Patent Risk Digest

A Surge of New Lawsuits Targets Common Email Practice

A patent troll litigation campaign that began in 2002 and has hit hundreds of defendants is still persisting—with more than 100 companies named lawsuits just in the past 12 months. The patent infringement suits brought by Shipping & Transit, LLC target a common business practice: emailing a tracking link to customers for monitoring product shipping. The litigation casts a wide net for settlements, with suits against businesses across sectors including retail, E-commerce, networking, logistics, and automotive sectors.

Shipping & Transit was one of the ten most prolific patent trolls last year, but that fact only tells a fraction of the story. Between 2002 and early 2015, Shipping & Transit used other names to bring some 400 cases over the exact same patents currently being asserted, naming more than 1,000 defendants.The litigation has all the hallmarks of a “nuisance” campaign, with its extensive reach based on broad patents and a strategy that focuses on a high volume of five-figure settlements from defendants—who pay just to avoid the costs associated with ongoing litigation.

The Shipping & Transit litigation offers a striking example of the potentially massive scale of wasted spending by companies sued in this type of campaign. Such cases involve the same plaintiff, and mostly the same patents and allegedly infringing products or services—yet each company, responding on its own, will likely pay not only a settlement—but just as much or more in legal defense costs on top of that settlement amount. In 2015 alone, more than 2,500 companies were accused of patent infringement by patent trolls, and the total cost to fight and settle these lawsuits reaches into the billions every year.

In April 2015, at a fraction of the cost that defendants spent resolving litigation from this campaign, RPX acquired and sublicensed rights to a patent portfolio that removed the threat of ongoing litigation for RPX clients at risk of being sued by Shipping & Transit. For other companies that remain vulnerable, RPX also offers patent litigation insurance as a means of transferring the risk and reducing case resolution costs by 50%, on average—sometimes resolving matters for policyholders at no cost.

To date, the validity of Shipping & Transit’s four patents asserted in the current wave of the campaign has not been challenged.