Patent Trolls Take on Folksy Craft-Site Etsy

May 17, 2012

trollThe popularity of Etsy, an online marketplace focused on vintage and handmade items, has skyrocketed in the last year.  Described as a cross between Amazon, Ebay, and “your grandma’s basement” the craft site gives sellers a personal storefront where they can list their art, jewelry, clothing, knick-knacks, and other items. 


Despite their incredible success, Etsy is still learning the ropes when it comes to being a big business.  Recently, the site was hit with a patent lawsuit.  Unified Messaging Solutions LLC claims that Etsy has infringed on five of its patents related to “methods for storing, delivering and managing messages.”  The company is asking for a permanent injunction, triple damages and profits. 


It’s no surprise that Unified Messaging Solutions is dropping such a hefty suit as it appears to be an arm of Acacia Research Corporation, a long-time patent troll.  It’s also no surprise that the suit is being brought now, just a week after Etsy brought in $40 million in investments. 


Patent trolls are responsible for having collected $500 billion over the last 20 years, and that amount is steadily rising.  Not only do they stifle innovation, but they can cost a company up to $20 million in market capitalization- maybe even more.  What’s worse is that these patent trolls will just use the money they make from on case to turn around and slap a suit onto some other company. 


With all of its recent success, Etsy should bounce back from this no matter the outcome.  The folksy craft-site is still in its beginning stages, and this is just one of downsides to being a large technology-based business. 





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