Neiman Marcus is Fighting Back Against a Notorious Dallas-Based Patent Troll
In the decade since it was founded in Dallas, IP Nav has established itself as a global leader in the increasingly lucrative business of "patent assertion," offering clients the ability to "maximize the value of their IP assets." Put more bluntly, it's a patent troll, shaking down companies by threatening them with lawsuits over patents that they or their clients are squatting on. They are a big problem in the tech world, and IP Nav is a big part of it. Rackspace, the San Antonio-based cloud computing firm, recently called the company "one of the most notorious patent trolls in America."
So when Neiman Marcus received a communique from IP Nav in April, the retailer knew the score. Headlined "proposal to negotiate patent license," the letter explains that an analysis reveals that some Neiman Marcus products appear to use patents held by an anonymous client, described only as the owner of "valuable patents in the field of automation of application programs.
"We would very much welcome the opportunity to enter into constructive discussions with your company to determine whether we can agree to a mutually acceptable patent license agreement or that you are not using our client's patents," the letter continues. "We are focused on addressing these issues without the need for costly and protracted litigation."
They give Neiman Marcus two weeks to agree to begin discussions. Instead, the company filed a federal lawsuit against the anonymous patent holder, asking a judge to declare that the retailer has not infringed on any patents, thereby preempting the lawsuit IP Nav suggests it is ready to file. The letter, the company notes, doesn't even hint at what patents it is allegedly infringing upon other than to say they have something to do with "automation."
"Neiman Marcus is now in the intolerable position of being pressured to choose between waiving its legal rights ... or subjecting itself to an ongoing threat of litigation and unspecified infringement allegations," the suit declares. "Neiman Marcus refuses to make such a choice and, instead, seeks declaratory relief as to its rights now."
To support its argument, Neiman Marcus includes an excerpt from a decision against IP Nav issued in 2011 by a federal judge in Wisconson. It's worth quoting.
[IP Nav's letter is] an unmistakable and intentional warning shot across the bow. The actual message is pellucid to any patent litigator, so that IP Nav's use of apophasis is disingenuous and unavailing. Remember Mark Antony's funeral oration in Julius Caesar? That's how an experienced business executive or lawyer would view IP Nav's assertions that 'we are focused on addressing these issues without the need for costly and protracted litigation' and 'our client's preferred approach is to conclude licensing discussions without resorting to litigation. We hope you share this objective.' The implied 'or else!' oozes from this letter like lye from lutefish. To paraphrase an observation attributed to Anton Chekhov, you don't hang a gun over the mantle in Act I unless someone is going to fire it in Act III."
Kudos to the judge for working references to Shakespeare, Chekhov and lutefish into a single opinion about patent litigation. Let's hope U.S. District Judge Ed Kinkeade, to whom the Neiman Marcus case has been assigned, has a pen that is equally sharp.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you'll never miss Observer's biggest stories.