Troll Survival: RevoStock's Patent Troll Lawsuit Story
The Worst Email I Have Ever Received
The subject line of the email in my inbox simply said, "Patent Infringement Lawsuit Against RevoStock." It was February 28th, 2012. I was about to turn in for the night and was checking some emails while watching TV with my wife. That's when I saw the e-mail subject line. A deep and nauseating pit started forming in my stomach. In this lawsuit-happy world, being the victim of a lawsuit is a scenario often lingering in the back of a business owner's mind, but being sued for patent infringement had never even entered my conscience. "How could this even be possible?!?" I thought. The look on my face gave away that something was very, very wrong. My wife asked me, "What is it?" I just stared at my computer in disbelief. "We've been sued," I said. I had no clue that this lawsuit would be far beyond anything I could have ever imagined.
As the sole founder of RevoStock, since December of 2005 I poured my heart, soul, and personal finances into my dream of creating the first microstock multimedia community specifically focused on video related media. While RevoStock was a small bootstrapped (self-funded) company without any outside investors, I worked hard to make it look and run like a large, funded company. I would never have imagined that giving the impression of being a larger sized company would draw the attention of a company known by many as a "Patent Troll."
Patent Troll? What's That?!?
The day after I received that infamous email, I frantically started doing my research to find out more about the lawsuit. I discovered that we were being sued by a company that many have called a "Patent Troll." Prior to this experience, I had never even heard this term.
I quickly learned that Patent Trolls are companies that own or acquire broad software patents. Then they use these patents to sue companies that may or may not be infringing on the patent in hopes of receiving a settlement or 'license agreement. In most cases, the troll does not make a product or utilize the patent. They just sue those who do. I was in shock. I couldn't believe this was happening, and I had never even heard of it. Every person I shared the story with was equally flabbergasted.
Learn More: What is a Patent Troll?
Most of the patents litigated by patent trolls are broad software patents, many of which should not have been awarded in the first place. Like most other Patent Troll lawsuits, our suit was to take place in The Eastern District of Texas Federal Court, which has become 'the place' for Patent Trolls to assert their cases as the courts and processes have historically been favorable towards the plaintiffs/trolls. See a pattern here?
I became most concerned when I learned that in general, the cost to go to trial and be able to defend yourself in front of a jury can often be close to 2 million dollars or more. You heard me right. Even if you don't infringe on the patent in question, you will need to pay upwards of 2 million dollars just to show that you don't infringe. I knew we didn't infringe on the patent in question, but how would we possibly afford to prove it?
Again, RevoStock is a self-funded small business. While I was very proud of the success of my company and the fact that we had seen steady and constant growth over 6 years, as a self-funded company it is important to pour back into the business to continue to spur growth. Additionally, there really isn't any insurance available that covers Patent Troll lawsuits.
You see, Patent Trolls don't want to go to court. In the grand majority of cases, they want you to settle and pay a license fee whether you are guilty of infringement or not. If you are a smaller company like us, they bet on the fact that you won't be able to afford to go to trial and defend yourself. If you are large as Google or Apple, they bet that you would rather pay a settlement fee than pay to go to trial.
Having read through the patent in question, and the claims they said we were infringing upon, I was more than sure that we weren't infringing on this patent. While there were some general similarities, in order to infringe on a patent, your product has to do everything as listed in the 'claim' that you are being accused of infringing upon, and I knew that we did not infringe.
Normally, when you are accused of a crime, you are innocent until proven guilty. I quickly learned that when you are sued by a Patent Troll, you are guilty unless you can afford to show you are innocent. I have never in my life experienced such a feeling of injustice.
Even though we had attorneys who were fair to us with their fees simply because they believed so strongly that we didn't infringe on this patent and we were unjustly sued, the attorney fees quickly multiplied.
Trolling "After Effects"
When companies like Google or Adobe get sued by Patent Trolls it is still a very frustrating and difficult experience, but they have teams of attorneys on staff to handle it. However, when smaller businesses like RevoStock get sued, it can be life altering. From a personal perspective, I can honestly say that the last two years have been the most difficult years of my entire life. The stress, pain and anxiety put upon me, my family and my employees because of this lawsuit has been off the charts and unlike anything I have ever experienced.
Here are some of the effects small businesses are required to bear when dealing with a patent troll lawsuit:
• Financial - As mentioned above, the average cost to go to trial is $2M. For some, simply consulting a patent attorney can cost tens of thousands of dollars. But that's just the legal cost. A suit like this affects a company financially in so many other ways. For instance, it is almost impossible for a company of our size to get any type of financing or investment when under the siege of a patent troll. For all intents and purposes, your company is financially held hostage.
• Psychological - When threatened with potential legal fees in the hundreds of thousands to millions, a small business owner must be careful in how they proceed with business. While one might normally be willing to take risks in order to move forward, innovate and grow, the psychological effects of a pending lawsuit puts the owner in a bearish mode.
