS PROBABLY
IS AN-- AN EXAMPLE

OF A LIMITATION
OF THE EVIDENCE
THAT WAS AVAILABLE.

PEOPLE MAY HAVE
USED THAT METHOD
OF SWINGING ON A SWING

PRIOR TO THE PUTATIVE
INVENTION DATE

BUT THERE'S NO
DOCUMENTARY EVIDENCE OF IT

AND SO IF YOU
HAVE TO ACT BASED ON
EVIDENCE

AND THERE'S
NO EVIDENCE AVAILABLE
TO CONTRADICT IT

THEN LEGALLY
WE'RE KIND OF STUCK.

[AUSTIN] SO, THERE WAS
NO EVIDENCE THAT ANYONE
HAD SWUNG ON A SWING

SIDEWAYS BEFORE,
AND SINCE THERE WAS NO
EVIDENCE OF THAT,

THE PATENT HAD
TO BE APPROVED.

UM, THAT'S
THE ONLY CONCLUSION
THAT I CAN DRAW

BUT I DON'T KNOW
SPECIFICALLY WHAT WENT ON

DURING THE PROSECUTION
OF THIS PATENT.

[AUSTIN]
UH, IN 1999, NO ONE
HAD EVER THOUGHT OF A STICK

THAT A DOG COULD
FETCH BEFORE.

HOW COULD THAT
BE APPROVED?

[ROBERT] UH, AGAIN,
I-- THAT-- I GUESS
THAT DOES SEEM OBVIOUS

CERTAINLY APPLYING
OUR COMMON SENSE TEST
FOR OBVIOUSNESS,

UM, I'VE-- CAN ONLY--
I DON'T KNOW
WHAT EVIDENCE

THE EXAMINER HAD
ACCESS TO

AND WHAT WAS IN
THAT RECORD WHEN THAT
APPLICATION WAS EXAMINED

BUT APPARENTLY
THE EXAMINER CONCLUDED
BASED ON THAT RECORD

THAT IT WAS
IN FACT PATENTABLE.

SORRY, DAISY,
YOU CAN'T HAVE IT.

SO, APPARENTLY
YOU CAN OWN AN IDEA,

NO MATTER HOW OBVIOUS,

IF YOU CAN JUST
CONVINCE THE UNITED STATES
PATENT OFFICE

THAT IT'S NEVER BEEN
PATENTED BEFORE.

SO, LET'S SUMMARIZE
HOW PATENT TROLLING WORKS.

IN THE MOVIE,
"THE BIG SHORT,"

MARGOT ROBBIE,
IN A BUBBLE BATH,

[GIGGLING]
APPARENTLY NAKED,

EXPLAINED HOW
THE HOME MORTGAGE FRAUD
WAS COMMITTED BY THE BANKS.

NOW I'D LOVE TO HIRE HER
TO EXPLAIN HOW PATENT
TROLLING WORKS AS WELL,

BUT I CAN'T AFFORD HER.

BUT, I DID MANAGE
TO GET US A PLUMBER
FROM NEW JERSEY.

LET ME TELL YOU
HOW TO BECOME
A PATENT TROLL.

FIRST,
TAKE OUT A STUPID PATENT.

IT DON'T MATTER
HOW STUPID IT IS,
BELIEVE ME.

TWO,
FORM A DUMMY CORPORATION
IN EAST TEXAS.

THAT'S THE BEST
PLACE TO SUE PEOPLE FROM,

'CAUSE THE JUDGES ARE--
HOW DO YOU SAY?

SYMPATHETIC TO YOUR CAUSE,
IF YOU KNOW WHAT I MEAN.

THREE,
RENT AN ABANDONED
OFFICE BUILDING

AS AN ADDRESS
FOR YOUR FAKE BUSINESS.

LET ME KNOW,
I MIGHT BE ABLE
TO HELP YOU WITH THAT.

