Business

A Boston firm labeled a ‘patent troll’ by some says it is actually performing a service

Blackbird Technologies’ Wendy Verlander says that if her firm was just interested in hassling companies, it would not need experienced patent lawyers.

Stan Fellows for The Boston Globe

Blackbird Technologies’ Wendy Verlander says that if her firm was just interested in hassling companies, it would not need experienced patent lawyers.

Wendy Verlander is either a righteous avenger for ripped off inventors, or the new face of an old menace, the patent troll.

Three years ago, Verlander left the world of big-firm law to start Blackbird Technologies, a Boston company that buys patents from inventors and then brings legal cases against other companies it claims are using its technologies without permission.

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Blackbird isn’t a law firm, but it litigates like one, as Verlander and her colleagues are lawyers. The company essentially acts as its own client and bears the legal costs in-house, which allows it to pursue claims that would otherwise be prohibitively expensive for a solo inventor. One entrepreneur who transferred his patent to Blackbird and then received proceeds from a successful challenge called Verlander and her team “beautiful people who found a way to make some money for our hard work, sweat, and labor.”

But those on the receiving end of Blackbird’s efforts see the company as a dangerous new take on a business model they say has long preyed on the economy’s true innovators, peppering companies with flimsy legal claims in hopes some will choose to settle rather than fight.

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One of Blackbird’s targets, a California Web services company called Cloudflare, is trying to rally others in the tech community by conducting an aggressive and highly public counterattack against Verlander’s firm. Cloudflare chief executive Matthew Prince said he would file ethics complaints against Verlander and her cofounder, alleging that legal ethics prevent them from owning the subject of their litigation.

Cloudflare has also offered $100,000 in rewards to people who find information to invalidate Blackbird’s patents.

“They have optimized a system where they can take what is a potentially extremely low-quality patent . . . impose a cost of more than a million dollars on another organization, and then collect a settlement of hundreds of thousands,” said Prince, whose company provides Internet performance and cybersecurity tools.

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Verlander said Prince is “blowing smoke.” Her claim, she said, is serious, her ethical standing rock solid, and she expects to prove Cloudflare’s technology is infringing on a 15-year-old patent involving third-party information in communications between a Web server and user.

The dispute is a rare instance where the target is fighting a patent challenge outside the courtroom as well, in the hopes of encouraging other tech companies to stop giving in legal threats that have resulted in billions of dollars in payments.

Brian Carroll, general counsel at the Boston-based payment technology company LevelUp, said publicly calling out a patent challenge can act as a deterrent.

“It’s to let the rest of the trolls know, ‘Hey, we will not be extorted.’ So when you’re going to fight, you want to do it publicly,” said Carroll.

Facing three patent suits in 2013, LevelUp made a show of fighting them — convincing then-Attorney General Martha Coakley, for example, to come to the company’s office and speak out against patent trolls.

Carroll said two of the patent suits were dropped, a third was thrown out, and LevelUp hasn’t faced a new legal claim against its technologies since.

Verlander has an engineering degree from MIT, a law degree from Columbia, and was a partner at WilmerHale in Boston, where she was mostly on the other side, defending companies from patent claims in cases that proceeded with lawyerly decorum.

So when she started Blackbird in 2014, it took her a while to become inured to the vitriolic responses her lawsuits usually triggered, often angry calls or letters decrying her as a patent troll. She calls them “nastygrams.”

“Until the Cloudflare thing hit, we were just kind of used to it,” Verlander said. “This one’s a little bigger.”

Verlander was in a meeting when she began to get insulting messages over Twitter — to her individual account and the company’s account — prompted by a lengthy blog post in which Prince laid out his grievances against Blackbird, labeling its legal claim “a shakedown.”

Whether known by the pejorative “patent troll” or the more plaintiff-friendly “patent assertion entity,” such repeat claimants generally keep a low profile.

Not Blackbird. Verlander and her staff display their pictures, bios, and links to social media on a company website that says Blackbird helps inventors who are outmatched by big companies with little incentive to respond to claims not backed by expensive lawyers.

Verlander sees herself as doing a service to combat rhetoric by what she calls the “infringer lobby,” which seeks to conflate all patent assertion work with the more dubious pursuits of unscrupulous trolls. There are bad actors, she said, on all sides.

“If in the end you can’t reward someone for their invention regardless of whether they make a product, then you’re discouraging people from inventing, and that’s bad,” Verlander said.

The original owner of the patent at the center of the Cloudflare dispute could not be reached for comment.

While Verlander won’t reveal exactly how Blackbird obtains its patents, she said the company’s researchers often seek out patent holders whom Blackbird thinks may have a case. As Blackbird’s profile has grown, aggrieved inventors are more frequently reaching out.

Sometimes, the company pays as little as a $1 for the intellectual property, but then later gives the inventor a cut of whatever proceeds the company takes in.

Verlander said Blackbird has possession of about 80 patents and brought legal claims over 23. Federal court records show Blackbird as the plaintiff in more than 100 cases; Verlander said none have gone to trial, but of those that are completed nearly all have had settlements or other positive outcomes.

She said that if Blackbird was just interested in hassling companies, it would not need experienced patent lawyers.

Stacy Howard said the company helped him and his wife, Janeen, finally get money off an invention they figured was a lost cause. Using an elastic belt and a son’s jock strap, the Howards came up with a concept for a women’s undergarment meant to enhance the shape of women’s rear ends.

They got a patent in 2006 but were unable to gain any traction on a product, and gave up a few years later. Then the Howards began seeing similar products. He recalled a feeling of indignation: “I’ve got a patent. I’m the butt man!”

Blackbird found the Howards’ patent, got in touch, and wound up acquiring it from them in 2014. Eventually, the company said it settled with a handful of firms. He declined to say how much Blackbird won or what they received, but noted it was enough money to move from Detroit to a new home in Arizona.

Verlander points to the Howards’ case as an example of how Blackbird can get results that would not have otherwise been possible.

“We were trying to do something good for folks that really didn’t have options, and so for us, it really felt like we were doing the right thing,” she said. “Have we been called all sorts of names? Certainly we have.”

Andy Rosen can be reached at andrew.rosen@globe.com. Follow him on Twitter at @andyrosen.
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