In an article for The Seattle Times, Benjamin J. Hodges explained the costly circumstances small businesses face when dealing with patent trolling conducted by a North Carolina-based company named Landmark Technology A (LTA).
Local Washington state firms such as Saltworks, a Woodinville maker of sea salt consumer products, has been a recent target of patent trolling. Saltworks was sued by LTA for allegedly infringing on a patent covering technology in its e-commerce system. Rather than going to a costly court battle, Saltworks reportedly settled despite how generic the patent lawsuit was. At least 10 other Washington state businesses have been subjected to similar patent trolling, and LTA has sent 1,200 letters to small businesses across the country between January 2019 and July 2020. According to Attorney General Bob Ferguson, “Landmark Technology A’s ‘entire business model consists of demanding licensing fees from other companies…Companies were told they had infringed on a patent owned by LTA that covers a broad swath of e-commerce operations and in many cases were threatened with litigation unless they paid Landmark a $65,000 licensing fee.”
The cost of taking on LTA is too high, therefore, most companies prefer to settle. Ben Hodges, who has represented several firms named in Landmark lawsuits, weighs in commenting that, “fighting these entities is expensive…The legal costs to merely file an initial response to LTA can be roughly similar to the amount LTA often settles for, which can be unsustainable for smaller firms,” He continued, “You don’t see them going after the Amazons, the Microsofts of the world,” Ben added. “You see them going after small, family-owned businesses.”
Washington state recently filed a lawsuit in King County Superior Court alleging that LTA “primarily targets customer login pages on company websites, but has also demanded license fees for webpages containing privacy practices, shopping carts, products for sale, and company home pages. In short, any business with a web presence is a potential target for LTA.”
LTA’s legal strategy involves targeting and bullying small companies with little means to fight the battle and would need to settle up by paying LTA regardless.
Read the full article on The Seattle Times to learn more about the impact of patent trolling on small businesses.