FOUR, FIND VICTIMS
THAT ARE TOO SMALL

TO DEFEND THEMSELVES,

BUT NOT TOO SMALL
THAT THEY DON'T HAVE
NO MONEY.

FIVE,
NOW YOU SUE THEM.

SIX,
USE SOME DUMMY NAME
ON THE LAWSUIT.

YOU DON'T WANT NO ONE
TO KNOW WHO YOU ARE.

ONLY LAWYERS NEED
TO USE THEIR REAL NAME.

SEVEN,
OFFER AN AVERAGE SETTLEMENT
OF LET'S SAY, UH,

$340,000.

MAKE SURE TO CALL IT
A LICENSING FEE.

EIGHT,
FORCE YOUR VICTIM
TO SIGN

A NON-DISCLOSURE
AGREEMENT,

SO THEY CAN'T SAY
WHAT YOU DID TO THEM.

NINE,
JUST SIT BACK AND
WATCH YOUR BUDDIES,

THE EAST TEXAS JUDGES,
REFUSE TO TOSS OUT
THE CASE,

'CAUSE THEIR SONS GET
TO TAKE THE CASES
ON BOTH SIDES.

IT'S PERFECT.

TEN,
USE THE MONEY
YOU JUST MADE

TO REPEAT THE STEPS
ONE THROUGH NINE,

FOREVER.

I'M DONE.

YOU'VE SEEN
HOW THIS AFFECTS ME

AND MANY OTHER
SMALL BUSINESS OWNERS

ALL OVER THE WORLD.

BUT HOW DOES
PATENT TROLLING LEAK
INTO YOUR LIFE?

[CHUCKLE]
WELL, HERE'S
A RECENT PATENT,

IT'S FOR
A COMMUNICATION DEVICE,

CAPABLE OF BEING USED
FOR VOICE COMMUNICATION.

[CHUCKLE]
YUP.

IT'S A PATENT
FOR THE TELEPHONE.

AND IT WAS A APPROVED
BY THE UNITED STATES
PATENT OFFICE

ON AUGUST 17 OF 2010.

YUP,
THE UNITED STATES
PATENT OFFICE

APPROVED
A PATENT FOR THE TELEPHONE

ON AUGUST 17 OF 2010.

AND HERE'S
A LITTLE GLANCE

AT THE DETAILS
OF THIS PATENT.

[MAN'S VOICE]
DIAL.

CONNECTED.

SEND.

OVER?

DISCONNECT.

END.

YES, THAT'S
IN THE PATENT:

HOW TO USE A PHONE.

THE PATENT TROLLS
HAVE NOW PATENTED

HOW TO USE A TELEPHONE

SO THEY'RE SUING APPLE.

HERE'S THE LAWSUIT:

APPLE'S ACCUSED IPHONES
ARE CAPABLE OF BEING USED
FOR VOICE COMMUNICATION.

APPLE'S ACCUSED IPHONES
HAVE TWO CAMERAS.

APPLE'S ACCUSED IPHONES
HAVE A CAMERA

AND A DISPLAY
ON THE SAME SIDE
OF THE PHONE.

APPLE'S ACCUSED IPHONES
HAVE A CAMERA LOCATED

ON THE SIDE
OF THE IPHONE THAT IS
OPPOSITE THE DISPLAY.

APPLE'S ACCUSED IPHONE IS
CAPABLE OF DISPLAYING

ITS LOCATION
ON ITS DISPLAY.

APPLE'S ACCUSED IPHONES
ARE WIRELESS

COMMUNICATION DEVICES.

THE "664" PATENT IS
PRESUMED VALID.

SO NOW, OF COURSE,
APPLE'S HAVING TO PAY
HUGE LEGAL COSTS

IN DEFENDING THEMSELVES
IN COURT,

FEES, OBVIOUSLY,
THAT ARE PASSED ON
TO YOU AND ME

EVERY TIME
WE BUY AN IPHONE.

NO WONDER THESE APPLE
DEVICES ARE SO EXPENSIVE.

