John O'Brien Aug. 31, 2011, 9:11am
The directory in Ogma's building.
Photo by Kevin Berns.
Photo by Kevin Berns.
LONGVIEW, Texas (Legal Newsline) - By some accounts, freshly formed Ogma LLC is a legitimate company in the business of making legitimate patent infringement claims. What the company appears to lack, however, is a legitimate office.
The company formed in January and, in the months thereafter, filed claims against more than 30 companies it says are using technology protected by two patents it has purchased. Like many companies, it chose the federal court in Texas' eastern district to do so.
The company lists an office building in Longview - a 26-mile trip to the federal courthouse in Marshall - as its place of business on court documents. A news release from the U.S. International Trade Commission also says the company is based in Longview.
But suite 303 of the building is occupied by Glade Investments, the company that rents out office space in the building. Workers there told Legal Newsline last week that the only desks in the office are being used by Glade.
And as of Aug. 24, the directory in the building's lobby makes no mention of Ogma or related company The Medici Portfolio, which lists the suite as its address on its website. Instead, suite 303 is listed as "Glade Investments," and the door of the suite says the same.
"The remoteness of the Marshall location raises litigation costs considerably. Every 15-hour round-trip by a senior litigator having to change planes in Atlanta adds $10,000 or more to the bill," said attorney Ted Frank, a legal reform advocate who writes for the blog Point of Law.
So-called patent trolls were the subject of a recent report on the radio program "This American Life." The companies acquire patents then file lawsuits in Marshall while setting up a sham office there.
According to patent attorney Brent Williams, Ogma - an operation run by Michael Connelly, Matthew Cunningham and Blair Lanier, all formerly of the Washington, D.C., office of McDermott, Will & Emery - is an impressive company.
The Medici Portfolio's website has a profile of each of the three. Connelly, the CEO, did not return a message seeking comment.
"Through a valid assignment, Ogma has the right to assert the patent," Williams said. "Without seeing the specifics of the 'infringing' claims, it appears that Ogma has a solid case for infringement because the other companies reimported their technology to avoid paying licensing fees."
Ogma initiated two U.S. International Trade Commission investigations that were consolidated, and several companies have signed licensing agreements - like video projector maker Optoma did last week.
One of Ogma's patents concerns video screens and the other is a motion sensitive sound effects device. Ogma's attorney James Otteson says the best example is a toy Star Wars lightsaber.
Ogma alleges products like Nintendo Wii remotes and the guitar from the video game Guitar Hero are using technology protected by the patent without a license. Games on smart phones also are using the product, Otteson says. Companies that have settled with Ogma include LG Electronics, T-Mobile, Apple and HTC.
"We're preparing the case as if it is going to trial," Otteson said. "I've tried a number of ITC cases - at least six. I'm definitely comfortable doing it.
"I'm not really sure (if there will be a trial). I think most are willing to settle. We'll have to see."
A trial is scheduled for March, and any appeals stemming from the ITC proceedings can end up in federal court in Washington, D.C, where the Texas-based company's CEO and CFO appear to be located. The LinkedIn profiles of Connelly and Cunningham put them both in the D.C. area.
Lanier's profile has her living in the Birmingham, Ala., area.
Frank said there are many reasons, in addition to the remoteness of the location, that a patent rights company would want to file its claims in Texas' eastern district.
The two judges in the Marshall division have a reputation for turning down summary judgment motions, forcing juries to decide the issue, Frank said. And the district is perceived to have plaintiff-friendly juries because only 20 percent of the population holds a bachelor's degree, "meaning that technically complicated cases may well get decided on grounds other than the science," Frank said.
Also, the district has a "rocket docket" - a system in place that calls for the speedy disposition of cases - that is beneficial for plaintiffs, Frank said.
"A patent plaintiff who has its act together will have its ducks in a row pre-filing: all of its research, experts and infringement theory of the case prepared," he said.
In most types of lawsuits, plaintiffs need discovery the most, but that's not the case in patent suits.
"Plaintiffs need discovery in patent cases, too, especially if they're hoping to prove 'willfulness,' but defendants need discovery more," he said. "Defendants will be working from scratch and hoping to find evidence to invalidate a patent. An expedited discovery schedule makes that more difficult."
Kevin Berns contributed to this report. Reach John O'Brien by e-mail at firstname.lastname@example.org.