Free for a Fee

nnovatio IP Ventures has become arguably the most infamous sender of patent demand letters in recent memory, besides the $1,000-per-worker “scanner trolls” we covered last year. Innovatio bought old Broadcom patents and then sent out more than 13,000 letters asking for individual chain hotels and coffee-shops to pay between $2,300 and $5,000 in licensing fees, for using off-the-shelf Wi-Fi routers and other access points. When the company didn’t get paid, lawsuits followed.Innovatio was one of a few examples that led directly to a Senate hearing specifically about patent demand letters, in which those who send demand letters were slammed as “bottom feeders.”

The big companies that make router equipment didn’t stand still as Innovatio’s campaign continued. Cisco, Netgear, and Motorola Solutions intervened in the litigation. Cisco even tried the brash tactic of filing a RICO suit against Innovatio. That didn’t work, but Innovatio went from asking for thousands of dollars per business, to a few dollars per router. Cisco was able to get Innovatio’s damage demands limited to less than 10 cents per device.