Trolls: Are They For Real?

FSC has been approached by a number of studios that have received notices from patent companies claiming patent infringement. Patent challenges are becoming an increasing threat to adult online revenues. Non-practicing entities (NPE), i.e. patentees that do not practice their own inventions, are buying up existing patents at an alarming rate and targeting companies that may or may not participate in activity that violates one or more of their patents. These entities are known more widely as patent trolls.

With little to no downside, these patent trolls send notices to or file claims with companies accusing the companies of violating their patent. Often their claims lack substance for a number of reasons. The patent may not apply to the activity of the business; the patent itself may be called into question for obviousness or prior art, meaning that the idea or activity was present before the patent. There are more issues to take into account but suffice it to say this is a complicated issue and the patent trolls are counting on businesses settling rather that paying the exorbitant legal bills that come with fighting.

Unfortunately, it looks as if we are seeing the tip of the iceberg when it comes to patent trolls.

Unfortunately, it looks as if we are seeing the tip of the iceberg when it comes to patent trolls. Filing frivolous suits against businesses in the name of patent violation has become a business model and is beginning to be an industry unto itself. The small town of Marshall Texas is rife with companies that have rented offices and have filed their business licenses in Marshall for the sole purpose of being able to file suits in this patent-troll friendly town. These patent troll businesses have no staff and no one is in their offices but it is enough to drag an unsuspecting company into a court, in Marshall, Texas.

As your trade association, we at FSC have explored how we can best be of service to our members to be a resource and protect you from this increasing threat. We have spoken with a number of patent attorneys and while this is a complicated issue, there are some basic action steps that can save everyone a great deal of time and money.

The first step is to educate and inform adult businesses of the options available to them if and when they receive a letter claiming patent on their business model. The second is to create an effective system of sharing and networking amongst adult businesses on the subject of patent claims, making attacks on our industry unattractive to potential patent trolls.

FSC is in the process of developing a networking and education program specifically on the subject of patent trolls and patent violation challenges. FSC will not charge additional fees for this program. Nor will FSC encourage our members to take action one way or another. As your trade association it is our responsibility to make sure that our members are well educated and have the best resources available to make sound business decisions for their businesses.

Stay tuned, we will be rolling out networking and educational opportunities on the issue of patent trolls throughout the coming months.

Related:  

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

Best Practices for Payment Gateway Security

Securing digital payment transactions is critical for all businesses, but especially those in high-risk industries. Payment gateways are a core component of the digital payment ecosystem, and therefore must follow best practices to keep customer data safe.

Jonathan Corona ·
opinion

Ready for New Visa Acquirer Changes?

Next spring, Visa will roll out the U.S. version of its new Visa Acquirer Monitoring Program (VAMP), which goes into effect April 1, 2025. This follows Visa Europe, which rolled out VAMP back in June. VAMP charts a new path for acquirers to manage fraud and chargeback ratios.

Cathy Beardsley ·
opinion

How to Halt Hackers as Fraud Attacks Rise

For hackers, it’s often a game of trial and error. Bad actors will perform enumeration and account testing, repeating the same test on a system to look for vulnerabilities — and if you are not equipped with the proper tools, your merchant account could be the next target.

Cathy Beardsley ·
profile

VerifyMy Seeks to Provide Frictionless Online Safety, Compliance Solutions

Before founding VerifyMy, Ryan Shaw was simply looking for an age verification solution for his previous business. The ones he found, however, were too expensive, too difficult to integrate with, or failed to take into account the needs of either the businesses implementing them or the end users who would be required to interact with them.

Alejandro Freixes ·
opinion

How Adult Website Operators Can Cash in on the 'Interchange' Class Action

The Payment Card Interchange Fee Settlement resulted from a landmark antitrust lawsuit involving Visa, Mastercard and several major banks. The case centered around the interchange fees charged to merchants for processing credit and debit card transactions. These fees are set by card networks and are paid by merchants to the banks that issue the cards.

Jonathan Corona ·
opinion

It's Time to Rock the Vote and Make Your Voice Heard

When I worked to defeat California’s Proposition 60 in 2016, our opposition campaign was outspent nearly 10 to 1. Nevertheless, our community came together and garnered enough support and awareness to defeat that harmful, misguided piece of proposed legislation — by more than a million votes.

Siouxsie Q ·
opinion

Staying Compliant to Avoid the Takedown Shakedown

Dealing with complaints is an everyday part of doing business — and a crucial one, since not dealing with them properly can haunt your business in multiple ways. Card brand regulations require every merchant doing business online to have in place a complaint process for reporting content that may be illegal or that violates the card brand rules.

Cathy Beardsley ·
profile

WIA Profile: Patricia Ucros

Born in Bogota, Colombia, Ucros graduated from college with a degree in education. She spent three years teaching third grade, which she enjoyed a lot, before heeding her father’s advice and moving to South Florida.

Women In Adult ·
opinion

Creating Payment Redundancies to Maximize Payout Uptime

During the global CrowdStrike outage that took place toward the end of July, a flawed software update brought air travel and electronic commerce to a grinding halt worldwide. This dramatically underscores the importance of having a backup plan in place for critical infrastructure.

Jonathan Corona ·
opinion

The Need for Minimal Friction in Age Verification Technology

In the adult sector, robust age assurance, comprised of age verification and age estimation methods, is critical to ensuring legal compliance with ever-evolving regulations, safeguarding minors from inappropriate content and protecting the privacy of adults wishing to view adult content.

Gavin Worrall ·
Show More