The owners are seeking both licensing fees and royalty payments for patents they have purchased. These new owners are known as non-practicing entities (NPEs, or patent trolls), as they do not create a product or service with the patented idea, but rather own the patent for the sole reason of profiting from it.
Pro Softnet claims these NPEs could hinder future development of upcoming new releases of their online backup services.
Cloud Storage Pioneer Pro Softnet Faces Most Disruptive Patent Attack to Date
Pro Softnet, creator of IBackup.com and IDrive.com, is now defending itself against patent attacks that rival any in its history
CALABASAS, Calif., Nov. 14, 2011 /PRNewswire/ — Pro Softnet, an independently owned and operated online backup and cloud storage company that provides service to over 800,000 subscribers through its popular IBackup and IDrive products, is now in the midst of defending itself against the largest patent attack it has yet faced brought on by a non-practicing entity, or NPE. With several new and exciting services in the cloud sharing space scheduled for release in the first quarter of 2012 – the pending lawsuit has the potential to interrupt growth for this pioneering company.
Since 2004, Pro Softnet has been targeted by several NPEs seeking licensing fees and/or royalty payments for dubious patents that are usually acquired through a series of purchases by patent-holding companies –
institutions created for the pure purpose of obtaining patents in order to enforce them against other companies. In these instances Pro Softnet has been forced to weigh the options of pursuing expensive litigation to fight what they believe are unwarranted claims or to settle, ultimately resulting in drains on operating capital.
This American Life recently aired an episode called written version of the story on NPR’s Planet Money covers most of the content about these so-called
The practice of
patent trolling seriously burdens those companies without the financial and legal resources of large, well-established organizations. The financial burden on small businesses can be significant – the least fortunate risk closing their doors – as the result of fighting these expensive and lengthy suits, which often end up with nuisance value settlements for profit-seeking NPEs. Although Pro Softnet’s day-to-day operations are continuing as normal, this
tax on progress and innovation is unavoidable.
This landscape has encouraged large public companies to purchase large troves of patents, often outbidding each other into the billions of dollars, not for the technology those patents cover, but for the protection owning them brings. For example, consider the recent joint acquisition of a Nortel patent portfolio by Apple, Microsoft and others for $4.5 billion and Google’s $12.5 billion purchase of Motorola Mobility. In August, Google’s Chief Legal Officer, David Drummond, vented his frustration at the “patent war” being waged against Google’s smart-phone operating system, Android.
An early innovator in the cloud storage industry, Pro Softnet’s founder and CEO, Raghu Kulkarni, chose to build products and services and expand the company’s user-base without the aid of venture capital or other investors. Instead, the company has sustained its growth through re-investment and simple online advertising.
Our strategy has always allowed us to be the driver of our own future rather than by the foresight of outside investors who may not have our long-term health at heart. Today, we are profitable, debt-free and hiring – we’d like to continue on that path.
I hope that with the passage of the America Invents Act we’ll see a slowdown of these attacks from NPEs, said Mr. Kulkarni.
Still though, these lawsuits keep coming at the detriment to hard-working, small American businesses like Pro Softnet. (Leahy-Smith America Invents Act)
About Pro Softnet Corporation
Started in 1995 and headquartered in Los Angeles County, Pro Softnet is a privately held company specializing in cloud storage, online backup, file-syncing, remote access, compliance and related technologies serving the consumer, small business and enterprise markets. Core products include IDrive®, IDriveSync®, IBackup® and RemotePC™. The company’s popular services currently have over 800,000 subscribers.
For more information visit http://www.ibackup.com and http://www.idrive.com
Stephen Gold, Pro Softnet Corporation