Genetec breaks silence on patent trolls

MONTRÉAL—“We don’t negotiate payment with patent trolls,” Pierre Racz, president of Genetec Inc., said, as the company announced that a patent infringement lawsuit initiated by a non-practicing entity (NPE) was withdrawn by the NPE at an early stage in the proceedings. In a rare result, the NPE paid an undisclosed sum to Genetec.

Genetec understands that legal attacks from NPEs are an unfortunate part of the technology business, representing a reported 90 percent of high-tech patent litigation cases in 2019 alone.(¹⁾ The practice, known as “patent trolling,” involves groups that don’t create technology, but rather aggregate patents that are generally of no technological value to use as the basis to initiate IP infringement cases against businesses. 

“Despite the potentially high cost of litigation, bending to their anti-innovation tactics only encourages their behavior and, as a matter of principle, Genetec will always vigorously defend its technology and the hard work of the people who create it,” Racz explained. “Those we have quietly followed this course since the first patent troll arrived at our door, we felt that this occasion was a good time to speak out against this practice.” 

Widely disparaged by courts, legal scholars and world leaders as a form of legal extortion(²⁾, these pursuits are estimated to cost businesses tens of billions of dollars per year(³⁾. Although the number of patent trolling cases has flattened¹since a landmark U.S. Supreme Court decision(⁴⁾, many groups continue to attempt to leverage hoarded patents as a legal buying tactic against companies that actively innovate. While larger firms facing this sort of litigation are more often reported on, the majority of victims of patent trolling are smaller companies or startups (below $10M in revenue)(⁵⁾.

This resolution settles all outstanding claims by the NPE against Genetec. 

“This represents an important symbolic victory for Genetec, and a clear demonstration of our policy of never paying nuisance value settlements,” said Jean-Yves Pikulik, director of Intellectual Property at Genetec, said. “While we would much rather spend our time patenting our innovations than fighting off patent trolls, we will continue to vigorously defend ourselves against NPEs and seek legal costs in lawsuits that we perceive as frivolous.”

Sources:

1. https://www.unifiedpatents.com/insights/2019/12/30/q4-2019-patent-dispute-report

2. https://www.wired.com/2014/03/obama-legacy-patent-trolls/
https://www.nytimes.com/2013/10/18/business/extracting-a-toll-from-a-patent-troll.html
https://www.patentprogress.org/2013/02/14/obama-acknowledges-patent-troll-problem-w-transcript/
https://en.wikipedia.org/wiki/Patent_troll

3. https://www.unifiedpatents.com/insights/2019/1/2/2018-patent-dispute-report-year-in-review
https://hbr.org/2014/07/the-evidence-is-in-patent-trolls-do-hurt-innovation

4. https://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf

5. https://digitalcommons.law.scu.edu/cgi/viewcontent.cgireferer=&httpsredir=1&article=1554&context=facpubs