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Pro Softnet Corporation
Pro Softnet

Bootstrapped Company Behind iDrive, iBackup Is Fed Up With Patent Trolls

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The Death Of The Internet Has Been Greatly Exaggerated

Normally, one doesn’t learn about patent infringement litigation through press releases, and if it does happen it’s usually the company initiating the lawsuit(s) that intends to make some noise.

This morning, however, a company under attack by patent trolls decided to take its rant public.

Pro Softnet Corporation, the company behind online backup and cloud storage services such as iDrive and iBackup (we’ve covered their solutions a few times in the past) apparently finds itself facing its “largest patent attack” brought on by a non-practicing entity (or ‘NPE’, aka a patent troll).

In the press release, the company writes:

Since 2004, Pro Softnet has been targeted by several NPEs seeking licensing fees and/or royalty payments for dubious patents that are usually acquired through a series of purchases by patent-holding companies – “institutions” created for the pure purpose of obtaining patents in order to enforce them against other companies.

In these instances Pro Softnet has been forced to weigh the options of pursuing expensive litigation to fight what they believe are unwarranted claims or to settle, ultimately resulting in drains on operating capital.

And that’s always the big problem with small businesses like Pro Softnet getting hit with patent infringement lawsuits. Whether they decided to step up and fight, or choose to settle, there is no way for them not to waste resources, time and money dealing with these suits.

This also serves as a reminder to Fark.com’s recent settlement with a patent troll (for $0). Fark founder Drew Curtis wrote a great blog post on the whole ordeal, entitled: “Patent-infringement lawsuit against Fark settled for zero dollars. Also, patent trolls suck hairy donkey balls.”

Using subtler terms, Pro Softnet calls it a ‘tax on innovation’:

The practice of “patent trolling” seriously burdens those companies without the financial and legal resources of large, well-established organizations. The financial burden on small businesses can be significant – the least fortunate risk closing their doors – as the result of fighting these expensive and lengthy suits, which often end up with nuisance value settlements for profit-seeking NPEs.

Although Pro Softnet’s day-to-day operations are continuing as normal, this “tax” on progress and innovation is unavoidable.

For the record, Pro Softnet was originally founded in 1995 and has never raised a dime of venture capital. They claim to be “profitable, debt-free and hiring” today. And they apparently get sued by these patent trolls all the time.

Pro Softnet doesn’t really mention which NPE is now waging war against them, but refers to an NPR article that talks about Nathan Myrhvold’s Intellectual Ventures, a well-known patent troll.

I’ve asked Pro Softnet founder and CEO Raghu Kulkarni for further comment and will update as soon as I hear back. And here’s the promised update:

“To be honest, we don’t know the actual persons who are attacking us. All I can say at this point is that the name of the company that initiated the current lawsuit is Oasis Research, LLC. To the best of my knowledge, Oasis is a shell company that was set up for the sole purpose of suing the online backup industry.

The NPR article and ‘This American Life’ episode referred to in our press release focus on our particular lawsuit and attempt to investigate who Oasis Research is and how they obtained the patents being asserted against the industry. They did a very good job covering this issue and Oasis Research in particular.

These lawsuits have been growing in size at a seemingly faster rate than our company and, as a small business, it was time for us to vent our frustrations as you correctly noted in your article. This lawsuit is the largest lawsuit in our history because it involves several patents and several defendants, all of whom are much larger than Pro Softnet. The lawsuit is well underway and it has been a very costly journey thus far.

It’s in our lawyers hands at this point, all we can hope for is to put this behind us as soon as possible.”

For your further reading pleasure:

Why We Need To Abolish Software Patents

Patents and Unions: When Good Intentions Go Horribly Wrong

The Terrible Cost Of Patents