WE'RE PAYING OFF
THE PATENT TROLLS.

BUT I HAVE
A SAMSUNG GALAXY.

OH, JOHN,
THEY'RE SUING SAMSUNG TOO.

OH.

HMM.

OF COURSE
THEY'RE SUING SAMSUNG.

OF COURSE
THEY'RE SUING ALL OF US.

THEY'RE PATENT TROLLS.

NOW, WHO WOULD FILE
SUCH AN ASININE LAWSUIT?

WELL, IN THIS CASE,
IT'S A COMPANY CALLED

CORYDORAS TECHNOLOGIES, LLC.

YOU ALL READY KNOW
THEY'RE A SHELL COMPANY

DESIGNED TO HIDE
WHOEVER'S BEHIND IT.

BUT EVERY LAWSUIT
LISTS THE LAWYERS
THAT ARE FILING IT

SO THE VICTIMS
CAN CALL THE LAWYERS
TO OFFER THEIR SETTLEMENT.

WE CAN FIND OUT
WHO THE LAWYERS ARE
EVERY TIME.

SO, WHAT LAWYERS WOULD
EVER PRESS SUCH A CASE

AGAINST, EFFECTIVELY,
ALL OF US?

THE ANSWER IS,

THESE LAWYERS.

THESE ONES,
RIGHT HERE.

AND NOTICE,
THEY'RE ALL FROM TEXAS.

HMM.
WHAT A COINCIDENCE.

SO, THESE PEOPLE ARE
EFFECTIVELY SUING ALL OF US

FOR USING CELL PHONES.

I HAD TO GIVE THEM
A CALL AND ASK WHY.

[PHONE TRILLING]

[ELIZABETH]
THIS IS BETTY.

[AUSTIN] YEAH,
ELIZABETH DERIEUX
PLEASE.

[ELIZABETH] IT'S ME.

[AUSTIN]
HEY, UM, THIS IS
AUSTIN MEYERS SPEAKING,

I AM LOOKING
AT A LAWSUIT, UM,

OF, UH, CORYDORAS
TECHNOLOGIES VERSUS APPLE...

-[ELIZABETH] UH-HUH.
-[AUSTIN] ...WHERE
APPARENTLY CORYDORAS

UH, CLAIMS
TO OWN THE IDEA OF
A COMMUNICATIONS DEVICE

CAPABLE OF BEING USED
FOR VOICE COMMUNICATION.

AM I UNDERSTANDING
THAT RIGHT?

DOES CORYDORAS
OWN THE PATENT FOR

A COMMUNICATIONS DEVICE USED
FOR VOICE COMMUNICATION?

-[ELIZABETH] I REPRESENT
CORYDORAS...
-[AUSTIN] UH-HUH.

- [ELIZABETH] ...IN THAT MATTER.
- [AUSTIN] UH-HUH.

[ELIZABETH]
AND I-- I'M NOT SURE--
LIKE, ARE YOU...

...CONNECTED
WITH CORYDORAS
IN SOME WAY?

I JUST HAVE NOT
MET YOU AND--

[AUSTIN]
NO, I'M NOT CONNECTED
WITH CORYDORAS, NO.

[ELIZABETH]
OKAY?

[AUSTIN]
SO, DOES CORYDORAS OWN
THE IDEA OF USING A, UH--

A DEVICE CAPABLE
OF BEING USED FOR
VOICE COMMUNICATION?

[ELIZABETH]
CORYDORAS OWNS THE PATENT
THAT'S ASSERTED

IN THE LITIGATION, YES.

[AUSTIN]
AND DOES THAT PATENT
CLAIM TO OWN A--

A DEVICE CAPABLE
OF BEING USED FOR
VOICE COMMUNICATION

AS STATED IN YOUR LAWSUIT,
PARAGRAPH 16?

