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Monster Cable tries to bully another small competitor, gets the full load back

Flag As Inappropriatejarkko jarkko 6 months ago about Monster Cable Products, Inc.

Monster Cable, the maker of insanely expensive cables (which are exactly as good cables as coat hangers) is notorious of its tactics of harassing its smaller competitors by sending them random cease and desist letters claiming the competitors infringe a bunch of their patents (or using the word “Monster” in their company name). This way Monster hopes the counterpart will bend over and settle for a licensing agreement. The latest case happened – coincidentally – the same day the Monster CEO Noel Lee publicly said they are not a corporate bully. However, this time they tried to bully the wrong guy by attacking Blue Jeans Cable. Kurt Denke, the CEO of Blue Jeans, happened to be a litigation lawyer in his previous life and wasn’t such an easy target as Monster would have hoped.

In a public reply posted on Audioholics (titled “RE: Your letter, received April Fools’ Day”), Denke rips off the claims, piece by piece. The piece is really ingeniously crafted, starting with standard, slowish lawyer-lingo and advancing to outright hilarious stabs at the claims and Monster Cable in general. You should really ready the whole piece, but here are some of the more juicy bits for your convenience.

First, the emperor has no clothes part:

I will begin by observing, first, that the five design patents are so very much unlike one another that it is very hard to imagine that any product could actually infringe more than one of them at a time; anything close enough to one of them to be deemed an infringement would, by that fact alone, be too dissimilar from the other four. The dissimilarity of the Tartan connector from each of them is readily evident.

If your view of Exhibit B is that it is to be construed broadly enough as to encompass the Tartan connector, it is very hard to imagine that there is such a thing as a solder-assembly style RCA plug which is not similarly, in your view, encompassed by this patent. And, needless to say, it is very hard to imagine that any court would ever adopt such a view of the patent’s scope; if you file on this sort of basis, you are in Rule 11 frivolous-claim territory.

Similarly, as I note further below, you omit reference to another patent Monster has held which appears, frankly, to be fatal to your position. [...] Also, please provide me all of the information referenced above as it relates to your expired patent D323643, a copy of which I am attaching. [...] But if one grants the sort of breadth to these patents that you appear to wish to do, a problem arises for Monster. D323643 is the least dissimilar to the Tartan connector of any of the patents, and stands as an obstacle to any claim of infringement of the others because it establishes prior art; if its scope, like the others, is granted the breadth you argue for, then the Tartan connector falls plainly under the prior art and cannot constitute an infringement of the later, and more dissimilar, patents. Read the patents narrowly, and Monster loses; read them broadly, and Monster loses.

Then, going ballistic:

Further, if any of these patents or trademarks has been licensed to any entity, please provide me with copies of the licensing agreements. I assume that Monster Cable International, Ltd., in Bermuda, listed on these patents, is an IP holding company and that Monster Cable’s principal US entity pays licensing fees to the Bermuda corporation in order to shift income out of the United States and thereby avoid paying United States federal income tax on those portions of its income; my request for these licensing agreements is specifically intended to include any licensing agreements, including those with closely related or sham entities, within or without the Monster Cable “family,” and without regard to whether those licensing agreements are sham transactions for tax shelter purposes only or whether they are bona fide arm’s-length transactions.

As for your requests for information, or for action, directed to me: I would remind you that it is you, not I, who are making claims; and it is you, not I, who must substantiate those claims. You have not done so.

I have seen Monster Cable take untenable IP positions in various different scenarios in the past, and am generally familiar with what seems to be Monster Cable’s modus operandi in these matters. I therefore think that it is important that, before closing, I make you aware of a few points.

After graduating from the University of Pennsylvania Law School in 1985, I spent nineteen years in litigation practice, with a focus upon federal litigation involving large damages and complex issues. My first seven years were spent primarily on the defense side, where I developed an intense frustration with insurance carriers who would settle meritless claims for nuisance value when the better long-term view would have been to fight against vexatious litigation as a matter of principle. [...] I am “uncompromising” in the most literal sense of the word. If Monster Cable proceeds with litigation against me I will pursue the same merits-driven approach; I do not compromise with bullies and I would rather spend fifty thousand dollars on defense than give you a dollar of unmerited settlement funds. As for signing a licensing agreement for intellectual property which I have not infringed: that will not happen, under any circumstances, whether it makes economic sense or not. [...] If you sue me, the case will go to judgment, and I will hold the court’s attention upon the merits of your claims – or, to speak more precisely, the absence of merit from your claims – from start to finish. Not only am I unintimidated by litigation; I sometimes rather miss it.

...and then to the rather hilarious ending:

Also, there is little doubt that making baseless claims of trade dress infringement and design patent infringement is an improper business tactic, which can give rise to unfair competition claims, and for a company of Monster’s size, potential antitrust violations with treble damages and attorneys’ fees.

(emphasis mine)

I actually hope this case will go to court (which is extremely unlikely). But even if it doesn’t, it creates an excellent prior case and gives a bunch of arsenal to the next small guy Monster tries to intimidate.

(via Daring Fireball)

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