Judge: FindTheBest can’t use anti-extortion law against a patent troll

Last year, consumer search website FindTheBest tried to use an anti-extortion law to fight back against Lumen View Technology, a patent troll that attacked it with a "matchmaking" patent. While FindTheBest was able to knock out Lumen's patent in short order, its lawsuit based on the Racketeering Influenced and Corrupt Organizations (RICO) Act came to an end this week.

The judge's opinion recounts some of the facts that led up to the RICO case, such as Lumen's attorney, Damian Wasserbauer, accusing FindTheBest CEO Kevin O'Connor of committing a "hate crime" for using the term "patent troll" against one of Lumen's owners.

"The courts of appeals which have addressed the question have all agreed that the instigation of meritless litigation does not establish the predicate RICO act of extortion," wrote US District Judge Denise Cote in her opinion (PDF). "Recognizing such litigation as a predicate RICO act would give complainants unprecedented access to federal courts and the treble damage remedy authorized under RICO. Moreover, allowing these suits to proceed as RICO suits risks chilling parties’ resort to the judicial system to resolve their disputes."

She wasn't convinced by the RICO precedents cited by FindTheBest, which included a case in which Russian criminal groups tried to extort a multi-million dollar payment. Another case, Chevron Corp. v. Donzinger, included some malicious lawsuits but was a much broader "multi-faceted extortionate scheme" that involved "intimidation of judges, fabrication of evidence, and bringing false criminal charges."

Claims that Lumen's behavior amounted to mail fraud and wire fraud also didn't hold up. Courts haven't recognized such claims, even in cases of malicious prosecution, "simply because the mail or wires were used."

An uphill battle

FindTheBest knew there was a high bar to move forward with a RICO lawsuit but thought it was worth a shot.

"The war between small businesses and patent trolls continues to be an asymmetrical fight with little recourse," wrote FindTheBest CEO O'Connor in an e-mailed statement to Ars. "We knew that setting legal precedent with RICO claims would be an uphill battle, but one that was worth fighting. We respect Judge Cote's decision and are reviewing her opinion to determine the best next steps."

O'Connor pledged $1 million of his own money to fight off Lumen View, and since FindTheBest's spat, the company became heavily involved in lobbying for patent reform. (The effort to get a patent reform bill passed this year died suddenly in the Senate yesterday.)

Attorneys representing Lumen View's principals in the RICO case didn't respond to a request for comment for this story.

There's still another avenue for FindTheBest to push back against Lumen View's failed patent attack. It's seeking legal fees in the original patent case, asking Judge Cote, who oversaw both the original patent infringement case and the RICO case, to find that Lumen's patent claims were "exceptional" and warrant fee-shifting. A recent Supreme Court ruling on fees in patent cases should make that fight a bit easier for FindTheBest.

An imperfect tool

The first RICO law was passed in 1970, and it was designed to make it easier to go after organized crime.

There have been several efforts to use RICO to fight back against patent claims perceived as abusive, but none have won a decision on the merits. Cisco tried to use RICO to hit back against a patent troll suing coffeeshops and chain hotels for offering basic Wi-Fi service, but that effort failed last year. A paper published in the Yale Journal of Law and Technology noted an attempt to use RICO against a patent holder back in 1994. Unlike FindTheBest's case, that lawsuit survived a motion to dismiss, after which the patent plaintiff quickly settled.

In an article on RICO and patent trolls, journalist Timothy Lee spoke to a lawyer for Tumi, a New Jersey luggage manufacturer that used RICO to fight back against ArrivalStar, the holder of "vehicle tracking" patents and now officially America's most litigious patent troll. ArrivalStar dropped its case against Tumi shortly after the RICO counter-strike.

While no one has ever used RICO to actually beat a patent troll, filing such a case does make it clear that the defendant won't roll over and is willing to put up a tough and expensive legal fight. In some cases, that's been enough to make a troll give up and walk away.