MARSHALL (Legal Newsline) – An alleged “patent troll” that sued eBay earlier this year for daring to ask the U.S. Patent and Trademark Office for a reexamination of three patents has dismissed its lawsuit.
On Monday, a judge with the U.S. District Court for the Eastern District of Texas — a popular venue for so-called “trolls” — granted Landmark Technology LLC’s notice of voluntary dismissal.
The Texas-based company submitted the notice weeks after eBay filed its motion to dismiss with the district court.
Landmark originally sued the online auction service in May.
In its complaint, dated May 8, Landmark said eBay “maliciously instigated” reexamination proceedings for the purpose of interfering with Landmark’s efforts to license its patents to customers of eBay and to evade indemnification obligations eBay claims to have to such customers.
“Federal law permits requests to be made of the United States Patent and Trademark Office (‘USPTO’) to commence a form of administrative review, known as an ex parte patent reexamination proceeding, to reexamine the patentability of an issued patent,” lawyers for the company wrote.
“Just as unscrupulous applicants can harm the public by obtaining a patent through improper conduct and deception before the USPTO (known as ‘inequitable conduct’), an inventor’s marketplace competitors can strategically deprive him of the commercial benefits that his patent rights would otherwise have afforded him by subjecting him to baseless or vexatious reexamination proceedings before the USPTO.”
Much like the patent application process, requesters for reexamination can make “willful misrepresentations,” with the sole motive to deprive the patent owner of the use of his patent, Landmark argued.
“This action arises out of such an instigation of objectively frivolous and baseless reexamination proceedings before the USPTO, which Defendants willfully and knowingly initiated without any reasonable basis in law or fact, by inter alia, improperly representing the meaning of certain key terms circumscribing Plaintiff’s patent’s claims (so as to give the impression to the USPTO that purported ‘prior art’ references created a question of patentability) rather than adopting the well-settled meaning of such terms as evidenced by the specification, explicitly defined by the patentee during prosecution, and as categorically established in the 9/24/07 NIRC of ‘625.”
Landmark sued for wrongful conduct in violation of Texas law prohibiting abuse of process, intentional and negligent interference with prospective economic relations, and malicious prosecution and negligence.
The company said eBay intended to “cripple” it financially.
Landmark sought compensatory damages — including but not limited to lost profits, licensing revenues, royalties, loss of business reputation and expenses — in the amount of $5 million. It also sought attorneys’ fees and costs for having to defend the “sham” reexamination proceedings.
eBay, in its Aug. 13 motion to dismiss, cited Chapter 27 of the Texas Civil Practice and Remedies Code.
It argued that the lawsuit was an attempt by Landmark to “punish” eBay for exercising its constitutional rights to petition the government for redress and free speech.
In 2011, the Texas legislature sought to curb abusive lawsuits and enacted Chapter 27, or the anti-Strategic Lawsuit Against Public Participation, or SLAPP, statute. The law is designed to end such lawsuits at an early stage and compensate defendants for the cost of defending against them.
Pursuant to the law, eBay sought dismissal of every claim in Landmark’s complaint.
“Each of Landmark’s claims is based on eBay’s exercise of its right to petition and right of free speech by submitting requests to the United States Patent and Trademark Office (PTO) for ex parte reexamination of three of Landmark’s patents,” lawyers for eBay wrote in its motion.
“The PTO — a federal agency charged with quasi-judicial powers — determined that each reexamination request raised a substantial question of patentability and granted the requests to initiate formal reexamination proceedings. At the end of its review, the PTO invalidated several claims of one patent and confirmed the claims of the other two patents. Landmark subsequently filed this lawsuit, asserting various state tort claims against eBay based upon the requests for reexamination of the two patents that survived review.”
The company continued, “Because Landmark’s claims are based on eBay’s exercise of its right to petition and right of free speech, the anti-SLAPP law applies.”
eBay argued that Landmark bears the burden of coming forward with “clear and specific” evidence sufficient to establish a prima facie case as to each element of its claims, and must be able to defeat eBay’s affirmative defenses.
“This Landmark cannot do,” eBay’s lawyers wrote.
Landmark did not provide a reason for its notice of voluntary dismissal, dated Sept. 11.
Attorneys for the company and eBay could not immediately be reached for comment.
From Legal Newsline: Reach Jessica Karmasek by email at patents@legalnewsline.com.