Last year, the world’s biggest patent-holding company, Intellectual Ventures, started offloading some of its more than 30,000 patents. Some of those went to small shell companies, which in turn used them to file lawsuits. One of the most notable of the last year was Pragmatus AV, which used patents acquired from IV to sue YouTube, Facebook, LinkedIn and Photobucket in November 2010. In January, Pragmatus expanded its campaign by suing much of the cable industry, saying that other patents it had bought from Intellectual Ventures applied to video-on-demand (VOD) services.
Pragmatus’ early lawsuits have run into serious obstacles. But that hasn’t stopped company, which filed a lawsuit [PDF] on Tuesday saying that Yahoo’s Messenger service infringes five different patents now owned by Pragmatus.
The patents in the Yahoo case have a similar provenance to those used against YouTube and Facebook. They were originally owned by Avistar Communications, which sold much of its patent portfolio to Intellectual Ventures, the giant patent-holding company founded by ex-Microsoft CTO Nathan Myhrvold, in January.
Court documents from earlier cases indicate that Pragmatus is owned by Anthony Grillo and Bill Marino, longtime insiders in the world of patent-holding companies. The duo also managed a patent-holding company called Saxon Innovations. Marino is a patent attorney and serves as general counsel of Altitude Capital Partners, a firm that invests in patent lawsuits. According to the court transfer opinion, Marino has owned a home in Alexandria since 2007, and works in Virginia four days a week. Grillo lives in Pennsylvania, and is a registered patent agent.
While it isn’t clear how the suit against Yahoo will fare, the three earlier lawsuits that Pragmatus has filed are all floundering.
In the first Pragmatus lawsuit, the four defendants—YouTube, Facebook, LinkedIn and Photobucket—asked the judge to transfer the case from Eastern Virginia to Northern California. “[I]t is unknown whether Pragmatus conducts any actual business in this District beyond filing lawsuits in this forum,” they wrote in their motion.
Pragmatus’ lawyers fought the transfer but lost. In her memo authorizing transfer, the judge said the case for moving the lawsuit was “overwhelming,” writing: “The only connection between the Eastern District of Virginia and this plaintiff is that Pragmatus was formed in Alexandria a week before it acquired the patent portfolio and five months before it filed this lawsuit.”
Now the case is in a San Jose federal court, and just yesterday Judge Edward Davila ordered the case to be stayed while the U.S. Patent Office reexamines Pragmatus’ patents, at YouTube’s request. That means a long delay for Pragmatus.
On the same day it sued Facebook and YouTube, Pragmatus also used different patents to file a second lawsuit against Facebook alone. That suit was also transferred west to Judge Davila, and Facebook has asked for it to be stayed as well. Davila hasn’t yet ruled on that, but yesterday’s ruling suggests he may be sympathetic to Facebook’s request.
A few months after suing Facebook and YouTube, Pragmatus sued the nation’s biggest cable companies, including Comcast, Cox, Charter, and Time Warner. But court papers [PDF] indicate that Pragmatus’ law firm, Desmarais LLP, had to withdraw from the case because of a conflict. The nature of the conflict isn’t revealed, but it’s interesting to note that Desmarais LLP is one of a few law firms now doing work for Intellectual Ventures, which owned these patents from 2009 until 2011.
Shortly after the Desmarais firm withdrew, the VOD case against the cable companies was dismissed.
Pragmatus v. Bright House et al. Complaint [Scribd]
In the new lawsuit against Yahoo, Pragmatus is being represented by a California IP boutique, Feinberg Day Alberti & Thompson. In the earlier cases against Facebook and YouTube, Pragmatus is being represented by a much larger law firm, Reed Smith LLP.
A History Of Making Millions With Patents
Pragmatus set up a website in May, on which it advertises Marino and Grillo’s skills in the patent enforcement arena. The company claims to have a “very practical and business-oriented approach to monetizing intellectual property.” While heading up Saxon Innovations, Marino and Grillo boast of having generated “licensing revenues in excess of $115 million in fewer than 3 years.”
During that time, Marino was the “chief architect” of Saxon’s strategy to use U.S. trade laws, and the U.S. International Trade Commission, as a venue to squeeze settlement money from tech companies—despite the fact that many observers thought that “patent trolls” wouldn’t be able to sue at the ITC. But the strategy worked, and “proved to be pivotal to the company’s success.”