Article from: www.thenewspaper.com/news/41/4158.asp

7/22/2013

Red Light Camera Company Patent Troll Trial Advances
ATS spends six figures to defend against legal attack from patent troll, wins first round.

A red light camera company won the first round in an ongoing legal battle with a patent troll. A federal judge last week rejected the attempt by Joao Control and Monitoring Systems to throw out counterclaims made by American Traffic Solutions (ATS), which is seeking an order shutting down Joao's lawsuit. In February, Joao filed suit against ATS in the US District Court for the Southern District of New York claiming that the way ATS allows recipients of speed and red light camera tickets view video of an alleged infraction on a website violates Joao's patent on webcasting and a related automobile security patent. Joao subsequently filed another federal suit against ATS in Delaware.

Joao has no customers; the firm's sole occupation has been filing 15 lawsuits against 42 different companies, each claiming the use of video streaming violates its intellectual property rights. The ATS legal response cites a number of features of automated ticketing machines that differ significantly from the technology described in Joao's patent.

"ATS's accused system does not transmit audio or video information from a processing device to a communication device over the Internet or over the World Wide Web," the company explained in a brief to the court.

The photo ticketing firm offered dozens of examples of prior art that show webcasting took place long before the granting of the controversial patent Joao now controls. Patent trolls rely on the high cost of fighting a lawsuit to encourage companies to cut large out-of-court settlement checks just to avoid a drawn out court battle. That is unlikely to happen here.

"It is hereby ordered that Joao shall answer ATS's counterclaims within the time prescribed by Federal Rule of Civil Procedure," District Judge Katherine B. Forrest

ATS is also asking the court to force Joao to pay the full attorneys' fees and other expenses from defending itself against the patent suit.

"The cost these frivolous lawsuits pales in comparison to the aggravation and resources it takes to defend them. Cases like these are not unique to our industry," ATS spokesman Charles Territo said in a prepared statement provided to TheNewspaper. "These types of lawsuits are a surcharge on innovation costing companies across the country are estimated to cost more than $29 billion every year. We expect that our company alone will spend upwards of six figures to dispose of this baseless litigation."

The parties in the litigation have until Friday to propose a revised schedule of proceedings.