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In the summer of 2017, we wrote about a battle between Cloudflare, the San Francisco-based internet security and content delivery network, and two attorneys who’d previously litigated intellectual property cases on behalf of numerous tech giants. The attorneys had come together to form Blackbird Technologies, a Boston and Chicago-based firm that quickly amassed dozens of patents, then began using them to file dozens of patent infringement lawsuits against companies, including Cloudflare.
The suit was typical in every way, except how Cloudflare responded to it. Rather than quietly settle, as have some targets of Blackbird and other so-called patent trolls, Cloudflare decided to fight back in a very public way, blogging extensively, talking with news outlets like ours and, most crucially, turning to anyone and everyone who could help it locate prior art. The idea wasn’t merely to invalidate the patent that Blackbird was using to sue Cloudflare — but to invalidate all of Blackbird’s patents. Cloudlfare declared war.
To its credit, Cloudflare won, too. At least, the case against Cloudflare itself was eventually dismissed, and in a postmortem published yesterday, the company described in detail its game plan and many more specifics around its efforts to crowdsource prior art that might invalidate Blackbird’s patents.
It revealed, for example, that it had received 275 total unique submissions from 155 individuals on 49 separate patents, and multiple submissions on 26 patents. Roughly 40% of these related to the patent asserted against Cloudflare, but individuals also turned up prior art submissions that could help protect Niantic (which also is trying to bat back Blackbird), as well as Lululemon and New Balance, both of which have been sued previously by Blackbird over a patent Blackbird owns relating to a “sports bra having an integral storage pouch.”
Cloudflare also went after the founders of Blackbird, filing ethics complaints rooted in rules of professional conduct that prohibit lawyers from acquiring a cause of action to assert on their own behalf. Where those complaints might lead is a question mark for now, though it’s worth noting that one of Blackbird’s founders, Chris Freeman, formerly of Kirkland & Ellis, currently works instead at a Chicago company that funds litigation.
Either way, Cloudflare’s victory is a feel-good story in a vast sea of bad news, but it also begs the question: what’s next?
Some might hope Cloudflare will somehow continue its campaign against injustice. They’ll be disappointed if so — Cloudflare has said from the outset that once its legal tangle with Blackbird had ended, it was getting out of the patent-troll-fighting business, a decision that the company’s general counsel, Doug Kramer, reaffirmed to us in conversation late last week. As he puts it, Cloudflare’s crusade was never meant to become “life-long advocacy” given the company’s other, more pressing concerns (including going public in September).
Still, passing the torch won’t be easy. Kramer acknowledges that he has received “a lot of phone calls from other general counsels or IP lawyers and CEOs [who are also the targets of patent lawsuits] who’ve said, ‘Isn’t there something we can do here other than roll over and write a check?'”
Which brings us to the point of yesterday’s post. It wasn’t simply to crow about its win over Blackbird, no pun intended. It was more to thank the community on which Cloudflare relied so much, Kramer says. And it was to “make clear there are other ways forward here,” says Kramer, who hopes other companies will use part of Cloudflare’s blueprint, as well as establish their own.
Taking a stand isn’t for everybody. As Kramer observes, once a patent case is filed against a company, “the options are all bad options, and a lot of companies take the least bad option,” which is to write a check to settle the thing. It’s why companies like Blackbird gain momentum. “They face very little resistance.”
Kramer doesn’t necessarily blame targets for folding easily. Even when things go a company’s way, as with Cloudflare, litigation can take years and can cost a company many hundreds of thousands, if not multiple millions, of dollars. “As a litigation matter, we knocked this out of the park on the first pitch,” he says, “but it cost us more than if we’d just written a check.”
But more companies need to take more action if they hope to see patents used as they were originally intended, and Kramer says that “introducing more resistance,” is one way to get there. Certainly, he suggests, there are tools at their disposal, including “very active, smart, thoughtful people who’ve organized themselves across in-house positions and third parties dedicated specifically to pushing back again these practices.”
Another are sympathetic politicians like Eric Lesser, a state senator in Massachusetts who views patent trolls as a threat to his state’s economy and is doing what he can to banish them and their infringement claims.
In addition are engineers and others who build things and don’t like the rise of firms profiting by means of licensing or litigation rather than by producing their own goods or services. Indeed, not every company has the financial muscle of a Cloudflare, which raised more than $300 million from investors before going public. (It also received an anonymous donation of $50,000 to support its efforts against Blackbird.) Yet even without such resources, Kramer says, the support of communities outside a company can add up to a lot.
“We came to understand that there are a lot of people out there — colleagues and friends and like-minded folks in the commercial sector and really just the man on the street at tech companies — that are really bothered” by the abuse of patents by companies that obtain them to demand royalties and sue for damages.
It isn’t a complete solution to the steady rise in patent cases over the years, but every bit — every willing advocate, every piece of useful information they can provide — helps. Cloudflare “didn’t fix [this broader issue]. It still exists,” says Kramer. “But we were able to leverage that sentiment. Hopefully, it’s evidence for others that there is support out there.”