[ELIZABETH]
I'M JUST NOT SURE
WHAT YOU'RE ASKING ME, I--

[AUSTIN]
I'M ASKING--
WHAT I'M ASKING--

[AUSTIN] YEAH SURE,
I'D BE HAPPY TO BE
MORE CLEAR

ABOUT MY QUESTION,
CERTAINLY.

I'M ASKING
IF CORYDORAS OWNS THE IDEA

OF A DEVICE BEING USED
FOR VOICE COMMUNICATION.

BECAUSE THAT'S-- THAT'S
WHAT YOU STATE IN
YOUR LAWSUIT,

WITH YOUR SIGNATURE
AT THE BOTTOM.

AND SO I'M WONDERING
IF YOU ACTUALLY
BELIEVE THAT.

[ELIZABETH]
I'M HAPPY TO CALL YOU
BACK AT A--

AT A TIME WHEN
I HAVE A LITTLE MORE TIME
TO DISCUSS THIS.

[AUSTIN]
SO RIGHT NOW,
YOU'RE NOT ABLE TO TELL ME

WHETHER-- WHETHER THIS--
THIS COMPANY OWNS--

[ELIZABETH]
YOU KNOW WHAT?
I MEAN, I DON'T EVEN KNOW

WHO YOU ARE,
AND I'M NOT SURE EXACTLY
WHAT YOU'RE ASKING.

IF YOU'RE ASKING--
IF YOU'RE JUST READING
THE COMPLAINT,

I DON'T HAVE THE FILE
IN FRONT OF ME--

[AUSTIN]
I-- I AM READING
THE COMPLAINT, YES--

[ELIZABETH]
IF YOU'RE JUST READING
THE COMPLAINT,

-[AUSTIN] YEAH.
-[ELIZABETH] THE ANSWER IS
THAT THE MATTERS

ASSERTED IN THE COMPLAINT
ARE ACCURATE

TO THE BEST
OF MY KNOWLEDGE
AT THIS TIME.

THE LANGUAGE
IN THE COMPLAINT IS ACCURATE.

[PHONE TRILLING]

[WOMAN]
POLASEK, QUISENBERRY
& ERRINGTON.

[AUSTIN]
YES, JOHN POLASEK,
PLEASE.

[CLEARS THROAT]

[WOMAN]
MAY I HAVE YOUR NAME?

[AUSTIN]
SURE, AUSTIN MEYER.

-[WOMAN] PLEASE HOLD.
-[AUSTIN] MM-HMM.

[WOMAN] HI, MR. MEYER,
MAY I ASK WHAT THIS CALL
IS IN REGARDS TO?

[AUSTIN]
UH, YES, THIS IS
WITH REGARDS TO, UH,

PATENT INFRINGEMENT
SUIT BETWEEN CORYDORAS
AND APPLE COMPUTER.

[WOMAN]
OKAY, WELL, MR. POLASEK
IS NOT IN.

WOULD YOU LIKE
TO LEAVE A MESSAGE
FOR HIM?

[PHONE TRILLING]

[MAN]
HELLO?

[AUSTIN]
YEAH, OTTIS CARROLL PLEASE.

[OTTIS]
UH, THIS IS HE.

[AUSTIN]
HI, THIS IS AUSTIN
MEYER SPEAKING.

I'M LOOKING AT A,
UH, LAWSUIT,

FILED AGAINST,
UH, APPLE COMPUTER,

A PATENT INFRINGEMENT
LAWSUIT,

UM, ON BEHALF
OF A COMPANY CALLED
CORYDORAS TECHNOLOGIES, LLC.

AND I NOTICE IN THIS LAWSUIT
THAT YOU CLAIM, THAT, UH,

CORYDORAS, LLC,
OWNS THE IDEA OF
A COMMUNICATION DEVICE

THAT IS CAPABLE
OF BEING USED FOR VOICE
COMMUNICATION,

OR AT LEAST IT WOULD SEEM
BY MY READING OF
THE LAWSUIT.

AM I MISUNDERSTANDING
SOMETHING ABOUT THAT
LAWSUIT?

