Suing the Largest Telco

by Colin Berkshire

One of the first lawsuits I oversaw when I became responsible for our company’s IP was where a very large legal information database whose name is strikingly similar to a luxury car brand violated one of our copyrights. This company hired a consultant to penetrate our computer system, and they successfully did so. At the time there were no laws regarding hacking, so it was not a crime to trespass into another computer system. Were struggled with how to file our complaint. They didn’t set foot on our property, they just broke into the computer. Eventually we decided to file a copyright infringement complaint against them. (They had downloaded some of our database.) It was a strong case because they got caught red-handed. (It was in the days of modems, and the Caller ID from their headquarters was what showed up in the Caller ID field…which is how we knew who had hacked us.) The settlement agreement we reached was favorable. This wasn’t the first time nor the last time we sued a Fortune 100 company and settled on favorable terms.

In another case we sued the largest telephone company in the world (whose name I contractually cannot mention in conjunction with discussing this particular lawsuit.) We were a small, 100 person company at the time. We had a multitude of claims ranging from theft of trade secrets to espionage, but the winning one turned out to be copyright infringement. The cash settlement for this general type of lawsuit can easily be in the tens of millions of dollars (in today’s dollars.)

In another case the company I was with took on a $25 Billion news and information company. Our squabble was really a contractual one that was very technical. The squabble was complicated, there was a mountain of conflicting correspondence spanning 15 years, and it was easy for the conglomerate to raise completely fictitious facts that were extraordinarily expensive to prove wrong. Faced with trips to a branch office in Germany to depose obscure people we faced international laws that threatened to make the entire lawsuit be prohibitively expensive, which was the goal of their large New York law firm. So we cut off all of those claims and basically went back to copyright law. Copyright law was clean and simple and the penalties were draconian (over $1 Trillion using the most extreme application of statutory damages.) Within weeks a meeting was requested and by the end of one day of negotiations a favorable settlement agreement was reached.

If you think that a small firm cannot take on the giants, you may not have a creative enough attorney. If you can bring copyright into play you can turn the tables on the big guys.

At one point I was accused of my IP group being the most profitable department in our company.

So copyright can be very powerful, and it can easily tip the scales against a behemoth organization. Because it is so clearcut and so easy to prove, it can sometimes be easier to sue under copyright law than whatever is the actual, real squabble at hand.