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Posted on October 4, 2011 by Matthew
There have been 31 comment(s)
Update from Wednesday, May 23 2012: The claims by Kelora against Ebay, Microsoft, Adobe, Target, etc have been invalidated. We did an updated post here which is mostly just other site's commentary about the ruling that our readers found. I am not a lawyer, so this isn't legal advise, but if you get a letter about patent infringement from Kelora, I would not pay it as their patent infringement claim has now been invalidated.
So we got a letter from Manatt, Phelps & Phelps, LLP yesterday, alleging that we owe them $70,000 for using their patent (number 821) on "Guided Parametric Search."
If you own an e-commerce website, you probably have gotten one of these as well. Kelora is suing Microsoft, eBay, Adobe, Target, and many, many other companies.
Here's what you need to know.
*Disclaimer: we aren't lawyers and this isn't advice. This is just our story.
Kelora is what's called a patent troll. They are a company in the least sense of the word; they do not exist to create a product. They bought a patent that was applied for years after almost the entire web had been using guided parametric search. They lost most of the rights to that patent, appealing that decision, and while in the appeals process have the ability to go after companies who use guided parametric search.
Guided parametric search is (this is from the original United States Patent 5715444 issued in 1998, which Kelora obtained) "A process for identifying a single item from a family of items presents a user with a feature screen having a series of groupings. Each grouping represents a feature having a set of alternatives from which to select. Selected alternatives are used as a selection criteria in a search operation. Results of the search operation is a revised feature screen indicating alternatives that remain available to the user for further selection and searching."
If your website has a way that you can select all the items in a category, and then narrow that category by price, feature, or other selling points, Kelora thinks you owe them a very large amount of money.
Kelora alleges that the way that we do product filtering is what infringes upon their patent. (This example is from our dome camera page) -->
1. Kelora sued a bunch of companies, lost much of the rights to the patent the first time, and are being countersued to lose the rest of their rights to the patent. Until that case closes, they still have the right to sue.
Here's the ruling where Kelora and PartsRiver lost rights to their claim and had to amend the patent (PartsRiver dropped out after this ruling).
While litigation before this Court was ongoing, the U.S. Patent and Trademark Office (PTO) was conducting an ex parte reexamination of claims 1 and 2. There, the patent examiner initially rejected claims 1 and 2 as being clearly anticipated by prior art. PartsRiver sought reconsideration of this conclusion, arguing the prior art clearly did not teach the subject matter contained in claim 1. The patent examiner dismissed PartsRiver’s arguments, concluding that PartsRiver relied on features that did not appear in the language of the claims subject to reexamination. On or about September 18, 2009, PartsRiver appealed the patent examiner’s final rejection to the Board of Patent Appeals and Interferences (BPAI).
From there Kelora became the sole owner of patent 821 and amended the patent against Microsoft and Ebay. Microsoft and Ebay, responded by arguing that since the first patent claims (1 and 2) were invalidated by prior art, and this new claim which utilizes the newly amended patent (number 9) is also invalidated. The courts did not agree, but stated that all claims before November 2, 2010 (the issue date of the ex parte reexamination certificate) were invalidated. The court ruled that Kelora cannot seek damages for infringement before November 2, 2010.
2. On November 17th 2011, the Federal courts will rule on the whether the patent is even valid. So, I would bet that they are trying to squeeze as much blood out in the last few days that they have to settle out of court. (update on 11/2/2011 -- the Nov 17 date has been moved to Dec 1st.)
3. Kelora's in a bunch of really expensive lawsuits with a bunch of really large companies like Ebay (who owns Magento -- the shopping cart this site uses), Microsoft, Adobe, etc and they are just looking for an easy buck to keep the fight going with those guys. Kelora hired Manatt, Phelps & Phelps, LLP on contingency basis only, which means that they only get paid if they win. This is why they are suing smaller companies: trying to strong arm those who don't have the resources to fight back.
1. If you use Magento, contact legal [at] magento.com
2. If you don't contact eBay, Microsoft, or Adobe.
3. We are hearing that people who contact Manatt, Phelps & Phelps, LLP, even to tell them that they won't be paying, get harassed by Manatt, Phelps & Phelps, LLP. We were told that the wisest thing is to just pretend that you didn't get the letter. If this has happened to you and the Nov 17 ruling adversely affects Kelora, you may have the right to go after them for harassment. You should talk to a lawyer; I wouldn't be surprised if Kelora closes up and declares bankruptcy if they lose, so you should do that quickly.