[OTTIS]
UH, YOU KNOW WHAT?
YOU MIGHT NOT BE,

BUT YOU'RE TALKING
TO THE WRONG GUY.

YOU NEED TO CALL
A PATENT LAWYER WHO'S
INVOLVED IN IT.

[AUSTIN]
I NEED TO CALL WHO?
I'M SORRY.

[OTTIS]
UH, YOU NEED TO CALL--

THERE'S ANOTHER
LAWYER LISTED,

ONE OF THE PATENT
LAWYERS,

GIVE HIM A CALL.

[AUSTIN]
UH, JOHN POLASEK?

[OTTIS]
YEAH, GIVE HIM A CALL.

[AUSTIN]
I'M JUST CURIOUS, WHY IS
YOUR NAME ON THE LAWSUIT

IF YOU'RE
NOT THE RIGHT PERSON

TO TALK TO
ABOUT SAID LAWSUIT?

[OTTIS] WELL, YOU KNOW WHAT?

I DON'T HAVE ANY REASON
TO TALK TO YOU RIGHT NOW.

[PHONE CLICKS]

OKAY, I THINK
EVERYONE IN THE ROOM

UNDERSTANDS PATENT
TROLLING NOW.

BUT DOES THE FEDERAL
GOVERNMENT UNDERSTAND IT?

WHEN, UH,
SOMEONE ASSERTS A CLAIM

THAT'S NOT VALID,

THAT'S CALLED
PATENT TROLLING.

AND WHEN THEY DO THAT,

THEY ARE THREATENING
A BUSINESS,

USUALLY A BUSINESS,
SOMETIMES IT'S AN INDIVIDUAL,

WITH, UH,
ENORMOUS COSTS.

UH, LITIGATION COSTS,

UH, COSTS OF
HAVING TO PAY DAMAGES
IN THE CLAIM.

THEN WHAT
THEY'RE EFFECTIVELY DOING

IS KEEPING GOOD PRODUCTS
FROM GETTING TO
THE MARKETPLACE,

EXTORTING MONEY
FROM LEGITIMATE BUSINESSES,

AND STIFLING NEW
START-UP BUSINESSES.

OKAY, SO THEY KNOW
ABOUT IT.

GOOD.

WELL IT TAKES
A LOT OF THINGS FOR A BILL
TO BECOME A LAW,

AND SO,
EVEN THOUGH THIS GOT
THE OVERWHELMING SUPPORT

OF THE HOUSE,
AND WAS VOTED VERY
STRONGLY OUT OF THERE,

UH, THERE--
IT NEVER MADE IT
OUT OF COMMITTEE

IN THE SENATE SIDE
BECAUSE, UM, HARRY REID
REPORTEDLY SAID,

"OVER MY DEAD BODY"

THAT THIS WOULD ACTUALLY
UM, YOU KNOW, DISCUSSED,

AND THAT WAS
BECAUSE OF HIS SUPPORT
FROM THE TRIAL LAWYERS.

[SIGH]
UM...

[AUSTIN]
UH, OKAY. UM...

THAT WOULD'VE BEEN
REALLY GOOD FOOTAGE.

IT MAKES ME WANNA
STRANGLE HARRY REID.

YEAH, I MEAN,
YOU MIGHT WANNA--
YOU CAN SAY-- REPORTEDLY.

-I DON'T KNOW IF THAT--
-YOU SAID "REPORTEDLY."

-I DID? OKAY.
ALL RIGHT. GOOD.
-[AUSTIN] UM.

OH, SO CLOSE!

THEY KNOW
ABOUT PATENT TROLLING,

BUT THEY JUST DON'T CARE.

THEY'RE SIDING
WITH THE TRIAL LAWYERS,

AND HANGING
THE REST OF US OUT TO DRY.

OF COURSE,
MOST LAWMAKERS ARE LAWYERS,

SO MAYBE
THAT SHOULDN'T HAVE
SURPRISED ME AT ALL.

