Gnarly Problem Produces Peculiar Solutions

The scourge of Patent Trolls is much-discussed, and ill-understood. Not a day goes by when one or more solutions to the problem is not offered. Yet, suits by Non-Practicing Entities, the polite word for people who sue for a living, remains steady. Some say it’s an inefficient use of limited Court resources. Others say it’s just people cleverly making the U.S. Patent enforcement system work for them. The truth lies somewhere in the middle. Then again, a troll was sued this week for RICO violations, on the basis of allegedly frivolous claims filed in a number of Districts.

But, courts have taken notice, and I have personally seen it in my practice, even within the last few months.

Now, we learn of a Federal Judge in the Northern District of California, who has taken matters into his own hands. Apparently the (now) unfortunate troll, er, NPE, tried to gin up a sham office in East Texas, to try to get venue there. That failed, and when the case ended up in N.D. Cal, a judge there decided to drill a bit deeper.

In his order leading up to trial later this month of the patent infringement claims brought by non-practicing entity (“NPE” or “patent troll”) Network Protection Services, LLC (“NPS”), Judge Alsup suggested he’d allow the jury to hear evidence of how:

NPS manufactured venue in Texas via a sham. [NPS founders] Ramde and Lam rented a windlowless file-cabinet room with no employees in Texas and held it out as an ongoing business concern to the Texas judge. They also held out [alleged employee] Cuke as its ‘director of business development’ but this too was a sham, a contrivance to manufacture venue in the Eastern District of Texas.

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