4. If you paid them, you might be able to recover your money if they lose the appeal on November 17th, 2011, but again, they might declare bankruptcy quickly, so you might want to talk to a lawyer now. (update on 11/2/2011 -- the Nov 17 date has been moved to Dec 1st.)
5. If you have been harassed by Manatt, Phelps & Phelps, LLP, you may be interested in this Yahoo group: http://tech.groups.yahoo.com/group/Us6275821/ and this forum: http://www.hackerne.ws/item?id=2808110 (which shows some of Kelora's older history)
6. As for us:
The actions of Kelora and many companies like it are the perfect example of how our patent law system is broken in our country. Until the government makes drastic changes to that system there will continue to be massive harm to our economy and suppression of innovation. Anyone with enough money and high powered lawyers can ruin someone's life just to make a buck. A vampiric company whose sole purpose is to file frivolous lawsuits shouldn't be allowed to exist.
If this is something you care about, please follow this link to the white house website and sign this petition.
(Update on the white house's response to the petition).
This post was posted in Uncategorized and was tagged with Kelora, parametric search, patents
Great info, thanks.
Posted on October 12, 2011 at 11:59 pm
Great info thanks for posting. I just received a letter from these bottom feeders and have contacted magneto legal. Would love to talk with you about this, feel free to email me.
Posted on October 13, 2011 at 6:18 pm
In a sign that some of the companies might have some more ammo to use against Kelora:
The article isn't interesting in and of itself. It's a request to seal some testimony because it may have proprietary info in it. The interesting part is who the testimony is from.
Ray R Larson is a professor at UC-Berkley. He works in the Information Science wing and during his tenure helped work on a project called Melvyl. This was a library cataloging software that was initially started in 1977. It had an "online" component to allow browsing as early as 1980. My guess is Newegg/Cabella's has found a juicy piece of prior-art.
Posted on October 14, 2011 at 1:32 pm
Great info thanks for posting. I just received a letter from these bottom feeders and have contacted magneto legal. Would love to talk with you about this, feel free to email me.
Posted on October 18, 2011 at 8:01 am
We have been on the net selling since 1994. This patent was filed in Aug 26, 1999. We where doing this long before they filed a patent.
Posted on November 2, 2011 at 9:04 am
Nick, unless you had been using parametric search back then and had kept records of it, you won't be able to prove that that is the case.
Sure many companies have been using parametic search for a long, long time. The problem is the records of that. Web archive http://www.archive.org/web/web.php doesn't have anything from before Aug 26 1999 that shows prior art from either Buy.com and Amazon.com.
Unfortunately, hlsm.com (NIck's site) blocked archive.org's crawlers in their robots.txt file, so they don't have any proof that you did either. Unless you have the original files or screenshots, you are as vulnerable as anyone who published a site sooner.
Posted on November 2, 2011 at 10:46 am
Thanks for this. I got one of these a couple hours ago, and I had to hit the nitro. I'm going to sue them as soon as I get out of the emergency room for what ever I can. I'm calling in the state attorney general of New York and my friend Jim Holder's brother. Eric Holder. I'm goning to send them copies of this too.
Thanks again !
Posted on November 12, 2011 at 3:38 pm
Thanks for the info. Awaiting what comes out on December 1st. If you go the www.whitehouse.gov and perform a search (try patents), you will get search results with facets. Is the government exempt from patents?
Posted on November 28, 2011 at 8:35 pm
Thank you so much for this!
Posted on December 26, 2011 at 4:57 pm
Received letter dated 12/23/2011. License is $40K and offered 25-30% discount if paid prior to 1/10/12 or 12/30/11.
Posted on December 28, 2011 at 4:08 pm
Any updates on this case?
Posted on January 3, 2012 at 3:46 pm
Isn't there supposed to be a ruling yesterday or today on this?
Posted on January 13, 2012 at 1:49 pm
Our website runs on Magento, we got a letter yesterday asking for $40,000 with a 25% discount till Feb. 8, and the threat of litigation if no response by Feb 15th. Our developer told us to ignore it, that a response will just get us more headache. Thanks for all the info!
Posted on January 24, 2012 at 6:16 pm
Well, they are still sending out letters, we just received ours today, Jan 30, 2012. Looks like I'm in good company!