SO MANY SOFTWARE
DEVELOPERS OUT THERE

WHO HAVE BEEN SHUT DOWN,

THEIR APPS HAVE BEEN
PULLED OUT THE STORES,

THEIR WEBSITES
HAVE BEEN SHUT DOWN,

OR, THEY SIMPLY SETTLE,

AND THEY PAY,

AND IT'S JUST LINING
THE POCKETS

OF THESE PATENT HOLDERS
WHO AREN'T REALLY

DOING ANYTHING WITH
THAT INTELLECTUAL PROPERTY.

SO, I THINK IT'S
JUST LIKE A--

LIKE A-- A--
IT'S AN EXTRA TAX

ON OUR SKILL,
ON OUR CRAFT.

[AUSTIN]
AND IS THE TAX DECIDED
BY THE-- THE GOVERNMENT

AND THE VOTERS?

NO.

[AUSTIN]
WHO DECIDES THE TAX?

THE LAWYERS.

EVERYONE SHOULD BE
CONCERNED ABOUT THIS.

THIS IS
A $80 BILLION TAX.

RIGHT?

BECAUSE
THEY SUE EVERYBODY

AND AT THE END OF THE DAY
ALL THESE COSTS SHOW
UP IN TWO FORMS:

ONE, GOOD COMPANIES
GO OUT OF BUSINESS

BECAUSE THEY CAN'T
AFFORD IT,

SO THE CONSUMER MISSES
SOME GREAT PRODUCT OR SERVICE,

OR IT GETS PASSED
ON IN INCREASED--

INCREASED COST
OF GOODS, YOU KNOW, SO,

IT'S GONNA COST
THE CONSUMER AT THE END
OF THE DAY.

WHO'S GETTING RICH?

ONCE AGAIN,
IT'S THE LAWYERS.

[AUSTIN, QUIETLY]
YEAH.

IMAGINE IF YOU
WROTE A BOOK,

AND WE HAD PATENTS ON BOOKS,
AND YOU HAD ONE GUY

WHO GOT THE PATENT
TO WRITE BOOKS ABOUT WHALES,
AND HE WAS THE ONLY GUY,

AND THEN YOU WANTED
TO WRITE A BOOK ABOUT WHALES.

YOU'D HAVE TO GO TO FRED,

WHO HAS THE PATENT ON WHALES,

AND GET HIS PERMISSION,

MAYBE A LICENSE AGREEMENT,

SO THAT YOU TOO
COULD WRITE ABOUT THAT TOPIC.

DOESN'T THAT SOUND
RIDICULOUS?

WELL, THAT'S EXACTLY
WHAT'S GOING ON
IN SOFTWARE, TODAY.

THAT'S HOW RIDICULOUS
IT IS.

AND THAT'S WHY
IT NEEDS TO BE FIXED.

WHY DON'T WE MAKE
SOFTWARE COPYWRITEABLE,

INSTEAD OF PATENTABLE?
AND IF WE DID THAT,

I THINK THAT WOULD BE
A HUGE STEP FORWARD.

I'M SORRY,
BUT ANY TIME I SEE

A METHOD OF ACCOMPLISHING
BLAH, BLAH, BLAH, BLAH,

THAT SCARES
THE HELL OUT OF ME.

IT REALLY, REALLY DOES,

BECAUSE THAT'S NOT
PATENTING A PHYSICAL DEVICE.

YOU KNOW, LIKE THIS MICROPHONE
THAT'S IN FRONT OF ME.

THAT IS A PHYSICAL DESIGN
THAT DOES A SPECIFIC THING.

THAT I BELIEVE IS
PATENTABLE.

BUT THE METHOD
OF ACCOMPLISHING A TASK

IS RIDICULOUS TO ME.

BUT THERE'S SO MANY
OF THOSE METHOD PATENTS

THAT ARE OUT THERE NOW

THAT YOU CAN'T EVEN
RUN A SIMPLE WEBSITE

WITHOUT GETTING POPPED.

