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Patent troll hits registrars with $60m shakedown

Kevin Murphy, January 25, 2016, 19:08:54 (UTC), Domain Registrars

A patent troll that claims it invented email reminders has launched a shakedown campaign against registrars that could be worth as much as $62 million.

WhitServe LLC, which beat Go Daddy in a patent lawsuit last year, is now demanding licenses from registrars that could add as much as $0.50 to the cost of a domain name.

According to registrar sources, registrars on both sides of the Atlantic have this month been hit by demands for hundreds of thousands or millions of dollars in patent licensing fees.

The legal nastygrams present thinly veiled threats of litigation if the recipients decline to negotiate a license.

WhitServe is a Connecticut-based IP licensing firm with connections to NetDocket, which provides software for tracking patent license annuities.

It owns US patents 5,895,468 and 6,182,078, both of which date back to the late 1990s and cover “automating delivery of professional services”.

Basically, the company reckons it invented email reminders, such as those registrars send to registrants in the weeks leading up to their domain registration expiring.

Three years ago, GoDaddy, defending itself against WhitServe’s 2011 patent infringement lawsuit, compared the “inventions” to the concept putting “Don’t forget to pick up milk” notes on the fridge: utterly obvious and non-patentable.

In December 2012, GoDaddy implied WhitServe used its patent expertise and exploited a naive 1990s USPTO to obtain “over-broad” patents.

It was trying “to monopolize the entire concept of automatic Internet reminders across all industries, including domain name registrars”, according to a GoDaddy legal filing.

But the market-leading registrar somehow managed to lose the case, opting to settle last August after its last defense fell apart, for an undisclosed sum.

Now, WhitServe is using that victory to shake loose change out of the pockets of the rest of the market.

It’s told registrars that GoDaddy and Endurance International (owner of Domain.com, BigRock and others) are both currently licensing its patents.

The deal it is offering would see registrars pay $0.50 for every domain they have under management, a number that seems to be based on .com registry numbers reported by Verisign.

The fee would be reduced to $0.30 per name for each name over one million, and $0.20 for each name over five million, I gather. That’s still more than registrars pay in ICANN fees.

If WhitServe were to target every .com registrar (which I do not believe it has, yet) its demands could amount to as much as $62 million industry-wide, given that .com is approaching 125 million names right now.

It’s not clear whether these fees are expected to be one-time payments or recurring annual fees.

It’s a trickier predicament for registrars than the usual patent shakedown, because registrars are legally obliged under their contracts with ICANN to send email reminders in a variety of circumstances.

The Expired Registration Recovery Policy requires them to email renewal reminders to customers at least twice before their registrations expire.

There’s also the Whois Data Reminder Policy, which obliges registrars to have their customers check the accuracy of their Whois once a year.

These are not services registrars are simply able to turn off to avoid these patent litigation threats.

Whether registrars will take this lying down or attempt to fight it remains to be seen.

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Comments (11)

  1. calvin says:

    What a crock of shit. We’ve been doing this since at least 97.

    • Kevin Murphy says:

      According to GoDaddy’s legal defense, NetSol was doing it in ’93.

      • …which seems a little odd, since NSI wasn’t charging for domain registrations until 1995.

        However, there was also a parallel Post-Grant Review (PGR) proceeding filed against the patents with the USPTO. The PGR was terminated by consent in August 2015, partly on the basis of Whitserve’s affirmation that the patents weren’t being asserted against any other party and that no litigation or proceeding against a third part “is contemplated in the foreseeable future”. Remarkably, the “foreseeable future”, in Whitserve’s terms, is a very short period of time indeed if, after the passage of about three months, they began asserting the patents against other parties.

        • Kevin Murphy says:

          Case 3:11-cv-00948-JCH Document 217-1 Filed 12/17/12

          WhitServe’s attempt to read its claims on GoDaddy.com, Inc.’s (“Go Daddy”) domain renewal process fails because Network Solutions, Inc., one of the first domain registrars, was using a “Message Ticketing System” in nearly the exact same way back in 1993.

          In particular, Network Solutions introduced an automated registration system based on emails and templates for handling domain, contact, Internet IP address, and other entity registrations as early as March 1993. (SOF ¶¶ 93-98.) The MTS system was operating as an automated system for reminding customers of deadlines and automatically receiving and processing responses to the reminders at least as early as September 30, 1994.

    • The earliest filing date of the patents in question is 7 October 1996, so saying you’ve “been doing this since at least 97” is supposed to mean what, exactly?

      (Now, there is a significant date in 1999, when additional subject matter was introduced into the chain of applications, but it probably is a good idea to check your facts before making statements like the one above)

  2. Yes, awful trolls.
    Yet I do find it ironic that Godaddy called their previous attempt “frivolous and non-patentable.”, the same company that holds a patent on “sharing that you’ve registered a domain name on social media”.

    Isn’t that just as frivolous and non-patentable?

  3. “If WhitServe were to target every .com registrar (which I do not believe it has, yet) its demands could amount to as much as $62 million industry-wide, given that .com is approaching 125 million names right now.”

    No, it couldn’t.

    Your calculation assumes, for reasons not stated, that US patents are enforceable outside of the US. Implicit in your calculation, for example, is an assumption that a German registrar should care about a US patent in relation to renewal reminders sent to German registrants in Germany. As I understand the situation, that country was restored to the German people some decades ago, and was not made US territory.

    • Kevin Murphy says:

      I wrote that WhitServe’s *demands* could amount to that much.

      I hear European registrars have already received demands.

      Whether they pay or not is another matter entirely.

      I make no comment about where or if its patents are enforceable.

    • Marcus Fauré says:

      Just to add a bit of OT history: While modern Germany was founded in 1949, in the early days politics were heavily influenced by the winners of WWII which ultimately lead to the seperation into West and East Germany. That influence decreased over time and was gone when the country was reunited in 1989/1990. Which also officially ended the state of war, inbetween 1945 and 90 it was just a cease-fire.

      That’s a long way of saying: We’re have our own legislation now and I do not believe WhitServe will try to knock on our doors to claim license fees. Also, I highly doubt that reminder emails could be patented here. And in general, damages play a much smaller roll in European law suits.

      Oh yes, please don’t confuse pre-1945 Germany with today’s Germany. I still believe it would have been better to rename the country in 1949

  4. Rubens Kuhl says:

    I don’t see this getting traction in European or BRIC countries, but each one needs to do their own risk assessment…

  5. Can email reminder be an invention?

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