There's a disturbing report in AdAge this morning titled "Threat of Patent-Troll Litigation Looms Large for Digital Agencies."
Some companies, nicknamed trolls, get patents on generic digital usability features without intending to build software and then lob lawsuits at companies who are actually building stuff, such as the digital agencies designing mobile apps for travel businesses.
Mobile apps may be the biggest target for patent-infringement claims right now, which is troublesome for travel companies, many of whom are rushing into this space.
One designer of mobile apps, Digitaria, has been targeted by patent trolls. In 2011, it designed an iPhone app for Best Western.
But a third-party apparently claimed that the app had "locator functionality to show which hotels were in the user's vicinity" that infringed on a patent it had taken out with a generic description of that function.
It seems that Digitaria paid for a licensing fee of $50,000 to (what it describes as) the patent troll, splitting the cost in half with Best Western*.
Given that the contract to design apps for the major hotel chain might have only cost $350,000, that $25,000 portion of the fee for each side must have hurt.
Worse, trying to prevent getting into such a situation is difficult. Hiring a legal practice to perform due diligence in advance might cost $25,000 to $50,000 itself.
For more info, click through to AdAge's patent-troll litigation story, and then come back to share your thoughts in the comments below.
*Yes, the AdAge story doesn't specify Best Western as the brand in question, but it's the only major hotel chain client that hired Digitaria to build an iPhone app with that functionality, so I'm making that logical leap.