IT HURTS INNOVATION

IN A VERY, VERY
TANGIBLE AND REAL SENSE

BECAUSE WHEN A STARTUP--

AND THERE ARE
NUMEROUS STORIES

OF STARTUPS,
BASICALLY IN THE APP SPACE

OR PEOPLE WHO SIMPLY
JUST PRODUCE PODCASTS, RIGHT?

GETTING THE THREAT LETTERS,

SAYING, "WE WILL SUE YOU
BECAUSE OF," FOR EXAMPLE,

NOT BECAUSE
YOU PRODUCED A PODCAST,

BUT BECAUSE
OF THE WAY YOU'RE LOADING IT
ONTO APPLE ITUNES

OR SOMETHING LIKE THAT,
SOMETHING STUPID LIKE THAT.

CAN YOU IMAGINE
THE WORLD WE'VE BEEN
IN RIGHT NOW,

IF STEVE JOBS, RIGHT
OUT OF COLLEGE WAS JUST--

WAS SLIDED WITH IPKs
THAT HE COULDN'T GET OUT OF.

IF NEWEGG SOFTWARE
CODERS HAD GOTTEN

THIS LEGAL LETTER IN 2001,
SAYING, "IF YOU PROGRAM
A SHOPPING CART

YOU-- YOU HAVE TO GIVE US
1% OF YOUR REVENUE,
FOREVER," RIGHT?

NEWEGG WOULDN'T
EXIST TODAY, RIGHT?
WHAT A COMPLETE JOKE.

IF WE HAD GOTTEN
OUR LAWSUIT THE SAME DAY
WE LAUNCHED,

WE WOULD HAVE
TO SHUT DOWN IMMEDIATELY.
THAT WOULD HAVE BEEN IT.

I WOULD HAVE BEEN REALLY
ANGRY ABOUT IT,

BUT I WOULD HAVE
HAD NO RESOURCES
TO FIGHT IT AT THAT POINT

OR NO IDEA WHETHER
OR NOT I INFRINGED

AND SO I WOULD HAVE
JUST WALKED AWAY.

SO THE COST
OF THIS ABUSE

IS LITERALLY INCALCULABLE.

THERE ARE CERTAIN AREAS

THAT ARE NOTORIOUSLY
PATENT TROLL BAIT,

AND I'VE HAD PEOPLE SAY,

"I'M NOT GONNA CREATE
A BUSINESS THERE

BECAUSE THERE ARE TOO
MANY PATENT TROLLS."

THAT'S A LOSS FOR US
IN SOCIETY.

THAT'S A LOSS
FOR THE COUNTRY.

[STAMMERING] IT'S
HAMPERING INNOVATION

BECAUSE PEOPLE ARE AFRAID
TO WRITE SOFTWARE

BECAUSE, BOY,
SOMEBODY ELSE MUST HAVE
SOME SIMILAR IDEA TO THAT,

AND SURE ENOUGH,
YOU CAN ALMOST GUARANTEE

THAT THERE'S SOME
PATENT SOMEWHERE

THAT-- SOMEHOW,
ANY PIECE OF SOFTWARE IS
GONNA INFRINGE ON.

YEAH, IT'S ABSOLUTELY
IMPOSSIBLE TO TELL

IF YOU'RE ABOUT TO BE
SUED FOR PATENT INFRINGEMENT.

[AUSTIN]
WHY NOT START ALL OVER

AND JUST WRITE A NEW APP
RIGHT NOW?

[SIGH]
WOW.

I WOULD LOVE
TO WRITE A NEW APP.
I REALLY WOULD.

BUT, THERE'S
ALSO THE FEAR OF BEING SUED
AGAIN BY SOMETHING ELSE.

I FEEL THAT THE RISK
IS TOO GREAT FOR A SMALL
GUY LIKE ME,

WITH NO VENTURE BACKING,

WITH NO MONEY
IN THE BANK

TO JUST TRY
TO START ALL OVER AGAIN.

