Trolling for Dollars
California Lawyer

Trolling for Dollars

"Greenmail" tactics on tech patents frustrate Silicon Valley.

July 2014


Illustration by Tim Bower

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When the demand letter landed at FindTheBest.com, Danny Seigle faced any small tech company's worst nightmare. The letter accused the Santa Barbara Internet start-up of patent infringement. It demanded that he seize employee laptops and smartphones to preserve evidence and curtail any cover-up. And it insisted the company cough up a quick cash settlement and licensing deal if it wished to avoid "full-scale litigation" and "protracted discovery" - which Seigle took to mean time and money no start-up could spare.

But when Seigle, FindTheBest's director of operations, read the actual patent attached to the letter, he almost laughed in relief. It was all a mistake, he decided: A Delaware shell company, Lumen View Technology, owned a patent on computerized matchmaking that compares the preferences of two or more people - for dating, hiring, customer acquisition, and more. The patent seemed to cover a lot of ground - too much, in Seigle's opinion - but none of it was FindTheBest's ground. The patent specifically excluded computer matching using just one person's preferences, and that's what FindTheBest does: It recommends products - from cars to computers to colleges - based on input from a single consumer.

"We figured we could resolve this with a phone call," Seigle says, sighing at his own naiveté.

He soon learned otherwise. The lawyer who signed the demand letter would only talk settlement terms, Seigle recalls, not legal merits, no matter how many times FindTheBest requested an explanation of how the company could possibly be infringing. (The attorney, Damian Wasserbauer of Middletown, Connecticut, declined to comment for this article.) A single payment of $85,000 would have made Lumen View go away, Seigle was told. (The sum later was reduced to $55,000 if the start-up settled quickly and filed no pleadings.) But if FindTheBest tried to defend itself, Lumen View's demand letter promised, it would "incorporate an escalator into its settlement demand" for each motion the company filed.

"Their attorney said settling early was the 'best business decision,' " Seigle recalls.

That was the moment he decided FindTheBest had been targeted by a "patent troll," a company whose primary business is to enforce patents through demand letters and lawsuits. "To us," he says, "it was extortion."

FindTheBest faced a no-win choice: capitulate and pay out over a dubious patent claiming ownership of the ancient art of matchmaking; or fight and inflict exorbitant legal costs on the start-up, with little chance of recovering a penny, even with a victory.

This dilemma is remarkably common on the battlefield known as the modern U.S. patent system. From Silicon Valley to Wall Street to Main Street, an estimated 100,000 businesses each year confront the same depressing choice because of demands from patent trolls, according to a recent White House report. And a study by Boston University's law school famously reported that in 2011, tech companies paid out $29 billion in direct costs to patent trolls.

These numbers are so startlingly large that they helped spark a national debate over patent reform: how to rein in abuses, and, in particular, how to blunt their most visible weapon, demand letters such as FindTheBest received.

So what, exactly, are patent trolls? Also known more politely as patent assertion entities, their business model is simple: Buy up or license patents (the more obscure and broad the better), then use them to manufacture not products, but demand letters and infringement lawsuits. There is a caveat, however, as a troll is defined more by its behavior than by the contents of its patent portfolio: Research universities hold many patents that they often license to others but are generally not known to engage in troll tactics, and are classified more broadly as "non-practicing entities" (NPEs). On the other hand, some manufacturers - called "practicing entities" in this context, because they actually use their patents to create a product or service - sometimes behave in exactly the same way as trolls, often to target competitors.

As far as doing something about patent trolls, the results to date have been mixed.

Congress has fumbled the ball. Initial bipartisan enthusiasm for saddling trolls with a loser-pays rule for attorneys fees, discovery limits, regulation of demand letters, and other patent litigation reforms has given way to Senate delay. In May, Senator Patrick Leahy (D-Vermont) pulled the Patent Transparency and Improvements Act from the Senate Judiciary Committee's agenda, effectively postponing any further action. "Unfortunately, there has been no agreement on how to combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day to protect their inventions," Leahy stated in a press release. "Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal."

"With the collapse of the Senate bill, companies large and small are at the mercy of patent trolls," says Robin Feldman, director of the Institute for Innovation Law at UC Hastings. "It is essentially open season on American companies."

