For several years now, a curious company called ArrivalStar – which has no website, appears to produce nothing, and is oddly registered in Luxembourg – has been systematically suing public transit agencies in the United States. As we wrote last April, the company holds a collection of dubious patents tied to the technology of tracking vehicles in motion. And it has been using them to claim patent infringement by transit agencies that ... track vehicles in motion.
Any agency electronically monitoring its own buses and trains, or producing apps for riders to track them, has been at risk of receiving a foreboding letter from these people. It's a pretty classic patent troll story, but with a taxpayer twist. In this case, the company holding the patents has been targeting (among many others) cash-strapped public agencies that can least afford to pay them off, but that are also most likely to avoid litigation.
These transit agencies have understandably had a hard time banding together against ArrivalStar – anyone who signs a settlement with the company can't say much about it. Now, however, the American Public Transportation Association is countersuing on their behalf in federal court. APTA filed a lawsuit on Tuesday in the Southern District of New York trying to halt what it calls "frivolous" patent suits by ArrivalStar and its affiliate, Melvino Technologies Limited. APTA is arguing not only that ArrivalStar's patents should be invalidated, but also that public agencies are protected from such suits by the 11th Amendment.
"The problem that the agencies have is when ArrivalStar goes out and files suit against them, even though they have what they believe is an absolutely perfect defense, they still look at the economic reality," says James LaRusch, APTA's chief counsel. "Do I spend $1 or $2 million or even more to vindicate myself? Or do I just pay these guys off and get rid of them?"
The Electronic Frontier Foundation, which has also been working on the problem, has already convinced the U.S. Patent and Trade Office to significantly narrow the scope of one notorious ArrivalStar patent most commonly used against transit agencies. But the company holds many more. "They have a whole slew of these things," LaRusch says.
Public court documents confirm that the company has sued at least 11 transit agencies, including the New York Metropolitan Transport Authority, the Port Authority of New York and New Jersey, and the Massachusetts Bay Transportation Authority. But undoubtedly many other agencies have received cease and desist letters and settled before a lawsuit was ever filed.
"The concern we have is we think we’re seeing the tip of the iceberg," LaRusch says. As for why APTA is only entering the fray now, LaRusch says the association had its own financial fears in taking on a company that appears to exist primarily for the purposes of suing people. "We would have been perfectly glad to file suit earlier," he says. "But we, like our members, have been inhibited by the cost of litigation. Patent litigation is millions of dollars. We just couldn’t get over that for a long time."
Now the association is being represented by the non-profit Public Patent Foundation. Together, they're also asking the court to declare that APTA and its member agencies are immune from suits for patent infringement by ArrivalStar, and to enjoin the company from taking any other actions to sue transit agencies.
Top image of a ride in the New York subway: Andrew Burton/Reuters