• Emotional - Quite frankly, a frivolous and unfounded lawsuit like this steals your joy. The joy of running a business, creating and innovating becomes the bane of attorney's fees, court dates and legal strategy.
• Temporal - Smaller companies that don't have their own legal team have to find the time to deal with all of the issues surrounding a patent troll lawsuit on top of running the day to day affairs of their business.
I personally spent the first 2 months after the lawsuit was filed researching the lawsuit, learning about trolls, trying to locate a good but affordable attorney, coming up with a defensive game plan and networking. The time that I should have spent working on new products or new website features or new partnerships I had to spend focused on this lawsuit.
The Bigger Picture
In 2001, there were 500 defendants in "Patent Troll" cases. In 2013, the number was around 3,700. That's almost a 600% increase in just over 10 years!A paper entitled, "Patent Assertion and Startup Innovation" by Colleen V. Chen outlines how Patent Trolls are stifling innovation. New companies with less than 10 Million in revenue make up 55% or more of patent troll lawsuits. Some startups are not "starting up" solely because they are afraid they might get sued. Innovation is being held hostage.
Our patent system is broken. While there are bills being entertained by Congress and the President to reign in trolls, I am concerned that these bills will help larger companies more than they will help the little guys, and it's the little guys that need help most of all!
While our battle began in March 2012, the actual trial was not set to happen until November of 2014. Yep, that is almost 3 years from the start of the suit to the trial date.
For almost two years we carried on. Along the way, we had several milestones where I was hopeful that justice would be served, and we would be vindicated only to have those hopes dashed each and every time. Things began to appear hopeless, but my wife and I continued to pray, trust and hope that everything would turn out ok. If ever there was a time that my faith was tested, this was it.
Then, one day, we got a surprise phone call from our attorney. After 593 days, (November 14th, 2013 to be exact) the patent troll suit was going to be dismissed, just like that. As quickly as it came, it would be gone. The feelings I had during that phone call were the exact opposite of that feeling I had when I read that initial email. I can't begin to describe how excited and relieved I was. It felt like a miracle.
While it is glorious to know that the lawsuit is over and we are free, it is sad that so much pain had to be endured for something that would end up being dismissed. I have thought to myself many times, "What a sad waste of life."
What To Do?
There is much to be done concerning this issue. First of all, people need to know about it. As mentioned before, when this happened to us, I had never even heard of a "Patent Troll." As I shared our story, I found very few people who had heard of it either. However, every person I shared our story with was shocked that this is happening in increasing numbers to small businesses like mine.
While the average joe may not be aware of it, in Washington, there is a lot of buzz about this issue right now. President Obama, in fact, alluded to it in his State of the Union address when he said,
"And let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation."
While there is more and more movement on this issue, small businesses are still the most vulnerable. I hope that you might contact your congressman and encourage them to stand up against the trolls, especially as they relate to small businesses!
There are a few websites that you can check out to learn more about the issue:
There are a few websites that you can check out to learn more about the issue:
The Electronic Frontier Foundation: A non-profit group fighting against trolling. They are home to Julie Samuels whose official position is, "The Mark Cuban Chair for the Elimination of Stupid Patents."
TrollingEffects.org: A relatively new site organized by the EFF where those getting harassed and sued by trolls can share their story, post threatening letters, etc.
How I Beat a Patent Troll: A "Ted" talk by Drew Curtis the founder of the website "Fark" talking about his patent troll situation.
CBS Story on Patent Trolls: Austin Myer, the creator of a popular flight simulator talks about his patent troll suit in this CBS story.
Thanks for reading about our journey and I would love to hear any comments or questions. Post away below!
Revostock 1... scumbags 0
Mar 05 2014 5:50 PM
I can't begin to imagine how traumatic the whole experience has been for you and your family... happy to know it's now all behind you!!
Absolutely love Revostock...100%..Total awesomness!!!
All the very best!!!
Mar 03 2014 5:24 AM
if you want I am an international lawyer and I can help you lowering the risk of future lawsuits like those.
I am not an american lawyer... therefore I will give you a free consultation about this... Jut because I love Revostock and I don't want suppressive attacks to effect you...
I totally hate this kind of tricky businesses!
Feb 28 2014 11:33 AM
Can't you sue them for the distress they've caused?
Good luck man. I'll buy the bundle.
Feb 28 2014 11:16 AM
I had no idea that patent trolls existed. Thank you for fighting the good fight and for increasing awareness of this scourge to innovation. Would have bought the bundle anyway--but it's a matter of principle now. Best wishes...
Feb 28 2014 10:19 AM
you are my hero
Feb 27 2014 11:42 AM
Thanks so much for saying that dconder. Very kind of you.
Feb 28 2014 3:37 AM
Damn man... this pisses me off so much. Definitely going to support and pick up the bundle & will continue to support you guys anyway.
