Parasite vs Parasite

Or, when sharks masquerade as squids.

Imagine you own the patent to the JPG format. Yes, that JPG format. The pixal image format that is used by eleventy bazillion websites all over the world.

Now, imagine that you are detoured from collecting royalties - from anybody - due to repeated, anonymous challenges thanks to the arcane, convoluted patent system that makes the IRS regs look simplistic by comparison.

The owner of this patent is Anthony Brown, a Chicago lawyer who years ago was among the first to be tagged a "patent troll"--pejorative jargon for someone who demands undeserved royalties.

Early in his possession of this JPG patent, Mr. Brown 'tagged' such well known companies as Sara Lee, United Airlines, FTD and Sears for amounts between $35,000 and $50,000 in back royalty fees. Then, in 2000, came a parasite lawyer representing an anonymous client with a challenge to the patent, and a Patent Office review process that normally takes 2 years mysteriously lasted for seven. As required by law, all royalty collection is put on hold during the review process.

Brown then launched a wave of lawsuits last summer, demanding anywhere from $25,000 to $15 million, depending on a company's revenues and reliance on the Web. One licensee, court records show, was Kraft Foods (nyse: KFT - news - people ), which was subject to a $5 million fee under Brown's "royalty schedule." Kraft agreed to an undisclosed fee.

Then, in 2007, came another parasite lawyer representing another anonymous client with another review to the patent. And, as required by law, all royalty collection is put on hold during the review process.

In late 2010 the patent expires--and there's no limit on the number of times "anonymous" parties can ask for a reexam.

It almost makes me feel sorry for Mr. Anthony Brown - Attorney at Law. Almost.

TY Overlawyered