Nearly 4 years in the past, we wrote about a battle between Cloudflare, the San Francisco-based web safety and efficiency firm, and Blackbird Technologies, a agency that rapidly amassed dozens of patents, then started utilizing them to file dozens of patent infringement lawsuits in opposition to corporations, together with Cloudflare.
The go well with was typical in each manner, besides how Cloudflare responded to it. Unlike many targets of comparable lawsuits that decide to settle, Cloudflare fought again, asking very publicly for assist in finding prior artwork that may not solely invalidate the broad patent that Blackbird was utilizing to sue Cloudflare, however to invalidate all of Blackbird’s patents. The public answered the name, and two years and 275 distinctive submissions later, the case in opposition to Cloudflare was dismissed and Blackbird’s operations have been diminished.
One would possibly surmise that given the stink that Cloudflare raised, different patent trolls would possibly select a better goal. Yet final month, Cloudflare was sued but once more, this time by Sable Networks, a “company that doesn’t appear to have operated a real business in nearly ten years — relying on patents that don’t come close to the nature of our business or the services we provide,” as says Doug Kramer, normal counsel of CloudFlare.
Unsurprisingly, Cloudflare isn’t going to take this latest motion mendacity down. This morning, after revealing the lawsuit publicly, it invited the engineering neighborhood to once more “turn the tables” on patent trolls by inviting them to take part in a crowdsourced effort to discover proof of prior artwork to invalidate the “ancient, 20-year-old patents” that Cloudlflare says that Sable is is “trying to stretch . . . lightyears beyond what they were meant to cover.”
Cloudflare can also be providing a $100,000 bounty to be cut up amongst entrants who present the most helpful prior-art references that can be utilized in difficult the validity of all of Sable’s patents, not simply these being asserted in opposition to Cloudflare.
The thought is to deal a large enough blow to Sable that not solely is its case in opposition to Cloudflare hobbled but additionally future circumstances in opposition to different entities.
“We feel fortunate that we didn’t run into one of these cases earlier in our history, where it might have really taken us off our path,” Kramer tells TechCrunch. “Blackbird came along when we had a bit more stability, and we have even more stability now.”
Given that place of relative power, he says, “We want to go about this in a way that will force [Sable] to define their claims and stand on their claims, and we want to do it in a way that leaves something behind for other folks, particularly smaller companies that may come behind us, so we want to put [Sable’s] entire patent portfolio under scrutiny.”
Certainly, Cloudflare isn’t the solely firm to entice Sable’s consideration. Indeed, a fast search exhibits that Sable has additionally sued the cybersecurity enterprise Fortinet, the knowledge platform Splunk, and networking giants Juniper Networks and Cisco Systems, amongst roughly a dozen different corporations.
Eight of these circumstances — together with with Juniper and Cisco — have already settled. The actuality is that almost all corporations see infringement circumstances by non-practicing entities like Sable as a nuisance to be rapidly resolved as a result of they’re a distraction and since the expense of preventing is usually equal to or much more than the price of settling.
The corporations additionally lose oftentimes. Though in 2017, the Supreme Court dominated unanimously that patent holders suing firms can’t search out a pleasant courtroom — their venue of selection was lengthy the Eastern District of Texas, the place 2,500 cases have been introduced in 2015 alone, 95% of them initiated by non-practicing entities like Sable — enterprise stays brisk in Texas, the place authorized groups herald some huge cash and infrequently efficiently forged main firms to native jurors as villainous.
A report in the Houston Chronicle final 12 months famous that companies and people filed 747 patent complaints in Texas throughout the first six months of 2020 — double the quantity from a 12 months earlier and twice as many as some other state. To underscore the level, it famous that whereas patent infringement lawsuits jumped 16 % nationwide in the first six months of final 12 months, the variety of new disputes in Texas soared 96%.
Some of these circumstances landed in the Eastern District of Texas (and principally in Marshall, Texas, which boasts a inhabitants of 23,000). Some landed in the Southern District, which covers Houston and, in accordance to that very same Houston Chronicle report, skilled a 43% soar in new patent violation circumstances final 12 months.
But Waco, the Western District of Texas, has grow to be the new heart for patent infringement circumstances. That’s largely as a result of the district encompasses Austin, the place many tech corporations have places of work, and notably, a key piece of that 2017 Supreme Court ruling restricted filings to venues the place the defendants have precise operations.
So-called patent trolls have additionally discovered a pal, seemingly, in U.S. District Judge Alan Albright, a former trial legal professional who was nominated to grow to be a federal choose in Waco in 2018 by former President Donald Trump. In the two years following his affirmation by the Senate, Albright has come to preside over the most popular court in the country to litigate mental property disputes, with a really excessive proportion of plaintiffs successful their circumstances.
It’s no marvel that outfits like Sable proceed on their path. Scoring early settlement agreements can add up to massive enterprise. (Their continued success can also be why litigation finance funds proceed to spring into existence.)
Cloudflare is a a lot greater quarry now, too. While Blackbird sued whereas it was nonetheless a privately held entity, Cloudflare went public in 2019 and at the moment boasts a market cap of $26 billion.
Kramer is aware of the upward battle forward. It’s why regardless of its assets, Cloudflare is reaching out to the public once more. “I don’t mean to sound self-serving, but we have a very intense group of engineers and people in this space who read [our] blog regularly,” Kramer says of the detailed post he revealed this morning relating to the case. “I also think this really strikes a nerve with some people because they are so bothered by” the follow of patent infringement fits.
Kramer says it’s inconceivable to overstate the affect of those far-flung engineers in Cloudflare’s fight in opposition to Blackbird, “It wasn’t simply individuals who thought, ‘Oh, it’s an opportunity to make some cash and I’m gonna go do that.’ There wasn’t a variety of junk in [what they submitted]. Instead, we had folks saying, ‘Hey, listen, I worked on this back in the ’90s once I was over at this firm, and it’s loopy that they’re attempting to say they invented this,’ and they’d ship us articles that that they had written.
“We had people doing research at libraries and stuff like that,” provides Kramer, “but we also had people who had worked in the industry and said, ‘I worked on this three years before they ever got that patent; there’s no way they should be able to create this [trouble] based something that I did.’”
Cloudflare is hoping once more that a variety of its followers will get energized, however “also the exact right people, who are motivated by this and and who are very, very knowledgeable in this space,” says Kramer.
“We’re hoping to get the gang back together.”