Federal courts have struggled with the underlying problem of how to tell a patent for a real invention from the sort of overbroad patent that makes ideal troll bait. Before its term ended last month the U.S. Supreme Court weighed in on multiple patent cases, including two rulings that make it (slightly) easier to award attorneys fees to defendants in infringement suits. (See Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S.Ct. 1749 (2014); Highmark, Inc. v. Allcave Health Mgmt. Sys., Inc., 134 S.Ct. 1744 (2014).)

In a somewhat unexpected turn, a growing number of state legislatures and attorneys general (so far, not California's) are using consumer protection laws to go after parties who send deceptive demand letters. At least eleven states have recently outlawed bad-faith assertions, and several more states have demand-letter bills pending. All would sanction those responsible for patent demand letters that allege infringement in bad faith and without due diligence. But these laws are expected to draw First Amendment challenges.

"Surprisingly, it's been the states that have been leading the charge against the trolls," says San Francisco attorney Julie Samuels, a troll hound for years who now heads the San Francisco start-up advocacy group Engine. (Previously Samuels was the inaugural holder of the Electronic Frontier Foundation's "Chair to Eliminate Stupid Patents," named after and funded with a $250,000 donation from Mark Cuban - the troll-hating Dallas Mavericks owner and well-known venture capitalist who claims to have been victimized by one of the more ridiculous patents ever issued.) "The states and also the Federal Trade Commission have been very effective by focusing on the anti-consumer tactics of trolls," Samuels says.

But trolls, she concedes, have proven remarkably resilient over the years. In America, corporate titans dating back to Henry Ford and presidents as early as James Madison have fumed over troll tactics (Madison wanted to sic armed troops on them for trying to extort licensing deals). Back then, though, the offenders were known as "patent sharks," and their numbers were nothing like today's legions.

Whatever you call them, the economy, and particularly the tech industry, pays a heavy toll for the "monetizing" of patents. In its most benign form, this involves the aggressive licensing of useful and proven inventions - software, medical devices, electronics - often in partnership with the original inventors, who lack the resources to protect their intellectual property on their own, says Matthew Vella, president and CEO of Acacia Research of Newport Beach, one of the largest and the most litigious patent assertion entities. "We're creating a marketplace for patents," Vella says. "We protect inventors from large technology companies who don't want to pay anyone for anything."

Vella, an attorney who previously worked as senior intellectual property counsel for ATI Research and lead patent license counsel for Nortel Networks, says the anger directed at companies labeled patent trolls is misdirected. From its inception, he says, the U.S. patent system was meant to protect patent holders and their covered inventions for the good of all. "If your patent is valid and infringed, you deserve to be compensated. That's our business model [at Acacia]. ... That's our marketplace. And it's a very lively marketplace."

Acacia has amassed testimonials from dozens of inventors of technologies ranging from product bar codes to improved surgical tools. Many recount how they failed on their own to budge large corporations that had appropriated their intellectual property without license or compensation. One small-company CEO quoted on the site, Ted Goodlander of Storage Computer Corp., which holds patents on storage-server technology dating back to the '80s, recalls being "beaten to the ground by large companies we litigated" and finally driven out of business. Goodlander and other such clients received licensing deals after turning to Acacia for help, often for a 50-50 split of the proceeds; Acacia says it has generated a billion dollars in revenue so far. "Do you call that patent trolling?" Vella asks. "I call it protecting inventors."

Others, however, see Acacia as a troll through and through. Lee Cheng, chief legal officer for Southern California-based Internet retailer NewEgg.com, has vowed never to settle with a troll. He banded together with about 20 other tech enterprises to battle attempts by an Acacia subsidiary - Site Update Solutions - to enforce a portfolio of Internet site-optimization patents that Cheng considered bogus. After the defendants won a favorable claim-construction ruling, Acacia ultimately dismissed its cases against all defendants but NewEgg, the only one that refused to waive its right to recover legal fees. Although NewEgg lost its initial motion for fees, it won the first-ever appellate ruling instructing a trial court to reconsider awarding fees under the U.S. Supreme Court's new and more permissive definition of what constitutes an "exceptional case" to justify an award of attorneys fees under the Patent Act. (See SiteUpdate Solutions, LLC v. Accor North America, Inc., 2014 WL 1910424 (Fed. Cir. 2014).)

