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Is the United States Navy the Latest Patent Troll?

By Troll Tracker

Network Signatures, LLC of Rancho Santa Margarita, California, is the exclusive licensee of U.S. Patent 5,511,122, a patent which is owned by the U.S. Navy. This patent relates to secure communication and authentication methods involving the use of public and private keys. Thanks to the plaintiff filing their agreement with the Navy publicly, we learn that the Navy gets 30% of any litigation proceeds.

Well, Network Signatures has now sued Bank of America, Wachovia, Wells Fargo, and Washington Mutual, all in the Central District of California (Orange County), hoping to start monetizing the Navy's patent. The U.S. Navy is not practicing this invention, but their exclusive licensee told the Navy that it was. Is that so? Check out their website and decide for yourself. One could argue it is practicing something - using a cell phone to authenticate so you don't have to carry around a VPN password-generating device. But that's not what Network Signatures is suing over, if you read the complaint carefully.

While I am not making this conclusion, there is certainly room to argue that in this case, the United States Navy is authorizing the filing of some very patent troll-like lawsuits. At the very least, the Navy has authorized patent infringement lawsuits against the financial services industry, and stands to make money off of those suits. Unbelievable.

Full post as published by Patent Troll Tracker on January 15, 2008 (boomark / email).