NAR General Counsel Katie Johnson discusses how a successful challenge brought by NAR resulted in a settlement where the owner agreed to not assert its patent against the entire real estate industry, including brokers and MLSs.
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Window to the Law: Patent Settlement Protects Industry: Transcript
DDT Patent Troll Victory
November 14, 2016
Does your website have a searchable database that allows users to receive an email alert when something on your website is added or updated? That’s pretty common functionality for websites these days. But if you answered “yes”, then you may be one of the many real estate professionals targeted by the patent troll Digital Distribution Technologies or DDT.
For the last several years, DDT has demanded licensing fees from real estate brokers and MLSs nationwide based on the use of that common functionality on their real estate websites. But I’m happy to report that DDT’s ability to extract fees from REALTORS® has now ended as NAR has obtained an industry-wide settlement that specifically prohibits DDT from making any demands or bringing any litigation against NAR members, associations, MLSs and others.
I’ll take a moment now to tell you how we achieved that great result, but here is the takeaway -- if you are ever targeted by a patent troll, contact your local, state or national association of REALTORS®. Our victories fighting back against patent trolls should diminish, if not eliminate, future attacks on our industry.
So here’s how we defeated DDT. After learning that DDT was targeting members and MLSs across the country, NAR reviewed the patent and determined that it didn’t warrant patent protection because it did not describe a novel invention and it likely covered subject matter that it is not patentable. Therefore, we implemented a two-pronged legal strategy to challenge the patent on behalf of our members.
Step One. NAR filed what’s known as an “inter partes review” with the United States Patent and Trademark Office. The request asked the USPTO to invalidate the patent based on a claim that DDT’s patent is overly broad and not sufficiently inventive.
Step Two. NAR filed a lawsuit against DDT seeking a declaration that the patent is invalid. Even though we knew this litigation would be put on hold while awaiting the outcome of the USPTO action, it was necessary to prevent DDT from suing NAR in a jurisdiction that is favorable to patent troll litigation, such as the eastern district of Texas.
Step Three. There was no step three! DDT surrendered to our attack. In exchange for us dismissing our legal actions, DDT agreed to refrain from enforcing its patent in the real estate industry forever. There was no money exchanged by either party. NAR used an administrative complaint and a lawsuit to fight back on behalf of its members and the patent troll completely capitulated.
This victory against DDT comes after two other NAR-supported attacks against patent trolls that sued members for infringement based on commonly-used website functionality. In 2014, Property Distribution Technologies sued real estate brokerages for infringing a patent that allegedly covered a process of searching an online property database and returning information about the environmental and physical characteristics of those properties. In 2015, POI Search Solutions sued real estate brokerages for infringing a patent that allegedly covered “displaying points of interest” on a digital map. In both cases, NAR’s legal action program provided financial assistance to allow those members who were targeted to fight back by filing motions to invalidate the patents at issue. And in both cases, the patent trolls surrounded by dismissing those lawsuits with prejudice.
In addition to pursuing these legal strategies, NAR is also attempting to effect useful changes in patent law. NAR is an active member of a coalition called United for Patent Reform that is focused on supporting comprehensive patent litigation reform. Additional information about NAR’s legal action program and NAR’s government affairs efforts is available on nar.realtor.
And remember, if you are ever targeted by a patent troll, please let us know.