Ward v. Cisco Systems, Inc. [1]

Rick Frenkel authors the Patent Troll Tracker [2] blog, where he comments on lawsuits that in his view abuse the patent system. John Ward, Jr., a patent lawyer practicing in Texas, sued Frenkel and his employer, Cisco Systems, for defamation. Ward alleges that Frenkel's post of October 18, 2007 [3]  falsely implied that Ward and a colleague had conspired with a Federal Court official to illegally alter court documents.

In his blog, Frenkel covers litigation brought by plaintiffs he considers to be patent trolls. "Patent troll" is a derogatory label for companies that do not develop technology or manufacture products themselves, but allegedly profit by abusing the patent system to extort legal settlements from companies that do. A troll first buys patent rights and then threatens lawsuits against wealthy corporations for infringing those patents. The troll hopes to obtain a lucrative settlement by inflicting commercial uncertainty and legal costs on the corporation as a result of the pending suit-regardless of the merits of its claims.

Frenkel's October 18, 2007 post [3] focused on ESN, LLC v. Cisco Systems [4], a patent lawsuit brought in the United States District Court of the Eastern District of Texas. He implied that ESN, LLC ("ESN") was a patent troll and claimed that when ESN filed its patent infringement suit against Cisco on October 15, 2007, the patent in question had not yet been issued. If this was the case, the post [3] contended, ESN would have no standing to sue because it had not been injured at the time of the filing. Frenkel identified Eric Albritton and T. John Ward as ESN's local counsel responsible for filing the suit.

Ward's complaint [5] alleges that Frenkel defamed him by anonymously posting the following statements [3] to his blog on October 18, 2007:

I got a couple of anonymous emails this morning, pointing out that the docket in ESN v. Cisco (the Texas docket, not the Connecticut docket), had been altered. One email suggested that ESN's local counsel called the EDTX [Eastern District of Texas] court clerk, and convinced him to change the docket to reflect an October 16 filing date, rather than the October 15 filing date. I checked, and sure enough, that's exactly what happened-the docket was altered to reflect an October 16 filing date, and the complaint was altered to change the filing date stamp from October 15 to October 16. Only the EDTX Court Clerk could have made such changes.

You can't change history, and it's outrageous that the Eastern District of Texas is apparently, wittingly or unwittingly, conspiring with a non-practicing entity to try to manufacture subject matter jurisdiction. This is yet another example of the abusive nature of litigating patent cases in the Banana Republic of East Texas.

Frenkel operated Patent Troll Tracker anonymously up to the time of this blog post [3] and through the time that Ward began legal action. As a result, Ward's original petition [6] to the Texas District Court in Gregg County on November 7, 2007, named John Doe and Google as defendants and sought to depose Google under Texas Rule of Civil Procedure 202 [7], which allows Texas district courts to order a deposition "to investigate a potential claim or suit," in advance of an actual lawsuit. Ward hoped that by deposing Google, which operated Blogger [8], the host of Patent Troll Tracker, he could identify the anonymous author of the post.

Before Google was deposed, Frenkel revealed his identity online and on February 27, 2008, Ward amended his state petition [9] to add both Frenkel and Cisco Systems, Inc. as defendants and to bring a defamation suit against them. The following week, on March 3, 2008, Ward's co-counsel, Eric M. Albritton, filed a nearly identical defamation suit [10] against Frenkel and Cisco Systems in the same Texas state court. Cisco removed the Albritton complaint to the United States District Court for the Eastern District of Texas, whereupon Ward dismissed his state case against Cisco and Frenkel and refiled his complaint [5] in the United States District Court for the Western District of Arkansas on March 13, 2008. By refiling in federal court in Arkansas, Ward may have intended to pre-empt Cisco from removing his case to the District Court for the Eastern District of Texas, as it had done with Albritton's case.

According to the complaint [5], Frenkel was employed as Cisco's Director of Intellectual Property and was responsible for managing the ESN v. Cisco case about which he wrote the post at issue. Ward further alleges that Cisco knew about and consented to Frenkel's blog and was therefore both directly and vicariously liable for any harm caused by the blog.

On April 8, Cisco moved to dismiss [11] Ward's suit for improper venue or, in the alternative, to transfer the case to the United States District Court for the Eastern District of Texas. Ward opposed Cisco's motion [12] to dismiss on April 24, and the parties traded pleadings regarding this motion in May.

On April 24, 2008, Frenkel answered Ward's complaint [5] and moved to dismiss the case or transfer it to the Eastern District of Texas, where it could be consolidated with the Albritton case. Frenkel's answer [13] denies that he was responsible for managing the ESN v. Cisco case and asserts that the First Amendment protects him from civil liability for his statements on Patent Troll Tracker.  In his motion to dismiss [14], Frenkel claims that the United States District Court of the Western District of Arkansas has no jurisdiction over him because he lacks minimum contacts with the state of Arkansas and because publishing on a website does not make him personally liable in every state where the website can be viewed (see Frenkel's memo in support of his motion [15]).

Also on April 24, 2008, Ward moved to dismiss [16] Frenkel from the case without prejudice (leaving Ward free to sue Frenkel again in the future) after Cisco admitted that Frenkel was acting within the scope of his employment when he posted the alleged defamatory comments. On April 25, 2008, Frenkel responded [17] that the District Court should instead award him his costs, expenses, and attorney's fees if it dismisses him from the case without prejudice, or in the alternative that it should dismiss the case with prejudice (thereby barring Ward from suing Frenkel again in the future). Frenkel argues that he deserves compensation because Ward forced him to defend against two suits (one in Texas state court and the other in the federal District Court), both of which Ward soon gave up on and voluntarily moved to dismiss.

Update:

8/28/08 -  Court dismissed the action against Frenkel in response to Ward's motion for dismissal without prejudice.