Washington AG files lawsuit saying ‘patent troll’ targeted small businesses

In this Feb. 9, 2017, file photo, Washington Attorney General Bob Ferguson speaks at a news conference in Seattle, Wash. (AP Photo/Elaine Thompson, file)

OLYMPIA, Wash. — Washington State Attorney General Bob Ferguson filed a lawsuit against Landmark Technology A, saying its predatory “patent troll” practices harm small businesses.

Patent trolls harass and threaten small businesses with patent infringement claims.

The AG’s office said the company’s business model is entirely based on demanding licensing fees from other companies, citing a legally questionable patent.

The lawsuit says Landmark sent deceptive letters to more than 1,000 businesses across the U.S. that threatened to sue if the business did not pay $65,000 to license the patent.

“Landmark extorts small businesses, demanding payment for webpages that are essential for running a business,” Ferguson said. “It backs them into a corner — pay up now, or get buried in legal fees.”

When five small businesses in Washington refused to pay, Landmark sued them. The businesses settled for $15,000 to $20,000 each to avoid a long and costly lawsuit. The businesses were a bakery, bookseller and bottle maker in Seattle as well as an electrical supply company in Spokane.

Other Washington companies may have paid the $65,000 fee. The attorney general’s office said that during the course of the lawsuit, it will determine exactly how much the targeted companies paid.

In the letters, Landmark says it has rights to a vaguely worded patent related to loan processing and credit reporting. In 2014, the U.S. Patent and Trademark Office determined the patent was likely to be declared invalid.

Landmark targets businesses web pages such as small business home pages, customer login pages, new customer registration and product ordering pages and claims that they infringe on its patent rights, Ferguson’s office said.

Ferguson’s lawsuit asks that Landmark be ordered to pay any costs the companies incurred from Landmark’s lawsuits and demand letters.