Xconomy a site that provides news and information about today’s high-tech economy, says that the Tippr federal patent lawsuit against 14 daily deals providers is over. All the cases have either been settled or dismissed with the federal judge signing seven of the dismissals in one day.
Most of the companies named in the suit were in business before Martin Tobias purchased the patent portfolio of former Paul Allen company, Mercata, from Vulcan Capital in 2010, using it shortly after to create Tippr (Founded February 2010) and then move on to sue the existing companies for patent infringement.
Tobias and Vulcan are no strangers since Vulcan was a small investor in Imperium Renewables, a Seattle-based biodiesel company where Tobias had once served as CEO and as a part of the patent portfolio deal, Vulcan now has an equity stake in Tippr’s parent company, Kashless.
One source with knowledge of the lawsuit, who insisted on anonymity, said Kashless had been trying to get many defendants to sign a licensing agreement to settle the cases—one that would take 4 percent of gross revenues. “That’s like the profit margin in this business,” the source said.
“But they probably got someone to. That’s what they were trying to pressure everyone into,” the source said. “A lot of these guys that he had on there were pretty small … People are going out of business like crazy.”
The 14 companies include:
BuyWithMe (Founded May, 2009)
DealOn (Founded 2009, acquired by ReachLocal),
Second Street (Deadline Deals)
TownHog (Founded 2009, acquired by BuyWithMe),
Analog Analytics (Founded 2008)
Chompon (Founded January of 2010)
HomeRun (acquired by Rearden Commerce this September)
OwnLocal (Founded 2007)
BringLocal (Founded 2009)
Local Offer Network (Founded January 2010)
Deal Co-op (Founded August 2010)
It’s unclear whether all the cases were actually settled in Tippr’s favor but according to Xconomy, Tobias confirmed that his company has “reached agreement” with all the defendants but when asked if that meant Tippr/Kashless had made a patent licensing deal with the companies, Tobias replied, “I don’t want to say licensing agreements. The correct term is ‘settlement agreements.’ We are not disclosing the details of any of the settlement agreements. Tippr is extremely happy with the outcome of these settlement agreements.”
Tobias has denied the growing claims that he is a patent troll. Investopedia describes a patent troll as: A derogatory term used to describe people or companies that misuse patents as a business strategy. A patent troll obtains the patents being sold at auctions by bankrupt companies attempting to liquidate their assets, or by doing just enough research to prove they had the idea first. They can then launch lawsuits against infringing companies, or simply hold the patent without planning to practice the idea in an attempt to keep other companies productivity at a standstill.
While Martin Tobias has obviously developed a viable business, you only need to look at the history to see that he may have done so from the beginning with these specific strategies in mind.