Startup founder offers free legal help to startups hit by patent troll

Chris Hulls got mugged on payday. The founder of Life360 had just raised $50 million to expand his business, a social network app for families, when a patent troll came calling with an invitation to discuss how Hulls could hand over a cut of that money.

According to the patent troll, Life360 was infringing on its “method of establishing a cell phone network of participants with a common interest” — a description that Hulls believes would apply to anyone using location-based social networks.

Despite the seemingly absurd claim, the economic asymmetries of patent litigation would still have led most companies in this situation to pay the plaintiffs to go away. Hulls, however, took a different route and told the troll what he thought of the claim in a missive that opened “Dear piece of shit.”

That letter was sent in May of last year, and since then Law360 has been battling the troll tooth and nail in court, racking up some victories. Now Hulls wants to help other startups facing the same situation by offering a model he hopes will reduce trolling directed at startups in the first place.

On Tuesday, Life360 announced “free legal support” for anyone else facing patent claims from the same troll, an entity called AGIS. Hulls told me by phone that he thinks AGIS was once a viable business, but that it’s now no more than a shell being run by patent lawyers working on contingency.

The nature of legal support will come in the form of access to lawyers and, importantly, the trove of motions, prior art research and other legal documents that Life360 has used to win key rulings on claim construction, and stop AGIS’s early advance.

Hulls hopes that this might be a model for fixing what he sees as a prisoners’ dilemma problem that arises when startups are confronted by a patent troll.

This version of the dilemma is that even though one startup may have a good chance to defeat the patent claims, the founders don’t want to take on the cost and consequences singlehandedly — with the result that the troll wins, imposes a non-disclosure settlement and moves on to other startups.

If the Life360 model catches on, however, the economic model for patent trolling would be much more perilous since the trolls, which typically target dozens of companies, could face the combined strength of all the startups.

It’s unclear if this will work but it does adds to the emergence of creative models the tech industry is using to roll back patent trolls; another one is partnerships between law schools and startups.

Meanwhile, Life360 will continue striking back at AGIS, including through a novel false-marking counterclaim. (“False marking” under patent law lets a company seek damages if a competitor asserts claims based on an outdated or nonexistent patent).