Defeated on Legal Technicality - A Patent Covering Emails with Links
Another patent, number 7,840,176, was granted. It is a broad patent that covers mass distribution of emails containing links. Acacia saw great potential in the patent and set up another subsidiary, Email Link Corporation, as the owner of this new patent. It started to sue several companies in Las Vega. See this link for a reporting:
Las Vegas casino operators hit with patent lawsuits (Las Vegas Sun).
Below is an opinion of a marketing professional on the broad coverage of the patent:
Company Claims Email Marketing Patent (Performance Marketing Insider; accessed October 2020).
Under patent law, a patent has exclusivity period of 20 years from the date the inventor first filed a patent application. Exclusivity means that the patent owner can exclude others from practicing the patented invention. As you can see from the history of my previous patents, it is possible to receive several patents based on the same initial filing. These patents issued at different times. In order to prevent patent owners from extending the reach of the invention, the law requires that all these patents in a “family” must be owned by the same owner and expire at the same time.
Just like everything in law, there are gray areas. How about company subsidiaries? Can different wholly owned subsidiaries of the same parent company own different patents of the family? There was no clear-cut answer.
As mentioned before, Acacia set up two different wholly owned subsidiaries to hold two set of patents of the same family.
Instead of attacking the merit of the invention or showing no infringement, defendants' lawyers raised the subsidiary issue. It became the focus of their attack. The lawyers were doing their job to look for all weaknesses of a case.
Common sense tells us that Acacia's arrangement should be okay. Also, the Patent Office had published a manual that explicitly stated that this arrangement was valid. Thus Acacia was following the rule laid down by the Patent Office. But the court overruled the Patent Office and Acacia lost. The court held that Online News Link could not hold one patent of the family while Email Link Corporation hold another patent (even though both companies were wholly owned by the same parent company).
The patents became unenforceable after the court ruling. The litigation ended. See the article below for a more detailed explanation of the issue (the last paragraph of this article discusses the Patent Office manual mentioned above):
District Court Draws Line on Terminal Disclaimers for IP Owned by Subsidiaries (Intellectual Property Law Blog)
Acacia lost on a legal technicality. This litigation shows that it is not easy to enforce a patent against infringement. Defendants will go over the patent with a fine-tooth comb. You are out even if you only make a tiny mistake!
A major international law firm (over 2,500 lawyers in 43 offices), which represented some of the defendants, highlights this litigation on its website as one of its success stories:
Five Las Vegas casino resorts defend against patent infringement claims brought by Acacia subsidiary
Click here to read my final thoughts.