Neiman Marcus is Fighting Back Against a Notorious Dallas-Based Patent Troll

Thumbnail image for cupcakesanta.jpeg
IP Nav doesn't say what patents Neiman Marcus is allegedly infringing on, but our money's on the driveable cupcakes.
In the decade since it was founded in Dallas, IP Nav has established itself as a global leader in the increasingly lucrative business of "patent assertion," offering clients the ability to "maximize the value of their IP assets." Put more bluntly, it's a patent troll, shaking down companies by threatening them with lawsuits over patents that they or their clients are squatting on. They are a big problem in the tech world, and IP Nav is a big part of it. Rackspace, the San Antonio-based cloud computing firm, recently called the company "one of the most notorious patent trolls in America."

So when Neiman Marcus received a communique from IP Nav in April, the retailer knew the score. Headlined "proposal to negotiate patent license," the letter explains that an analysis reveals that some Neiman Marcus products appear to use patents held by an anonymous client, described only as the owner of "valuable patents in the field of automation of application programs.

"We would very much welcome the opportunity to enter into constructive discussions with your company to determine whether we can agree to a mutually acceptable patent license agreement or that you are not using our client's patents," the letter continues. "We are focused on addressing these issues without the need for costly and protracted litigation."

They give Neiman Marcus two weeks to agree to begin discussions. Instead, the company filed a federal lawsuit against the anonymous patent holder, asking a judge to declare that the retailer has not infringed on any patents, thereby preempting the lawsuit IP Nav suggests it is ready to file. The letter, the company notes, doesn't even hint at what patents it is allegedly infringing upon other than to say they have something to do with "automation."

"Neiman Marcus is now in the intolerable position of being pressured to choose between waiving its legal rights ... or subjecting itself to an ongoing threat of litigation and unspecified infringement allegations," the suit declares. "Neiman Marcus refuses to make such a choice and, instead, seeks declaratory relief as to its rights now."

To support its argument, Neiman Marcus includes an excerpt from a decision against IP Nav issued in 2011 by a federal judge in Wisconson. It's worth quoting.

[IP Nav's letter is] an unmistakable and intentional warning shot across the bow. The actual message is pellucid to any patent litigator, so that IP Nav's use of apophasis is disingenuous and unavailing. Remember Mark Antony's funeral oration in Julius Caesar? That's how an experienced business executive or lawyer would view IP Nav's assertions that 'we are focused on addressing these issues without the need for costly and protracted litigation' and 'our client's preferred approach is to conclude licensing discussions without resorting to litigation. We hope you share this objective.' The implied 'or else!' oozes from this letter like lye from lutefish. To paraphrase an observation attributed to Anton Chekhov, you don't hang a gun over the mantle in Act I unless someone is going to fire it in Act III."

Kudos to the judge for working references to Shakespeare, Chekhov and lutefish into a single opinion about patent litigation. Let's hope U.S. District Judge Ed Kinkeade, to whom the Neiman Marcus case has been assigned, has a pen that is equally sharp.

My Voice Nation Help
13 comments
bvckvs
bvckvs topcommenter

It doesn't matter that some companies say the little guy is a "scumbag" or "notorious" or whatever, so it's dumb for Neiman and its supporters to even mention such a thing.

All it does is show that when they got caught, instead of man'ing up, they whined like beggars.

MikeWestEast
MikeWestEast

These suits are never about actual software. Firms that attract these epitomes of the legal profession always use patent protected code or develop their own code. It is about the asinine patents given out by the Patent Office for business processes in the late 90's and early 2000'ss. These civil service all stars handed out broad patents on things like using UPC on a plastic tab to verify identity or scan an image, put it in a cloud type server, and retrieve it from another place. So called inventors wrote garbage code that did basic functions and the government said they consequently invented the process. Congress eventually eliminated the process, but those stupid patents remain. The only defense is either to have built something that differs in some detail from patent layout or own a patent on same thing issued before the business process patent. Yes, that is right. The bureaucrats had so completely lost control of the process that they issued patents on things covered at least partially by other patents. When you hear about firms like Google or Microsoft spending billions to buy technologically dinosaur, loser firms for intellectual property, that is the reason. They have no desire to use that garbage. Their patents do predate this wacky period at the Patent Office and each one might be key item to end a lawsuit.

What a waste of time and money. All because the bureaucrats did not understand the dot.com surge and bubble. The Federal judge cannot render a summary judgement unless the lawyer troll completely screws up the complaint. The judge has to order a discovery process and the lawyer's cash registers start clicking.

mcdallas
mcdallas topcommenter

Was that a Federal Judge or a European history/biology professor?

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

A number of years ago the computer software industry asked for patent protection on software rather than copyright protection.  They received what they wanted and now they are reaping the rewards.  It is just that old Chinese curse: "Be careful what you wish for, you just might get it."


Another problematic area that has reared its ugly head is that you only purchase a license to use software; and, not the software itself.

PersistentID2345
PersistentID2345

@ThePosterFormerlyKnownasPaulYou can have both patent and copyright protection on software. They cover different aspects. 

It is at times difficult to distinguish what is hardware and what is software so there is no clear line distinguishing software patents.

There are areas of software research where solutions to difficult problems are attempted, requiring significant resources to be expended. These circumstances seem appropriate for patent protection because the greater expense can be justly incentivized by the protection.

The major problem is that a lot of software patents are granted on systems that any software engineer could trivially build given a few weeks or less of design time (obviousness problems).

Another problem subtly illustrated here is that our legal system is inefficient at handling complex issues and therefore great expense is required to determine patent validity/invalidity infringement/non-infringement.

The use of the term 'squatting' in the article is inappropriate in a basic sense because, by law, the right to exclude others is the primary benefit afforded patent holders. The term is, OTH, appropriate in cases where the patent should never have been issued in the first place and the holder is squatting on IP that should equitably be non-restricted.

In a perfect world  only meritorious innovation would be afforded patent protection, enforcement adjudication would be economically viable, and an efficient market would exist for the purchase/sale of patents.

Because the opposite is mostly true, we have 'Trolls', buying questionable patents on the cheap, doing some vague arm twisting and then collecting on the cheap from a large number of targets. In short, a protection racket. But instead of cops getting paid to facilitate the whole thing we have the legal industry and the Patent Office.

IP NAV was attempting to leverage a desire for litigation expense avoidance while walking a fine line on the intricacies of declaratory judgement law in order to gain a cave-in from the retailer.

The purchase price and quality of the patents and the infringement arguments in this case are not known so one could argue that IP NAV is justly protecting their reasonably acquired patent rights, but they incriminate themselves somewhat as trolls by the measly nature of their assertions.



observist
observist

@ThePosterFormerlyKnownasPaul  In many, if not most, cases, the patent isn't even on a piece of software, just a software concept like "including a hypertext link in an sms text message".  The patent system is truly broken when it comes to IT.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

@PersistentID2345 @ThePosterFormerlyKnownasPaul  

Thank you for a succinct article as to why the patent system should nroot have been used for software.

Many of the software patents are overly broad and never should have been granted based on the broadness of the claims.


It would be like obtaining a patent based on the claim of being able to change the space-time coordinates of an object in physical space and then suing FedEx.


The best example that I think of as to why the majority of these infringement claims are specious are the same arguments as were used against the Selden patent for an automobile.

Now Trending

From the Vault

 

General

Loading...