[telecom] Has Patent, Will Sue: An Alert to Corporate America

Has Patent, Will Sue: An Alert to Corporate America

By DAVID SEGAL July 13, 2013

If you're a corporate executive, this may be one of the last sentences you want to hear: "Erich Spangenberg is on the line." Invariably, Mr. Spangenberg, the 53-year-old owner of IPNav, is calling to discuss a patent held by one of his clients, which he says your company is infringing - and what are you going to do about it?

Mr. Spangenberg is likely to open the conversation on a diplomatic note, but if you put up enough resistance, or try to shrug him off, he can also, as he put it, "go thug."

He demonstrated what that sounds like in a brief bit of role-play recently, sitting in the apartment he is renting for the summer in Paris near the Arc de Triomphe. His voice dropped, the curse words flowed, and he spoke with carefully modulated menace.

"Once you go thug, though, you can't unthug," he explained, returning to his warm and normal tone. "Actually, you can unthug, but if you do that, you can't rethug. Then you just seem crazy."

Mr. Spangenberg's company, based in Dallas, helps "turn idle patents into cash cows," as it says on its Web site. A typical client is an inventor or corporation, with a batch of patents, demanding a license fee from what it contends is an infringer, usually a titan in the tech realm. His weapon of choice in this business - the brass knuckles of his trade, so to speak - is the lawsuit.

In the last five years, IPNav has sued 1,638 companies, according to a recent report by RPX, a patent risk management provider, more than any other entity in the patent field. "To get companies to pay attention, in some percent of the market, you need to whack them over the head," Mr. Spangenberg said. "In our system, you can't duel, you can't offer to fight in the street, which would be fine with me."

This combat readiness has made Mr. Spangenberg, a high-school dropout raised in Buffalo, very rich. He earns about $25 million a year, he says, which is at least a couple of million more than the country's top bank executives. Until recently, he lived in a 14,000-square-foot home in Dallas; it is now on the market for $19.5 million. He often flies on a company jet, and at one point he owned 16 cars, six of them Lamborghinis.

His clients, who pay IPNav a percentage of any recovery, contend that he earns every dollar and praise him as a hero.

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***** Moderator's Note *****

This story is related to telcom, sad to say, because mobile data devices are often stung by patent trolls.

Bill Horne Moderator

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Monty Solomon
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