Unscrupulous lawyers in search of an easy revenue stream often acquire rights to patents and then sue large tech companies for infringement. Rather than bleed legal fees fighting all the lawsuits, these tech companies often strike licensing agreements or settle with these patent trolls.
In 2017 Blackbird Technologies, one such patent troll, asserted a ridiculous software patent (which we should do away with, but that’s another post) against Cloudflare. Instead of following the traditional playbook, Cloudflare decided to fight back. Instead of fighting it out in the courts using the traditional method, they created a new pattern for everyone else to stand up to patent trolls. Their clever method consisted of three parts:
(i) defending ourselves vigorously against the patent lawsuit instead of rolling over and paying a licensing fee or settling, (ii) funding awards for crowdsourced prior art that could be used to invalidate any of Blackbird’s patents, not just the one asserted against Cloudflare, and (iii) asking the relevant bar associations to investigate what we considered to be Blackbird’s violations of the rules of professional conduct for attorneys.
They won in court, but it took two years and they spent a lot of money. But winning once isn’t enough; Blackbird could bring other patent suits against other companies. The community submitted prior art on 49 of Blackbird’s patents, and an anonymous donor allowed Cloudflare to challenge other Blackbird patents with administrative proceedings (a less costly way to invalidate a patent that suing in federal court).
Finally, Cloudflare filed ethics complaints against both of Blackbird’s co-founders before the bar associations of Massachusetts and Illinois. The rules of professional conduct for lawyers prohibit them from acquiring a cause of action to assert on their own behalf. Blackbird purchased the patent they asserted against Cloudflare for $1, but it’s likely there was some additional side agreement that Blackbird would split any legal proceeds with the inventor. Bar proceedings are generally confidential, but could result in sanctions including disbarment, suspension, and/or financial penalties.
Not only did Cloudflare win their case, but they made it substantially more difficult for Blackbird to sue other tech companies. It was more work for them, and also more money. But if everybody who got sued by a patent troll followed this pattern, I think we could make patent trolls go away. Every tech company should do this.
And software patents suck.