I think I vaguely recall hearing about this in law school at some point, but I didn’t imagine that things like this actually happened.
To start from the beginning: someone formed an LLC specifically for the purpose of suing companies like Wham-O and Brooks Brothers. What did Wham-O do, you may ask? Well, in 1957, they patented the Frisbee under the name Flying Toy – one can only wonder what college students did before the invention of the Frisbee. The patent expired a short time later (intellectual property rights that don’t last for decades? How delightfully absurd!), but Wham-O apparently didn’t remove the patent numbers from its Frisbees. The machine that manufactured the Frisbee had the patent numbers engraved in it, which kept stamping patent numbers after the patents no longer protected the Frisbee.
No big whoop, right?
Well, yes whoop. It’s a federal crime to lie about the patent status of your product. For the record, I definitely learned that in law school. However, I didn’t realize that people would wander around toy stores and look up patent numbers on products to see if they expired. Then, a bizarre kind of reverse patent troll firm would file suit in federal court. There was an explosion in this practice after the Federal Circuit ruled that defendants of such a suit were liable for $500 per offense; e.g., per Frisbee sold. Since the 1960s? That fine would be somewhere between $500 million and ‘Oh My God We’re Bankrupt What the Fuck’.
This story has a happy ending, however. As part of the America Invents Act, cases like these can now only be filed by (1) the federal government, or (2) a private plaintiff alleging an actual competitive injury. Reverse Patent Troll Firms will have to hope the federal government crushes the bastard Wham-O Frisbee empire. Both parties agreed that the lawsuit was now moot, and the plaintiff has agreed to shut up and go away.
the litigation industry
This kind of nonsense reminds me of the mass copyright infringement litigation industry. A lawyer with more bills than money goes to an indie movie studio with more bills than money and says “hey, I heard you spent a lot of money making a bunch of movies nobody bought. What would you say if I could make your movie profitable with no effort of your own?”
The lawyer takes on the studio as a client, and searches The Pirate Bay for the titles of the studio’s films. Finding one that’s reasonably well-seeded, the lawyer gets the IP addresses of the peers of the swarm, and fires off a barrage of John Doe lawsuits. Neither the lawyer nor the studio have any intention of litigating to jury verdict; rather, they intend to eke out settlements from a few scared kids.
Torrent-chasing is the ambulance chasing of the information age. You know, besides the actual ambulance chasing that gives lawyers a bad rap.