Ask HN: We just got patent trolled by Kelora Systems. Need Advice

17 points by mkull 14 years ago | 46 comments

I run a mid-size eCommerce business and we just received via certified mail a patent infringement notice from Kelora Systems, LLC regarding US Patent No. 6,275,821 entitled "Method and System for Executing a Guided Parametric Search".

The patent is for a “search method” where instead of a hierarchical approach, the application uses family groupings to narrow products (they call it guided parametric search). A hierarchical approach would be one where in order to get to Small Red Widgets I would have to first go to Widgets, then to Red Widgets, then to Small Red Widgets. If you wanted to get to Small Blue Widgets, I would have to go back to the top of the hierarchical tree and then select Blue and then Small to get my Small Blue Widgets. The issue with this being you may not know how your end user may prioritize those things. They may want to see all the Small Widgets and don’t care about the color, but in this hierarchical approach, that isn’t possible as its a branch past the color selection.

This is something just about every major eCommerce site does.

Doing some research I see we are not alone - http://www.google.com/search?aq=f&sourceid=chrome&ie=UTF-8&q=kelora+patent+troll

Essentially they have stated that we can either pay a $150,000 licensing fee within 30 days or they will file a formal complaint and pursue 'legal remedies'. (A copy of the complaint was included)

eBay, Microsoft, Target, Office Max, Shopzilla and lots of other major companies have already been targeted. - http://www.docstoc.com/docs/60405793/Kelora-v-Target-Officemax-Shopko-Briggs-and-Stratton-et-al

eBay has also counter-sued, however I am not sure how that effects how we can respond to this letter (if at all) - http://dockets.justia.com/docket/california/candce/5:2010cv05106/234117/

Some, such as ShopZilla and Footlocker have settled: http://www.prweb.com/releases/Kelora-Systems/Step-Search/prweb5094424.htm

My gut is that we need to bite the bullet and pony up to get our lawyers involved immediately, however they are not by any means cheap and would like to be as efficient as possible when dealing with them.

Very curious to any insight or advice that can be offered, particularly from someone who has dealt with this in the past.

petervandijck 14 years ago |

Holy shit faceted search is now attracting patent trolls?

I would do 2 things:

1. Talk to 4 or 5 different patent laywers (for free). Learn.

2. Contact other companies that also use faceted search (everyone does) and ask to talk to the person in charge. Perhaps you can work together?

I'm pretty sure there will be prior art to the patent. The first time I saw faceted search on the web was epinions.com (2001-ish), but it's been described in depth in the 70s or earlier in library science (Ranganathan). Good luck!

cmarius 14 years ago | |

Peter. This patent was filed in 1998. It was reexamined in 2010. You're right that everyone is using it now, and it can be proved that Amazon used it before this patent was filed. However, someone will have to litigate this to bring that prior art into play.

therealdiego 14 years ago |

This particular patent was invalidated and thrown out a few years ago. Kelora, through their lawfirm, Manatt, amended it and brought it back from the dead for round 2. So Manatt is the Palo Alto firm behind this. Robert D. Becker is the attorney willing to put his name on it and grab the mom and pops out there by the goanads (they are targeting the smaller sites who don't have the where-with-all to fight the legal threat, whether there are merits or not). Nice. And patents are supposed to encourage innovation, right? Or maybe they exist so that deep pocketed lawfirms can go after every lean-running online store around and shake them down ...

therealdiego 14 years ago |

Oh, and if you've been targeted by them, reach out to me and let me know. I'm hearing that there may have been some mistakes made by this law firm in their process which may expose them to some legal dangers, themselves. If you've been targeted by them, I'd be happy to share what I know, but won't do it in a public forum. Not yet. I have been asked to help gather info that may prove very useful in a push-back, info which you may have in the letters they sent you. (Things are really heating up behind the scenes!)

djhillssc 14 years ago | |

Same here. Would love to know more. Email is djhillssc@gmail.com

ctotheharr 14 years ago | |

I was targeted by them as well. Not sure how to contact you?

hknaxu 14 years ago | |

i'd also like to hear more from people who are in the same boat. my email is jeriko2011@gmail.com. I'd like to go with an attorney that represents many of us.

lgonzales 14 years ago | | |

how can I contact therealdiego?

stinker2 14 years ago | |

just opened the letter from their office in Palo Alto today, first night reading up on it.. i'm more than interested with what you have at this point.

email zeetee33@yahoo.com

kanetrain 14 years ago |

You can read the Microsoft counter-suit and get a complete factual history of this case. You can read about how Kelora systems was just created a few months ago and was just assigned the patent (presumably so they could appeal the case under a different entity and continue to try and extract settlements while the real case is being decided - speculation on my part based off of the MS countersuit). If you read the history (as detailed in the MS counter-suit), you'll see that the patent was recently invalidated and is now being appealed. I am extremely surprised that a legitimate law firm like Manatt would actually take this case and engage in such tactics. Strange times, indeed. http://www.docstoc.com/docs/61865036/Microsoft-v-PartsRiver-...

