Unfortunately, app developers are facing another onslaught of letters demanding money they shouldn’t have to pay.  This time, the sender is Jorge Maass, a patent owner who also runs a real-estate business in Texas. In recent months, Maass has been sending out threatening letters under the name of his company, Price Setter, LLC. The letters tell developers that the apps they built infringe his patent—and they owe him money—just for using standard software to display online ads. 

The Price Setter letters, titled “Notice of Potential Infringement” [PDF] or the more threatening “Final Notice of Potential Infringement,” [PDF] demand that developers pay an annual license fee ranging from $400 to $2,000, depending on the number of times the app is downloaded.

In the letter, Price Setter specifically cites claim 15 of U.S. Patent No. 9,892,445. This claim doesn’t come close to showing that Maass is some kind of a pioneering creator of ad technology. In fact, it’s not evidence of much at all, beyond the fact that Maass could paste together buzzwords. We’re declaring the ‘445 patent the winner of our Stupid Patent of the Month award.

A "Real-Time" History of Ad Bidding

The dominant form of online advertising today uses a technique known as real-time bidding, or RTB. This is what takes place when you load a webpage, and algorithms figure out who you are, then auction off the online ad space in a fraction of a second. Today, most online ads use RTB technology. (As an important aside from the patent issues here, RTB technology involves invasive tracking, and its growth has harmed user privacy.) 

There’s some debate over who is most responsible for the creation of RTB. But by about 2010, it was clear that RTB had taken root. One name that doesn’t pop up in trade press articles about the creation of RTB is Jorge Maass—the man who's sending out demand letters to inventors, insisting that they pay him money. 

Despite his apparent absence from the well-documented history of RTB advertising, Maass says he is central to it. “We invented Real Time Bidding back in the year 2005!” he claims on the Price Setter LLC website. He calls his system “a block-chain RTB patent licensing program for digital advertising and dynamic pricing for mobile shopping partipants,” and says the company will have an Initial Coin Offering to return RTB “back to the way it was originally intended to be.” 

Maass does have a “parent” patent that was filed back in 2005. But the claims describe a “transaction arbiter system” that’s basically an auction system, but tied to a mobile phone and with extra data, like location. The patent application uses the term “real-time” as a buzzword, in the sense of “very fast.”

Then—much later, in 2014—Maass was able to file the ‘445 patent, which again describes “real-time” bids but has one claim focused on advertising. Because the ‘445 patent is a “continuation” of the original parent patent, he’s able to claim priority back to 2005, and demand money from today’s app developers.

Maass’s patents are examples of the continuation abuse plaguing the patent system. Determined applicants are able to game the system by filing broad applications early and then filling in the blanks in later applications that describe in more specific and concrete terms work that others had already achieved—and even made ubiquitous—in the real world. The developers being threatened by Maass are just using display advertising software and services that were created by others, such as AdMob, the Google-owned service that Maass cites in one of his letters.

This campaign by Maass’s company, Price Setter LLC, is not the first to target small and independent app developers. That strategy is reminiscent of the campaign waged by the notorious patent troll Lodsys. That company sued a bunch of small developers, and threatened many more with aggressive demand letters, accusing them of infringing because they used standard “click to upgrade” software. When Lodsys actually went after a target that could afford to fight back—Kaspersky Lab—it backed down, settling for $0 instead of taking the risk of a trial over its patents. 

Rather than paying attention to these problems, Congress is trying to roll back the clock, making it even harder to dismantle ridiculous patents like the Maass patent. Right now, a patent bill under consideration in the Senate would dismantle the type of review that developers could use to knock out a wrongly issued patent like this one efficiently.

Congress needs to move the system in the right direction, not continue to consider wrongheaded legislation like the “Stronger Patents Act.” Instead, let’s consider some policies that would actually help people who create new software. One good step would be legislation to crack down on continuation abuse, by limiting applicants’ ability to get new patent rights based on the dates of old patent applications.