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I got a mail from Kelora Systems LLC, saying something about patent infringement
 
ashk
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Total Posts:  20
Joined:  2010-11-22
 

I’m curious as to what this “new” batch of letters entails or if it is any different than the first round.

The first round (which was sent last year around this time) was something to the effect of:

- You are breaking our patent
- You can pay $35,000 to liscence the patent if you pay prior to some date
- After some date, the cost will be $70,000
- If you don’t pay, expect legal action
- See included suit against Target et al. and patent information

As far as I know (looking through their court documents) noone else has been sued other than the original list (although a few companies like Nebraska Furniture and Cabela’s have counter sued).

As someone else said, noone here is giving out legal advice and nothing here should be taken as such.  If you want legal advice, talk to your lawyer.

Quite frankly, I bet the old warfunds are starting to run dry for Kelora and they are hoping for some cash to keep the suit going against the larger companies.

If you want to learn a bit about what is going on, I would first start with the first court ruling against PartsRiver (the former patent holder prior to Kelora).

http://docs.justia.com/cases/federal/district-courts/california/candce/4:2009cv00811/212919/234/

It’s full of “legalease” (and the middle 2-3 pages about non-moving parties can be skipped) but it’s a good primer of the arguments and why PartsRiver lost the first round against Microsoft et al.  Unfortunately, due to the ridiculousness of the patent system they were able to re-work the patent and file these new claims.  However, the court DID rule that they cannot claim any damages prior to those patent changes (November 2nd 2010).

This doc contains some of the information regarding the changes to the patent and PartRivers failed attempt to overturn the judges previous ruling

http://docs.justia.com/cases/federal/district-courts/california/candce/4:2009cv00811/212919/278/

The currently running case is here:
http://dockets.justia.com/docket/california/candce/4:2011cv01548/239060/

This is the Kelora v Internet case.  A couple notes, the Microsoft/eBay v Kelora case was rolled into this case so its a few more lawyer wolf packs “on our side” (and Microsoft did win its first run at this patent).  A few of the smaller companies here have settled.  Now, the terms of that settlement aren’t known.  It could be a small fee to Kelora (Kelora as a company has no income other than its suits, they may desperate enough to take only a few grand from a few of these companies to keep their lawyer team afloat and these smaller entities might be all too willing to get out of the way for a couple grand).  Not only that, it gives Kelora some “press” that it “won” settlements.  Thankfully Microsoft isn’t the type to bend over for anybody and they will run this through to (Kelora’s) bloody end.

Kelora has little skin in the game.  The second they can’t pay their bills with the settlements they take in, they will file for bankruptcy and have lost little other than the time they put into it.  Since they haven’t taken action on a single one of the first round notices they sent out, I’m guessing funds are getting a little short as this is taking longer than they anticipated and they probably thought they would get more bites from their intimidation campaign so the second round of notices went out.

As for Magento, unless you are enterprise, it’s not their problem.  By going community edition you absolved them of any obligation in this.  That isn’t them being cold hearted, that’s the way Open Software Liscenses are done.  Quite frankly though, it will be their problem long before it’s any of our problems.  Magento itself is a meatier target and worth the lawyer fees over any community site out there.

 
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ashk
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Total Posts:  20
Joined:  2010-11-22
 

Also, found this group also discussing the issue:
http://news.ycombinator.com/item?id=2808110

Quite a few seem to think prior art can be easily found and displayed (although I would think if that were the case, one of suits would have found it).

 
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Magento_Legal
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If anyone is continuing to receive letters from Kelora, please send them to legal@magento.com, so that we can continue to monitor the matter.

Thanks.

Lisa A.

 
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ashk
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Total Posts:  20
Joined:  2010-11-22
 

Love the smell of Kelora\’s burning money.....

Adobe enters the fray
http://dockets.justia.com/docket/california/candce/3:2011cv03938/244035/

 
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Melissa Walton
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Total Posts:  1
Joined:  2011-02-26
 

We just received a threatening letter from Kelora’s lawyers.  We are a small business, we do limited revenue online.  Can’t really afford to hire a lawyer, does anyone have any advice on how to deal with this?

Many thanks

Melissa

 
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edimensional
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Has anyone let the deadline expire? Have you received any follow up or what happened?

 
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sativo
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jwebber - 02 August 2011 11:40 AM

If you received the most recent batch of letters from these people (and you are really concerned about this) please contact your lawyer.

If you want to make a serious business out of selling products on the internet, you really need to have a good lawyer. Yes, they are expensive, but it is worth it to have solid legal advice! I have been contacted by over 10 different people in the past few days who want my advice on what to do. I will post here exactly what I have been telling them: Please contact your lawyer about this, I am not a lawyer and don’t want to give out legal advice. You really need to contact a lawyer if this scares you, not someone you found on the internet.

This post insultingly obvious.

The nature of the claims made by Kelora, and the gravity of the damages they’re seeking warrant open discussion by anyone using magento.