MattBearman 14 years ago |

This is getting ridiculous, when these patent trolls first started appearing I wasn't sure where I stood on software patents, but enough is enough, software patents need to be abolished.

It reminds me of a mob protection racket, only it's legal!

I wish you the best in fighting these assholes, when was their patent filed? Surely there must be some prior art?

Good luck

ashhk 14 years ago |

As always, talk to a lawyer and nothing offered here is legal advice nor should be taken as such.

But......

We got this letter about a year ago. The price then was $35,000 if paid within 2 weeks, $70,000 after that. If you didn't pay, they were "gonna getcha'". A ton got this email. I doubt many paid (we certainly didn't).

New suits by Kelora since they sent that letter over a year ago?

Zero.

I would confer with a lawyer loooooooong before I would pony up to Kelora. They are bleeding money to lawyers trying to make a large sum off of one of the big boys. Its been 3 years since PartsRiver started down this path and 1 year since Kelora picked up the torch with absolutely nothing to show for it.

They need to cover their lawyer fees. They must be getting really low on funds now if they've upped it to $150k....

(also, correct me if I'm wrong, this second group of letters are the threat of suit, not actually suits, correct?)

stinker2 14 years ago | |

they put in a copy of the actual complaint along with the letter showing that they can simply file it, to appear more intimidating..

ashhk 14 years ago |

This is probably the most interesting case (Microsoft vs PartsRiver) and sheds the most light I think on what is going on:

http://docs.justia.com/cases/federal/district-courts/califor...

"A patent is invalid pursuant to 35 U.S.C. § 102(b) if the claimed invention is offered for sale more than one year before the filing date of the patent application. Here, the "critical date" is October 14, 1993, which is one year before the filing date of the ‘821 patent application.

The Court concludes that claims 1 and 2 of the ‘821 patent are invalid due to the on-sale bar because they were the subject of a commercial offer for sale of an invention that was reduced to practice before October 14, 1993."

This was were the initial patent was ruled invalid due to the OnSale bar. Not being a lawyer, I'm not sure how changes they made to it made the OnSale bar no longer valid. Do the changes somehow effect the patent/conception date?

The original filing date was October 14, 1994 and, according to the above court documents:

"As noted above, Danish, a co-inventor of the ‘821 patent, and Plaintiff have conceded that claims 1 and 2 were reduced to practice in April, 1992"

It is tough to claim prior-art as early as '92 or '94. But, if the changes to the patent somehow makes the onsale bar no longer valid, does it change or negate those two dates.

Prior-Art could be claimed on a few different things. Faceted search can definitely be found in different things as early as the late 90s:

http://idl.ils.unc.edu/rave/history.html http://en.wikipedia.org/wiki/Faceted_search

It might be a stretch but, as others have stated, you could make an argument that faceted search has prior-art as early as the mid 1930s: http://en.wikipedia.org/wiki/Colon_classification

There are a few libraries that use it but it isn't clear when it was instituted.

cmarius 14 years ago |

We also received the letter. We have several attorneys working on this right now. One attorney we just learned of is Sid Leach in Phoenix, he specializes in patent law and has spent considerable time dealing with patent trolls. Our attorneys will be contacting him in addition to the work they are already doing. Many, many companies have received this letter. Our current take is that the patent will ultimately be proved invalid, but that is yet to be decided because it has not been litigated on its merit yet.

cmarius 14 years ago | |

I forgot to say that Sid Leach is already aware of this situation and has consulted with another company that received the letter.

stipple 14 years ago | | |

I'm sure your attorneys were just giddy when you contacted them, but I wonder if it would have been better just to ignore this.

epc 14 years ago |

Faceted search over a network connected was demonstrated in a video education series (some sort of HCI distance education class) hosted by Ben Schneiderman of the university of maryland in the fall of 1992. I don't have a link or more concrete reference to give you nor any idea if that would help in this specific case.

