Broken Toys

As the latest pool of saliva in point, a patent lawsuit filed against NCsoft for creating MMOs. That’ll show ‘em!

Specifically, the suit claims that NCsoft has infringed on patent 7,181,690, “System and Method for Enabling Users to Interact in a Virtual Space” through its games, including City of Heroes, City of Villains, Dungeon Runners, Exteel, Guild Wars, Lineage, Lineage II, and Tablula Rasa.

This, despite the fact that about 9 seconds of research would turn up quite a few “systems and methods for enabling users to interact in a virtual space” prior to the patent’s filing in 2000 – one of which was even listed in the complaint (Edit: as pointed out in comments, the patent refers to an earlier filing date of 1996 – which just barely precludes most Internet-era MMOs with the exception of Meridian:59 -  but there’s still no shortage of earlier titles.)

So why was NCsoft targeted specifically, and not, say, a somewhat larger and more well known company with thousands of slavering lawyers on standby ACHING to take your call? Well, as another lawyer speculated, Texas is like a whole other country.

“Being a foreign defendant in Texas is not a pleasant thing,” he said of NCsoft, which is primarily a Korean company. “The juries are, many would say, biased towards American plaintiffs and have a propensity to offer high damages. Some defendants might view them as an unfriendly jury and it might make the defendant more likely to settle.”

Uh huh. Riiiiight.

Worlds.com, when not targeting frivolous lawsuits on racial grounds, develops branded versions of the antediluvian “ActiveWorlds” system.

This dance happens quite often in the high tech industry – a company with no actual products files ridiculous patents, and then basically blackmails larger companies to take them to court, where (after the appropriate legal fees are paid out by all parties) the patent is thrown out as spurious after a clerk with five minutes of time on Google defines “prior art“.

And that brings us back to East Texas. Spectres of good upstanding Texas cowboys standing up to those uppity Asians raised by the quoted patent lawyer aside, the suit was filed in that district for a somewhat more mercenary reason.

Conditions never have been better for patent pirates. Patent cases in general are getting more expensive and difficult to defend. According to the 2003 American Intellectual Property Lawyers Association Economic Survey, it will cost a defendant in a patent action filed in Texas with between $1 million and $25 million at stake roughly $1.5 million just to get through discovery. Even worse, for that same amount at stake, the defendant is looking at spending more than $2.5 million if it has to go through trial.

OK, so that’s why they’re filing an obviously absurd claim… but why east Texas?

Texas, particularly the Eastern District of Texas, has become a favorite venue of these pirates for two reasons: our judges and our juries. First, many of our federal courts have relatively quick dockets and judges with greater-than-average experience in patent cases. For instance, judges in the Eastern District have dealt with hundreds of patent cases, and some judges have developed special rules for dealing with them. Unlike the Northern District of California, which also has its own patent rules, courts in the Eastern District of Texas typically try to set a trial date in a patent case within 18 months or less from its filing date. This threat of imminent trial is the “gun to the head” that the patent pirate needs to execute his strategy.

Perhaps more important, many in the patent bar know that juries typically have little technical training or knowledge, and often even less interest in technically complex arguments, so they’re not inclined to consider fully the merits of a difficult infringement analysis. Juries in East Texas, unlike those in Houston, Dallas or Austin, are much less likely to have a member with any technical training or education, which exacerbates the problem from the defense perspective, but makes East Texas federal courts an attractive venue for would-be plaintiffs, who know that the jury will, instead, gravitate toward softer or superficial issues that are difficult to predict.

Randy Farmer, one of the developers of Habitat, isn’t too happy either, and retells his last adventure with patent trolls here.

Our legal system: totally awesome.