Blog post "impugns and defames" attorney whose patents feature in 100+ lawsuits.
by Joe Mullin
Jun 3, 2015
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The Electronic Frontier Foundation has been involved in plenty of litigation, but until now, it's always been the one filing suit—seeking to create change in areas like free speech, copyright, or government surveillance.
Now the EFF finds itself on the other side of the "v." Scott Horstemeyer, an Atlanta attorney and inventor whose patents were the subject of a monthly EFF feature called "Stupid Patent of the Month," has sued the advocacy group over an April 30 blog post entitled "Eclipse IP Casts A Shadow Over Innovation." Horstemeyer also named Daniel Nazer, the EFF lawyer who wrote the post, as a defendant.
The EFF revealed the lawsuit in a blog post published yesterday afternoon. "We stand by the opinions expressed, and we will defend the lawsuit vigorously," EFF general counsel Kurt Opsahl told Ars in a brief interview.
The filing of a defamation suit against the EFF—a group that has fought numerous legal cases to defend online speech—is a stunning turn of events, with a cast of characters that you can't make up. The plaintiff, Scott Horstemeyer, is a patent lawyer who also has a side business of "inventing"—that is, not just prosecuting patents for clients but also convincing the US Patent and Trademark Office to grant him his own patents, many of which include broad claims to Internet and mobile technology.
Those inventions include US Patent No. 9,013,334, which Nazer homed in on in his blog post. The patent describes a way of changing a delivery item, called a "mobile thing" or MT in the patent, by updating a personal communication device, or PCD. The patent was granted to Horstemeyer and then assigned to Eclipse IP, a Florida-based LLC. Eclipse's ownership is unclear, but its patents all go back to Horstemeyer.
Eclipse owns more than 20 patents and is one of a select few "patent trolls" that has filed more than 100 lawsuits. It operates by sending demand letters to companies like Ohio-based Tiger Fitness, which sells nutritional supplements online. Eclipse's letter suggests that Tiger Fitness should make a quick license payment of $45,000 or it could face a lawsuit against an opponent that "aggressively litigates" its patents. The letter reminds Tiger Fitness' CEO that litigation "can be expensive and time consuming."
Blog post leads to a lawsuit
The allegedly defamatory blog post describes the kind of mundane behavior that could infringe such a patent. Nazer writes:
Imagine you’re on your way to deliver a case of beer to a party. Before you get there, your boss sends you a text: They want 2 cases now. You read the text while driving (don’t do that), so you deliver an extra case when you arrive... Congratulations! You might get sued by the owner of April’s stupid patent of the month.
Horstemeyer's letter to the EFF says the Stupid Patent of the Month article is full of "false, malicious and defamatory remarks made under pretext of 'reporting.'" The letter is written by Horstemeyer's attorney, Sanford Asman, an Atlanta lawyer whose trademark dispute with CaseRails was recently featured on Ars Technica.
"I've been quoted by EFF," said Asman, speaking with Ars earlier today. "I have no problem with EFF, generally, at all."
Asman wouldn't comment on the specifics of the case, saying his letter to the EFF (PDF) and complaint (PDF) speak for themselves. Asked about his relationship with fellow Atlanta attorney Horstemeyer, Asman said, "I have known him for long enough for me to say, when I read that article, my mouth dropped."
Two weeks after the EFF post went up, Asman sent a letter (PDF) demanding a retraction and an editorial "expressly repudiating" Nazer's piece.
There was no retraction forthcoming, and Asman filed suit on Horstemeyer's behalf in Fulton County, Georgia, on May 26.
"Notwithstanding Horstemeyer's unblemished career and reputation as an attorney-at-law and as a Registered Patent Attorney, the Article maliciously, and improperly called into question Horstemeyer's legal ethics," the complaint states.
It also contends that Nazer and the EFF "profited financially" because Nazer's position, the Mark Cuban Chair to Eliminate Stupid Patents, is funded by a $500,000 grant. "[T]he Article was especially heinous, as it was done not only with malice, but also for their own selfish financial benefit and profit," writes Asman.
Asman: EFF “impugns and defames” a lawyer with 28 patents
Asman's letter cites three examples of alleged defamation. First, Nazer's post pointed out that patent lawyers have an ethical obligation to disclose "any information material to patentability." On the face of it, that seems like an unassailable statement—it's essentially a quote from the rules of patent practice. Nazer goes on to point out that Horstemeyer didn't tell the patent examiner about a pretty important piece of information—that a California judge had just invalidated three closely related Eclipse patents of his. (All of Eclipse's patents stem from the one 2003 application).
But in Asman's view, that ruling (PDF) by US District Judge George Wu isn't "material" at all, and suggesting that Horstemeyer should have submitted it is actually defamatory. Wu's ruling "did not relate to the claims then under consideration" at the patent office, says Asman. The duty to disclose is a reference to showing "prior art."
The EFF's response letter (PDF), written by its outside counsel Eric Schroeder, dismantles Asman's narrow reading of the rules, which go beyond the need to disclose prior art, Schroeder says. He points to other patent office rules that specifically mandate the disclosure of "related litigation." The EFF isn't alone, either—two of the many companies facing Eclipse IP in court have already noticed, and mentioned in court filings, that Horstemeyer didn't disclose the Wu ruling.
In any case, Schroeder adds, all of the competing views about the Wu ruling are opinions—protected by the First Amendment. The same goes for Asman's second example of defamation, which is this sentence written by Nazer: "While Horstemeyer has not made any genuine contribution to notification 'technology,' he has shown advanced skill at gaming the patent system."
Asman says that statement "impugns and defames" Horstemeyer as both an inventor and lawyer. Schroeder responds that it's "obviously opinion and rhetorical hyperbole," and thus protected speech.
Lastly, Asman points to this sentence: "It appears Horstemeyer hoped the Office would not notice [the Alice] decision and would simply rubber-stamp his application." The US Patent and Trademark Office was well aware of the Alice v. CLS Bank Supreme Court ruling, Asman contends.
The bracketed addition in that sentence, though, was written by Asman, not by the EFF. Nazer's unmodified post never makes the off-the-wall suggestion that the USPTO would somehow be unaware of the landmark Alice case. In the original, when Nazer writes "this decision," he's clearly referring to the Wu decision. The whole premise of this final statement is a misquotation, and the EFF's response points that out.
"EFF firmly believes there were no false facts in the Article to correct or retract, and that Mr. Horstemeyer's lawsuit is a serious mistake," Schroeder concludes.
Meanwhile, as the EFF prepares its response to the complaint, Asman would seem to have more than enough litigation to keep him busy. In addition to becoming the first lawyer to ever sue the EFF, he's also sued CaseRails for trademark infringement over the domain name dispute covered by Ars Technica last month. Last week, he amended that complaint to add a claim for—you guessed it—defamation. Asman argues that CaseRails founder Erik Dykema defamed him by talking to Ars Technica. We'll report on that lawsuit in an upcoming post.