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An Update on Patent Troll Shipping & Transit, LLC

DEEPLINKS BLOG
August 19, 2016

There has been significant activity relating to cases and patent infringement claims made by Shipping & Transit, LLC, formerly known as ArrivalStar. Shipping & Transit, who we’ve written about on numerous occasions, is currently one of the most prolific patent trolls in the country. Lex Machina data indicates that, since January 1, 2016, Shipping & Transit has been named in almost 100 cases. This post provides an update on some of the most important developments in these cases.

In many Shipping & Transit cases, Shipping & Transit has alleged that retailers allowing their customers to track packages sent by USPS infringe various claims of patents owned by Shipping & Transit, despite previously suing (and settling with) USPS. EFF represents a company that Shipping & Transit accused of infringing four patents.

Shipping & Transit Is Facing Numerous Alice Motions

In April 2014, the Supreme Court decided Alice v. CLS Bank, holding that “abstract ideas” are not patentable. Many courts have since applied that ruling, finding that patents are “abstract” and therefore invalid, often very early in litigation, saving significant time, money, and effort by the parties.

Several defendants have now asked courts to quickly find Shipping & Transit’s patents invalid under Alice. Neptune Cigars has filed a motion with the Central District of California, arguing that two Shipping & Transit patents (U.S. Patent Nos. 6,763,299 and 6,415,207) are invalid. That motion is pending.

Another defendant, Loginext, also filed a motion arguing that U.S. Patent 6,415,207 was invalid under Alice. Shipping & Transit quickly dismissed its case against Loginext, with Loginext paying nothing to Shipping & Transit. Loginext had also sent a “Rule 11” letter to Shipping & Transit pointing out that Loginext did not even exist when U.S. Patent No. 6,763,299 expired.

Our clients, Triple7Vaping.com LLC and Jason Cugle (together, Triple7), have also noted that the patents are likely invalid under Alice. When another party in the Southern District of Florida moved to dismiss under Alice, we asked the court to consolidate our case with that one, and provided a brief explaining in detail why the claims are invalid under Alice. The motion, however, was not decided after the original party that moved to dismiss settled with Shipping & Transit.

Unified Patents Filed an Inter Partes Review Against the ’270 patent

On July 25, 2015, Unified Patents filed a petition for inter partes review of U.S. Patent 6,415,207 (the ’270 patent), one of the few Shipping & Transit patents that remains in force (many of Shipping & Transit’s patent expired in 2013). In its petition to the Patent Office to review the ’207 patent, Unified Patents argues that the patent is invalid because it is obvious in light of other patents, including a different, much older, Shipping & Transit patent. 

Shipping & Transit Disclaims All Liability by Triple7

On May 31, 2016, Triple7 filed a lawsuit asking for a declaratory judgment that four of Shipping & Transit’s patents were invalid and not infringed. Triple7 also asked the court to find that Shipping & Transit violated Maryland state law when it made its claims of infringement, because the claims were made in bad faith.

In response, on July 21, 2016, Shipping & Transit covenanted not to sue Triple7, meaning it has disclaimed any possible claim of infringement against Triple7. In doing so, Shipping & Transit has sought to prevent the court from deciding the merits of Shipping & Transit’s claims of infringement. Triple7 has argued that the court retains that ability as part of the Maryland claim, and the court is expected to decide the issue soon.

Shipping & Transit Reveals The Minimal Investigation It Does Before It Sends A Demand Letter 

Shipping & Transit asked the Court to dismiss Triple7’s claims for violations of Maryland State law. In doing so, it submitted two affidavits that detailed the investigation it engages in before sending a demand letter. In response, Triple7 argued that Shipping & Transit’s investigation was plainly deficient under binding Federal Circuit law.

While every individual case will have some differences, we hope that these materials are useful to current and future targets of Shipping & Transit’s trolling campaign.

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