Innovatio Sues Hotels with WIFI Hotspots for Patent Infringement

By Joseph Mandour on October 5, 2011

wifi1-200x150 Los Angeles – Imagine that you are the owner of a neighborhood bakery, which offers free WiFi to all of your customers. Now, imagine opening up shop one morning, only to be served with a patent infringement suit for providing WLAN. Innovatio has exploited the patent statute to do just that–sue end users.

35 U.S.C §271 provides in part that, “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States . . . infringes the patent.” The statute language does not limit infringers to manufacturers, companies, and businesses but is broad enough to encompass end users as well. The broad language has permitted Innovatio IP Ventures, LLC to file patent infringement lawsuits against defendants you would not normally find tied up in patent litigation.

Innovatio is a nonpracticing entity (NPE) that acquired 17 patents from Broadcom earlier this year. Some of these patents, Innovatio believes, covers standard wireless local area network (WLAN) products. Rather than file suit against the companies that make or sell the wireless products, Innovatio decided to file suit against unrelated businesses such as coffee shops, bakeries, restaurants and hotels that are mere users of the WLAN products. Innovatio’s method of suing end users rather than manufacturers is a dangerous new approach to patent enforcement–one that may lead to an influx of lawsuits against consumers for patent infringement. It is reported that Innovatio filed suit against Ramada, Days Inn, Travelodge, and Super 8 whom all operate WiFi hotspots, about 200 in total.

In these cases, Innovatio is seeking $2,300-$5,000 from each of the defendants to license the patent. Innovatio’s patent litigation attorney insists that Innovatio “doesn’t intend to pursue [lawsuits on the basis of] residential use of WiFi” and that “this is not a seat-of-the-pants, fly-by-night shakedown.” Innovatio is not fooling anyone. Innovatio seeks from defendants an uncommonly low amount for patent infringement, making it appear that the company is going after small businesses that cannot afford to take the matter to court.

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Posted in: Patent Infringement