Why would I be sued for patent infringement?
Unfortunately, over the last several years, the ecommerce industry has seen a rise in the number of third parties, including entities that only assert patents rather than practice them (otherwise known as non-practicing entities), that claim to have invented a variety of technologies that enable basic ecommerce. We and others in the industry think many of these patents are invalid or unenforceable, or that they are asserted under overly-broad interpretations that apply to activities that they were not intended to cover.
These patents sometimes are alleged to cover processes that you may perform either completely or in part on our platform. These patents may require you or your customers to perform certain steps before an infringement claim can be asserted (this is why the plaintiff may have sued you and not us). Often, it does not matter what ecommerce platform you are using, it is the fact that you are performing the process covered by the patent that creates the infringement claim.
Many non-practicing entities will assert these patents against businesses, including small and medium sized businesses like yours, because many of these defendants determine that it is cheaper to settle the claim rather than to go through the expensive litigation process. Indeed, one of the challenges of our current legal system is that it is can be very expensive to litigate these claims, or to contest the validity of the patent, and there is often no fee-shifting (the ability for the prevailing party to recover their legal fees from the other side) or other potential recoveries for successful defendants. In essence, it has become what many think is an attempt to impose an illegitimate private “tax” on doing business online. We honestly believe that the so-called “patent-troll” problem is bad for our economy because it requires the use of time and money that could otherwise be spent on creating value and jobs.
I’ve been sued or threatened with a suit for my ecommerce business. What do I do now?
The first thing that you should do is retain counsel that has experience with patent litigation. They can help to counsel you as to your alternatives, whether you are dealing with a lawsuit, or a threat of one. Every case is different and the general information provided in this FAQ might not apply to your situation. Volusion cannot provide you with legal advice on this matter.
A demand letter threatening a patent infringement suit does not mean that you will necessarily be sued. Sometimes, non-practicing entities will send out demand letters to a number of businesses with the hope of encouraging the payment of a license fee, without any intent to sue. However, an actual lawsuit requires an answer to be filed with the court by a certain deadline.
Why can’t Volusion just handle this for me or make it go away?
First of all, if you or your business have been named as a defendant in a lawsuit, you have to file an answer on your behalf and it is best to be represented by your own counsel.
In addition, because we do not and cannot control how each customer uses our tools, and given the vast scope of our customer base, our Terms of Service with all of our customers make clear that Volusion provides its services "as-is" and without any warranty of non-infringement. We believe that this is consistent with the terms of service for all of our major competitors. Moreover, while you may perform certain actions described in the lawsuit wholly or in part on our platform, these patents are often directed toward the activities of you and your customers, and not tied to anything specific about the Volusion software or services.
What can Volusion do to help?
Volusion take these matters very seriously, and we are committed to doing what we can to assist our customers in pursuing their defense against claims of this nature when and where appropriate. For example, we are happy to provide to you information about your use of the services or tools in question and how those services or tools operate to the extent any of that is relevant. Please have your counsel let us know what information might be helpful to you and your case, and we will do what we can to provide that.
What is Volusion doing to take a stand against abuses of the patent litigation system?
Volusion values the small and medium sized businesses that we serve and understands the challenges of running a business. This is reflected by our commitment to provide industry leading ecommerce solutions to customers like you at a very competitive price point. We believe that the current patent litigation system allows for abuses such as the assertion of overly broad and potentially invalid patents by non-practicing entities against small and medium sized businesses. Businesses such as yours are a significant growth engine for our economy, and the actions of patent trolls curtails job creation, innovation and value creation.
Unfortunately, like our competitors, we have had our own direct experiences with non-practicing entities, and have spent significant sums to defend against baseless claims. As a result of these experiences, combined with the experiences of participants in the ecommerce space (including our customers), we have become a very outspoken proponent of patent litigation reform. If you would like to learn more, please reach out to us.