Feb 25 2014 8:00 AM
Feb 26 2014 1:32 AM
I would have never known about this situation if not for this generous offer - which I jumped on immediately, so THANKS! Genius way to get the word out. I have already shared this story on social media and will be keeping an ear to the ground from here out. Thank you for the links to action, as well. Keep thriving, man.
Feb 20 2014 10:28 PM
Thanks so much only1dp. Really appreciate you saying that. Glad to know the story resonated with you and thanks for being willing to share the word.
Feb 21 2014 1:02 AM
Reading your story really made me mad, who are these people who spend their time and earn their money like this. They must feel really bad everyday they go home from work. Taking about bad karma... I'm an entrepreneur myself and getting your livelihood threatened like this is just crazy.
I'm so glad that you all got through this. Good you choose to fight and won – I wish you all the best in the future.
Feb 15 2014 1:40 PM
I am speechless. I seriously can't believe this is even legal for companies to do this. What would be nice is if there was a website or list of business that practice patent trolling so that the public is aware of who they are and if they have any other types of business, not buy anything from them so that they go under.
This just kills American Innovation. People too stupid to come up with something creative on their own would rather sue others for money and ride on their hard work. This just sickens me.
Feb 15 2014 12:59 PM
Jeez, Craig, awful glad the bullies turned tail and ran. Our small production company went through a somewhat similar circumstance a few years back and it was very, very scary. The people coming after us finally gave up as well (perhaps, as in your case, not wanting to go to court) but it was cause for a lot of sleepless nights and diverted energies. I'm gonna grab me a sweet Patent Troll Bundle to celebrate your success!
Feb 15 2014 12:29 PM
Throughout our history, so many of the laws,regulations, and Supreme Court decisions in this country have been passed and written with the large corporations in mind, and generally to the benefit of large corporations...aka "Citizens United"... and often to the detriment of small businesses and middle class Americans. The two-million dollar cost of going court is a perfect example, a large corporation could handle this... but not a small company. That said, the very fact that current patent laws allow these blood sucking Patent Trolls to cause so much havoc, especially with small businesses, is an indication that there must be patent reform. This is where we need to put our energy. We need to write to Senators and Representatives and demand a patent reform bill. Now given that we currently have a "Do Nothing Congress," it will take a lot of us writing and calling to get something done... and with the 2014 elections coming up it is a chance to "clean house" so that something will be done in the future if not now. Thank you, Craig, for bringing this situation to our attention. You have done your part, now it is our turn. Excuse me while I send off a couple of emails to Congress....
Feb 15 2014 10:09 AM
Wow, amazing the things companies like that tries and gets away with!! I am glad you are free and clear of those trolls!!! They should all be hung with a patent pending rope, Lol
One of my AE submitted for the bundle, but wish I could add more! :)
Feb 15 2014 9:28 AM
Congratulations on surviving. I had never heard of this before so I thank you for the education. I am more inclined to do business with you more than ever just knowing that you fought the good fight.
Feb 15 2014 7:50 AM
Really feel for you and nightmare you went thru.
Keep fighting and let sucess of REVOSTOCK be the only answer.
God Bless he has a his hand on your life Craig.
Feb 15 2014 6:44 AM
I'm glad you prevailed and I hope that the trolls get their karmic retribution. What a terrible thing to do to a small business owner. Keep up the great work and thank you so much for putting this site together. If something like this happens in the future, take it to the press and social media right away. I've heared of similar suits being dismissed when faced with such a public shaming.
As Justice Louis Brandeis said "Sunlight is said to be the best of disinfectants"
Feb 14 2014 6:31 PM
I am so sorry you and your family had to endure this, but I am grateful you have come through it. There is so much injustice.
Feb 13 2014 7:50 PM
Thanks Richard. Thanks for taking the time to comment and for your kind words!
Feb 13 2014 11:31 PM
So glad to hear you finally got justice. I'm so sorry this happened to you. Buying your bundle now to help you celebrate. :) TY!
Feb 13 2014 5:04 PM
Thanks Jahuss! Appreciate that! The bundle isn't quite available yet. Will be ready for sale on the 19th. Until then, you can vote on the items you would like to see included in the bundle here:
Feb 13 2014 11:32 PM
What i meant to say was GOOD for YOU! Glad you fought & made it though! Then i started thinking about my story and these scammers and i got pissed:)
now im goona go vote for some cool AE templates!
Feb 13 2014 4:10 PM
i had a similiar thing happen to me...i bought a software/website product at a convention...never really used it but it was sitting on one of my sites...5 years later a company said that they owned some of the pictures associated with the software...one was a bird on a mailbox and they wanted 60k to settle now or they were going to "stick it to me"...it was all total BULL...T but like you said you go through all of the hassles and stress...i also got them to drop it after about a year but these companys are scammers and are the scum of the earth!!!
Feb 13 2014 4:06 PM
Thanks for posting bk. So sorry you had to deal with that. Sounds ridiculous. If these type of people would invest themselves into things that are productive instead of finding people to sue, they might be able to create some amazing things!
Feb 13 2014 11:40 PM
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