Ditto Defeats Patent Claim After Teaming Up With A ‘Troll’

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Gillmor Gang: Context Matters

Earlier this year, I wrote about a startup called Ditto, which launched a campaign on Indiegogo to fund patent battles against 1-800-CONTACTS and Lennon Imaging Technology — or, as Ditto characterized it, to “save” the startup from “patent trolls.”

Since then, Ditto’s story has taken a couple of turns. Over the summer, the company partnered with IPNav and its founder Erich Spangenberg. Spangenberg is an odd ally, since Ditto co-founder and CEO Kate Endress described him and IPNav as “one of the largest patent trolls in the country.” However, as outlined in an IndyStar article, he reached an agreement with Endress where IPNav is paying for Ditto’s legal costs, and if it wins, it gets a $1 million stake in the startup.

Endress said this approach seems to be working, with Ditto scoring a victory this week. As I mentioned above, the company was actually facing two suits, including one from Lennon, which is a “non-practicing” company that owns intellectual property but doesn’t offer any products or services of its own. A judge has granted Ditto’s motion to have Lennon’s lawsuit dismissed — I’ve embedded the motion and the court order granting the dismissal at the end of this post.

That still leaves Ditto’s case against 1-800-CONTACTS (which is owned by WellPoint). Endress has pointed out in the past that the larger company is suing her startup over a patent that it didn’t acquire until its CEO had visited the Ditto website. The Electronic Frontier Foundation said 1-800-CONTACTS was “little better” than a patent troll, while a company spokesperson sent me a statement claiming that 1-800-CONTACTS “offered to discuss an amicable resolution to the lawsuit through licensing or other options.” (Both sides accuse the other of misrepresenting their discussions.)

So the startup isn’t out of the woods yet. But when I spoke to Endress yesterday, she sounded optimistic — she noted that not only has partnering with Spangenberg given Ditto more resources for its legal fights, but it has also freed the Dittos team’s time to actually focus on building the business (a site where shoppers can virtually try on eyeglasses) again.

And although the Indiegogo campaign only resulted in about $10,000 of funding, Endress said that talking about her story has “resulted in nothing but good things” — she’d encourage other startups facing patent threats to follow Ditto’s lead rather than staying silent.

Oh, and when I asked about how Spangenberg feels about being called a troll, so Endress noted that when asked about using patents to attack other companies, he told the IndyStar, “I don’t stand accused. I stand guilty of that.”

“He’s not doing this out of the goodness of his heart,” Endress said. “He sees a big opportunity here.”

Ditto Motion To Dismiss by TechCrunch

Ditto Court Order by TechCrunch