Posted on January 30, 2012 at 3:12 pm
We received a similar letter 1/30/12. Same amount- $40K with discounts before 2/24/12. We are a mom and pop site also using Magento.
Anyone know of more recent news on this?
Posted on January 31, 2012 at 10:29 am
I think they are just looking for suckers to pay money to fund their current legal battles. Patents in general are a huge peeve of mine, but this is not the forum for discussing the government granted monopolies that inhibit the progress and growth that comes from combining ideas.
Posted on February 2, 2012 at 11:12 am
Thanks for the info. We use magento for a small business and we received a similar letter on 2/2012. Do we at least have to respond to anyone or simply ignore it?
Posted on February 8, 2012 at 2:08 pm
A Motion to strike some prior art was dismissed. Don't know how important it is to the case.
Posted on February 10, 2012 at 4:13 pm
Anyone have an update on this?
There should have been some type of ruling by now
Posted on February 16, 2012 at 9:47 am
We have a family owned business using 50 Below web site services and we got our letter Feb. 21-2012. Same thing pay them $40,000 but if paid before March 16, 2012 receive 25% off. This is such crap.
Posted on February 21, 2012 at 4:25 pm
I just got my certified letter today, $40,000 and pay by 3/16 with an early payment discount. Many thousand people in my industry use the same website I do through our industry association, so I've asked for their advice. Otherwise I'm ignoring it.
Posted on February 21, 2012 at 4:51 pm
Just got my letter today March 2, 2012 I will contact my family's law firm and my cousin who is the Summit Co. Prosecutor in Akron Ohio. Can these people be sued by us?
Posted on March 2, 2012 at 12:16 pm
I see that a lot of people have received the letter's but what has happened to you since receiving them? If you didn't respond, did they contact you again?
We just got one last week and can't believe that we are basically being extorted.
Posted on March 5, 2012 at 9:42 pm
I have refused my second letter from them. I have not received another in a couple months. Any news/update to whats going on?
Posted on March 11, 2012 at 1:59 am
Just got a certified letter today too. We are a promotional products distributor. How is everyone responding to this threatening certified letter?
Posted on March 12, 2012 at 7:31 pm
Yet ANOTHER reason to hate lawyers. Shakespere was right, if you know what I mean. I got my letter today looking for 10 grand.........yeah, right............
And another thing......where'd they come up with all these figures? 10 grand, 30 grand, 40 grand, bla bla bla...........these low lifes will certainly go away in time. But for now, it's just another example of that "Nigerian Prince" who needs to move 10 million dollars into the US, but needs your money in order to do so, and in exchange, will give you half! Yeah--I get it: I give you 5 grand, and you give me 5 million! Great! Here it is!! Take it!! And where do I sign? And who represents you??? Manatt-Phelps-Phillips????
Posted on April 9, 2012 at 6:47 pm
Got this letter today via certified mail. I am just going to give it to our lawyer!!
Posted on April 30, 2012 at 11:19 am
I am a promotional products distributor and received the letter. I called the trade association and was told these are patent trolls and to ignore it. They must be getting desperate because they wanted $10000 with a 25% discount if paid right away. Do your research before you send anybody money for this stuff.
Posted on May 8, 2012 at 9:23 am
I'll have to read through it to get a better understanding to why they lost but this is a good day.
They may still apeal but it's even more of an uphill battle now.
This is just beautiful....
For the reasons set forth above, the Court construes the disputed claim language in the manner explained and GRANTS Defendants' motion for summary judgment of invalidity. Defendants shall recover their costs from Kelora.
Good bye and good riddance to Kelora LLC.....I look forward to the bankruptcy posting.
Posted on May 22, 2012 at 4:59 pm
The judge finally dismissed this yesterday, with Kelora to pay defendants legal costs. This should also help discourage other patent trolls
"For the reasons set forth above, the Court construes the disputed claim language in the manner explained and GRANTS Defendants’ motion for summary judgment of invalidity. Defendants shall recover their costs from Kelora."
Posted on May 22, 2012 at 5:03 pm
Great news for eCommerce Merchants! It looks like Kelora has been defeated, at least for now. We wrote a detailed story on the judgement and outcome, which includes the reaction from Kelora's attorney:
Posted on May 24, 2012 at 1:44 pm