Stupid Patent of the Month
Patent trolls are everyone’s problem. A study from 2019 showed that 32% of patent troll lawsuits are directed at small and medium-sized businesses. We told the stories of some of those small businesses in our Saved by Alice project.
But some patent trolls go even further. Hawk Technology LLC doesn’t just sue small businesses (although it does do that)—it has sued school districts, municipal stadiums, and non-profit hospitals. Hawk Tech has filed more than 200 federal lawsuits over the last nine years, mostly against small entities. Even after the expiration of its primary patent, RE43,462, in 2014, Hawk continued filing lawsuits on it right up until 2020. That’s possible because patent owners are allowed to seek up to six years of past damages for infringement.
One might have hoped that six years after the expiration of this patent, we might have seen the end of this aggressive patent troll. Nope. The U.S. Patent and Trademark Office has granted Hawk Tech another patent, U.S. Patent No. 10,499,091. It’s just as bad as the earlier one, and starting last summer, Hawk Tech has started to litigate.
Camera Plus Generic Terms
The ‘091 patent’s first claim simply claims a video surveillance system, then adds a bunch of computer terms. Those terms include things like “receiving video images at a personal computer,” “digitizing” images that aren’t already digital, “displaying” images in a separate window, “converting” video to some resolution level, “storing” on a storage device, and “providing a communications link.” These terms are utterly generic.
Claim 2 just describes allowing live and remote viewing and recording at the same time—basic streaming, in other words. Claim 3 adds the equally unimpressive idea of watching the recording later. The additional claims are no more impressive, as they basically insist that it was inventive in 2002 to livestream over the Internet—nearly a decade after the first concert to have a video livestream. Most laughably, claim 5 specifies a particular bit rate of Internet connection—as if that would make this non-invention patentable.
In order to be invalidated in court, however, the ‘091 patent would have to be considered by a judge. And Hawk Tech’s lawsuits get dismissed long before that stage—often in just a few months. That’s because the company reportedly settles cases at the bottom level of patent troll demands, typically for $5,000 or even less. That’s significantly less than a patent attorney would request even for a retainer to start work, and a tiny fraction of the $2 million (or sometimes much more) it can cost to defend a patent lawsuit through trial.
The patent monetization industry includes the kind of folks that can be counted on to sue a ventilator company in the middle of a pandemic. Even in that context, Hawk Tech has taken some remarkable steps.
Hawk Tech has sued a municipal stadium that hosts an Alabama college football team; a suburban Kentucky transit system with just 27 routes; non-profit thrift stores and colleges; and a Mississippi public school district that serves an area with a very high (46%) rate of child poverty. That last lawsuit is one of at least three different public school districts that Hawk Tech has sued. These defendants would be hard pressed to mount a legal defense that could easily cost hundreds of thousands of dollars.
One type of company you won’t see on the long list of defendants is a company that actually makes camera systems. Instead, Hawk Tech finds those companies’ customers and goes after them. For instance, Hawk Tech drew up an infringement claim chart against Seon, a maker of bus camera and GPS systems; then used that chart to sue not Seon, but the Transit Authority of Northern Kentucky (TANK), based on a Seon pamphlet that pointed to TANK as a “case study.” Instead of suing camera company Eagle Eye, Hawk Tech sued the city of Mobile, Alabama, likely after seeing a promotional video made by Eagle Eye on how the city’s stadium used its camera systems.
The problem of what to do about patent trolls that demand nuisance-level settlements is a tough one. What may be a “nuisance” settlement in the eyes of large law firms can still be harmful to a charity or a public school serving impoverished students.
That’s why EFF has advocated for strong fee-shifting rules in patent cases. Parties who bring lawsuits based on bogus patents won’t be chastened until they are penalized by courts. We also have supported reforms like the 2013 Innovation Act, which would have allowed customer-based lawsuits like the Hawk Tech cases to be stayed in situations when the manufacturer of the allegedly infringing device steps in to litigate.
Right now, there are two different parties seeking to invalidate Hawk Tech’s ‘091 patent and collect legal fees. One is Nevada-based DTiQ, a camera company whose customers, including a Las Vegas sandwich shop, have been sued by Hawk Tech. Another is Castle Retail, a company that owns three supermarkets in Memphis. Let’s hope one of those cases gets to a judgment before Hawk Tech files off another round of bogus lawsuits against small companies—or public schools.
Source: How A Camera Patent Was Used to Sue Non-Profits, Cities, and Public Schools