Companies sued by ArrivalStar and Melvino Technologies offer products that track cars or shipments, notifying users of their whereabouts. Photo by Flickr user Axion23.

With 13 patents and three lawyers, ArrivalStar and Melvino Technologies have sued 17 companies within the past five weeks, all for their vehicle tracking systems.

This is the latest rash of suits filed by the two foreign patent-holding companies; with these newest cases, ArrivalStar and its sidekick have filed more than 100 vehicle tracking-related patent infringement lawsuits since 2003.

It’s not a strategy that has earned the company a lot of affection. The companies are “patent trolls” simply trying to “extort a license fee,” American Millennium CEO Bruce Bacon told The Patent Examiner.

ArrivalStar and Melvino filed four lawsuits against seven companies on Sept. 16, and filed two more suits on both Sept. 22 and Sept. 27. Previously, they filed a suit on Sept. 7 (complaint PDF), and notably, an Aug. 31 suit included the Chrysler Group and Nissan North America as defendants for their vehicle tracking and recovery systems (PDF).

“In all instances, it’s someone who’s infringed on one of their patents, we’ve reached out to them and they were either unwilling or unable to stop the infringement,” said Anthony E. Dowell, ArrivalStar and Melvino Technologies’s lawyer in most of their recent cases.

ArrivalStar and Melvino have licensed their patents to an array of companies, including Ford and Volvo, both American and United Airlines, and shipping companies Federal Express and DHL, among other transportation-related organizations according to Dowell, of Dowell Baker, P.C. Nearly all of the licenses are a result of litigation or letters threatening litigation.

A March report from a North Carolina business journal about ArrivalStar’s tactics say the company demanded a $110,000 licensing fee from one local business.

Dowell said nine out of ten companies he approaches regarding patent infringement agree to pay a license fee.  “The rest go into litigation,” he said.  “We have a responsibility to our over 180 licensees to enforce the patents.”

Sometimes it’s actually those licensees who help ArrivalStar and Melvino Technologies find more companies to sue. “I get calls from general counsel at other companies saying, ‘Our competition is doing something similar,’” said Dowell.

The “something similar” is usually providing electronic notification messages to users, to let them know, for example, how far away a vehicle is or if it is delayed, said Dowell.  He said that it would be fairly difficult for a company to create a “useful” vehicle tracking notification system without, in his opinion, infringing upon ArrivalStar and Melvino’s patents.

One of the companies caught in ArrivalStar and Melvino’s crosshairs is American Millennium Corporation, a wireless asset tracking company in Colorado that the companies’ sued on Sept. 16 (complaint PDF).  “We think they’re patent trolls and they’re out to get money from people,” said American Millennium’s CEO Bruce Bacon.  “Basically, what they’re doing is trying to extort a license fee.”

Dowell contends that the increase in patent suits has become necessary because some companies in the Internet age don’t do enough research on patents before they barrel ahead and create products.  “With major development, there have always been patent wars,” he said.  “But now instead of just the behemoths there are a lot more little skirmishes.”

Although the lawsuit doesn’t identify a specific American Millenium product, Bacon thinks his company’s impending skirmish with ArrivalStar and Melvino is because of its SatAlarm Sentry satellite-based monitoring device.  The Sentry, Bacon said, has never been used to track vehicles.  However, its manual states it could be used as a tracking device.  “We wrote it in the manual because we thought maybe someday it would, but none of our customers has used it.”

Because the manual is available online (PDF) for ArrivalStar and Melvino to see, Bacon said American Millennium got sued.

He hopes to prove that his company’s product line, started in the late 1990s, is older than ArrivalStar and Melvino’s patents, secured between 2001 and 2008.

Dowell declined to say much about Melvino Technologies, except that the company either owns or has licensed the patents in question. Court documents show Melvino is based in the British Virgin Islands.

ArrivalStar, based in Luxembourg, had a satellite office in Delray Beach, Fla. until 2007 that was run by Martin Kelly Jones, ArrivalStar’s founder and CEO and the the inventor behind most of the company’s patents. Beginning in the 1990s, Jones had been CEO of Global Research Systems in Rome, Ga., now defunct, where he developed a school bus tracking system for parents Now he serves as the CEO of ArrivalStar.  “By the early 2000s, Martin had stopped focusing on growing that business and instead focused on licensing patents,” said Dowell.

For companies like American Millennium, deciding whether to settle with ArrivalStar and Melvino or pay hundreds of thousands of dollars to have their day in court is “picking the lesser of two evils,” said CEO Bacon.  “If we were a smaller company, it’d probably kill us.”

More on the suits mentioned above:

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