A few weeks ago, we wrote about Cloudflare's decision to punch back hard against a patent troll, Blackbird Technologies, that had sued the company over a questionable patent (US Patent 6,453,335). Beyond just challenging the claim of infringement, the company also filed ethics complaints against the lawyers who run Blackbird, noting that the company appeared to be a law firm masquerading as a company, and breaking a number of local rules about law firms and "buying" a proprietary interest in a lawsuit. At the same time, Cloudflare set up a $50,000 fund to offer prizes to people who could find prior art not just to invalidate the patent that Cloudflare was sued over but also every other patent held by Blackbird Technologies.
Apparently, the company has now received a ton of submissions -- many of which it claims are quite thorough. And it's upping the ante. An anonymous donor has agreed to match the $50,000 fund, and so now Cloudflare is offering $100,000 for prior art to invalidate Blackbird Tech patents. The company says that it's received 140 separate prior art submissions so far, targeting 18 of the 38 patents and applications it knows about, but wants to go after the rest as well.
We’ve been impressed with the exceptionally high quality of the submissions. The Cloudflare community of users and readers of our blog are an accomplished bunch, so we have a number of searches that were done by expert engineers and programmers. In one case that stood out to us, someone wrote in about a project they personally had worked on as an engineer back in 1993, which they are convinced is conclusive prior art to a Blackbird Tech patent. We will continue to collect and review these submissions.
The submissions so far relate to 18 of the 38 Blackbird Tech patents and applications. You can see a summary of the number of submissions per patent here (PDF). You'll see there are still 20 Blackbird Tech patents and applications we’ve yet to receive a submission for.
We’re looking for prior art on 100% of the Blackbird Tech patents. If you are interested in helping, take some time to look into those patents where we don’t have anything yet. We’ll update the chart as we review the submissions with additional information about the number we receive, and their quality, to help focus the search. After the initial review, we’ll start to color code the patents (i.e., red/yellow/green) to demonstrate the number and quality of submissions we’ve received on each patent.
Also, Cloudflare is nothing if not thorough in going after any and every argument made by Blackbird Technologies. In response to Cloudflare's ethics complaints against Blackbird as violating rules for lawyers and law firms, the company insists it's not a law firm, to which Cloudflare now claims "oh really?"
And Ms. Verlander’s unequivocal assertion that Blackbird Tech is not a law firm can be contrasted with sworn statements submitted by Blackbird Tech attorneys to courts last May asserting how much they operate like a law firm. In Blackbird Tech v. Service Lighting and Electrical Supplies, Blackbird Tech CEO Wendy Verlander, Blackbird Tech co-founder Chris Freeman, and Blackbird Tech employee Sean Thompson, each filed declarations in opposition to a proposed protective order.
Protective orders are important in patent litigation. Often, discovery in those cases involves companies handing over highly confidential information about their most important trade secrets or the history of how they developed valuable intellectual property. In most cases, courts limit access to such materials only to outside counsel, as opposed to the parties’ employees and in-house counsel. In-house counsel generally serve a number of functions at a business that include competitive decision-making, either directly or indirectly. Because in-house counsel may benefit from the additional perspective and insight gained by exposure to sensitive trade secrets of a competitor, and are unable to simply wipe their memories clean, courts in patent litigation cases often limit their review of particularly sensitive documents. In such cases, documents classified as “HIGHLY CONFIDENTIAL—ATTORNEY EYES ONLY” are limited to review by outside counsel, who are less likely to face the same sort of business decisions in the future.
When it served their purposes in opposition to a proposed protective order, the Blackbird Tech attorneys were quick to point out how much they operated only like a law firm and distance themselves from their business roles. Their sworn declarations specifically asserted:
“Although the structure of Blackbird is unique, the realities of patent litigation at Blackbird are very much the same as patent litigation on behalf of clients at law firms.” (Verlander at ¶13, Freeman at ¶14)
“Thus, in many ways, my role at Blackbird as a member of the Litigation Group is identical to my previous role as outside counsel at a law firm.” (Verlander at ¶13, Freeman at ¶14)(emphasis added)
“Blackbird’s Litigation Group operates almost identically to outside law firm counsel. Blackbird’s litigators are presented with patents and possible infringers, just as clients bring to law firms. The Blackbird litigators then bring their litigation expertise to bear and thoroughly analyze the patent and the potential infringement case, ultimately deciding whether to move forward with litigation — just as a law firm would evaluate a case. If the Blackbird litigation team identifies a strong infringement case, the litigators draft Complaints and conduct litigation, acting in the same role as outside counsel.” (Verlander at ¶14, Freeman at ¶15)(emphasis added).
“On a day-to-day basis, what I do at Blackbird is the same as what I did when practicing at a firm.” (Thompson at ¶2).
This inconsistency points out once again how Blackbird is attempting to gain an advantage by turning traditional roles on their head. If they were a typical company, that was looking to make products using the patents they own, then we’d be able to seek discovery on their products and operations. Instead, they function as a law firm with no business operations that would be subject to the same sort of scrutiny they will apply to a company like Cloudflare.
Also, while we noted the ethics complaints that Cloudflare has filed, it appears that politicians are paying attention and at least one is looking to make Blackbird Technologies' style of patent trolling explicitly illegal:
On May 23, 2017, Rep. Keith Wheeler of Illinois introduced a bill (the “Ethics in Patent Litigation Act”) that would make it the public policy of the State of Illinois that attorneys in the state, like Blackbird co-founder Chris Freeman (LinkedIn), should not be able to buy patents themselves for the purpose of suing on them if they are not in the business of any other productive activity.
Cloudflare is very much building on the Newegg strategy of making sure that if you try to patent troll against it, it's going to hit back hard -- which should discourage other patent trolls from trying (in Newegg's case, this has been amazingly successful, even if it took a few years). But, again, the idea that our system allows this to happen in the first place is the real travesty. Companies shouldn't have to fight back hard to discourage being attacked by patent trolls. The very existence of trolls is the problem. Bad patents, broadly granted, combined with a ridiculous patent litigation process that makes this system ripe for abuse. It's great that Cloudflare is fighting back. It's frustrating that it's even necessary.
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