We were using faceted search on the IBM Corporate web site in the 1998-1999 timeframe, I believe in the IBM PC “shop” site, however I no longer have any of the relevant information/documentation (IBM might).

epc 14 years ago | |

I think what I was thinking of was "Dynamic Queries: database searching by direct manipulation" which is linked off here: http://www.cs.umd.edu/hcil/pubs/video92.shtml. That may not be as applicable as I thought it was.

kanetrain 14 years ago |

We got the same letter from Kelora. It's more than just you and me too. I just sent you an email to the contact info in your bio. Give me a call.

therealdiego 14 years ago | |

oh, there are likely hundreds, if not thousands. At least, when they first tried this, last year, there appeared to have been a ton of them ...

dgunn 14 years ago |

Is there no way to get out of the "Guided Parametric Search" realm? Maybe you could add something to your search capabilities or rethink a part of it such that you are no longer a reasonable target for this company. This is probably what I would do. This approach wouldn't require a lawyer and would only cost a few days of development.

mkull 14 years ago | |

Unfortunately no, guided search / faceted navigation is core to our customer experience.

djhillssc 14 years ago |

We also got the same letter/threat from Kelora Systems. Like the original poster here and countless others I've found online, we're not quite sure what to do and what our legal exposure is likely be. Curious to speak to therealdiego about what he knows behind the scenes...

adrianwaj 14 years ago |

"eBay has also counter-sued, however I am not sure how that effects how we can respond"

Contact eBay.

hurricane8 14 years ago |

we're in the same boat. we have disabled the search mechanism on the site. if we are not interested in licensing the search, what other steps need to be taken at this point? it seems like the only options given by them are to license or they will litigate. hopefully people can keep us updated on what actions they are taking.

also, they provided an incorrect value of our estimated annual revenues, almost double over our actual amount. would this have any relevance? i am wondering where they obtained this information from, probably those questionnaires you have to fill out to get a free magazine.

stipple 14 years ago | |

Do you ever send out mass marketing through the mail? Or have you ever received spam? They tell you not to click on any links in a spam email because it could expose you to harm. In the same way, I expect that replying to this threat would do more harm than good. CLEARLY, they don't have 10,000 lawyers working for them, and yet they've probably sent out that many notifications. So, clearly they cannot actually make good on all of those threats. I could be wrong, I suppose.

macinthebox 14 years ago |

We received the same letter last week. How many of you have responded? The first attorney we contacted wants to get in touch with them. Depending on the situation, that may or may not be the right thing to do.

jeffhansen 14 years ago |

I just got the same letter...going to contact a patent lawyer and see where that gets me. This is crazy...please email me at jeff@hansenwholesale.com with any extra info that you may have...I will do the same.

a3camero 14 years ago |

Many lawyers offer free consultations. You may want to talk to a patent lawyer and find out what your options are. Discussing it with them might help you better understand what the different options might cost.

bfe 14 years ago |

Talk to an attorney, and one who does nothing but patent law. If you go through your regular business lawyer that's what they will do anyway.

stinker2 14 years ago |

there is now a usergroup up dedicated to this issue so whoever gets this letter, signup to this group to increase collaborative efforts: http://tech.groups.yahoo.com/group/Us6275821/

almightygod 14 years ago |

At this point you have two options, pay 150K or contact your lawyer.

sharth 14 years ago | |

At 150k, they should probably consult with their lawyer for a bit anyways.

kanetrain 14 years ago | | |

you make a good point. if you are paying $150,000, you should at least talk to a laywer to make sure you are getting the "license" they claim to be offering. You really have 1 viable option at this point - talk to a very good patent attorney.

mkull 14 years ago | |

Yep, the hope is that our firm does not have to spend lots of time spinning their wheels getting up to speed on this just to give us some basic advice, but I fear they will need that.

If there was a firm specifically geared to dealing with IP patent trolling that would be ideal.

therealdiego 14 years ago | | |

Do a quick search online and you'll see there's a long history around this patent and ongoing litigation with Microsoft, Ebay, Shopzilla, etc. Have it ready for your attorneys and help them get up to speed quickly. Manatt is basically giving people only 2-3 weeks to pay up until they say they'll file the lawsuit, so they're banking on your not having the time to get your stuff together. Like I said, nice people. Welcome to the mafioso world which is patent trolls.

stinker2 14 years ago |

"on-sale bar in 35 U.S.C. § 102(b) rendered the patent invalid."

stinker2 14 years ago | |

"(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or"

http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35...

stinker2 14 years ago | | |

its being held up because they're appealing the judgement made with microsoft,etc... so they're trying to suck the most blood they can while they can.. even though its bullsh!t, its a headache, and another isnt needed. it's a last strike for them.

even though many may feel the appeal will be withdrawn, its still a headache.. Options i feel are..

a) pay an attorney to try and delay it until the appeal is decided. b) take out the search until the appeal is decided. c) pay they're $150,000 (f'n nutz) if it will grow ur sales by the time the decision of the appeal.

staunch 14 years ago |

Fucking parasites.