Jason Cugle, if all goes well, will soon be able to continue to operate his mail-order business without fear of a spurious patent lawsuit. With any luck, so will thousands of other small businesses that are often targeted by one of the worst patent trolls around.
Jason runs Triple7Vaping.com, a small Maryland business that sells products online and ships them across the country. Jason doesn’t run a high-tech operation: a customer orders a product, Jason manually composes an email letting that customer know the order had shipped, and packages are then sent out via tracked USPS mail.
In January, a company called “Shipping & Transit LLC” sent Jason—via his company—a demand letter, claiming that Jason’s activities infringed four patents, and demanding a license fee of $25,000. In its demand letter, Shipping & Transit claimed to own various “tracking and messaging technologies” that Jason’s website allegedly infringed. When Jason tried to explain that his business didn’t operate the way Shipping & Transit claimed, Shipping & Transit tried to force Jason to sign an affidavit with confusing and unclear language under penalty of perjury. When Jason didn’t respond to Shipping & Transit’s demands, Shipping & Transit sent Jason a document making it seem like his company had been sued, even though no lawsuit had been filed.
Jason and his company have now fought back. Jason and his company, through EFF and with generous pro bono assistance from Julie Turner of Turner Boyd and Matthew Sarelson of Kaplan Young & Moll Parrón, have sued Shipping & Transit, asking the court to reject the idea that Jason or his company owe anything to Shipping & Transit. In addition, the lawsuit seeks to show how Shipping & Transit makes frivolous claims of infringement in order to extract nuisance value settlements.
Jason is not the first target of Shipping & Transit’s frivolous claims. Shipping & Transit has filed over 500 lawsuits alleging patent infringement. Despite this remarkable number of lawsuits, no court has ever decided the merits of Shipping & Transit’s claims.
Instead, Shipping & Transit’s lawsuits follow a familiar patent troll pattern. A lawsuit is filed and quickly dismissed, often before the party accused of infringement even appears in the lawsuit. From what we can tell, Shipping & Transit offers to settle lawsuits for well below the cost of litigation, allowing it to sue hundreds of small businesses without ever needing to show it has the right to. This appears to be stereotypical patent troll behavior: leveraging the cost of litigation to get money it doesn’t deserve.
This is not the first time EFF has encountered Shipping & Transit. As we wrote about last year, Shipping & Transit used to be known as ArrivalStar. ArrivalStar notoriously sued local municipalities for telling their citizens when a bus was due to arrive. Now, its campaign is focused on small businesses who ship packages through carriers like FedEx, UPS, and USPS, based on the fact that these small businesses allow their customers to track their packages.
In Jason’s case, if we’re successful at getting the court to agree that Shipping & Transit doesn’t own package tracking the way it says it does, or we can show that the patents never should have issued in the first place, countless small businesses will no longer need to fear a similar Shipping & Transit demand letter.
Jason Cugle is standing up for himself and his company. In doing so, he is standing up for all other small businesses who have received baseless demand letters from Shipping & Transit. Through this lawsuit, we hope to make sure Shipping & Transit cannot extort money from small businesses again.
The complaint is available here.
Have you recently been sued by Shipping & Transit or received a demand letter? Contact email@example.com.