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Rail News Home Federal Legislation & Regulation

6/27/2013



Rail News: Federal Legislation & Regulation

APTA files lawsuit to stop patent infringement claims


The American Public Transportation Association (APTA) earlier this week filed a lawsuit in federal court to halt what it characterizes as "frivolous" patent infringement claims made against U.S. public transit systems by two foreign companies.

For the past three years, Arrivalstar S.A. of Luxembourg and its affiliate Melvino Technologies Ltd. of the British Virgin Islands have filed claims stating that they own or are the exclusive licensee of patents relating to arrival and status messaging systems for the transportation industry, according to an APTA press release.

"Arrivalstar has made these claims, yet it appears they have never done research or developed technology or products related to patents," APTA officials said.

APTA, which is being represented by the Public Patent Foundation, is asking the U.S. District Court of the Southern District of New York to declare that its members cannot be sued for patent infringement by ArrivalStar. The suit claims that the company's patents are invalid and unenforceable, and that the claims cover ineligible subject matter. In addition, the lawsuit asserts that the 11th Amendment prohibits state and regional entities from being subject to such suits.

APTA also states that ArrivalStar's goal in filing each suit is not to seek a remedy for a legitimate claim but to settle for an amount below the cost to each defendant to defend itself in court. At least 11 transit systems have been subject to "these harassment claims" and settled them rather than fight the litigation, APTA officials said.

Meanwhile, U.S. Rep. Dan Lipinski (D-Ill.), a member of the House Transportation and Infrastructure Committee, has asked the Federal Trade Commission (FTC) to investigate "patent trolls, also known as "patent assertion entities," that are increasingly targeting transit agencies with lawsuits claiming patent infringement.

In a letter to to FTC Chairman Edith Rodriquez, Lipinski noted that at least 20 transit agencies, including Metra, have been sued or threatened with lawsuits that often result in a "nuisance settlement" to avoid more costly litigation, Lipinski said in a press release.

"Patent trolls are stifling American innovation and, in the case of transit agencies, are draining financially strapped public entities," he said. "These lawsuits only hurt taxpayers in my district and elsewhere who rely on a vital public service, especially when transit agencies already are struggling in these tight financial times."



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