Friday, January 1, 2010

New Year Palate Cleanser

Via Smitty at the newly hosted Other McCain and House of Eratosthenes.

To help preface this story, you need to know that Monster Cable is the 500 pound gorilla in the room. The Microsoft of high end interconnects.

There are still a few other high end cable companies out there but MonCab (as the insiders like to say) is famous for using the courts to litigate the competition out of the way. They met their match when they sent a notice asking a little company called Blue Jeans Cable to stop making their product.
[Dear Monster Lawyers,][Audioholic's term, not mine or Mr. Kurt Denke's]
Let me begin by stating, without equivocation, that I have no interest whatsoever in infringing upon any intellectual property belonging to Monster Cable. Indeed, the less my customers think my products resemble Monster's, in form or in function, the better.

I am evaluating your claim that the connectors on certain Tartan brand products infringe Monster's design patents and trademarks. However, the information supplied with your letter is plainly inadequate to support a claim of infringement and so I am writing to you to ask for further information and clarification regarding your claims.
[. . .]
I will point out, though you are no doubt already well aware, that the gross morphology of the RCA plug is pretty well dictated by function. RCA plugs intended for soldering and assembly have certain attributes in common; their diameter is constrained by the need for the shell to fit over an internal set of solder points and cable clamp, and their length by the need to provide some room for cable end prep and attachment; they are generally radially symmetrical along the anterior/posterior axis owing to the need to accommodate both a round-profile cable and the round-profile RCA socket; the connector end is constrained by the standard dimensions of the RCA socket, and by the need, as the socket provides for no bayonet or screw attachment, to provide sufficient tension on insertion to maintain good mechanical and electrical contact; the barrel, grasped by the user for the purpose of insertion and removal, requires traction which is typically provided by raised or recessed rings, plastic inserts, knurling, or the like; and transition between the connector and the cable to which it is attached requires, in one form or another, a reduction in barrel size at the connector rear. It is my assumption, since you cite design patents only and no utility patents, that Monster Cable makes no claim here for any functional aspect of any of these designs; if I am wrong, please let me know what utility patents Monster Cable does hold, and what claims, if any, Monster asserts on the basis of those utility patents.
[. . .]
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. In plaintiffs' practice, likewise, I was always a strong advocate of standing upon principle and taking cases all the way to judgment, even when substantial offers of settlement were on the table. 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.
[. . .]
Let me be clear about this: there are only two ways for you to get anything out of me. You will either need to (1) convince me that I have infringed, or (2) obtain a final judgment to that effect from a court of competent jurisdiction. It may be that my inability to see the pragmatic value of settling frivolous claims is a deep character flaw, and I am sure a few of the insurance carriers for whom I have done work have seen it that way; but it is how I have done business for the last quarter-century and you are not going to change my mind. 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.

I will also point out to you that if you do choose to undertake litigation, your "upside" is tremendously limited. If you somehow managed, despite the formidable obstacles in your way, to obtain a finding of infringement, and if you were successful at recovering a large licensing fee--say, ten cents per connector--as the measure of damages, your recovery to date would not reach four figures. On the downside, I will advance defenses which, if successful, will substantially undermine your future efforts to use these patents and marks to threaten others with these types of actions; as you are of course aware, it is easier today for your competitors to use collateral estoppel offensively than it ever has been before. 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.

I look forward to receiving the information requested and will review it promptly as soon as it is received.

Sincerely,

Kurt Denke

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