Kaspersky Lab Prevails in Legal Fight Against Technology Patent Troll

02 Oct 2013
Corporate News, Press Releases

Kaspersky Lab is pleased to announce that it has emerged victorious from a lawsuit initiated by Lodsys, a company located in Texas that operates as a Patent Assertion Entity, more commonly known as a Non practicing entity or “Patent Troll,” known for initiating patent infringement lawsuits against a variety of companies.  Kaspersky Lab, along with 54 other companies including Atari, Symantec and Estee Lauder were originally named in Lodsys’ lawsuit.  Of the 55 total companies named as defendants in the lawsuit, only Kaspersky Lab refused to settle out of court with Lodsys, and instead demanded the case be brought to trial.  On September 30, seven days before the trial was to commence, Lodsys withdrew its claims rather than facing the verdict of the court, and its lawsuit was dismissed with prejudice.  Kaspersky Lab paid no money to Lodsys, and did not agree to any settlement terms.

“Our position is firm.  No concessions to the trolling scum and IT racketeers.  We call on all other IT companies to keep on fighting and not give up. Only then will it be possible to get rid of the patent parasites once and for all,” said Eugene Kaspersky, Chairman and CEO, Kaspersky Lab.

In May 2012, Lodsys filed a patent action against 55 companies in the USA. Lodsys claimed that each company was infringing on one or more of four patents, that pertain to collecting user’s perceptions about the product, including purchases, and upgrades with computer applications.  51 of those companies agreed to settle the case out-of-court.  The rest of the defendants were initially determined to fight against the lawsuit, but unfortunately they gave up just 10 days before the final trial hearings were to commence. The only company that stayed to assert its rights was Kaspersky Lab.  On September 30th, 2013, the court approved the petition from Lodsys to withdraw its claim and the lawsuit was dismissed with prejudice.  Kaspersky Lab maintains that it does not infringe on any of Lodsys’ patents, and that their patent claims are invalid.

It should be noted that more than 400 other companies, including large companies like Oracle as well as many small application developers, had signed license agreements with Lodsys before this lawsuit was filed. Through these agreements, Lodsys earns licensing fees whenever these companies use their allegedly-patented technologies. Lodsys is currently involved in a number of ongoing lawsuits.

The business of Patent Trolls around the globe is very large scale, and has been attributed as a hindrance to innovation, development, and implementation.  Rather than incur the cost of litigation and time required to fight these frivolous lawsuits, most companies will pay these Patent Trolls their requested fees.  The example set by Kaspersky Lab’s handling of this lawsuit shows that these legal actions can be successfully defeated, and that appeasement, while perhaps a faster course of resolution, only succeeds in “feeding the trolls.” 

“The process was really hard to manage for different reasons: First, many co-defendants had their own opinion so it was hard to coordinate the case on the defendant side; Second, the troll’s patents are very abstract and the first fight that must be won is the fight about terms and claim constructions,” said Nadia Kashchenko, Chief Intellectual Property Counsel at Kaspersky Lab, Patent Attorney. “Also in Texas, where the lawsuit was filed, everything is very speedy and we had very little time to prepare for each step, do deep analysis and prepare weighty counterarguments, and present all materials to the court. Finally the troll’s nature, where no concessions can be given!”

This is not the first lawsuit over a patent troll won by Kaspersky Lab. Last year another Troll, IPAT (Information Protection and Authentication of Texas), gave up without getting anything from Kaspersky Lab following a decision in favor of Kaspersky Lab from the U.S. District Court for the Eastern District of Texas.

See related post by Eugene Kaspersky.

Read blogpost by Nadezhda Kashchenko.

* The company was rated fourth in the IDC rating Worldwide Endpoint Security Revenue by Vendor, 2012. The rating was published in the IDC report "Worldwide Endpoint Security 2013–2017 Forecast and 2012 Vendor Shares (IDC #242618, August 2013). The report ranked software vendors according to earnings from sales of endpoint security solutions in 2012.

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