Daniel Nazer of the Electronic Frontier Foundation. (Photo: Jason Doiy/ALM) Daniel Nazer of the Electronic Frontier Foundation. (Photo: Jason Doiy/ALM)

 

At the rate the Electronic Frontier Foundation is going, Mark Cuban may want to endow a chair to eliminate stupid defamation lawsuits.

For the second time in two years, the EFF has found itself in a legal row over Stupid Patent of the Month, a bloggy column penned mostly by staff attorney Daniel Nazer, EFF’s Mark Cuban Chair to Eliminate Stupid Patents. The column has spotlighted patents that claim song lyric websites, TV channel changing systems, and any other patent the nonprofit advocacy group considers especially egregious.

The columns don’t sit well with the patent owners. One sued EFF in 2015, but dropped the case weeks later following a wave of bad publicity. This time, EFF is facing a bigger fight. An Australian court has ordered EFF to remove its June 2016 column from the internet after patent owner Global Equity Management (SA) Pty. complained “the patent is not, in fact, ‘stupid.’”

Now EFF is asking a San Francisco federal court to protect its U.S. constitutional right to express its opinions. The group is invoking a 2010 law designed to shield online publishers from foreign libel judgments that don’t meet U.S. legal standards. A favorable ruling could rescue EFF from its strategy of ignoring the Australian suit and essentially taking a default judgment. EFF v. Global Equity Management might also give Global Equity, which goes by the name GEMSA, a platform for its allegation that Cuban is using the EFF channel to influence patent litigation against companies he’s invested in.

“An injunction issued by an American court arising from the publication of this article would undoubtedly violate the First Amendment to the United States Constitution,” EFF states in a complaint signed by Levine Sullivan Koch & Schulz’s Ashley Kissinger. Under the SPEECH Act, such orders cannot be enforced in the United States, argues EFF, which is also represented by Duffy Carolan and Kevin Vick of Jassy Vick Carolan.

GEMSA, which claims it’s been damaged to the tune of $750,000, hasn’t answered yet. In Australia, the company tried to drag Cuban into the case. Cuban donated $250,000 to EFF in 2012 to fund the “Stupid Patent” chair. GEMSA alleged Cuban and a “large corporation” operating in GEMSA’s field are using EFF’s column to “sabotage” its patent litigation. The corporation isn’t named, but most of GEMSA’s patent suits target customers of Amazon Web Services, and Cuban has said publicly that Amazon.com is one of his largest investment positions.

Nazer’s June 30, 2016, column focused on GEMSA’s U.S. Patent No. 6,690,400, which is for a graphical user interface that represents virtual cabinets. GEMSA has asserted the patent against 37 companies ranging from Johnson & Johnson to Spotify, all in the U.S. District Court for the Eastern District of Texas. Nazer wrote that GEMSA “seems to be a classic patent troll” and that “as far as we can tell, GEMSA seems to think that anyone with a website that links to hosted content infringes its patent.” Nazer, a former Keker & Van Nest attorney who hails from Perth, Australia, linked to the patent, several of GEMSA’s lawsuits and a T-shirt bearing Australian slang, among other things.

Schumann Rafizadeh didn’t find it funny. “I was immediately hurt and insulted as I am the inventor of the referenced patent and a director of GEMSA,” he stated in affidavit to the Australian Supreme Court. Rafizadeh, who lives near Adelaide, Australia, stated he contacted his U.S. counsel and they advised him to seek representation in Australia.

Pasha Mehr of Conatur Legal wrote to EFF on Aug. 26 requesting an “unqualified apology and retraction, to be copied to all users having viewed your website” and “your unconditional agreement” to pay damages caused by the article.

EFF engaged King & Wood Mallesons to write back declining the requests, calling the letter “very vague,” and seeking clarification about the specific statements GEMSA considered defamatory.

Rafizadeh and GEMSA responded by suing. The column “does not accurately depict the complexities involved with the patent,” they alleged. Plus, just three weeks after the column was published, Amazon sued to invalidate GEMSA’s patent—the first such suit against GEMSA. Soon after, eBay filed the first IPRs targeting the patent. Other defendants canceled mediations and showed less interest in settling, Rafizadeh stated in a supporting affidavit.

“Mark Cuban is a private benefactor with investments within other American companies subject to [GEMSA's] patent litigation,” Rafizadeh stated. “I believe that he has directly influenced the publication of the article, as a malicious and misleading attempt to sabotage our position.”

EFF did not respond to the lawsuit. In its San Francisco complaint, EFF said GEMSA did not properly serve the organization. Instead it served King & Wood Mallesons, but the firm no longer represented EFF at that point and told GEMSA so, according to EFF’s complaint.

Australian Judge Katrina Bochner then issued her order directing EFF to “immediately remove the article entitled ‘Stupid Patent of the Month; Storage Cabinets on a Computer,’” and that EFF “be restrained from publishing any content with respect to the plaintiff’s intellectual property.” Failure to comply could lead to asset seizures and “directors and other officers may be liable to be imprisoned for contempt of court.”

EFF has no intention of complying, according to its San Francisco lawsuit. “The article is a statement of EFF’s opinion about GEMSA’s patent based on disclosed facts and public information, commentary that is of significant public concern and protected by the First Amendment to the United States Constitution,” Kissinger wrote.

“Stupid Patent of the Month” has had a positive impact in the United States, Kissinger added. As one example, IBM formally disclaimed a dubious patent on out-of-office email following Nazer’s February 2017 column.

As for the claim of “sabotage” by Cuban, GEMSA offers no evidence or support, Kissinger wrote. Nor does GEMSA advance any evidence that the column has caused its patent enforcement problems in the United States, she added.

EFF Deputy Director Kurt Opsahl said April 14 that Australia is one of a number of Commonwealth countries that have a different view of defamation law from the United States and others. The SPEECH Act provides a tool for establishing that commentary such as Stupid Patent of the Month is protected in the United States, he said.

“People may not like our criticism,” Opsahl said, “but we have a right to criticize and express our opinions.”

Contact the reporter at sgraham@alm.com.