Just last year, we wrote about how the CEO/founder of the social network Life360 responded to a threat letter from a patent troll, AGIS, by sending a letter titled “Dear Piece of Shit” and explaining why the company had no intention of settling with some stupid patent troll shakedown move. Three days later, AGIS sued for patent infringement. Since then, Life360 has become a vocal opponent of patent trolls, and AGIS in particular. In fact, just last month the company made a really bold move in announcing that it would provide free legal support for any other startups sued by AGIS:
“We have been committed to fighting these baseless claims from the outset and sharing our resources with the tech community. Today, we’re taking it a step further and offering to provide free legal support to other small companies being sued by AGIS,” said Chris Hulls, co-founder and CEO of Life360. “By providing this support, we can make it economically viable for smaller companies to defend themselves thus breaking the calculus that is core to most patent trolls’ existence.”
The company also filed a complaint with the California Attorney General against AGIS. And, now, Life360 has won in court as well, with a Florida jury saying that it was clear that the company did not infringe on the AGIS’ patent. The “dear piece of shit” letter was entered as evidence during the trial, but Life360 actually used it to its advantage, talking about how Hulls had founded the company and worked for a while without salary, building it up and suddenly got a letter from a company that wasn’t even a competitor, telling him he needed to shut down the company in just three days or pay up. That seemed to get sympathy from the jury.
Reporter Joe Mullin spoke to people on the jury and found that the letter actually worked to Hulls’ advantage:
“Anyone who got a letter like that—three days, or shut down—of course, you’re going to be pissed,” said Sheri Coombs, an elementary school teacher in Palm Beach County who served on the jury. “He reacted, and who could blame him?”
The jury didn’t invalidate the patent, but agreed that Life360 didn’t do everything claimed in the patent, which was necessary for it to be infringing.
AGIS’ lawyer, Mark Hannemann, of Kenyon and Kenyon (who Hulls claims is really the one responsible for AGIS trying patent trolling), tried to make a big deal out of the “piece of shit” letter, but that seemed to backfire as well, as Hulls had a ready response:
On cross-exam, Hannemann suggested the expletive was a “calculated move” to get press coverage for Life360.
“The calculated move was not the expletive,” said Hulls. “The calculated move was to make clear that we didn’t feel that we were infringing and be very public about that with our investors.” He wanted to “set a firm tone” showing that Life360 “won’t roll over.”
It also sounds like Hannemann made another mistake in cross-examining Hulls, in asking him how much he thought a “reasonable royalty” would be on those patents, allowing Hulls to make the simple point that what is in AGIS’ patents (7,031,728, 7,764,954, 8,126,441 and 7,672,681) wasn’t even remotely important or new:
“Close to zero,” said Hulls. Having a map with visual representations of people on it is important, but “Mr. Beyer’s patents are not about putting people on the map. There are eight different things for most of these. If we change one of these steps, we are no longer infringing.”
If Life360 removed its “call” feature—a feature used by 0.36 percent of its users—it couldn’t possibly be infringing anymore, even accepting the plaintiff’s other arguments.
“You could make the changes to make it not infringe but you haven’t yet, right?” Hannemann asked.
“I was advised by our attorneys that we should not make any changes to our product while this litigation is ongoing because it would be a false admission that we felt we were infringing,” Hulls said. “And I think this trial will hopefully show we were not infringing these patents and they’re invalid.”
And, while the jury didn’t go as far as to call the patents invalid, it did definitively say that Life360 didn’t infringe. Not that this suggests the “dear piece of shit” letter is advisable, but it didn’t seem to work against Life360 in this case.
Also, I hope that other companies sued by trolls think about launching similar programs to Life360 promising to pay the defense costs of other startups as well. That could really put a dent into the trolling business model of shaking down startups that don’t have enough cash to fight a patent lawsuit.