"We believe that trying to make a patent troll pay, no matter what amount, sends the clearest possible message to all abusive patent asserters," Cheng said in a press release.

Even Vella, who sees himself as a white hat in the patent wars, admits that there are other, less-than-benign players in his line of work who need to be reined in. He even supports some reforms - loser-pays rules for infringement cases, for instance - which he says would add risk to the filing of infringement claims, driving more business Acacia's way while deterring abusive players from filing nuisance suits.

Such "bottom feeder" trolls grab old, obscure, overly broad, and sometimes ludicrously constructed patents issued by an overworked and understaffed patent office, then stretch their claims beyond all recognition, says IP expert Mark Lemley, a law professor and director of Stanford University's law, science, and technology program.

Have you ever sent an email from your smartphone? Attached a photo to a text message? Used a Wi-Fi hot spot while slugging down a latte at your favorite café? Scanned and emailed a document? Sold or bought something - anything - online? If the answer to any of these questions is yes, Lemley says, there's a patent troll who wants you - or, more to the point, your money. Whatever the software app, it seems, there's a patent troll for that, claiming ownership of ubiquitous and broadly used technologies they had nothing to do with inventing, developing, or marketing. Old wired-telephone and fax patents have been used to extract settlements and license fees for cell phone and email technologies that didn't exist when the patents were issued. One company that bought up a 1985 patent on a dead technology used to dispense audio cassettes via shopping-mall kiosks argued that the broadly worded patent covered contemporary online sales - and made a $100 million in settlements and licensing fees for "inventing" e-commerce before a British court invalidated the patent. (See E-Data Corp. v. Getty Images, Inc., 2005 WL 1630778 (Patents Cnty. Ct. U.K.).) According to Lemley, overly broad software patents are a primary source of the problem.

"We've seen an endless array of these people who pop up and say, 'Oh, I invented the mobile Internet, I invented video on demand, I invented video downloads,' " Lemley says. "It goes on and on. ... Innovation is not happening because of the patent system. It's happening in spite of it."

The economics of patent litigation favors trolls who send out deluges of demand letters, sometimes with little or no investigation, and patents of the poorest quality, daring defendants to invest in a legal battle rather than settle up on the cheap. FindTheBest's situation is typical. If it chose to fight Lumen View's claims, the company would do so knowing that the average patent case that goes to a full trial, win or lose, costs defendants $5.5 million, according to Lemley. If it chose to settle for even a hundredth of that amount, it could save money and time - but it also would encourage more trolls to come knocking.

"We'd be feeding the beast," Seigle says.

The advantage trolls have is reflected in how Lumen View fared with its patent demands: Nineteen of the 20 companies it accused of infringement decided to settle, according to FindTheBest's attorney, Joe Leventhal of the Leventhal Law Firm in San Diego. This was likely a checkbook decision, he says, since every one of them thought Lumen View's patent on matchmaking was patently ridiculous. And the only reason FindTheBest could afford to fight was that the start-up's CEO, venture capitalist Kevin O'Connor, pledged a million dollars of his own cash. (The last company O'Connor founded, online ad pioneer DoubleClick, sold to Google for $3.1 billion in 2008.)

"Fighting [patent trolls] may not be a rational business decision," says Seigle, "but it is the ethical one."

It certainly has not been a profitable strategy. Although Leventhal succeeded in getting a federal district court to rule the matchmaking patent invalid (Lumen View Tech., LLC v. FindTheBest.com, Inc., 2013 WL 6164341 (S.D.N.Y.)), that decision has been appealed. The first part of the fight has so far cost the company more than $250,000: a bargain in the rarified world of patent litigation, which Colleen Chien - a Santa Clara University law professor and White House intellectual property advisor - calls "the sport of kings." Still, it's nearly five times the amount FindTheBest could have settled the matter for. Meanwhile, Lumen View, whose only products are lawsuits, has 19 settlement payments in its coffers - a take of $1 million to $1.6 million on an invalid patent, assuming the payouts were similar to the one demanded of FindTheBest.

Leventhal also pursued a racketeering suit on FindTheBest's behalf against Lumen View and the inventors listed on the patent. On May 19, District Judge Denise L. Cote dismissed the case, concluding that Lumen View's conduct did not amount to a pattern of activity covered by the RICO statute. (FindTheBest.com, Inc. v. Lumen View Tech., LLC, 2014 WL 2050610 (S.D.N.Y.).)

