Kate Hudson’s California-based athleisure company, Fabletics – which she launched in 2013 with JustFab co-CEOs, Don Ressler and Adam Goldenberg – has fired back at an alleged patent troll in a new lawsuit. According to the suit, which was filed on Friday in U.S. District Court for the Northern District of California, a federal court in San Francisco, Landmark Technology LLC (“Landmark”) and its predecessor, PanIP LLC (“PanIP”), have been involved in nearly 40 lawsuits in California, in addition to another 17 other lawsuits as PanIP, since 2008.
The companies have been pursuing patent infringement claims in connection with U.S. Patent No. 6,289,319 (“Patent 319”), a utility patent for a data processing system that processes e-commerce transactions between remote sites. Fabletics asserts in its complaint that it has received formal threats of litigation from Landmark in connection with Patent 319.
In October 2016, Fabletics alleges that it received a letter from Landmark asserting that the company had infringed the patent. The letter concluded with “non-litigation” settlement terms, including a non-exclusive offer to license Patent 319, as well as other patents in Landmarks arsenal, in exchange for $45,000. The letter also threatened to withdraw the cash sum offer in the event of litigation, which Fabletics alleges is a tactic aimed to “discourage Fabletics from defending itself” by way of litigation.
Fabletics further claims that on December 2, 2016, it received a second letter from Landmark, reminding Fabletics that the prior offer had lapsed but again offering Fabletics the right to license its patent portfolio for $45,000.
With the aforementioned in mind, Fabletics filed suit, alleging that “by its own admission, Landmark technology files patent infringement lawsuits against companies that refuse to pay the requested sum in Landmark’s licensing demand letters,” thereby insinuating that Landmark is little more than a patent troll.
In fact, Fabletics does more than suggest, it specifically refers to Landmark as a patent troll, stating that “Landmark technology is in the business of patent licensing through the threat of litigation – commonly referred to as a patent troll.” The complaint goes on to state that “a key part of Landmark Technology’s business model is sending letters threatening patent litigation and following through on that.”
For the uninitiated, a patent troll (or "non-practicing entity" as the White House has coined it) is an entity that buys up ambiguous, vague or broad patents (typically patents that are not otherwise being used) and then tries to make money off of them by threatening to sue (i.e. demanding a license fee) from anyone who could arguably be said to be using them without permission ("infringing them").
Fabletics has asked the court for a declaratory judgment, an official court declaration that the patent at issue is, in fact, invalid, as it involves an abstract idea that is not eligible for patent protection under U.S. law. The company states Landmark’s litigation shows a “pattern of litigious zeal” and due to the fact that “roughly half” of Landmark’s patent litigation involved Patent 319, it created “reasonable fear” that Fabletics would be the troll’s the “next target.” It is also seeking an injunction thereby prohibiting Landmark from enforcing any patent in relation to Patent 319 against Fabletics.
Brian Mitchell, legal counsel for Fabletics, has stated, “We’re confident our clients will succeed in obtaining a declaration from the court that the patent is invalid and not infringed. It’s a racket.”