I’m surprised magento/ebay themselves have been so quiet about all this.

I for one would like to hear any experiences folks have with these trolls.

 
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sativo
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Can anyone clarify why they’re able to go after consumers of technology (even open source licensed tech). We don’t sell magento or any services related to magento.  We sell tangible gift products online.

Sure, I use magento as an asset to generate revenue, but I also use my car to get to work so I can generate revenue. I wouldn’t expect an infringement on the part of my car manufacturer to warrant a claim against me directly.

 
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ashk
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Total Posts:  20
Joined:  2010-11-22
 

Has anyone let the deadline expire? Have you received any follow up or what happened?

We got the notification last November and our “deadline” expired last Jan.  Haven’t heard from them since.  Right now they are more concerned with the litigation they have and are hoping to cash in on some quick, no work on their part, liscensing payments.  If they win their current monster suit, then they’ll come back at all of us (and it won’t be pretty).  I’d be shocked if they won and if they do, we can blame the judge for the downfall of a large chunk of the retail internet.

This post (is) insultingly obvious

Maybe so, but it really should be said over and over.  Noone should put the future of their business in the hands of a random person posting on a message board.  That combined with the fact that noone here wants to be blamed for someone getting sued into non-existance.  Nothing here should be taken as or construed as legal advice.  You don’t have to hire a lawyer and keep them on retainer.  Just meeting with a patent lawyer to have them better explain your options isn’t going to cost one a ton and is in their best interest.

I’m surprised magento/ebay themselves have been so quiet about all this.

They are currently in a suit against Kelora.  They can’t exactly say alot while that suit continues.  And, unless your Enterprise, you signed away your rights for them to have to tell you anything when you downloaded and installed the community edition.  They are doing something about it by their suit against Kelora.  We just have to let that play out.

Sure, I use magento as an asset to generate revenue, but I also use my car to get to work so I can generate revenue. I wouldn’t expect an infringement on the part of my car manufacturer to warrant a claim against me directly.

That’s a pretty bad analogy.  For starters, you purchased your car.  If you pay Kelora for liscensing you’ll be fine as well.  Secondly, the car you chose probably doesn’t directly effect your daily sales on your website.  Whereas faceted search vs another kind of search more than likely does.

 
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sativo
Member
 
Total Posts:  39
Joined:  2007-09-24
 

Yep.. more non-answers.

I disagree about it being a bad analogy.  Magento, through their open source license, granted us rights to technology they apparently had no right to grant us rights to.  Besides, what cart out there does not use faceted search these days?

Also, while I understand their case requires some discretion, I imagine unsuspecting mom and pop retailers are downloading and installing magento in present day, without so much as a peep from ebay about this matter.  That seems fair to you?

Seems this forum is really not the place to look for information on this subject.

 
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ashk
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Total Posts:  20
Joined:  2010-11-22
 

Yep.. more non-answers.

You’ve shared nothing so far.  I’ve told you how we handled our letter.  eBay/Magento is in a suit regarding this issue, they are not going to openly discuss the case, get over that point.  If you want to know more, do some research.  Read the older cases between Parts River and Microsoft.  Noone here is in nor has completed litigation.  You want answers for something that hasn’t finished yet to have answers.  All you want is someone to tell you exactly what to do so this goes away.  The only option that accomplishes that is to pay Kelora.  Most have either talked to a patent lawyer and gotten their options laid out for them and are acting on those options or are just sitting in a holding pattern seeing how the current lawsuits pan out.

Magento, through their open source license, granted us rights

See, that’s the thing.  An open source license doesn’t grant you a thing.  That is the whole point of having this under an open source license such as it is.  If you want to take the time to read through the license you agreed to, you’re going to be quite dissapointed in what you think you are getting out of it.

Besides, what cart out there does not use faceted search these days?

It’s probably more difficult to find a site that doesn’t use faceted search rather than ones that do.  This patent is irrelevant for alot of reasons but unfortunately, the number of things that use it doesn’t make it so.

Also, while I understand their case requires some discretion, I imagine unsuspecting mom and pop retailers are downloading and installing magento in present day, without so much as a peep from ebay about this matter.  That seems fair to you?

They get a free site management and cart system by agreeing to an open source license. I’m sorry that you think you are owed something more than what you agreed to.  If the open source license isn’t something you feel is sufficient, you can pay for the Enterprise edition.

Seems this forum is really not the place to look for information on this subject.

Heh, good luck. Every single suit is laid out in this thread along with explanations of the patent.  You want someone to tell you what to do without doing any work yourself.  You probably don’t want to pay to talk to a patent lawyer (understandable), you don’t want to pay Kelora (very understandable), and you don’t want to wait it out.  Unfortunately those are your three options.  Noone is going to pay to talk to a patent lawyer about their company and this patent and come to a board and dump the contents of that conversation.  This is the information we have and those are the choices we have.  Do what you will with it.

