If someone loses a patent lawsuit very badly—to the point where they face orders to pay attorneys' fees—you wouldn’t think they would be eager to come back to court with a nearly identical lawsuit. But that’s what has happened with this month’s patent. What’s more, the lawyer representing the patent owner, William Ramey, has been ordered to pay attorneys' fees no fewer than five times in recent years.
U.S. Patent No. 10,820,147 is owned by Traxcell Technologies. It’s not clear what, if anything, Traxcell ever made. The company applied for patents back in 2002. By 2004, it had a bare-bones website stating that its mission “is to provide leading edge technology and innovation to in [sic] the field of telecommunications.” Today, its business is pretty clear—Traxcell is a patent troll. The company’s website has little information beyond its patents, which have been used in dozens of lawsuits since 2017.
The key claim of the ‘147 patent is long, but it essentially describes a wireless device that collects and shows location information, and also includes traffic congestion information. There’s also the “feature” that the device can allow, or disallow, tracking (a standard feature on modern smartphones).
This patent has come up in more than 20 of Traxcell’s lawsuits in the last two years, with its litigation picking up steam as the patent’s expiration date of September 2022 drew near. It’s been used to sue major cell phone companies like T-Mobile and Verizon, the makers of online maps like Google and Apple, and delivery and gig companies. It’s sued FlightAware for using publicly available flight-tracking information, and the Curb app for tracking taxis, and Instacart for tracking its own shoppers.
“Objectively Baseless Theories”
Traxcell was scheduled to bring this patent to trial next week in a federal Texas court. The trial actually would have been the conclusion of Traxcell’s second lawsuit against Verizon. Since it’s coming back for another round, one might think that Traxcell’s first lawsuit was a big success. That’s not the case, though.
In the first Traxcell v. Verizon patent lawsuit, filed in the Eastern District of Texas (then a hot patent venue), Verizon won on summary judgment—meaning, before the case went to a jury, a judge ruled there was no patent infringement, and that the case was over. Traxcell appealed, but the appeals court agreed that Verizon should win the case. After the failed appeal, a judge awarded Verizon attorneys’ fees based on “Traxcell’s pursuit of objectively baseless infringement theories and filing of meritless motions that disregarded the earlier rulings.”
Traxcell objected to the fee order, and didn’t pay. But its objection was overruled and in December 2022, it was ordered to pay within 30 days. Traxcell appealed 28 days later, and also filed a motion in district court asking to not post a bond, or have a reduced bond. Last month, the district court ordered it again to pay, posting a bond of the fee award plus 20% interest, for a total of $587,902. But Traxcell still hasn’t paid the fees, or paid for a bond.
None of this stopped Traxcell from filing its second lawsuit against Verizon, this time in the Western District of Texas (Waco division), which became popular after a Supreme Court ruling narrowed the ability of patent trolls to shop for favorite venues.
Last week, the judge in charge of Traxcell’s second case dismissed it, ruling that Traxcell no longer has standing. Its patent is in receivership.
“Ignored Obvious Issues”
Traxcell’s lawsuit never should have gotten this far. Now that a judge has shown it clearly doesn’t have standing to sue Verizon, its lawsuits against other defendants, including much smaller companies, should be called into question as well.
- Traxcell has been subject to repeat fee orders since at least 2017. That year, an Eastern District of Texas magistrate judge ordered Traxcell to pay fees to Samsung, Alcatel-Lucent, Nokia, and Huawei after failing to send key documents to the defendants.
- In another Traxcell case, the company was ordered to pay $44,866.27 to Nokia for attorneys’ fees for filing objections to court rulings long after the deadlines. Those fees were affirmed just last week.
- In a case called WPEM v. SOTI Inc., Ramey again represented a patent owner who was ordered to pay attorneys’ fees. The plaintiff “wholly failed” to conduct a pre-filing investigation and “ignored obvious issues that should have been readily apparent,” the judge found. The attorneys’ fee award of $179,622 was upheld on appeal in 2020.
- Working for a patent troll called NetSoc, LLC, Ramey sued several companies over a patent on “establishing and using a social network to facilitate people in life issues.” The claims in the patent didn’t even match the patent claims listed in the lawsuit. “NetSoc provided no explanation for why it failed to correct its pleadings for three months,” a New York federal judge held in that case. Two defendant companies were awarded just under $30,000 in fees.
- Just last month, another patent-assertion company represented by Ramey, ZT IP, was ordered to pay $92,130.35 in fees in a case where it sued VMWare over a product that VMWare created a year before ZT’s patent even issued. When VMWare threatened to move for sanctions against Ramey, Ramey used “expletives direct at VMWare during the conference,” then dropped his lawsuit 30 minutes after the call.
U.S. technology users and companies shouldn’t have to constantly face the same bogus threats from the same actors. Judges should vet these repeat players. A company with Traxcell's track record, or a company hiring an attorney who has been subject to at least five fee orders in recent years, can and should be required to post bonds to proceed to get their patent lawsuits past the initial pleading stage. Finally, judges should follow the example set by 25% of courts in this country and demand that the financial interests in patents be disclosed at the outset of litigation. In 2020, at least 30% of all patent litigation was financed by outside entities—up from essentially zero 15 years ago.
Documents related to this post:
- Traxcell v. Huawei, Alcatel-Lucent, Nokia, and Samsung Fee Order
- Traxcell v. Nokia Fee Order
- WPEM LLC v. SOTI Inc. Federal Circuit Opinion
- NetSoc LLC v. Chegg, Oath, and Quora Fee Order
- ZT IP LLC v. VMWare Fee Order