Crowdfunding ‘Operation Ninja STAR’ Arms Small Business Against Patent ‘Trolls’

Small businesses form the backbone of the American economy, but many see patent assertion entities (PAEs), or, “patent trolls” and troll lawsuits as serious wrenches thrown into these economic engines of innovation and ideas.

So, Article One Partners (AOP), a global patent research community that crowdsources its research for tech giants and law firms the likes of Microsoft and Philips and/or Sony [corrected], today launched “Operation Ninja STAR,” a crowdfunding effort to help small businesses defend themselves against PAEs behaving badly.

Crowdsourcing allows companies like AOP to utilise researchers and even Average Joes from around the globe who curate information and prior art on a patent; researchers are compensated based on the quality of work submitted. AOP has completed more than 1,000 crowd-based studies looking for prior art; they have saved clients at least $25 million by paying the crowd about $5 million for the work. Now, they are employing their “patent ninjas” to help defend small business.

“We’re just sitting here on the sidelines saying, ‘wait a minute – if the crowd can work for the Apples, the Microsofts, the Googles of the world, why can’t it work for a more dispersed group” of those facing potentially frivolous PAE threats, AOP CEO Marshall Phelps said in an interview with Intellectual Property Watch.

“This is a bit of an experiment to see if we can pull this together to act on behalf of really a group that isn’t well represented,” Phelps added. “This is not an experiment in terms of the mechanics – we know the crowd can do it. The question is – is there enough interest by these small companies … to say ‘this is worth it?’”

Whereas large companies have the resources to combat PAEs both in and outside the courtroom, for a small business, paying the PAE to go away – let alone going to litigation – can seriously hurt, if not break, their business.

Even though some argue that the PAE threat is not as dire as it is often made out to be, and that PAE suits are not exactly swamping the American courts, there is a case to be made that small businesses are particularly vulnerable. The White House noted in a report [pdf] earlier this year that the majority of PAE suits target small and inventor-driven companies; in a survey of 223 technology startups, 40 percent of PAE-targeted companies reported a “significant” operational impact due to a suit or threat of one.

How It Works

By using crowdfunding platform Indiegogo, AOP aims to raise a minimum of $17,500 by 25 January 2014 to begin this initiative and pay crowd researchers based on the quality of their evidence. When contributions exceed that goal, evidence for additional patents will be added to the repository.

To start, the campaign will investigate the validity of US patent 8,180,858, which involves an “apparatus and method that employs selectable and modifiable animation to collect data related to the choices made by the users of an information network.”

The patent is owned by Treehouse Avatar Technologies, which has sued several companies, making a large number of patent assertions against small companies, including independent game developers like Bad Pug Games, the creator of “Starpires”, and medium-sized companies including Turbine Entertainment, creator of the popular “Dungeons and Dragons” game.

AOP’s international “patent ninjas” will look for evidence that could prove the patent in question is not unique, then submit their findings to a repository – the “Start-up Troll Attack Resource” or “Ninja STAR,” for short – which are vetted by the AOP team. When a startup is sued, they can use “Ninja STAR” for support and information on the patent.

Once AOP can determine the success of the Treehouse experiment and it proves useful to small business, it may consider crowdsourcing additional patents.

Meanwhile, it doesn’t hurt that the White House-backed Innovation Act is making its way through the US Congress – it’s prime goal to reduce PAE activity. That bill passed the House last week; the Senate Judiciary Committee is set to hold a hearing on the measure on 17 December.

“The timing is wonderful in a sense … it can’t hurt any,” said Phelps, a former vice president and deputy general counsel for intellectual property and licensing at Microsoft. “There’s a lot of attention being paid to this problem and at the end of the day, it comes down to something we really care about and that’s patent quality.”