"You could say we have a flawed system," says Leventhal.

But Judge Cote didn't let Lumen View off the hook; later that month, citing Octane Fitness, she deemed the company's case against FindTheBest to be frivolous and objectively unreasonable, awarding the defendant attorneys fees. "Lumen's motivation in this litigation," she wrote, "was to extract the nuisance settlement. ... [F]ee shifting in this case will 'serve as an instrument of justice'." (2014 WL 2440867 at *7 (S.D.N.Y.), quoting from Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1378 (Fed. Cir. 2001).)

How big is the patent troll problem? Consider: In 2002 patent assertion entities filed only 5 percent of all patent suits, but by 2011 that figure had risen to 40 percent. Last year, PAEs were behind 67 percent of all new patent infringement cases, filing a record 5,411 separate suits, reports RPX, which bills itself as an anti-troll company that accumulates patents "defensively" on behalf of customers before trolls can snatch them up.

Yet the full weight of the "troll toll" and the range of its victims is not reflected in statistics on lawsuits, which are only a piece of a much bigger and more secretive process, says Samuels. The common practice of coercing settlements in infringement cases before any court record is established - almost always accompanied by a nondisclosure agreement imposing secrecy - masks the extent of the problem, she says. And a relatively new tactic of targeting thousands of end users of technology through the mass mailing of demand letters, rather than targeting tech manufacturers, means the problem is likely orders of magnitude greater than the lawsuit statistics reflect, Samuels says.

This new tactic, aimed primarily at small businesses that make use of the allegedly infringing technology, came to light in the past two years, Samuels says. One company with patents related to wireless network devices sued thousands of entities that use off-the-shelf Wi-Fi routers, rather than the devices' manufacturers. Coffee shops, hotels, restaurants, transit services - virtually any type of business that offers wireless Internet access to staff or customers - were targeted by Innovatio IP Ventures. The company demanded up to $3,000 apiece from nearly 14,000 businesses, Samuels says, for doing nothing more than buying off-the-shelf wireless base stations. (Patent law draws no distinction between creators, sellers, and unwitting users of infringing technology, which Samuels sees as a flaw that invites patent abuse and bullying of vulnerable targets.)

"Do we really want people who buy routers at Best Buy to be required to read patents and understand patent law, and to be aware of whether they are potentially infringing?" Samuels asks. "That would be a total economic disaster."

Cisco Systems, the manufacturer of many of the router models involved, intervened after frightened and bewildered customers reported receiving demand letters, says Mark Chandler, general counsel of the San Jose-based company. In all, about 230 million wireless devices were targeted, each containing a Wi-Fi chip Cisco had obtained from a number of different suppliers. The chips used technology originally patented by Broadcom Corporation, which sold the patents to Innovatio for $7.5 million as their expiration date approached. The federal court in the Northern District of Illinois decided to evaluate Innovatio's potential damages before the infringement claims were litigated and found that, instead of the thousands of dollars Innovatio tried to wrest from each end user, the patent holder was entitled to less than a dime per device.

Innovatio settled the case last year with Cisco for a total of $2.7 million - about 3.2 cents per device. Chandler called this a "great victory," though it cost Cisco $13 million in legal bills to get there.

"Innovatio had hoped to get $4 billion by threatening innocent users and entrepreneurs [with demand letters]," Chandler says, "so we were happy to give our customers peace of mind."

A racketeering suit Cisco filed against Innovatio in collaboration with Motorola and Netgear was dismissed. (See In re Innovatio IP Ventures, LLC Patent Litig., 921 F. Supp. 2d 903 (N.D. Ill. 2013).)

At the moment, the most notorious player targeting end users for patent infringement is MPHJ Technology Investments, sometimes referred to as the "scanner troll," though the company rejects that label. In 2012 the company and its 101 shell subsidiaries began sending out more than 16,000 demand letters across the country. Its exploits have been a frequent topic of angry discussion in Congress and statehouses, drawing in elected officials not normally concerned by technology issues but who are incensed that MPHJ is picking on mom-and-pop businesses. Samuels says MPHJ's antics are "giving the entire patent system a bad name."

