'Patent trolls' targeted Metra, officials say
By Richard Wronski
Metra was among at least 20 U.S. public transit agencies that were sued or threatened with questionable lawsuits by two foreign companies claiming patent infringement, officials said Wednesday.
Metra ended up "reluctantly" paying a $50,000 settlement rather than spend more money defending itself in court, officials said.
An industry group, the Washington-based American Public Transportation Association, has sued in federal court seeking to halt what it called "frivolous" patent infringement claims against transit systems by the companies.
ArrivalStar, based in Luxembourg, and Melvino Technologies Limited, based in the British Virgin Islands, filed the suits saying they own or are the exclusive licensee of patents relating to arrival and status messaging systems used by the transit systems.
U.S. Rep. Dan Lipinski, D-Ill., said Wednesday he has asked the Federal Trade Commission to investigate the so-called patent trolls that are targeting transit agencies.
Lipinski said patent trolls, more formally known as "patent assertion entities," are companies that do not sell, produce or invent anything but acquire patents and then demand licensing fees from other companies through litigation or lawsuit threats.
Patent trolls exploit the fact that public agencies are at a disadvantage in defending themselves, Lipinski said.
"These lawsuits only hurt taxpayers in my district and elsewhere who rely on a vital public service, especially when many transit agencies already are struggling in these tight financial times."
ArrivalStar and Melvino sued Metra in March 2011 claiming patent infringement over the commuter railroad's My Metra alert system.
Rather than fight, Metra agreed to settle the lawsuit in September 2011 for $50,000, Metra said.
"The cost of pursuing this (case) was much higher than the settlement," Metra spokeswoman Meg Reile said.
Pace, which uses bus-arrival technology, was not targeted, a spokesman said. The CTA did not respond to an inquiry.
The Lafayette, Ind.-based attorneys for the two companies did not respond to calls for comment.
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