FourSquare is a service loved and loathed by different people. Some will argue that it spams Twitter incessantly as you check in at various locations, while others extol its virtues for letting you share your experiences with friends. Theres concrete evidence the service has something to offer, in the form of "check-ins" for Facebook having been added after the service became popular. Whether youre part of the loving or loathing crowd you more than likely will have seen it in use. As you would expect it uses GPS to identify your location, but how long will that last?
It was only a matter of time until a company started suing for patents. Silver State Intellectual Technologies Inc. of Nevada has filed a lawsuit against FourSquare, alleging that the service infringes on two of its patents. These two patents are U.S. Patent 7475057, and U.S. Patent 7343165. The first concerns a "system and method of user navigation", and the second is about a "GPS Application Publication Server". For some reason all these companies that own the patents manage to have the most bland names in any industry, and they pop out of the woodwork to snag some profit off companies infringing on obscure patents that they might not even know existed.
These so called "patent trolls" have become more apparent recently, springing forth to snag profits from smaller start-up ventures, rather than established companies. Etsy and Hipmunk are two other companies to have been targeted by the trolls, who reap their profits from licensing the usage of these patents to the companies. To balance calling them "patent trolls", the friendlier term is a "non-practicing entity".
The two patents that are being used against FourSquare were filed for in 2001 and 2002, and granted in 2008 and 2009. The person named as the inventor of these patents, Michael Obradovich, transferred them to a shell company shortly after. Wikipedia sums up a shell company best:
"a company which serves as a vehicle for business transactions without itself having any significant assets or operations"
They arent illegal but can be valuable components in a tax haven. Certain countries are notorious for their low taxation, and therefore a shell company can exploit these to maximize their profits.
FourSquare users may remember another confrontation from a
patent troll non-practicing entity last year, when the company was hit with another lawsuit for infringing on its patent, relating to online shopping.