"The bad actors are making a mockery of a patent system that for a long time has done good in this nation," says Samuels. "Now the system has totally gone off the tracks, because patents are being turned into weapons in a way that was never meant to be."

MPHJ is nothing if not ambitious. The Delaware-incorporated, Texas-based outfit burst on the scene last year with a small portfolio of patents the company purchased for one dollar, according to the New York Attorney General. It wants $1,000 to $1,200 per employee from every business it accuses of infringement. According to an email reply to questions from this writer, MPHJ believes 5 percent of businesses in America with 20 or more employees are infringing on its patents. The company says it is simply defending a valid patent, and as evidence of its bona fides, points to licensing agreements it has already reached with scanner manufacturers Canon and Sharp that protect their customers from end-user infringement claims.

Couched in the complex jargon common to modern patents, MPHJ's interpretation of its intellectual property boils down to this: If you scan a document and then email it, you owe us. MPHJ claims its patents cover "the concept" of scanners attached to computer networks - not the scanning, and not the emailing, but the two together. The company does not single out any particular device or method.

While Innovatio dealt in dubious claims for high-quality patents, MPHJ has been accused of wielding overly broad patents that likely should never have been issued in the first place, Samuels says. (Both companies, however, were accused of conducting little or no investigation of their targets for actual evidence of infringement.) MPHJ now has suits pending against Coca-Cola, Dillard's department stores, and a few other U.S. companies, but it has not sued any of the targeted end users, according to the company.

MPHJ has gotten in considerable hot water for allegedly putting false information in its demand letters to pressure targets to pay up, including claims that other businesses had already joined its "licensing program" when none had. Pursuing the company under state consumer-protection laws, the Vermont attorney general filed suit, the Minnesota attorney general obtained a settlement requiring MPHJ to get the office's consent for each and every future demand letter, and the Nebraska attorney general issued a cease-and-desist order against Farney Daniels PC, the law firm representing MPHJ, while its investigation is pending.

And in the most sweeping case so far, New York AG Eric T. Schneiderman negotiated a settlement requiring MPHJ to refund to New York businesses any licensing fees it received as a result of deceptive letters, and imposing limits on future demand letters: Misleading statements are barred; MPHJ must include material information about each alleged infringement claim; and demand letters can be sent only after a good-faith effort to investigate each allegation of infringement. (In the Matter of the Investigation of MPHJ Tech. Invs. LLC, Assurance No. 14-015 (Ofc. of N.Y. Atty. Gen., Jan. 13, 2014).) "The agreement provides a model for other states, and for federal regulators as well," UC Hastings's Feldman said when the settlement was announced in January.

The Federal Trade Commission is investigating MPHJ for consumer-protection violations as well. But the company has fought back, suing the FTC and persuading a federal judge in Nebraska to issue a preliminary injunction against that state's attorney general's cease-and-desist order, on the grounds that MPHJ's constitutional rights to free speech and counsel of choice was violated. (See Activision TV, Inc. v. Pinnacle Bancorp, Inc., 2014 WL 197808 (D. Neb.).) MPHJ can also cite a body of five federal appellate cases holding that patent demand letters are a constitutionally protected form of speech, even when they include falsehoods.

According to the FTC, for all MPHJ's brash efforts it has collected money from just 17 of the 16,000 businesses and users targeted during its letter writing campaign. Which is why the best tactic for start-ups may be to put demand letters they receive into the "round file." When Chien surveyed 223 tech start-ups about their response to demand letter campaigns, she found that of those who responded to the survey, 22 percent reported they ignored the demand letter and were not sued, and 18 percent said they settled the claim with money or equity.

So, with patent reform legislation stalled in Congress, what recourse do defendant companies have?

Some large tech companies are expressing reservations about any substantive changes to the law because they, too, have begun to wield patents as weapons against competitors. Apple, Sony, Ericsson, Blackberry, and Microsoft have even created their own patent assertion entity, the Rockstar Consortium, which in 2011 outbid Google for the bankrupt Nortel Networks' patent portfolio. Last fall Rockstar filed a patent infringement suit in Texas against handset manufacturers that use Google's Android operating system. Google has moved to transfer the case to the Northern District of California, filing a separate case in that district as well. (Google, Inc v. Rockstar Consortium, No. 13-5933 (N. D. Cal., filed Dec. 23, 2013).)