THIS IS NOT
WHAT THE AMERICAN DREAM
IS ALL ABOUT.

THIS IS NOT
WHY PEOPLE START COMPANIES.

THIS IS NOT THE KIND
OF ATTITUDE

THAT MAKES PEOPLE
WANT TO GO BUILD NEW THINGS.

THAT'S THE CHALLENGE
THAT-- THAT ENTREPRENEURS
FACE,

AND I THOUGHT
THAT THE AMERICAN DREAM

WAS SOMETHING MUCH
DIFFERENT THAN THAT.

IT JUST BAFFLES ME
THAT THIS INDUSTRY EXISTS,

IT'S ALLOWED TO EXIST

AND THAT WE HAVE AGENCIES,

GOVERNMENT AGENCIES THAT--

THAT GET FAT OFF IT.

SOMEONE NEEDS
TO BRING IT DOWN.

AND NOW,
HERE'S HOW YOU FIX IT:

THIS IS SO EASY TO FIX,
IT'S RIDICULOUS.

FIRST OF ALL,
NO MORE METHOD PATENTS.

METHOD PATENTS
ARE STUPID.

IT'S JUST SOMEBODY
WRITING DOWN THE STEPS
HE TAKES TO DO SOMETHING.

[CHUCKLES]
NO MORE SOFTWARE PATENTS.

WE HAVE COPYRIGHT
FOR SOFTWARE.

YOU DON'T NEED TO PATENT
THE WHOLE DAMN IDEA.

NO MORE 20-YEAR DURATION.

PATENTS LAST 20 YEARS

BECAUSE IT TOOK 20 YEARS
TO RECOUP YOUR INVESTMENT

IN THE STEAM AGE!

DOES IT TAKE 20 YEARS
FOR A PRODUCT

TO GO THROUGH ITS
LIFECYCLE TODAY?

IT'S RIDICULOUS.

PATENTS SHOULD OBVIOUSLY
LAST ABOUT FIVE YEARS
AT THE MOST.

YOU SHOULD FILE
YOUR LAWSUITS IN
THE DEFENDANT'S DISTRICT,

NOT EAST TEXAS.

YOU WANNA GO SUE SOMEONE?

FINE, GO SUE 'EM.

DON'T DRAG 'EM
TO YOUR ABANDONED OFFICE
BUILDING IN TEXAS.

TROLLS SHOULD REVEAL
WHO THEY ARE,

NOT HIDE BEHIND
DUMMY CORPORATIONS.

HOW DO YOU JUSTIFY
SUING SOMEBODY

WHEN YOU'RE AFRAID
TO EVEN LET ANYBODY KNOW
WHO YOU ARE?

DON'T SUE SOMEONE
JUST FOR USING TECHNOLOGY,

SUE THE PERSON
THAT CLAIMS TO HAVE
INVENTED IT.

YOU CAN'T JUST SUE
EVERYONE THAT USES
THE GOOGLE STORE.

DON'T SUE SOMEONE
IF YOU MAKE MORE MONEY

SUING PEOPLE
THAN MAKING THINGS.

OF COURSE THAT JUST SETS
THE STAGE FOR PATENT TROLLS.

DO ALL THESE THINGS NOW

AND WE'LL SOLVE
THE PATENT TROLLING
PROBLEM FOR THE FUTURE.

IT'S A SNAP.

AND NONE OF THESE
THINGS WILL COST ANY
MONEY TO DO.

IN FACT,
IT'LL SAVE TAXPAYER DOLLARS

BECAUSE WE WON'T HAVE
ALL THESE EXPENSIVE LAWSUITS

GUMMING UP
THE FEDERAL COURT SYSTEM.

WE DON'T HAVE TO THROW MONEY
AT THIS PROBLEM.

WE JUST HAVE
TO CLOSE THE LOOPHOLES

THAT THE GOVERNMENT
LEFT OPEN.

THAT'S IT.