navigating patents

A Cautionary Tale of Navigating Patent Predicaments

Aloft Media came to my attention about a year ago, when a colleague sent me a copy of a C&D letter received regarding a couple of patents.  If you are an unfortunate recipient of such a letter, you will know it likely pertains to an allegation of patent infringement of one or more claims of US 10,078,623 and US 10,372,793.  In their simplest form, these patents are directed to a particular configuration and operation of a website.

Upon receipt of such a letter, a good first rule of thumb is to conduct basic research on the sender, including an internet search.  A map search raised immediate flags for me, as the ‘street’ view shows a dilapidated, non-descript building as the primary business address:Not to suggest that a legitimate business couldn’t operate out of such a place, but it did nothing to make me feel like Aloft Media was on the up and up – which only fostered curiosity and the need for further digging.

Luckily, it did not take long to find out that Aloft Media is reputed for sending letters to numerous recipients, and even escalating claims into actual litigation.  See, e.g., Aloft Media, LLC v. Adobe Systems Inc., 570 F. Supp. 2d 887, Aloft Media, LLC v. Yahoo!, Inc., No. CIV.A. 6:08-CV-255, 2009 WL 2058661 (E.D. Tex. July 13, 2009), etc.

An ‘Act’ of sending a C&D – The Jurisdictional Conundrum

One particular party in North Carolina took exception to the letter they received from Aloft Media, and filed for declaratory relief in their home state jurisdiction.  According to a complaint filed in Schaefer Sys. Int’l v. Aloft Media, LLC, the plaintiff argued that the patents allegedly infringed upon should be declared by the Court as invalid, non-infringed, unenforceable, etc.

A question arose as to whether a party in a non-forum state (in this case, Texas) can be subject to the jurisdiction of a forum state where a C&D letter was sent.  In June of 2023, the Court answered in its order that indeed, yes, it can exercise jurisdiction over a non-forum resident that sends a C&D letter “if the defendant has `minimum contacts’ with the forum, such that to require the defendant to defend its interest in that state `does not offend traditional notions of fair play and substantial justice.”

The Court found the particular background facts of the case showed that the Plaintiff’s claims “arose out of the activities directed at the State…that Plaintiff has sufficiently alleged that the unlawful patent infringement claims relate directly to the demand letter and subsequent communications sent into North Carolina.”  The Court further found that the “exercise of personal jurisdiction over Defendants would be constitutionally reasonable. While Defendants might naturally prefer to defend against Plaintiff’s claims in a different forum, such as Texas, there has been no showing that it would be unduly burdensome for Defendants to litigate in this Court.”

It wasn’t long after that the case was closed per a dismissal order.

KMD Takeaways

When faced with a cease-and-desist letter or any other kind of demand, do a first round of diligence.  Investigate who the sender is, assess their legitimacy, explore their online reputation, etc., are all easy initial inquiries to find answers to.

On the other hand, if you have to make a demand against a third party, be careful about how you do it and the words used.  Any kind of allegation may subject you to having to defend your position in an inconvenient or unfriendly jurisdiction.

At KMD, our goal is to help you understand all aspects of IP as they apply to your business. As intellectual property strategies vary greatly between industries or even businesses, we aim to help you navigate through choices that might arise as they pertain to a range from simple to complex, such as receiving or sending demand letters or the like.

Written by John Deboer, Senior Attorney at KMD Law.


References:

1 A Texas limited liability company with its principal place of business in Texas at 211 W Tyler St # C, Longview, TX75601-6398, not to be confused with any other “Aloft Media” elsewhere

2 Drop down menu, mouse-hover functionality, and so forth

3 Civil Action 3:22-CV-00513-KDB-DCK (W.D.N.C. Jun. 16, 2023)