In another patent assertion case, Stephen Korniczky of Sheppard, Mullin, Richter & Hampton's Del Mar office won invalidation last year of 3G wireless patents on behalf of Taiwanese phone maker HTC. (Intellect Wireless, Inc. v. HTC Corp., 732 F.3d 1339 (Fed. Cir. 2013).) Korniczky says some federal reforms under consideration could have the effect of making infringement defense even more costly than it is now. Many of the legislative proposals - whether for fee shifting or discovery - will simply provide more fodder for courtroom battles (and legal fees), he says.

But none of those proposals would go beyond litigation reform to reach the core problem, which Korniczky says is the patent office's history of issuing patents with flaws that trolls love to exploit. Korniczky says he was able to win the HTC case largely because he discovered that the patents' inventor had provided false information to the patent office that allowed his invention to be backdated. And because the patent office operates on the honor system (all the information in a patent application is assumed to be true), such duplicity is rarely uncovered, he asserts.

The patent office is trying to shore up the patent approval process by crowd-sourcing its search for "prior art" - evidence that can reveal whether a patent applicant describes a truly original invention. Lemley and Chandler suggest it may fall to the U.S. Supreme Court to give the patent office the tools it needs.

The greatest challenge may lie in the very nature of patents in the digital age. Software patents, which account for about 40,000 of the 278,000 utility patents granted by the U.S. Patent and Trademark Office last year, present difficulties that didn't exist when Eli Whitney patented his famous hardware invention, the cotton gin, in 1794. The problem was laid bare last year before the U.S. Court of Appeals for the Federal Circuit, which nearly melted down when it tried to separate legitimately specific patents from improperly abstract ones. The en banc panel ruled that Alice Corporation's business-method patent for computerized financial transactions was invalid, but it couldn't agree on a standard for patent eligibility. This produced a one-paragraph per curium decision, followed by six separate opinions and a jumble of different tests for determining patent validity, resolving nothing in the end. (CLS Bank, Int'l v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013).)

To no one's surprise, the high court granted cert in the Alice case (see 134 S.Ct. 734 (2013); at press time, the case was pending as No. 13-298). During oral arguments in March, several of the justices asked pointed questions about "functional claims" that make patents such as Alice's too broad and abstract - patents that, in effect, don't describe a specific method of trapping mice, but instead patent the entire concept of a mouse trap. Justice Stephen Breyer wondered aloud if Alice had done just that, and if its financial transactions "method" was no different than the one used by King Tut's abacus-wielding scribe, but for the use of a computer. Describing an invention by its function, which is supposed to be impermissible as "an abstract idea" under section 101 of the Patent Act (35 U.S.C. § 101), has nevertheless become common in software patents, Lemley says. Finding better and more constrained language to describe software patents is the best way to rein in trolls, he says, but no one has yet managed to do that.

FindTheBest's Seigle, who testified last fall at a congressional hearing on patent assertion entities and their impact on innovation, finds it mind boggling that patents such as the one on matchmaking used against his company could ever survive scrutiny at the patent office. He notes that Judge Cote had no trouble concluding that Lumen View's patent never should have been approved, being nothing more than "the computerization of a fundamental process that has occurred all through human history." (Lumen View Tech, LLC v. FindtheBest.com, Inc., 2013 WL 6164341 at *10 (S.D.N.Y.).) But the tortured process Cote was forced to go through in reaching her conclusion - including the multiple legal tests proposed in the Federal Circuit's split rulings in the Alice case - has made such outcomes rare. The Supreme Court is in a position to address this morass, but how far-reaching a remedy the high court might impose remains to be seen.

Would fixing software patents' particular vulnerability to trolling solve the problem? Conventional wisdom holds that other major industries are far more resistant to being preyed upon. But a new study by Feldman at UC Hastings, looking at the enormous trove of university patent holdings in the biological sciences, found dozens of patents relevant to the pharmaceutical and life sciences industries that could easily be wielded as legal weapons if trolls ever got hold of them.

"The trolls have turned patents into weapons of mass innovation destruction," laments Seigle. "It costs them next to nothing to send out these spray-and-play demand letters. It costs everyone else a fortune. Something has to change."

Edward Humes, based in Southern California, is a Pulitzer Prize--winning journalist and author of 13 nonfiction books.

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