Patent trolls are a growing threat amid current economic downturn, warns in-house lawyer
Givex, a global cloud-based provider of POS, gift cards and loyalty solutions, has joined LOT Network in a bid to combat the growing threat posed to its business and its customers by patent assertion entities – also known as patent trolls, which are companies that acquire patents solely for the purpose of filing law suits against other companies.
Fighting back against patent trolls is key to protecting an organization at times of economic downturn, according to Esther Gonzalez, vice president, legal and corporate counsel at Toronto-based Givex.
“2020 has all the indications that we are heading towards another downturn in the economy. We anticipate an increase in the threat of patent assertion litigation will climb with the current economic situation,” says Gonzalez. While PAE litigation may be here to stay, Gonzalez recommends taking action to mitigate against it – particularly in light of the COVID-19 pandemic crisis and subsequent financial challenges.
“One of the most important things you can do is to fight litigation,” she says. “A key part of the business model [of patent trolls] is dependent on quick and easy settlements, so fighting back, while controlling costs, sends the message that you’re not a good future target.” Reaching out to others who are being sued, and sharing costs, strategies and knowledge can also be beneficial, according to Gonzalez.
Givex is the first Canadian retail tech company to join LOT Network, an international non-profit community which offers immunity from patent trolls. Members agree that if an asset fall into the hands of a patent troll, they will grant a license to all other members — thus rendering them immune from patent troll litigation using those assets. All traditional uses of patents, such as selling them or using them to sue other companies, are retained.
“We understand that as the economic situation distresses North American companies, those companies may look to offload their assets – including their patents – to potential patent trolls, as a cost-saving or revenue-recovery measure,” says Gonzalez. “Through these distressed sales, patent trolls can secure patent portfolios as a means to profit from infringement cases. With the average software patent troll lawsuit costing $4.2 million CAD to defend, we believe that joining LOT Network’s low-cost, preventative community is a smart move against future litigation.” Givex solutions, such as online ordering and contactless payment, have become essential for many retailers and restaurants during the pandemic crisis.
LOT Network currently protects more than 800 members in 36 countries from litigation from over 2.5 million worldwide patents and counting. Network members include market leaders such as IBM, Toyota, Visa, Canon, Google, Tesla, Cisco, Amazon, Microsoft, Alibaba and Salesforce, as well as innovative companies across industries.