 
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ashk
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Total Posts:  20
Joined:  2010-11-22
 

Some more information and discussions going on out there

Not much in here but maybe another round of letters going out?
http://www.sellpromos.com/topic/18304-any-distributors-getting-threatening-letters-re-asi-logomall-site-being-in-violation-of-kelora-systems-patents/

A fun little read from a company that has been contacted by Kelora and their story:
http://www.security-camera-warehouse.com/blog/1757/kelora-and-patent-821-guided-parametric-search

One VERRRRRRRRY interesting thing found
http://docs.justia.com/cases/federal/district-courts/california/candce/4:2011cv01398/239313/69/

The short version of that article......Cabella, Newegg, and Nebraska Furnituremart requested to seal the testimony from a man named “Ray R Larson”.  The requested seal is because the information may be confidential and and proprietary in relation to a third-party firm named Endeca.  The requested seal isn’t a big deal, they are just trying to cover themselves if anything proprietary was in his testimony.  The big deal is who Ray R Larson is and what is in his testimony that Cabella, Newegg, and NFM got.

Looking up Professor Larson, he is a Associate Professor in the School of Information Management at Berkely.  Looking into his bio, you can see he worked on a system called “MELVYL”.

Melvyl is the name of the online catalog of the University of California’s library system, and is a registered trademark owned by the University of California (UC).  Wiki article here: http://en.wikipedia.org/wiki/Melvyl

This could be the prior-art we all probably knew existed somewhere out there.  Online access to the system began as early as 1980 (with the system itself starting development in 1977).

 
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clarity
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I got a letter today, dated Oct 14, 2011. Being the first I’d heard of this, I googled it, which led me here. I use the free magento cart.

To answer thequestion about what appears to be different:

- Patent breaking claim seems the same. I am supposedly using a guided parametric search that they have the ‘821 Patent for
- They’ve upped the ante. My license offer is $40k, payable by 11/10/11. They offer a 25% discount if I pay by 11/04/11
- There is not much mention of cost in the future. It tells me that if I don’t pay by November 11, 2011, they will “pursue their legal remedies”
- They go on at length about the cost to me of implementing “non infringing alternatives” and the lower conversion rates that I will have without their system
- They tell me that the letter constitues a notice of alleged infringement and that creates a “reasonable apprehension of litigation”, and that I am “required to implement a litigiation hold’ It goes on to tell me how that means I have to “preserves all elements of the e-commerce and other infrastructure at my site. It blithers on some more about if I do make changes that I have to be sure that a “pre-change version of the infrastructure is preserved”. This part made me laugh. Seriously.
- It includes a copy of the license agreement
-They attached a copy of the complaint that they will file in USDC against me if I don’t pay by their date.

I don’t know about anyone else, but I intend to ignore this. I use magento on a site that is a side, side hobby, and really am not alarmed at the possibility of them being able to prove damages against me.

 
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JaneTaylor
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Joined:  2011-10-17
 
clarity - 17 October 2011 07:43 AM

I got a letter today, dated Oct 14, 2011. Being the first I’d heard of this, I googled it, which led me here. I use the free magento cart.

To answer thequestion about what appears to be different:

- Patent breaking claim seems the same. I am supposedly using a guided parametric search that they have the ‘821 Patent for
- They’ve upped the ante. My license offer is $40k, payable by 11/10/11. They offer a 25% discount if I pay by 11/04/11
- There is not much mention of cost in the future. It tells me that if I don’t pay by November 11, 2011, they will “pursue their legal remedies”
- They go on at length about the cost to me of implementing “non infringing alternatives” and the lower conversion rates that I will have without their system
- They tell me that the letter constitues a notice of alleged infringement and that creates a “reasonable apprehension of litigation”, and that I am “required to implement a litigiation hold’ It goes on to tell me how that means I have to “preserves all elements of the e-commerce and other infrastructure at my site. It blithers on some more about if I do make changes that I have to be sure that a “pre-change version of the infrastructure is preserved”. This part made me laugh. Seriously.
- It includes a copy of the license agreement
-They attached a copy of the complaint that they will file in USDC against me if I don’t pay by their date.

I don’t know about anyone else, but I intend to ignore this. I use magento on a site that is a side, side hobby, and really am not alarmed at the possibility of them being able to prove damages against me.

I received the same letter in the mail today. We’re a new, small e-commerce company using magneto (4 months old), trial is set for November.

In the letter they are telling us we made approx 500k last year with the help of their software… this site wasn’t up last year.

How are these crooks able to get away with this?

I see some of these threads are old, does anyone have any updates on their situation with these scammers?

 
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clarity
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@JaneTaylor...I had my site totally offline for months this year due to illness, so I\’m about in the same boat as if it wasn\’t online at all.

According to the first post in this thread, even if they actually sued me and won, they can\’t claim damages for things that happened prior to them changing the patent.  (Nov 2010).

So when I factor in the time the site was offline...that I can verify through my hosting company...and how little sales I actually do through that site, I really think it would be somewhat comical if they spent the money to come to my state and demand a trial by jury.

 
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